Bankrupt soy company hurts Dutch banks

Rabobank, ABN Amro and ING are threatening to go bankrupt now that an Argentine soy company, in which the Dutch financiers have a stake of millions, has gone bankrupt. In addition, banks are linked to deforestation in South America. 

Due to the bankruptcy of the Argentine soy company Vincentin, it looks like the Dutch banks will jointly lose $245 million, Het Financieele Dagblad reported on the basis of research. Vincentin unexpectedly went bankrupt in December last year.

There is an edge to bankruptcy. This is because the company in question is affiliated with fraudulent acts, the banks suspect. Vincentin himself denied this. Rabobank indicates, together with other banks, that it has filed a complaint against the Argentine soy company.

Taxpayer also duped 
Vincentin is a large Argentinian agribusiness that managed to secure $500 million in loans last year, including $245 million from Dutch banks. The bulk ($150 million) of this comes from the Financing Company for Developing Countries (FMO).

The Dutch state has a majority interest of 51% in this, while the three major banks have a joint interest of 3%. The taxpayer is thus also indirectly duped. ING and Rabobank risk losing $34,7 million and $72 million respectively in direct loans to the bankrupt soy producer. 

Banks to blame for deforestation?
Apart from the bankruptcy, Dutch banks, including Rabobank and ING, are held responsible by Fair Money Guide for deforestation in the Amazon region and the Brazilian Cerrado savanna. This is because the banks provide money to (South American) companies that would be involved in this, because of the production of soy and beef.

Fair Money Guide, an initiative of various NGOs that assess banks for sustainability, claims that Rabobank and ING have both lent around €4 billion to companies and customers engaged in such practices. Rabobank is known to have interests in Cargill and meat giant JBS.

Rabobank says that the conclusion of Fair Money is incorrect and that they do not tolerate deforestation for agricultural production. ING also says that loans to agricultural companies cannot be linked one-on-one to deforestation.  

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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