r
I
Goodwill and other intangible assets
Savings up 4%
Debt securities in issue
Equity
Financial targets
Equity
in EUR billions
30
25
20
Other minority interests
15
Trust Preferred Securities III-VI
10
Rabobank Member Certificates
5
Retained earnings and
0
other reserves
2004
2005
2006
assets is the largest category within other financial assets.
These assets play an important part in providing for
Rabobank Group's liquidity needs. Differences between
carrying value and fair value are taken to the revaluation
reserve.
The value differences of those financial assets that are
valued at fair value, EUR 21.5 (17.4) billion, are taken to the
profit and loss account. This concerns securities linked
directly to financial instruments where any value changes
are likewise taken to the profit and loss account.
A small part of the other financial assets, EUR 1.5 (1.9) billion,
is held-to-maturity and is valued at amortised cost.
At 31 December 2006, an amount of EUR 1,844 (252)
million in goodwill and intangible assets was outstanding
on the balance sheet. The increase of the item goodwill
and intangible assets was mainly due to the acquisitions of
Athlon, parts of Bouwfonds and Community Bank of
Central California. Another contributor was the increase in
the bank's interest in Sarasin.
Amounts due to customers grew by 16% in 2006 to
EUR 215.9 (186.4) billion. Savings make up a significant part
of this item and increased by 4% in 2006 to EUR 89.5 (86.2)
billion. This growth was realised entirely in Internet savings,
which showed an increase of EUR 4.1 billion. Partly as a
result of the expansion of the Direct Banking activities
abroad, Internet savings as a percentage of total savings
climbed from 46% to 48%. One factor offsetting this was
a decline in savings at Roparco. The greater part of total
savings - EUR 80.5 (77.7) billion - is entrusted to the local
Rabobanks. Otherwise, the growth of the item due to
customers reflected mainly an increase in corporate term
deposits and other amounts due to customers. Term
deposits increased by 28% to EUR 46.3 (36.2) billion.
In the year under review, more than EUR 25 billion in long
term debt securities was issued to finance the growth in
lending. These issuances contributed to the increase in the
amount in debt securities in issue to EUR 128.1 (116.0)
billion, more than a third of which concerns short-term
debt securities.
Rabobank Group's equity increased by EUR 3.1 billion in
2006 to EUR 29.4 (26.3) billion. Equity comprises equity
of Rabobank Nederland and local Rabobanks, Rabobank
Member certificates, Trust Preferred Securities III-VI and
other minority interests. The addition of profit resulted in
an increase in the item retained earnings and other reserves
to EUR 17.4 (15.5) billion. At the end of 2006, 59% of equity
consisted of retained earnings and other reserves, 20% of
Rabobank Member certificates, 7% of Trust Preferred
Securities III-VI and 14% of minority interests.
Rabobank's financial targets are threefold: net profit growth,
Tier I ratio and return on equity. With a net profit growth of
13% for 2006, Rabobank Group exceeded its target of 12%.
The Tier I ratio - the ratio between core capital and total
risk-weighted assets - was 10.7 (11.6), which is well above
the target of 10. The acquisition of Athlon and parts of
Bouwfonds caused the Tier I ratio to decline. Tier I capital
increased by EUR 1.5 billion to EUR 26.4 (24.9) billion in the
year under review. Further growth in lending caused the
risk-weighted assets to increase by 16% to EUR 247.5 (213.9)
billion. Rabobank achieved a return on equity - net profit
expressed as a percentage of core capital - of 9.4% (9.7%),
compared with the target figure of 10%.
For more information
www.rabobank.com
22 Rabobank Group Annual Report 2006
