Operating expenses up 8%
Results (in millions of euros)
Value adjustments at 63 basis points
Net profit down 43%; RAROC 8.4%
24% (19%) is from the international retail banking business. Income from the retail banking
activities was 23% higher, at EUR 624 (506) million. ACCBank's income showed a marginal
increase, which was in line with the slight growth in lending. Income from the retail banks in
the other regions rose as a result of both organic growth and acquisitions.
Total operating expenses were 8% higher in 2007, at EUR 1,715 (1,586) million.
Acquisitions were important drivers for the 49% growth in staff numbers to 9,957 (6,684)
FTEs. Of this increase, around 2,800 FTEs are the result of acquisitions. Despite the staff
increase, staff costs rose by a mere 3% to EUR 890 (867) million. The expansion of the activities
contributed to the 16% rise in other administrative expenses to EUR 772 (668) million.
20072006 Change
Interest
1,832
1,649
11%
Fees and commission
394
372
6%
Other income
601
-47%
Total income
2,546
2,622
-3%
Staff costs
890
867
3%
Other administrative expenses
772
668
16%
Depreciation and amortisation
53
51
4%
Operating expenses
1,715
1,586
8%
Gross result
831
1,036
-20%
Value adjustments
493
234
Operating profit before taxation
338
-58%
Taxation
-56
115
Net profit
394
687
-43%
Value adjustments (in basis points)
63
39
Ratios
Efficiency ratio
67.4%
60.5%
RAROC 8.4%
Balance sheet (in billions of euros)
31-Dec-07
31-Dec-06
Total assets
399.9
404.0
-1%
Private sector lending
77.7
74.7
4%
Ris.k-weig.hle.das.s.e.t.s.
76.3
64.3
19%
Economic capital
4.6
Number of employees (in fte)
9,957
6,684
49%
Due to the crisis on the financial markets, the item Value adjustments increased to
EUR 493 (234) million in 2007. This corresponds to 63 (39) basis points of average lending
and is higher than the five-year average of 46 basis points.
As a result of the decline in gross profit and the increase in the item Value adjustments,
net profit fell by 43% to EUR 394 (687) million, despite the lower income tax. The lower result
from Global Financial Markets and the higher income from Participations, the latter being
largely tax-exempt because of participation exemption, contributed to the decline in the
item Taxation.
Rabobank International achieved a Risk Adjusted Return On Capital (RAROC) of 8.4% in
2007. At year-end, the economic capital required was EUR 4.6 billion.
