Rabobank Group, annual results 1987 RaDo band For the Rabobank Group, 1987 was characterized by a substantial increase in profit before provision and taxes, which had been de- creasing in the previous two years. While the rise in income by near- ly 4% was slightly higher than in 1986, the growth in expenses was constrained at 2% as against 6% a year earlier. Profit before provi sion and taxes consequently went up by 7% (1986: down by 2%) to f 1,487 (1986: f 1,390) million. After deducting a transfer to the provision for general contingencies of f 477 million (equal to last year's) on the one hand, and substantially (40%) higher taxes on the other, the net profit remaining was up by 1% at f 692 (1986: f 685) million. Consolidated total assets exceeded those of a year earlier by more than 4% and stand at f 145.5 billion (1986: f 139.7 billion). Issue I/April 7, 1988 Profit before provision and taxes up by 7% to f 1,487 million Net profit higher by 1% to reach f 692 million Renewed strong growth of 6% in lending Lending As was the case in 1986, the year under review saw vigorous growth in lending operations. Under the condition of price stability in the Dutch economy, total private sector loans out- standing rose by 6% (1986: 8%) to f 99.1 billion. Contributions came from rises in the agricultural sector (3%}, trade, industry and services sectors 6% and private individ uals 8%. Measured in terms of Dutch guil- ders, international lending was naturally under pressure from the depreciation of the US dollar. However, despite this ad- verse influence, growth was evident. Only a small and steadily declining portion of the foreign loan portfolio was invested - most- ly in the interbank sphere - in the so-called debtor countries. By far the largest part concerned Europe and North America. The financing of foreign public authorities is de clining in favour of international concerns and goods traffic. Fierce international com- petition notwithstanding, branches abroad were able to achieve significant growth in lending operations. The Rabobank's opera tions abroad now account for 21% of its to tal assets. Attracting funds The rise in funds entrusted was con- siderably lower than expected. This was at- tributable to a disappointing performance in the area of savings which feit the ad- verse impact of tax regulations. The growth in funds entrusted was insuffici├źnt to cover the needs of lending operations, which meant that substantial borrowings had to be contracted on the domestic and international money and capital markets. Aggregate funds entrusted and borrowed rose in 1987 by 4.6% to f 108.2 billion (1986: 5.3% to f 103.4 billion). Income and expenses In the past year, too, interest margins were under pressure. Thanks to larger volumes, net interest nevertheless in- creased by nearly 4% to f 3,763 million (1986: f 3,630 million). Commission went up by more than 8% to f 635 million (1986: f 586 million). The reason was a further ex- pansion in activities on all major fronts (such as insurances, payment transactions and securities). Other income was affected by the stockmarket crash in the fall. It amounted to f 130 million (1986: f 154 mil lion). Total income reached f 4,528 million (1986: f4,370 million). Total expenses came to f 3,041 million (1986: f 2,980 million). The rise in costs could be constrained by cost control, mod erate personnel growth and a change in the calculation of pension premiums. The number of employees of the Rabobank Group went up by 679 (1986: 1,425) to 32,646 (1986: 31,967). Of these, 620 (1986: 600) are employed at the Group's 19 foreign offices. Particularly the increase in loans, the higher commissions and the The press conference. Herman Wijffels, chair- man of the Executive Board (second from the left) and Henry KI aren beek, vice chalrman (cen- tre) together with thelr advisers. limited growth in expenses were cause tor satisfaction. Prospects The expectations for 1988 are that lending operations, the core business of the cooperative Rabobank Group, will not lag far behind the high 1987 level. Fewer adverse external - especially tax - condi- tions are foreseen in attracting savings in the current year. Barring unforeseen developments, some increase on the 1987 results ap- pears feasible for 1988. Key figures 1) Amounts (in millions of guilders) 1987 1986 4.528 3.041 1.487 Total assets 145.535 Reserves 2) 8.383 Loans and advances to the private sector 99.081 Funds entrusted 108.152 Income Expenses Profit before provision and taxes Addition to provision for general contingencies Taxes Minority interest Net profit Numbers of Member banks Members (in 000) Offices - branches - agencies Employees Savings accounts (in 000) Payment accounts (in 000) Current accounts (in 000) Loans (in 000) 139.689 7.723 93.40 103.353 4.370 2.980 1.390 477 316 2 692 922 805 2.293 1.071 32.646 8.745 3.670 500 1.135 477 226 2 685 930 820 2.345 1.114 31.967 9.020 3.550 500 1.070 1) Owing to some changes in definitions, some amounts included will vary from informa- tion disclosed in earlier annual reports. 2) After appropriation of net profit.

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blad 'Raboband International' (EN) | 1988 | | pagina 3