Budget 2007
The local Rabobanks
Strategy implementation
Proposal to the General Meeting
The following subjects were given special attention:
Financial statements 2005
This review included a detailed discussion, in the presence
of both the internal auditor and the external auditors, of
the management letter. The Audit Compliance
Committee did intensive preparatory work to facilitate
the review of the 2005 financial statements.
In accordance with the Articles of Association, the budget
for 2007 was discussed and approved by the Supervisory
Board. Again, the Audit Compliance Committee provided
important input for this purpose.
The drive for market leadership took more shape in 2006:
the chief market shares of the local Rabobanks showed a
favourable development. The corresponding results lagged
behind expectations however, reflecting the increase in
laws and regulations, lower income due to fierce competition
in the market and declining interest margins. Following this,
the Supervisory Board and the Executive Board discussed
suitable policy measures to help improve the long-term
financial outlook of the domestic retail banking business.
In addition, the Supervisory Board gained extensive infor
mation on the way in which the demand for future top
management for the local Rabobanks can be met.
In 2005, ambitions and plans for the period up to 2010 were
established in the new Strategic Framework. This Strategic
Framework aims at maintaining Rabobank's leadership in
the domestic market and - where applicable - strengthening
our market position. Rabobank wishes to develop its inter
national banking business further, focusing on the food
agri business and - particularly in a few large mature
economies - on retail banking. Strengthening the successful
collaboration with Eureko/Achmea as well as the way in
which the envisaged follow-up must be defined, are regular
items on the Supervisory Board's agenda.
The implementation of the targets of the Strategic
Framework is making strong progress. The Supervisory
Board pays due attention to monitoring the alignment and
decision-making concerning intended equity investments or
acquisitions and their consequences for the financial ratios.
The year 2006 saw the acquisition of Athlon by De Lage
Landen, the acquisition from ABN AMRO of part of the
activities of Bouwfonds, the acquisition of Mid-State Bank in
California, which is expected to be finalised in the second
quarter of 2007, and the increase to a controlling interest of
Rabobank's participation in Sarasin, the Swiss private bank.
These investments are practical translations of Rabobank's
strategic ambitions. In addition, Rabobank acquired both
Bank Haga and Bank Hagakita, in Indonesia. With due regard
to the implementation of the BIS II guidelines, the
Supervisory Board and the Executive Board discussed the
desired future solvency level and the associated policy.
In compliance with the relevant provisions of the Articles of
Association of Rabobank Nederland, the Supervisory Board
has reviewed the annual report and the financial statements
for 2006. This review included a discussion with the external
auditors. Partly on the basis of the auditor's report issued by
Ernst Young Accountants and with due regard to the
relevant provisions of the Articles of Association of
Rabobank Nederland, the Supervisory Board proposes that
the General Meeting of Rabobank Nederland adopt the
financial statements for 2006 and appropriate the profit for
the year as proposed.
Report of the Supervisory Board of Rabobank Nederland 13
