2 Rabobank Group Annual Report 2003 Chairman's foreword 2003 can best be described as a year full of contrasts. First, there was the invasion in Iraq.The Pax Americana envisaged in its wake had, and is still having, difficulty in getting off the ground however. Recession reigned in large parts of Europe. At the same time, the economies in the United States and China started to pick up again. After three years, we enjoyed a return to relatively good performance on the interna tional stock exchanges.The dollar fell sharply however, which in turn hit the highly dollar sensitive Euronext Amsterdam Stock Exchange, with the AEX index showing only a modest increase. Meanwhile the temperature of the Dutch economy fell to below zero, with business confidence declining and the number of bankruptcies reaching a record high. Amidst all the negative sentiments in 2003, Rabobank Group performed well.The Group's net profit increased by 12%, which means that we achieved our long-term target. Despite the unfavourable Dutch economy, our retail banking business reported an excellent growth performance in terms of both volume and profit.The wholesale banking business likewise turned in a handsome improvement in its results. After a difficult year in 2002, our insurance business made a strong recovery in terms of profit, which more than doubled, and in terms of higher premium income. Results on asset management and investment activities increased twofold.The lease activities continued their success story of the past years, despite the unfavourable effect of the dollar's depreciation on our international activities. The good results for 2003 benefited from the various efficiency programmes, such as Fast, that have been implemented over the past years.These involve a combined effort aimed at increased selling power (i.e. income) and stringent cost management, which should result in doing more with less people. At the member banks, this resulted in a reduction of almost 2,000 job positions in the year under review, compared with more than 1,600 in 2002. If this reduction continues at a similar pace in 2004 - and that is what we plan - the effect will be a large-scale efficiency contribution over a three-year period and one that is implemented in a way that is advantageous to Rabobank Group, i.e., heeding the interests of individual employees and in proper consultation with employee representative bodies and trade unions. Market leadership across the financial services sector in the Netherlands, that is our ambition for the long term. We already lead the field in many areas and our goal is to be the leader soon in those areas where we are not yet in first place. High on the agenda for 2004 is the expan sion of our market share in the large cities, including the market posi tion among ethnic minorities. We also wish to strengthen our position in real estate and insurance.In view of our aims in insurance, we perfor med a study last year, together with our partners at Eureko/Achmea insurance company, into possible forms of collaboration. In mid-January 2004 the first important agreement in this connection was signed. I am confident that the joint effort needed to expand our collaborative venture will be successful. Satisfaction does not come from merely being the biggest, however. Being perceived as the market leader by those around us is at least as important, particularly in areas where we still have a long way to go. A pleasing success in this connection was being named 'Corporate Bank of the Year' by the Dutch financial newspaper Het Financieele Dagblad and the Vallstein agency in 2003.This title was awarded on the basis of a joint survey among Dutch corporate businesses of their appreciation of banking services. We are also a highly valued employer. In December 2003, Intermediair magazine's annual survey ranked Rabobank as the second best employer in the Netherlands.

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Annual Reports Rabobank | 2003 | | pagina 6