Financial results
Private sector lending up 4% to EUR 77.7 billion
Income down 3%
conditions, pollution and deforestation. If a client is unable to meet Rabobank Group's CSR
requirements to a sufficient degree, the bank enters into in a dialogue with that client in an
attempt to strengthen the sustainable character of the client's operations. For Rabobank
Group and for the clients involved, this engagement activity is still in full development.
Refusing or dissolving the relationship with the client is a real option if all else fails.
A number of Rabobank Group's international branches are planning to devise a climate
policy with reduction targets, where applicable, for their respective countries.
Private sector lending grew by 4% in 2007 to EUR 77.7 (74.7) billion, despite the 11%
depreciation of the US dollar. The international retail banking business accounted fully for
this growth in lending.
Thanks to the expansion of the international retail banking network, lending to private
individuals grew by 17% to EUR 3.8 (3.3) billion. Lending to the food agri sector grew by
6% to EUR 28.1 (26.5) billion, with this sector accounting for 36% of total private sector
lending. Lending to the trade, industry and services (TIS) sector grew by 2% to EUR 45.7
(44.9) billion.
At 31 December 2007, 28% (24%) of lending came from the international retail banking
business, where lending increased by 18%, to EUR 21.6 (18.2) billion. In Australia and New
Zealand, this lending grew by 12% to EUR 8.8 (7.8) billion. The portfolio of the American
retail banking activities increased by 42% to EUR 6.0 (4.2) billion. The lending portfolio
acquired with Mid-State Bank Trust amounted to EUR 1.2 billion. The consolidation of HNS
Banco, Hagabank and Bank Hagakita resulted in an EUR 0.4 billion increase in lending.
Loans at ACCBank grew by 4% to EUR 6.5 (6.2) billion.
Mid-State Bank Trust has been consolidated in Rabobank International's results from
May 2007. The smaller banks HNS Banco, Hagabank and Bank Hagakita made limited
contributions to net profit in 2007.
Total income declined by 3% in 2007 to EUR 2,546 (2,622) million. Although some units
within Global Financial Markets benefited from the turbulence in the financial markets,
income at Global Financial Markets fell by EUR 497 million to EUR 268 million. At the same
time, Participations had an excellent year. Income at Global Financial Markets is largely
recognised in other income. As a result, other income was 47% lower, at EUR 320 (601) million.
Like many others, Leveraged Finance and Structured Finance were hindered by the
subprime crisis in the American mortgages market, although to a lesser extent. Income from
Leveraged Finance was 7% lower and income from Structured Finance was 5% lower.
The growth in lending in the international retail banking business and the Corporate
Banking activities contributed to the 11% growth in interest income to EUR 1,832 (1,649)
million. Income from the Corporate Banking activities was 11% higher. Of total income,
Lending by region
at year-end 2007
America 35%
Europe excluding the
Netherlands
Netherlands 15
Australia and New Zealand 15
Asia 5
Lending by sector
in billions of euros
Food agri
TIS
Private individuals
2005 2006 2007
54
Rabobank Group Annual Report 2007
