Press release interim results 2016

Rabobank transition is taking shape

Underlying operating profit up in all commercial business segments

Results for Rabobank Group in first half of 2016

  • Rabobank’s strategy implementation is on track. The changes to governance have been implemented, and innovation has been intensified. Customer satisfaction has improved. The bank’s capital position has been strengthened further and we have made progress in making our balance sheet stronger and more flexible.
  • Strategic decisions support our two pillars: ‘Banking for the Netherlands’ and ‘Banking for Food’. Rabobank is thus realising its ambition as a cooperative and customer-oriented bank to make a sustainable contribution to welfare and prosperity in the Netherlands and to help resolve the global food issue.
  • Net profit came to EUR 924 million, 39% lower than in the first half of 2015. Profit was down, due among other things to restructuring costs and an additional provision for compensation of business customers with interest rate derivatives. Market volatility also led to a lower valuation of some financial instruments, and profit was further pressured by higher regulatory levies.
  • All commercial business segments improved their underlying results.
  • The recovery in the Dutch economy contributed to a sharp fall in loan impairment charges, which were EUR 208 million lower than in the first half of 2015. Loan impairment charges amounted to EUR 148 million, or 7 basis points on the average loan portfolio.
  • Staff costs decreased 6%, largely due to the reduction in the number of employees by 1,888 FTEs to 49,971 FTEs.
  • Private sector lending increased EUR 1.3 billion to EUR 427.3 billion. Amounts due to customers rose by EUR 5.3 billion to EUR 342.9 billion. Private savings declined slightly to EUR 139.4 billion, partly due to additional mortgage repayments.
  • Solvency, as measured by the fully loaded common equity tier 1 ratio, improved by 0.4 percentage points to 12.4%. The current (transitional) common equity tier 1 ratio stands at 13.4% (31-12-2015: 13.5%). The total capital ratio improved from 23.2% to 23.5%.
  • Thanks in part to growth at our Wholesale, Rural & Retail division, we were able to further expand our global position as a Food & Agri bank. Rabobank announced a joint venture with FMO and Norfund to invest in African banks in order to boost growth in Africa.
  • The sale of Athlon Car Lease will be completed in the second half of 2016, contributing to a further improvement of the capital position.

Executive Board Chairman Wiebe Draijer:

‘Rabobank’s transition clearly took off in the first half of 2016. We are making significant progress towards achieving our strategic goals: excellent customer service, a flexible and stronger balance sheet and improved financial results. While there’s still much to do, we are well on track regarding the fundamental strengthening of our cooperative bank. This should lead to us becoming an outstanding customer-oriented bank in the Netherlands as well as a leading Food & Agri bank worldwide’.

‘We have made fundamental changes to our organisation in line with our strategic objectives. Our new cooperative structure took effect on 1 January and has now been successfully implemented. The organisational structure of Rabobank Nederland is being adapted and we are working on the design of the local bank of the future, whereby our virtual service will go hand in hand with a new ‘nearby’ customer experience for both members and customers.’

‘The digitisation of our services and the implementation of necessary improvements to efficiency, especially in the back office and supporting departments, are proceeding at a rapid pace. The very large loss of jobs associated with this presents a huge challenge to both remaining and departing employees. We are doing our utmost to ensure that this process is effected with care and attention.’

‘We are pleased to note that customer satisfaction as measured by NPS has further improved among both retail and business customers in the Netherlands thanks to the various efforts to improve our services. We are seeing improvements, but we are not yet where we want to be in this respect. We also see improvements in our international operations. Our market shares in the Netherlands are stable at high levels: mortgages 20%, savings 35% and business lending 41%.’

