2016: Year of transition

Net profit 2,024 million

Rabobank’s transition got off to a good start in 2016. The bank’s strategy focuses on excellent customer service, improvement in the financial results, and a flexible and stronger balance sheet. Progress was made in all these areas. Customer satisfaction rose in all segments thanks to investments in digitalisation, organisational changes, and improvements in service provision. In 2016, as a cooperative bank, Rabobank reinforced its leading position in the Netherlands and successfully expanded its role in food & agri worldwide. The capital base was further strengthened, in line with the objectives. Thanks to a good operating result, the net profit amounted to EUR 2,024 million (-9%). The result came under substantial downward pressure from non-recurring items such as restructuring costs, an extra provision for compensating commercial customers with an interest rate derivatives contract, and an impairment on the stake in Achmea. The underlying operating profit before tax was EUR 4,090 million, (+14%). This is largely attributable to lower loan impairment charges and cost savings, while income levels were stable despite a low interest rate environment

  • The net profit amounted to EUR 2,024 million. All Rabobank businesses in the Dutch and international markets showed improvement in underlying results. The underlying operating profit before tax was EUR 4,090 million, 14% up on 2015 (EUR 3,592 million).
  • The decline in net interest income was limited despite reduction of the balance sheet and the low interest rate environment. Partly owing to the recovery of the Dutch economy, loan impairment charges fell sharply to EUR 310 million or 7 basis points, well below the long-year average.
  • The retail and commercial loan portfolios amounted to EUR 424 billion (EUR 425 billion in 2015). Amounts due to customers increased by EUR 10 billion to EUR 348 billion. Private savings rose by EUR 2 billion to EUR 142 billion despite additional repayments on residential mortgages.
  • Staff expenses fell by 6%, mainly due to a drop of 6,446 FTEs, bringing the total to 45,567 FTEs (internal and external employees). The intended reduction in staffing is proceeding quicker than planned. The cost/income ratio exclusive regulatory levies rose to 67.1%, partly due to non-recurring factors.
  • Rabobank aims to achieve a common equity tier 1 ratio of at least 14% in 2020 and a total capital ratio of at least 25%. Accordingly, Rabobank further reinforced its strong capital position in 2016. Solvency—measured as fully loaded common equity tier 1 ratio—rose by 1.5 percentage points to 13.5%. The current (transitional) common equity tier 1 ratio is 14.0% (31-12-2015: 13.5%). The sale of Athlon had a beneficial effect of 0.4 percentage points. The (transitional) total capital ratio improved from 23.2% to 25.0%.
  • In January 2017, Rabobank issued new Rabobank Certificates for a nominal amount of EUR 1.5 billion to retail and institutional investors. This raised the pro-forma common equity tier 1 ratio by a further 0.8 percentage point. Rabobank is accelerating the realisation of its capital targets in anticipation of an expected increase in capital requirements.

Chairman of the Executive Board Wiebe Draijer:

“2016 was a year of transition for Rabobank. We’re making progress towards achieving our strategic objectives but we’re not there yet. The bank’s objectives are to achieve excellent customer service, improvement in the financial results, and a flexible and stronger balance sheet. In 2016, we achieved what we set out to do in all three areas. I am proud that, thanks to the enormous efforts of our employees, all businesses have generated improved results, both in the Netherlands and abroad, and that surveys among our 8.7 million customers show that customer satisfaction has risen. Customers in our Retail, Private banking, Commercial and Wholesale banking businesses in the Netherlands, and in the food & agri domain worldwide, are increasingly appreciative of our service provision. Based on the developments in 2016, we look to the future with confidence.”

“On 1 January 2016, our new cooperative structure came into effect, making us more customer-oriented and more effective. In the new governance model, the local banks have a maximum focus on serving our customers in the Netherlands. Where possible, we perform support functions centrally. We put intensive effort into this transition in 2016.”

“The improvements at the bank are proceeding at high speed and are continuing in 2017. This asks a great deal from our employees. Many of them are seeing their jobs disappear as a consequence of digitalisation of our services, and the implementation of much-needed improvements particularly in the back-office and support functions. Certainly in view of the heavy demands they face, we are extremely grateful to our employees for their efforts in what was a very intensive year.”

