Operating expenses up 12%
Value adjustments at 22 basis points
Income tax up 5%
Net profit up 14%
Total operating expenses increased by 12% in 2007 to EUR 7,709 (6,887) million. The higher
staffing level caused staff costs to go up by 8% to EUR 4,445 (4,117) million. In 2007, several
acquisitions resulted in an increase in staff numbers by around 2,800 FTEs. Rabobank Group's
total number of employees grew by 8% in 2007 to 54,737 (50,573) FTEs. The growth in activities,
both organic and due to acquisitions, caused an 17% increase, to EUR 2,846 (2,429) million, in
other administrative expenses. Depreciation charges were 23% higher, at EUR 418 (341) million,
mainly because of higher depreciations on buildings and self developed software.
The item Value adjustments increased by 65% in 2007 to EUR 742 (450) million. This
corresponds to 22 (15) basis points of average lending, which is in line with the five-year
average of 23 basis points.
Income tax recognised in 2007 amounted to EUR 386 (367) million, which is equivalent to an
effective tax rate of 12.7% (13.5%). One of the contributors to the lower income tax was the
reduction in the Dutch corporate income tax rate compared to 2006. The results from equity
investments such as those in the Gilde funds and the Eureko participation, which are exempt
from taxation, contributed to a lower tax burden.
Because Rabobank Group's income grew more strongly than its expenses, the efficiency ratio
improved by 1.5 percentage points in 2007, to 67.0% (68.5%). The higher gross profit,
particularly, caused Rabobank Group's net profit to grow by 14% in 2007, to EUR 2,662
(2,345) million. After deduction of minority interests and payments on Rabobank Member
Certificates, Capital Securities and Trust Preferred Securities III to VI, the sum remaining was
EUR 1,937 (1,757) million.
38
Rabobank Group Annual Report 2007
