Ambitions and outlook
Results (in millions of euros)
Bisfc-wejohtfidLasaets
Operating expenses up 20%
Value adjustments at 61 basis points
Net profit up 14%; RAROC 21.0%
2007
2006
Change
Interest
518
507
2%
Fees and commission
49
6%
Other income
425
286
49%
Total income
995
842
18%
Staff costs
369
305
21%
Other administrative expenses
193
168
15%
Depreciation and amortisation
32
21
52%
Operating expenses
594
494
20%
Gross result
401
348
15%
Value adjustments
100
77
30%
Operating profit before taxation
301
271
11%
Taxation
67
65
3%
Net profit
234
206
14%
Value adjustments (in basis points)
61
53
Ratios
Efficiency ratio
59.7%
58.7%
RAROC
21.0%
Balance sheet (in billions of euros)
31-Dec-07
31-Dec-06
Loan portfolio
20.7
18.9
10%
21.1
18.9
12%
Economic capital
1.1
Number of employees (in fte)
4,411
4,128
7%
Total operating expenses were 20% higher, at EUR 594 (494) million in the year under review.
This was largely due to higher staff costs. The greater part of the 21% increase in staff costs
to EUR 369 (305) million was the result of the acquisition of Athlon. Staff levels grew by 7% in
2007 to 4,411 (4,128) FTEs as a result of organic growth of the activities. Other administrative
expenses were 15% higher, at EUR 193 (168) million. Depreciation charges were EUR 11
million higher, at EUR 32 (21) million, mainly due to higher depreciation of equipment.
The item Value adjustments increased to EUR 100 (77) million in 2007. This was connected
with the growth of the loan portfolio and the greater portfolio share of consumer loans.
This corresponds to 61 (53) basis points and is below the five-year average of 69 basis points.
Net profit was 14% higher, at EUR 234 (206) million. Following its acquisition, in mid-2006,
Athlon contributed for six months to De Lage Landen's results for that year. For 2007,
Athlon's full-year contribution was recognised, resulting in an additional increase in net profit
of EUR 18 million.
The current credit problems in the United States make economic developments, such as the
volumes of business investments and value adjustments, harder to predict. Nevertheless,
2008 looks promising for De Lage Landen. The volume of the loan portfolio is expected to
grow, although margins for the Vendor Finance activities will remain under pressure.
For international expansion of its leasing activities, De Lage Landen is looking for attractive
66
Rabobank Group Annual Report 2007
