Impairment losses at 93 basis points
Results (in millions of euros)
administrative expenses, to EUR 715 (772) million. Depreciation and amortisation charges were 58%
higher, at EUR 84 (53) million, partly because of higher depreciations of proprietary software and
increased amortisation of intangible assets.
Although Rabobank International was not directly affected by the failure of certain American banks in
2008, these events do reflect the unfavourable macroeconomic conditions. The Irish real estate sector
was hit hard in 2008. The financing provided by Rabobank International to this sector had a major
influence on impairment losses. The item'value adjustments'rose by EUR 770 million to EUR 786 (16)
million. This corresponds to 93 basis points of average lending, which is higher than the long-term
average of 47 basis points.
Capital requirement and RAROC
In the calculation of the capital requirement under Basel II, the risks of Rabobank International are
weighted with greater precision. Due to the implementation of new solvability regulations and due to
the increase of the loan portfolio and the effects of the financial crisis, the capital requirement increased
by 41%, to EUR 8.6 (6.1) billion in the year under review.The required economic capital, i.e. the internal
capital requirement, amounted to EUR 6.2 (4.7) billion at year-end 2008. Rabobank International
achieved a Risk Adjusted Return On Capital (RAROC) of 0.5% (6.9%).
2008
2007
Change
Interest
3,156
1,832
72%
Fees and commission
304.
332
-8%
Other income
IotaI income
Staff costs
Other administrative expenses
Depreciation and amortisation
Operating expenses
Gross result
Value adjustments
Operating profit before taxation
laxation
Net profit
-1,463
1,997
909
715
84
1,708
289
786
-497.
-524
27
-175
1,989
890
772
53
1,715
274
16
258
-76
334
0%
2%
-7%
5%
-92%
Impairment losses (in basis points)
Ratios
93
Efficiency ratio
85.5%
86.2%
Balance sheet (in billions of euros)
31-Dec-08
31-Dec-07
Total assets
420.2
399.9
5%
Private sector loan portfolio
100.7
90.5
11
Capital requirements (in billions of euros)
Capital requirement
Economic capital
8.6
6.2
6.1
4.7
41%
32%
Number of employees (in FIEs)
15,2239,957
53%
Mid-State Bank Trust, an American bank, is consolidated in Rabobank International's results since May 2007. As a result of the expansion of the
interest in Bank BGZ from 46% to 59%, this bank is consolidated from April 2008.
38
Rabobank Group Annual Report 2008
