Rabobank Nederland

Overview

Rabobank Nederland is the central organization to Rabobank group which comprises of 161 independent local Dutch Rabobanks and a large number of specialized international offices and subsidiaries.

This company can trace its origins to the local loan cooperatives founded in the Netherlands nearly 120 years ago and are the product of a merger between Centrale Raiffeisen-Bank and Cooperative Centrale Boerenleenbank in 1972, followed by the name change to Rabobank Nederland in 1980. With its dominant market position based in agribusiness, among private individuals and in small and medium-sized enterprises in the Netherlands, Rabobank is also a global leader in Food and Agribusiness banking.

Performance

The following information was extracted from Rabobank Group's annual report, released on 14 February 2020:

"Net profit in 2019 is lower than the record level of EUR 3 billion we posted over 2018. The interest rate environment significantly impacted our results and contributed to the impairment of our equity stake in Achmea by EUR 300 million. The sale of RNA resulted in a one-off positive result of EUR 342 million. In the past year loan impairment charges were substantially higher than the historically low level of previous years. At 23 basis points impairment charges have reverted to a normalized level.

Costs were down by 4% and the cost/income ratio improved from 65.9% to 63.8%. Structural factors driving cost development will include substantial investments in digitalization and the IT infrastructure and costs related to regulation and supervision, including CDD and AML activities. Nonetheless Rabobank aims to further improve the cost/income ratio to a percentage in the low 60's in the coming years. The long-term ambition is for a percentage in the mid 50's. Achieving this level is conditional on, among others, normalizing interest rate levels.

Rabobank's capital position further strengthened: the common equity tier 1 (CET 1) ratio is 16.3%, which is well above the regulatory requirement and Rabobank's ambition of at least 14%. The increase of 0.3 percentage points is partly attributed to retained earnings and the sale of non-core activities. Our strong capital position enables Rabobank to absorb the future impact of, among others, Basel IV. The return on equity amounted to 5.3% (7.3% in 2018).

The loan portfolio increased by EUR 6 billion in 2019, excluding the sale of the RNA portfolio, due mainly to growth in international Food & Agri and at leasing subsidiary DLL. Underlying deposits from customers rose by EUR 11 billion with the most evident growth

in domestic retail banking."