Looking back
on 1999
results
Internet focus
The accelerating process of rationalization in the financial services industry will
breathe wind into the sails of the cooperative banking movement's ambition to
establish strategie integration in Europe, Rabobank Executive Board Chairman
Hans Smits predicted during his presentation of the Group's 1999 accounts.
Solid performance
Double-digit growth
Looking ahead
What's NewS Issue 2 March 2000
C \\mat we have seen UP unt'l this
W time is mainly a process of finan-
cial consolidation within individual EU
countries,' Smits said. 'This is going to
cliange and we are increasingly going to
see cross-border developments, including
link ups in the cooperative sector.' The
strategie tie hetween Rabobank and DG
Bank is meanwhile proceeding according
to plan, and the new venture is expected
to be operative at the end of this year.
Smits' presentation touched on several
issues in addition to the 1999 results.
He also highlighted the growing impor-
tance of the Internet and other electronic
distribution channels in the overall mix
of Rabobank Group business. This trend -
which is transforming the way we connect
with our clients and address their needs -
is especially pronounced in the securities
industry.
'More and more transactions - including
payments, savings, and investment - are
effected directly by clients without their
needing to actually go to the bank,' he
said. Indeed, by the end of last year, 14%
of all orders were placed with Rabobank
via the Internet, against 7% at the end of
1998. Smits also pointed to the growth in
electronic fund transfers as well as our
push into the business-to-business sector
via our investment in the Internet vTrac-
tion site (see related article on page 14).
'Rabobank was the first Dutch bank
operating on the Internet and we want
to stay ahead of the field in this area,'
Smits said. 'This type of distribution
channel will be an important
supplement to the services
provided by the bank's
domestic branch network.'
Meanwhile, Smits was able to
present a long list of accom-
plishments for 1999. Both in
our banking and insurance
activities, we turned in double-
digit levels of growth for the
third year in succession. There
was a particularly pronounced rate of
growth in lending by our banking opera-
tions, where volume was up 22% to EUR
170.5 bi 11ion. The primary factor behind
this rise was an inerease in mortgage
lending to private individuals - over the
past five years the stock of mortgage loans
has more than doubled to EUR 69 billion.
Wim van den Goorbergh briefs the press
an advance of 15% in premium income to
EUR 2.8 billion. Both life and non-life
insurance helped drive this improvement.
The result of all of this increased business
activity was a rise in profits of 9% to EUR
1.02 billion. Total income rose by 17% to
But corporate customers, buoyed by the
strong economy, became more active
borrowers as well.
The volume of business generated by
investment clients was also up. Assets
managed by the Rabobank Group were
up by 27% to EUR 113 billion, and the
total number of investment clients rose by
50,000 to 482,000. The insurance activi
ties also turned in a solid performance;
Interpolis, our insurance subsidiary, saw
EUR 6.8 billion, of which by far the
largest component was interest income
but also commissions as well; however,
operating expenses rose at the higher rate
of 18% to EUR 4.8 billion. RI was singled
out for its successful efforts to improve
efficiency. 'The strategie reorganizations
at RI already had a noticeable effect on
the unit's profitability last year,' Smits
remarked. 'We expect this trend to
continue throughout this year.'
The Rabobank Group's total assets
increased by EUR 3 1 billion to EUR 28 I
billion. The BIS ratio and tier I capital
ratio were 10.5% and 10%, respectively.
This is comfortably above supervisory
requirements. The return on reserves
was 9.8% in 1999.
'Rabobank's primary task is providing
customer value; we succeeded very well in
doing so in 1999,' Smits said. Looking
ahead, Smits said intensive efforts to
improve performance and efficiency will
continue throughout this year. Over the
next five years, 'we aim to achieve a stable
net profit growth of 10 to 12%.
For 2000, we expect a continued although
less rapid growth in services and, barring
unforeseen circumstances, we can expect
an inerease in net profit in excess of the
9% achieved in 1999.' Please check Public
Folders/ newsletters/What's News/Group
figures for more detailed info.
