Vigorous growth in activities
and financial performance
at Rabobank in 1989
Rabo
Development of the Rabobank Group in figures
activity', declares Wijffels. 'So the em
ployees in the Netherlands and abroad
will also be a central factor in our ser
vices in the coming decade. Banking is still
largely a matter of financing. The main
thing there is knowing the customers. You
get to know your customers best by meet
ing them and talking to them. You can't
leave that to automatic machines. In judg-
ing their bank, customers mainly regard the
relationship of trust as a decisive factor. In
particular, the tailor-made solutions and
personal advice they are given serve as a
touchstone in assessing that relationship.
In short, the quality of the employees is a
decisive factor in the competitive battle be-
Issue 6/April 6, 1990 band
tween banks in the Netherlands and be-
yond. Our endeavour to give maximum at-
tention to the staff development policy in
the nineties fits in with this context. Decen-
tralizing powers as far as possible and pay-
ing constant attention to education and
training are important ingredients in such a
poiicy.'
Net and gross profit up by 15% and
12%, respectively
Renewed upturn in lending operations,
which grew by 8.5%
Savings rose sharply by 6.8%
In 1989, the Rabobank Group showed vigor
ous growth in both activities and profit. Net
profit was up by 15.4 (12.4)% to f 89 8
(778) million. Gross profit grew by 11.9
(12.3)% to f 1,868 (1,670) million. This was
the result of a renewed surge in income of
7.7% and the fact that expenses increased
by only 5.5%. In line with the growth of lend
ing the addition to the provision for general
contingencies was increased to f 585 (525)
million. Taxes payable in the year under re-
view amounted to f 385 (367) million.
Consolidated total assets increased by
6.7% to f 172.4 (161.6) billion.
Lending Lending continued to expand
strongly, both domestically and abroad.
The total amount outstanding to the private
sector was up by 8.5 (7.3)% to f 115.6
(106.5) billion. The share of our foreign
business in private sector lending rose to 8
(7)%. Our international operations - includ-
ing interbank loans - currently constitute
almost 25 (24)% of Consolidated total as-
sets.
Interest-bearing funds Savings recover-
ed significantly in 1989, rising by no less
than f 4.5 (1.9) billion to 70.7 (66.2) bil
lion. Interest-bearing funds and borrowings
rose in the aggregate by 8.4 (8.2)% to
f 126.8 (117.0) billion.
Income and expenses Interest mar-
gins feil slightly, a development which
could be amply compensated by accelerat-
ed volume growth in interest-earning activ
ities. Net interest income rose accordingly
by 8.1 (4.4)% to f 4.2 (3.9) billion. Commis-
sion income was highly satisfactory and
was up by 13.5 (12.0)%, reaching f 816
(719) million. Other income amounted to
J 165 (209) million. Total income was up by
7.7 (6.7)% to f 5.2 (4.9) billion. Total ex
penses amounted to f 3.4 (3.2) billion, an
increase of 5.5 (4.0)% as against the pre-
vious year. This is the result of a moderate
rise in personnel expenses and a slightly
accelerated rise in other expenses and de-
preciation. Following two years of limited
growth, the number of people employed
rose sharply by 1,199 (554) to 34,399
(33,200), of whom 730 are working
abroad.
Prospects There is reason to believe
that the 1989 upward trend in lending,
(amounts in billions of guilders)
1989 1988
Balance sheet total 172.4 161.6
Reserves 10.2 9.3
Loans and advances to private sector 115.6 106.5
Funds entrusted and cash withdrawn 126.8 117.0
Foreign offices
Balance sheet total 20.4 16.0
Loans 8.7 5.4
Inter-banking/securities 9.6 9.6
Numbers
Member banks 882 906
Offices branches 2,192 2,242
agencies 1,048 1,035
abroad 30 24
Number of employees Netherlands 33,669 32,528
abroad 730 672
Wijffels presenting annual figures to the international press.
which is the Rabobank Group's core busi
ness, will show a slight decline in 1990. It
is expected that further increases in dis-
posable incomes will continue to boost
savings. Unless there is a sharp and rapid
fall in money market interest rates, interest
margins will be under heavier pressure
than in the year under review. Expenses are
expected to rise further, not least on ac
count of external factors. In spite of this,
some improvement in the Group's financial
performance seems feasible in 1990.
International operations Operations
abroad are being progressively expanded.
Offices in Milan, Madrid, Sao Paolo, San
Francisco and Sydney were added to Rabo-
bank's international network, which now
consists of 30 offices in 16 countries. A
strategie alliance agreement was con-
cluded with Banco Popular Espanol, which
enables our customers to make use of a
network of 1,600 offices in Spain.
