Customer focus pays
off in centenary
group performance
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Announcing strong growth for the whole Rabobank Group in 1998, Herman
Wijffels and his successor Hans Smits were both at pains to point out the
underlying strategy that has produced them, year-on-year, for more than a
decade. At a press conference to announce the gratifying centenary
numbers, both senior executives stressed the creation of customer value as
major contributory factor in the ongoing success story of this undisputed
Allfinanz provider.
Under pressure
Attractive services
Allfinanz offering
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Subsidiary performance
Dnhnhnnls in fimnroc
IO What sNewS Issue 3- March 1999
Smits and Wijffels on the stand
Aglance through the numbers in 'Ten
years of Rabobank in figures' tells its
own story. Balance sheet total has grown
consistently, initially at around 8 to 15
percent. More recently, this growth has
shot up to almost 30 percent. In the
reporting year, the Group not only
surpassed the NLG 500 billion (EUR
223.5 billion) watershed, butcame in at
over NLG 550 billion (EUR 250 billion).
In the past ten years, net profits have also
more than doubled as we pursued our
gradual shift front a straight lending and
savings institutions to the intermediary
and services brokerage house that will
ensure Rabobank's position in the future.
All in all, the centenary year was a
satisfactory one. The turbulence and
crises on markets around the world
made their mark on the overall results.
But stringent risk management and the
bank's almost proverbial cautious
conservativism ensured the effects of the
Vodka and Ciapiranha crises largely
passed us by. While some competitors
feit obliged to issue profit warnings in
the autumn of 1998, the Rabobank
Group saw results come under pressure,
but was still able to bring in net profits
up 8 percent.
Growth was achieved in all Group
activities. Insurance premium turnover,
which is an indication of performance in
this business, was up 15 percent, we were
able to raise the assets under management
by 51 percent, and the volume of
securities and options transactions was up
45 percent. Add to this 17 percent growth
in both lending and funds entrusted, and
the increase in the services provided to
customers confirms the Group's focus on
customers is paying off.
Creating customer value, it seems, is more
than just a slogan, and customers
themselves are responding to the Allfinanz
range now available through the Group's
subsidiaries. Ar the same time, we have
also been pushing for a more mature and
sophisticated business offering, which will
generate the fee income that is crucial to
maintaining continuity in the future.
Again, we appear to be succeeding.
Commission income was up 20 percent in
1998, reflecting increasing customer
activity, especially in investment products.
Since 1994, the number of securities and
options orders handled by the Rabobank
Group has increased six-fold to almost
2.7 million last year.
Rabobank Internationale (RI) figures
were not presented separately at the
Group's presentation. What's News will
come back on the specific RI results in
our next issue. The overall report did
attribute much of the substantial growth
in the balance sheet total to RI's
increased activity on global financial
markets. Looking to the performance of
other subsidiaries, insurer Interpolis
generated a 10 (10) percent increase in
net results. De Lage Landen, which
offers vendor finance, leasing and trade
finance, saw net results rise by 28 (30)
percent. Robeco has had a very good
year with increases of total assets under
management of almost 60 percent, due
in part to acquisitions of the real estate
asset manager Rfeef and asset manager
Weiss, Peck Greer. Gilde Investment
Management, which provides venture
capital, also grew strongly. Nedship Bank
returned net results which feil short of
previous year's numbers at NLG 41 (48)
million (EUR 18.6 million).
(in NLG millions)
1998
1997
1996
1995
1994
Balance sheet figures
Totalassets
550,307
428,010
335,114
293,516
269,053
Private sector lending
304,651
259,089
219,748
189,772
176,052
Funds entrusted
253,042
216,641
175,974
163,380
150,804
Reserves
22,877
21,393
19,373
17,493
16,228
BIS-ratio (core capital: tier-l)
10.3
10.4
10.6
9.5
9.4
BIS-ratio (total capital)
11.1
11.3
12.0
12.0
Profit and loss account figures
Total income
12,853
11,636
9,642
8,608
8,130
Interest
8,332
7,806
7,078
6,389
6,236
Commission and other income
4,521
3,830
2,564
2,219
1,894
Operating expenses
9,034
8,220
6,437
5,692
5,350
Value adjustments to receivables
750
560
840
840
840
Operating result before taxation
3,069
2,856
2,365
2,076
1,940
Taxation on operating result
884
871
706
636
651
Third-party interests
123
78
27
13
5
Net profit
2,062
1,907
1,632
1,427
1,284
Income/operating expenses ratio
1.42
1.42
1.50
1.51
1.52
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