News Half-year figures
Rabobank profit falls in first half of 2019
Rabobank posted a net profit of €2019 billion in the first half of 1,2. This represents a drop of 29% compared to the first half of 2018. According to the bank, credit losses in that year were at an extremely low level.
The current level of credit losses is again approaching the long-term average. In addition, the income in the first half of 2019 was affected by the loss of the results of a number of non-strategic components. According to Rabobank, low interest rates also had some effect on the result. "This has been going on for a number of years and is much more persistent than expected," said Bas Brouwers, Rabobank's VFO.
Wiebe Draijer, the bank's chairman of the board, is satisfied. This in view of the challenging environment. "Global developments have put further pressure on stability and growth prospects. These include further escalation of the trade war between the United States and China, the increased likelihood of a hard Brexit and persistently low interest rates. Nevertheless, we were able to again making progress on our strategy and mission."
Food and agri credit
Rabobank's lending to food and agri companies rose by more than 2% in the first half of the year to €105,5 billion. That is 25% of Rabobank Group's total lending (€416,2 billion). Of all loans to the food and agri sector, €38 billion was outstanding with companies in the Netherlands. At the end of 2018, that was only a fraction higher. However, Rabobank's lending to agricultural entrepreneurs has been increasing for years gradually decreases.
The share of food & agri in Rabobank's lease portfolio rose to €13,5 billion. The sector therefore accounts for a share of 39% of the total lease portfolio. With a market share of 85%, the bank remains the market leader in the Dutch food and agri sector.
Cost reduction
The €1,2 billion profit in the first 6 months of 2019 is partly due to a further cost reduction. Compared to the same period last year, costs decreased by 5%. Thanks to the restructuring measures, the cost/income ratio also improved from 65,9% to 64,4%. Rabobank's capital position remains strong. With a common equity tier 1 (CET 1) ratio of 15,8%, the bank remains above the set target (minimum 14%).
Rabobank wants to further optimize its balance sheet in the coming years by focusing on its core activities. The divestment of the non-agri activities of Rabobank National Association (RNA) in North America is an example of this. However, the positive effect of this will only become apparent in the third quarter of 2019. By bringing these activities into Rabo AgriFinance, Rabobank has become the fourth largest financier of agribusiness in North America.
Rabobank also sold the 'ACC loan portfolio' in Ireland and the retail activities in Indonesia are being further reduced. By focusing on core activities, which are in line with the Food & Agri strategy, Rabobank believes that there is room for growth.
Encouraging customers to become more sustainable
Draijer about the coming six months: "Our efforts are focused on the further implementation of the cooperative services and connections with our members. We want to be a meaningful cooperative and thereby make an important contribution to the living environment. This is reflected in our services with which we encourage customers to become more sustainable."
To make the agricultural sector and food chain more sustainable, the bank previously announced the Green Revolution at. Also in May the first impact loan provided.
Jeanette Pennings
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