Rabobank can measure up to its international competitors
1-6-2006 |
Rabobank performs as well as the international competition. This has been concluded in a recently published scientific study of the Dutch Central Bank (DNB), which compared the performance of the 31 largest banks from seven countries in the period 1997-2002.
Comparisons were made based on measures of performance, risk, market power and efficiency. The DNB-study reveals that the four largest banks show an average performance, based solely on profitability measures such as return on equity and interest income margin. The US and UK banks tower above the other countries on these measures. Profitability, therefore, appears to be positively related to the country in which a bank is located.
When the degree of risk a bank incurs is taken into consideration, we see a different picture. Based on the risk-adjusted income after provisioning, Rabobank takes an impressive second place.
The ever keener competition within the international banking system causes banks to be increasingly subject to pressures to achieve high performance levels. Considering the progressing globalisation within banking, chances are that consolidation will continue and increase and that cross-border mergers should be expected. In such an environment, it is important that the Dutch banks’ performance should remain in line with that of their principal foreign competitors in order to ensure a competitive position in the international playing field. Up until now, we can conclude that Rabobank is doing a good job.