Big 2 billion euros profit for Rabobank

Rabobank has made a profit of €2021 billion in the first half of 2,16. According to the cooperative bank, this is due to the positive economic growth figures of the recovery from the negative impact of the corona pandemic. The agricultural loan portfolio in the Netherlands increased by 6% to €4,5 billion in 39,9 months.

Rabobank announced this this morning during the presentations of the half-year figures. Thanks to the strong economic recovery in the first half of this year, partly thanks to the relaxation of the corona measures due to the wide availability of vaccines, the expected deterioration in credit quality did not materialize, according to Rabobank. In addition, the Food&Agri sectors have proven to be very resilient during this period, the bank reports.

Fewer negative surprises
The extension of the various support measures from the Dutch government to the business community also resulted in fewer negative surprises for the bank. As a result, Rabobank was able to record a net release of loan loss provisions of €274 million in the first half of 2021, more than €1,7 billion less than in the same period last year. 

Although the uncertainty about the future recovery has decreased, Rabobank states that it remains cautious because government support measures for companies are coming to an end and new variants of the corona virus may resurface. Despite the billion-dollar profit, the bank remains concerned about low interest rates.

“Uncertainty continues with the pandemic. Reason for the bank to remain cautious as the credit quality of our corporate loan portfolio could still be affected. The low interest rate environment also continues to put pressure on our results, as does our investments in KYC measures ( actions against money laundering and other financial crime, ed)", said Wiebe Draijer, CEO of Rabobank, in a statement.

Lending
The loan portfolio increased by 1,2% to €414,2 billion, partly due to currency movements. The Food & Agri portfolio increased by 4% to €104,8 billion. Lending to the Dutch agricultural business community grew relatively faster in the first 6 months of 2021, with an increase of 4,5% to €39,9 billion.

Dutch farmers and horticulturists borrowed slightly more from Rabobank during this period. The loan portfolio to the primary agricultural sector increased slightly by €100 million to €28 billion, a growth of 0,36%. Food and agri companies abroad have borrowed 3,6% more to a total portfolio of €64,9 billion.

Organic farming is growing fastest
According to Rabobank, the growth in outstanding loans is reflected in almost all segments of the agricultural sector. "We see a strong recovery across the entire sector," says Draijer. "Organic agriculture is growing slightly faster than average. As a bank, we have an important share in this. Three quarters of organic farmers bank with Rabobank."

Healthy business operations have been implemented throughout the agricultural sector, Draijer notes. He does see that pig farming is lagging somewhat behind. "We see less growth in this sector. There is stability or even a slight contraction." In general, the sector is prospering. However, a comment should be made: "Commodity prices have risen sharply. So there is a price recovery on the demand side, but that is partly camouflaged by purchasing. This means that less is left for farmers at the bottom."

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