‘We introduced many new initiatives in the first six months of 2016 to show members and customers that we are ready to support them. Being able to present a mortgage proposal within one week is a notable example. Interest rate averaging has been available to our mortgage customers since 1 July 2016. We also made further investments in our online service provision in the first half of 2016, which led to many improvements. The Rabo Banking App is being continually improved, also on the basis of customer feedback. Rabobank entered into a strategic partnership with Kepler Cheuvreux in the first half of 2016. Rabobank’s customers with a market listing now have access to 1,200 institutional investors serviced by Kepler Cheuvreux’s network of 13 branches in 10 countries. The alliance will also offer additional European equity research to Rabobank customers: 90 analysts following 700 companies in 32 sectors.’

‘We further strengthened our position in the international Food & Agri sector in the first half of 2016. In line with our international ‘Banking for Food’ strategy, loans to the Food & Agri sector increased both in the Netherlands and abroad. Our F&A loan portfolio now amounts to nearly EUR 100 billion, a quarter of our total loan portfolio. Our recently announced joint venture with FMO and Norfund confirms our strong commitment to sustainable growth and development in Africa and its local financial sector. Together, we will invest in African banks in order to encourage growth in Africa.’

Chief Financial Officer Bas Brouwers

‘We further strengthened our capital position in the first half of 2016. Our fully loaded common equity tier 1 ratio rose by 0.4 percentage points to 12.4%. The current (transitional) common equity tier 1 ratio stands at 13.4% (31-12-2015: 13.5%). Our target is a common equity tier 1 ratio of at least 14%. We want to achieve this by raising our profitability and reducing our risk-weighted assets. The sale of Athlon Car Lease will increase our common equity tier 1 ratio by around 40 basis points in the second half of 2016 and reduce our balance sheet by approximately EUR 4 billion. Our total capital ratio improved from 23.2% to 23.5%. Our goal is to increase this relatively high buffer to at least 25%.’

‘All commercial business segments improved their underlying results. Domestic retail banking profited from the recovery in the Dutch economy and the improved housing market. Wholesale banking and international rural and retail banking showed growing profits compared to the first half of 2015, when a goodwill impairment of EUR 600 million for RNA in California pressured results. The loan portfolio grew by EUR 5 billion. The leasing activities (DLL), spread across 35 countries and 8 sectors, saw further increase in activity, coupled with profit improvement. In the real estate segment, results improved despite a decrease in the loan portfolio. This segment, too, profited from the economic recovery and lower loan impairment losses. Financing commercial real estate remains an important activity for Rabobank.’

‘We are working actively to reduce the size of our balance sheet. We are placing loans with investors, we are focusing more on our core businesses and aim to reduce the volume of loans carried on our own balance sheet. We have sold a EUR 1 billion residential mortgage portfolio to VIVAT in the first half year. Also commercial real estate loans have been placed with investors. On 30 June, we announced the sale of our lease subsidiary Athlon Car Lease to Mercedes Benz Financial Services for a sum of EUR 1.1 billion. Rabobank is developing a platform for SME customers to borrow money from the bank’s high net worth customers. This platform offers broader access to finance for entrepreneurs and a new investment opportunity for high net worth customers, while the loans are no longer carried on our balance sheet.’


The economic recovery in the Netherlands will continue in 2016 and also in 2017. Global economic growth will be slightly lower this year. The uncertainties range from the future course of Brexit and the outcome of the US presidential elections to the developments in China.

Rabobank expects the low interest rate environment to continue and that customers will continue to make additional repayments on their mortgages. This will lead to a slight decline in both the loan portfolio and savings held by retail customers in the second half of 2016. Due to the economic recovery, loan impairment charges were relatively low in the first half of 2016. Rabobank expects to see a substantial improvement in its loan portfolio in 2016, as well as lower loan impairment charges compared to 2015.

More information:

Further information on the results for the first six months of 2016 is provided in the Interim Report 2016.


Elements of this press release are considered by Rabobank as inside information relating directly or indirectly to Rabobank within the meaning of article 7 of the Market Abuse Regulation (EU Regulation 596/2014) that is made public in accordance with article 17 Market Abuse Regulation.

Press contact

Hendrik Jan Eijpe

Press Officer

+31 30 21 30869


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