Domestic retail banking
Strategy and targets
Core activities Local Rabobanks and Obvion
2005 was not an easy year for the domestic
retail banking operations. The dominant market
positions in the small and medium-sized enter
prises sector, the agricultural sector, savings and
mortgages were maintained. Market share in
mortgages, particularly, declined slightly due to
fierce competition, which also led to slightly lower
margins. Net profit was 35% higher, at EUR 1,024
million, due in part to non-recurring results.
Market and clients
More client interface points
Private clients
27 Rabobank Group Annual Report 2005
The tentative economic recovery which started in the Netherlands in 2004
did not regain its momentum until the second half of 2005. The growth
in world economy levelled off slightly, so that Dutch exports declined.
Purchasing power likewise declined and consumer confidence remained
low. As a result, the Dutch economy showed only marginal growth.
Financial services were characterised by fierce competition in the mort
gages market in 2005, which put margins under further pressure. Many
clients took advantage of the historically low interest rates, thereby
raising activities in the mortgages market to an unprecedented level.
In 2005, a record amount of EUR 113 billion in new mortgages and
mortgage switches was achieved in the Netherlands, a rise of 24%
compared with 2004.
Total lending by the domestic retail banking operations was 9% higher,
at EUR 200.7 (183.6) billion, with private individuals accounting for 70%,
the trade, industry and services sector for 19% and the agricultural sector
for 11%. Also in 2005, major steps were made in insurance in collaboration
with Eureko, resulting in a broader product range for the client.
The 'bank near-you' - that is what the local Rabobanks wish to be and to
remain for their clients. The number of physical client interface points
rose by 2% in 2005 to 3,031. Due to mergers, the number of local
Rabobanks fell from 288 to 248. The number of branches declined by 50
to 1,249. The reduction was however more than offset by an increase in
the number of other interface points, many of which are within
healthcare institutions and homes for the elderly.
The new branch policy, which was presented in 2004, was implemented
further in the year under review. The branches operate under a range of
different concepts, so that clients can obtain specialist or more standard
advice, depending on their needs.
In August 2005, Rabobank was the first bank to introduce mobile ATMs
for use at fairs, concerts, sports events and the like. The increase in the
use of direct channels of the past years continued in 2005. With approxi
mately 2.2 million unique visitors each month, the Rabobank website is
one of Europe's busiest bank sites. Rabobank stimulates the use of the
virtual channels, for example by organising training courses for the elderly.
Half of all the households in the Netherlands use the banking services
of the local Rabobanks. These banks offer a comprehensive package of
financial services to private clients that is tailored to their needs. In the
past years, a great deal has been invested in realising a shift from pro
duct segmentation to client segmentation. This shift has been executed
successfully, as attested for example by a customer satisfaction survey
by Incompany among consumers in the professional services sector.
The service is highly appreciated by private banking clients of the local
Rabobanks (capital or income EUR 80,000). In the survey, Rabobank
was second only to its own subsidiary Schretlen Co, and the local
Rabobanks left all the other reputable private banks well behind.
Similarly, customer satisfaction among private clients generally increased
from 7.3 in 2004 to 7.4 in 2005.
Pursue market leadership in all financial
Customer satisfaction rating of
services sectors in the Netherlands.
at least 7.5
Be and remain bank 'near-you' in the
Increase the number of physical
Netherlands, in both physical and
interface points to approx. 3,200
virtual terms.
Efficiency ratio of 67%
