Financial developments
In financial terms, 2006 was another successful year for Rabobank
Group. Net profit increased by 13% to EUR 2.3 billion, compared
with EUR 2.1 billion in 2005, which means that the bank's target -
an increase in net profit of at least 12% - was achieved. Total
lending increased due to the great number of mortgages taken
out in the Netherlands and the increase in lending abroad.
2,429
341
367
As a result, private sector lending
increased by 17%, from EUR 278.1
billion in 2005 to EUR 324.1 billion
in 2006. The 4% increase in savings
to EUR 89.5 billion was mainly due
to growth in the international Direct
Banking activities. Despite pressure
on interest margins, income rose by
7% to EUR 10.0 billion. Organic
growth and acquisitions contributed
to a 10% increase in operating
expenses to EUR 6.9 billion. As a result
of acquisitions, the Tier I ratio declined
by 0.9 to 10.7 in 2006, well above
Rabobank Group's target for its Tier I
ratio of at least 10. The return on
equity declined slightly to 9.4% (9.7%).
Results (in EUR millions)
2006
2005
change
Interest
6,472
6,261
3%
Fees and commission
2,296
2,060
11%
Other income
1,281
1,042
23%
Total income
10,049
9,363
7%
Staff costs
4,117
3,880
6%
Other administrative expenses
2,031
20%
Depreciation
331
3%
Operating expenses
6,887
6,242
10%
Gross profit
3,162
3,121
1%
Value adjustments
450
517
-13%
Operating profit before taxation
2,712
2,604
4%
Taxation
521
-30%
Net profit
2,345
2,083
13%
Risk-related costs (in basis points)
20
25
-20%
Ratios
Efficiency ratio
68.5%
66.7%
Return on equity
9.4%
9.7%
Balance sheet (in EUR billions)
31-Dec-06
31-Dec-05
Total assets
556.5
506.6
10%
Private sector lending
324.1
278.1
17%
Savings
89.5
86.2
4%
Risk-weighted assets
247.5
213.9
16%
Capital ratios
BIS ratio
11.0
11.8
Tier 1 ratio
10.7
11.6
FTEs
50,573
45,580
11%
18 Rabobank Group Annual Report 2006