“In 2016 we took several new initiatives to improve our customer service and to innovate. A good example is the 'mortgage within a week’ service. Since 1 July 2016, we have offered interest-rate averaging to our mortgage customers. Our market share in the mortgage sector rose from 20% to 21%. Commercial customers whose funding needs are less than EUR 1 million have benefited from our service, which offers them clarity on their funding request within one day. We are developing a model for peer-to-peer lending through Rabo&Co, which matches private banking customers with SME customers.”

“For our Wholesale clients, we were able to play a leading role in many major food & agri and other transactions in the Netherlands and worldwide. We were recently named the Best Commodity Bank by Global Finance Magazine. 2016 was also an extremely successful year for the international Rural business, with extremely high customer satisfaction scores and growth in the loan portfolio. One of the highlights was the Farm to Fork event on innovation in food & agri. The event was a showcase for how the bank brings clients together and shares knowledge.”

“In sectors experiencing structural problems, such as glass horticulture, pig farming and the dairy industry, Rabobank has taken the lead in the search for solutions. We are taking responsibility, in partnership with the sector.”

“Rabobank seeks to reflect the 17 Sustainable Development Goals of the United Nations in its activities. From a broad sustainability perspective, the SDGs provide direction to the priorities for a sustainable society. In this respect, our Banking for Food activities are leading in the world, but our activities at local banks in the Netherlands and through Rabobank Foundation also make a contribution. We make both people and resources available to shape these activities. Our cooperative dividend, which is invested in projects determined by the Member Councils of the local banks, amounted to EUR 49 million.”

“We received many accolades for our efforts on sustainability in 2016. In the Dutch Transparency Benchmark, we earned second place in the financial institutions category. RobecoSAM puts Rabobank at number 7 in its worldwide ranking of over 100 international banks and gave us the maximum score for climate contribution. In 2016, Sustainalytics analysed 396 banks worldwide, ranking Rabobank number 2 for its positive impact on the environment. Our joint venture with FMO and Norfund underlines our deep commitment to sustainable growth and development in Africa and its local financial sector. Together we invest in African banks to stimulate growth. Also worthy of mention is our first green bond, which we issued in 2016 with a total value of EUR 500 million. We will invest the returns in sustainable energy projects, such as wind farms and solar panels. Our vision on Banking for the Netherlands and Banking for Food drive the agenda for our contribution to the SDGs.”

CFO Bas Brouwers:

“2016 was a year of contrast for Rabobank in financial terms. We achieved good operational results, saw a sharp fall in the loan impairment charges as the economy picked up, and succeeded in bringing down costs. The result was tempered by, among other things, non-recurring items such as restructuring costs, extra provisions for compensating commercial customers with an interest rate derivatives contract, and an impairment on the stake in Achmea. We achieved a good underlying operating profit before tax of EUR 4,090 million, 14% up on 2015.”

“A strong capital base is one of the main pillars of Rabobank’s strategy. Our objective is to achieve a common equity tier 1 ratio of at least 14% in 2020 and a total capital ratio of at least 25%. In 2016, we once again reinforced our strong capital position, partly through the sale of Athlon. The recent issue of new Rabobank Certificates with a nominal amount of EUR 1.5 billion also impacts the fully loaded common equity tier 1 ratio, thereby accelerating the realisation of our target of at least 14% in anticipation of a possible increase in capital requirements.”

“In 2016, we took steps to reduce the balance sheet, including the sale of mortgage portfolios to investors and a more intense focus on core activities. We intend to take more of the loan portfolio off-balance and will continue to reduce the balance sheet in 2017.”


In 2017, economic growth will pick up, but at the same time, there is economic and political uncertainty around the world. In Europe, the consequences of Brexit and the outcome of elections in the Netherlands, Germany and France will be influential factors.

In 2017, Rabobank will continue to invest in customer service provision. We will give priority to our digital activities and innovation, in combination with our identity as a bank firmly anchored in local communities and always nearby. Outside the Netherlands, we will further capitalise on the growth potential in Rural Banking and through our continued focus on F&A, we will reinforce our leading position in the F&A chain for our Wholesale clients. Overall, the positive developments Rabobank experienced in 2016 give us confidence for 2017 and beyond.

For more information contact:

Rabobank Press Office +31 (0)30 2162758 or pressoffice@rabobank.nl

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.



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