Risk-related costs down
Ambitions and outlook for 2006
31 Rabobank Group Annual Report 2005
Core activities: domestic retail banking
Value adjustments were EUR 72 million lower at EUR 175 million. Risk-
related costs amounted to 14 basis points of the average risk-weighted
assets. This is 7 basis points lower than in 2004, in line with the improve
ment in the loan portfolio, which consists predominantly of personal
lending.
The operating result before tax increased 30% to EUR 1,521 (1,172)
million. Adjusting for the non-recurring results referred to above, the
increase amounted to 13%.
Customer satisfaction is an important spearhead for 2006. The local
Rabobanks will show that despite their upscaling through mutual
mergers, the high quality of service provision will be maintained.
The number of client interface points will continue to grow and the
possibilities for virtual banking will be expanded. The service focus will
likewise be strengthened further, especially by listening to clients and
providing advice at the times when it is important to the client. In addi
tion, the local Rabobanks aim at maintaining and if possible expanding,
their dominant market share and at strengthening their position at the
top of the private and corporate markets and in the large cities.
For 2006, it is anticipated that the interest margin will decline further.
Total income, the greater part of which is interest income, will be under
pressure as a result.
For more information
www.rabobank.com
Results (in EUR millions)
2005
2004
change
Interest
4,176
3,949
6%
Fees and commission
1,205
1,156
4%
Other income
50
68
-26%
Total income
5,431
5,173
5%
Staff costs
1,990
1,836
8%
Other operating expenses
1,745
1,918
-9%
Total expenses
3,735
3,754
-1%
Gross profit
1,696
1,419
20%
Value adjustments
175
247
-29%
Operating profit before taxation
1,521
1,172
30%
Net profit
1,024
757
35%
Risk-related costs (in basis points)
14
21
-33%
Balance sheet (in EUR billions)
31-Dec-05
31-Dec-04
Total assets
219.8
201.5
9%
Private sector lending
200.7
183.6
9%
Savings
77.7
71.9
8%
Total risk-weighted items
132.8
124.9
6%
FTEs
28,909
28,970
0%
Market share
Mortgages
23%
25%
Agricultural sector
83%
84%
Trade, industry and services
38%
40%
Savings
39% 39%
