Highlights
Rabobank Group booked a number of impressive
successes in the year under review. Major progress
was made in the further definition of the Group's
strategy. The services and products of Group
entities received several awards and were given
high ratings in a number of surveys. However,
it was not a success story in all cases and there is
certainly room for improvement.
13 Rabobank Group Annual Report 2004
Highlights
The Group reinforced its reserves by the equivalent of EUR 2 billion in
Tier I capital. It did this by means of a successful issue of Trust Preferred
Securities, which was made in three different currencies and was several
times oversubscribed. Australian investors voted the emission the
'Hybrid deal of the year'and Euroweek, the magazine for the financial
markets, awarded it the title of 'Best Financial Bond' in 2004.
Early in the year, a collaboration agreement was signed with Eureko/
Achmea. The agreement was put into practice during the year in the
form of a 5% interest in Eureko Group's capital and the start of
intensive collaboration in healthcare insurance between Interpolis and
Zilveren Kruis.
In the final quarter of 2004, Rabobank Group acquired a 35% interest
in the Polish BGZ bank and announced its plan to start a strategic
collaboration with the Turkish Sekerbank. Unfortunately, the planned
acquisition of Farm Credit Services of America (FCSA) announced in
mid-2004 did not go ahead due to political pressure on FCSA not to
leave the American Farm Credit System.
The upsizing progressed successfully. This process was started in 2004
to create, through the merger of local banks, a smaller number of more
powerful banks without affecting the aim to be and remain the 'near-you'
bank. In the year under review, the number of local Rabobanks declined
by 40, to 288. The upsizing towards greater expertise and professionalism
is necessary, especially to be able to provide adequate services to the
top segment of the private individuals and corporate markets. As an
extension of this, Operation Service was initiated at Rabobank
Nederland in order to shape its support function to more closely meet
the service needs of the professionalised banks. This reorganisation is
expected to generate cost savings of EUR 200 million, partly by a staff
reduction of 1,200 FTEs. Besides better service from Rabobank Nederland,
Operation Service will result in lower costs for the local banks.
Out of the 1,200 job positions to be cut, Rabobank Nederland had already
achieved a reduction of 400 at the end of 2004. The local banks failed to
keep up the rate of local staff reductions of the past few years under a
programme of tight cost control. In 2004, the number of staff reductions
was just 934 FTEs, compared with 1,921 in 2003 and 1,643 in 2002.
In 2004, the savings market grew by 8% in the Netherlands. Rabobank
Group succeeded in increasing its share of this growing market by
1 percentage point, to 39%. This is an excellent performance, considering
the ever growing competition in the savings market and Rabobank's
declining market share in recent years. Rabobank Group did not achieve
its goal of at least maintaining its share of the equally competitive
mortgage market at the level of 2003. The bank's total market share
declined by 1 percentage point to 25%.
Rabobank Group pursues a (global) leading position in sustainable
entrepreneurship. One of the criteria for this is high market shares in
sustainable financial products. An example of such products is green
financing, a field where Rabobank, with a 50% share, is the clear market
leader in the Netherlands. The Rabo Groen Bank, which provides these
loans, achieved a milestone just before the end of 2004, when its balance
sheet total passed the EUR 2 billion mark. Corporate social responsibility
also means making one's own operations more sustainable.
Accordingly, a framework contract was concluded in 2004, under which
more than 1,300 locations within Rabobank Group in the Netherlands
will be fully powered by green energy as from 2005. The target 10%
reduction in paper use within Rabobank Group was not met in 2004.
In the year under review, the reduction achieved was 7%.
In 2004, the Rabobank site www.rabobank.nl was awarded the title of
best financial website of the year and Alex was voted the best service
provider in online investing. In a survey of the business finance sector,
conducted by the new business magazine Incompany, Rabobank came
out as the 'absolute number 1 among the large banks'.
The Management Team magazine interviewed top managers about
the quality of financial service provision. According to this magazine,
Rabobank Group emerged as 'the glorious winner'. Among the ten
financial businesses with the highest score (three stars), there were no
fewer than five Group subsidiaries.
