Good performance in a challenging market
Rabobank Group succeeded in attaining a very
satisfying result in 2005, despite global volatility
in the economic climate. Net profit rose by no
less than 16%. This was achieved in an often
highly challenging market, particularly in the
Netherlands, and is accordingly reason for
satisfaction. All business units contributed success
fully to this result, in terms of both volumes and
income. The local Rabobanks performed well,
despite fierce competition in our home market
and the merger movements that required the
attention of many of the local Rabobanks.
The wholesale and international retail business
saw a limited increase in results. Our subsidiaries
Robeco, De Lage Landen, FGH Bank, Rabo
Vastgoed, Alex, Schretlen Co and Obvion
reported substantial improvements in income, as
did our former insurance subsidiary Interpolis,
now merged with Achmea.
An eventful year
Market leadership in the Netherlands
7 Rabobank Group Annual Report 2005
Chairman's foreword
2005 was an eventful year in many respects. After the tsunami in late
2004, the global community was hit by still more natural disasters of
unimaginable extent. The effects of the terrible earthquake in Pakistan and
the havoc reaped by hurricane Katrina in the south of the United States
are still acutely felt. As for ourselves, we were deeply affected by the
unexpected death of our Supervisory Board member Wim Duisenberg.
We shall remember him as the first President of the European Central
Bank, in which capacity he gained world-wide esteem, and as a
nationally widely praised President of the Dutch Central Bank. We also
remember him as the deputy chairman of the Executive Board of
Rabobank Nederland who initiated, in the early 1980's, the build-up of
our international business. 2005 was also the year in which oil prices rose
to unprecedented levels. This had a negative effect on the world economy,
although the United States, Asia and various emerging countries saw a
favourable development nevertheless. Europe lagged behind again.
In the Netherlands, the ailing economy continued and the tentative
recovery that started in 2004 was not sustained in the year under
review. On the upside, the Amsterdam stock exchange - the AEX gained
25% - for the first time in many years joined the upward trend in stock
exchanges elsewhere in the world.
In the year under review, we continued to take major steps forward
on the path towards all-finance market leadership in the Netherlands.
Undoubtedly, the most prominent move was the intensified collaboration
with Eureko/Achmea. The merger between Interpolis and Achmea has
created not only the largest insurance company in the Dutch market,
but herewith we increased our stake in Eureko to 37%. This new combi
nation offers the prospect of attractive opportunities for organic growth
as a basis for strengthening our market leadership further. Another
example is the merger process at the local Rabobanks, which went
entirely according to schedule in the year under review. This move
towards a smaller number of larger local Rabobanks was initiated in
order to raise the quality and the professionalism of these banks and to
serve our clients even better. This is necessary for further strengthening
