ISA
Making up the balance
Rabo
At a press conference on March 5, Rabobank chairman Herman
Wijffels made the annual announcement of the Group's results to
representatives of the national and international media. Following
a year marked by continued global economie stagnation and few
signs of recovery, the chairman was able to report some growth in
almost all the Group's activities, although the overall results were
less positive than in the preceding year.
Rabobank Nederland
Balance-sheet
core data 1992
Describing 1992 as a difficult and
somtimes hectic period in both
economie and political terms,
Wijffels went on to examine some of the
problems that had affected the worldwide
situation. 'The turbulence on the European
currency markets is just one example of the
instability that prevailed during a year which
was characterized by a further slowdown of
growth in Western Europe and Japan,' he
said. 'On the politica! stage, problems
around European unity, a new administra-
tion in the White House, agreements on
agriculture between the US and the EC, and
continuing disintegration and instability of
the former Eastern Bloc and Soviet Union all
made their mark on 1992.' The international
banking sector also faced difficulties. 'in
Japan,' Wijffels said, 'the bubble finally
burst, leading to a sharp fall in real-estate
and equity prices. The US banking sector
again had a troubled year. Although there
was some recovery in American industry,
the funadmental problems surrounding the
savings bank sector resulted in a struc-
turally weak performance there. Nor were
the European banks unaffected by prevalent
macro-economic instability. to an increasing
extent, banks and other financial insti-
tutions got into difficulties through dis-
appointing developments in sectors which
had previously shown (artificially) strong
growth.'
Inversion and competition Touching
on European wrangling around the Maas
tricht Treaty, which was instrumental in the
turbulence in the money markets last Sep
tember, Wijffels saw one positive effect of
the EMS crisis. 'Short-term interest rates
were cut slightly in the Netherland and Ger-
many among others,' he said, 'which contri-
buted to a reduction in the inversion of the
interest-rate structure. However, continuing
inversion combined with stiff competition in
attracting savings' inflow resulted in rising
costs of funding for the whole European
banking sector.' This process is ongoing at
a time when this sector in most of the
industrialized nations has become a mature
industry, and Wijffels believes that rising
costs of funding wiii mean greater emphasis
has to be piaced on the reduction, or at
least stricter control of costs in the whole
sector.
Structural changes According to the
chairman, the European banking sector will
face major structural changes in the coming
years as the transition to a mature industry
is completed. The bank has responded to
these changes by taking measures which
Issue 16/March 22,1993 0 3011
shouid accommodate future scenarios. 'In
this sense,' said Wijffels, '1992 was an im
portant year for our organization. We have
further reinforced our position as largest
Dutch bank on the domestic market. Be-
sides maintaining our major market share in
the savings and mortgage markets, and in
financing medium and small companies, we
have also seen a considerable increase in
corporate sector market share.'
Global outlook On an international
level, the bank has grown through new stra
tegie alliances in three European countries
and the opening of new Rabobank offices
in Budapest, Buenos Aires and Guernsey.
'Through these strategie alliances, we are
(in NLG billions)
1992 1991
Balance sheet total
232.7
217.1
Reserves
14
13
Lending retail sector
147.3
137.7
Entrusted funds
129.3
126
Borrowed funds
33.6
24.1
(in NLG millions)
Assets
7.059
6.568
Liabilities
4.754
4.386
Gross result
2.305
2.182
Taxes
560
496
Third-party interests
5
4
Net profit
1.020
1.012
(Numbers)
Member banks
744
789
offices
2,056
2,101
Foreign offices
50
46
Employees
39,510
39,050
now represented in six EC member states,'
Wijffels said, 'and our global strategy has
been taken a step further through new of
fice expansion.' The bank's foreign offices
made their own contribution to the balance
sheet, especially in terms of loans to major
national and international corporate clients.
On the international food and agribusiness
market, the bank's activities also expanded,
particularly in the project finance field.
Although Group performance in 1992
was not as spectacular as in some previous
years, chairman Wijffels called the results
'satisfactory in difficult circumstances'.
Overall, growth in lending reached 7 per
cent, commission-generated income was up
by 10 percent, gross profit rose by 6 percent
and the net profit figure was up 1 percent on
1991 totals. Economie prospects for 1993
look unfavourable, but the bank believes
that its resolute moderation policy will en-
sure rises in costs are reduced. Barring un-
foreseen circumstances, a further improve-
ment of Rabobank's financial performance
appears possible.
Rabobank chairman Herman Wijffels announces 1992 results to the media at a press
conference held in Utrecht. He told journalists that the reporting year had been
'satisfactory in difficult circumstances'.
