News Half-year figures
Rabobank sees profit collapsing like pudding
Rabobank's net profit decreased to €2020 million in the first half of 227. Last year at this time, the counter was still at € 1,2 billion. The corona crisis has left deep marks, as a result of which the bank will not make cash payments on the member certificates this entire year.
The impact of the corona pandemic is enormous, according to chairman Wiebe Draijer. "Conditions have never changed so quickly as in the past six months. Thanks to the consistent execution of our strategy, we were in good shape when the virus broke out. Our strong buffers ensure a good starting position to bridge this difficult period and to support both our customers and our customers. to support the economy. In total, we have been able to provide some 80.000 customers with temporary financial relief."
Not only the corona crisis has an influence on Rabobank's result. "The persistently low interest rates also continue to affect us. There is no improvement for the time being," said CFO Bas Brouwers this morning (Thursday 13 August) at the presentation of the half-year figures. These figures show that the effects of the corona crisis are mainly visible in the loan provisions that Rabobank has made. These have increased to no less than €1.442 million (first half of 2019: €440 million).
Food and agri fairly stable
The credit that Rabobank has with food and agri companies increased by 6% in the first 2020 months of 1 to €108,3 billion. That is 26% of Rabobank Group's total loan portfolio, which remained fairly stable at €415,4 billion. Of all loans to the food and agri sector, €38,4 billion was outstanding with companies in the Netherlands, also a slight increase. The share of food & agri in Rabobank's lease portfolio remained stable at €14,5 billion. The sector therefore accounts for 41% of the total lease portfolio.
"The food and agri sector seems to be hit a little less hard by the corona crisis," says Brouwers, who notes that people still need food. "The outlook for the floriculture sector, which was hit hard at the start of the corona crisis, also looks slightly better. The total decline in turnover in this sector is approximately 15%."
ascending noose pot
The decline in Rabobank's net profit in the first half of 2020 to €227 million is mainly due to the income side. Revenues lagged due to reduced economic activity combined with negative asset revaluations due to the corona crisis. There has also been a sharp increase in the so-called strop pot, a provision that the company must make for losses in the near future. Rabobank has set aside €1,4 billion for this, which is €1 billion more than last year. For the whole of 2020, this amount is expected to amount to €2 billion. "With this we prepare ourselves for what is to come," says Draijer.
Uncertainty will predominate at Rabobank in the coming six months. Draijer: "The duration, the further course of the pandemic and the measures to contain the virus are unclear. It is therefore impossible to predict what the actual impact will be. We will continue to make efforts to guide our customers through the crisis ." But, says Draijer realistically: "The generous measures of the government and our own initiatives will not be sufficient for everyone." This will influence the results for the whole of 2020.
Developments in payment of Certificates
The foremen of Rabobank paid special attention to the member certificates, which are also owned by many (former) agricultural entrepreneurs. At the beginning of April, the bank announced to stop paying interest on Rabobank Certificates. In doing so, Rabobank says it is following the recommendation of the European Central Bank (ECB) not to pay out a dividend. The period for this has recently been extended from October 1, 2020 to January 1, 2021.
"We also stick to this second recommendation," says Draijer. "This means that we will not make any cash payments on Rabobank Certificates throughout 2020." However, the recent ECB recommendation does not rule out so-called stock dividends. This would mean that dividends could be paid out in the form of shares, in this case Rabobank Certificates. "We will investigate this carefully, while maintaining our discretion." Draijer emphasizes: "We continue to value our long-term relationship with private and institutional investors."
Jeanette Pennings
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