Financial developments
Rabobank Group's tier 1 ratio of 13.8% in 2009 was comfortably higher
than the ambitious target of 12.5%. Return on equity was 7.5% with net
profit falling by 17% to EUR 2,288 million. The poor economic conditions
caused an increase in bad debt costs by 17 basis points to 48 basis points,
with dropping demand for loans. As a result, the local Rabobanks saw their
growth in lending level off and Rabobank International saw a decrease in
lending. As a result, the private sector loan portfolio was up 2% at group
level, rising to EUR 415.7 billion. The local Rabobanks received more savings
deposits from retail clients, which resulted in a 6% increase in total savings
deposits to EUR 121.4 billion. Local Rabobanks also attracted more client
deposits from corporate clients. At group level, however, amounts due to
customers were down 6% to EUR 286.3 billion due to the drop at Rabobank
International. There was a group-wide focus on cost-cutting. The efficiency
ratio improved by 3.8 percentage point to 61.5% thanks to an increase in
income combined with a reduction in expenses. RAROC stood at 10.3%.
Rabobank Group profitable with higher capital ratios
Net profit at EUR 2,288 million
- Efficiency ratio at 61.5%, a 3.8% percentage point improvement
- Bad debt costs above long-term average at 48 basis points
- RAROC at 10.3%
Balance sheet
- Loan portfolio up 2% to EUR 415.7 billion
- Amounts due to customers down 6% to EUR 286.3 billion
- Equity up 14% to EUR 38.1 billion
Financial targets
- Tier 1 ratio up 1.1 percentage point to 13.8%
- Net profit down 17%
- Return on equity at 7.5%
6 For page 1 to 51the amounts in
brackets are the comparative figures.
Where income is concerned, these are
the figures for 2008; where the
statement of financial position is
concerned, these are the figures at
year-end 2008.The comparative figures
have been restated to reflect the
insights gained since their preparation.
Financial targets
Rabobank Group has three financial targets: a tier 1 ratio of 12.5% or more, an increase in net
profit by at least 10%, and return on equity of at least 8%. At year-end 2009, the tier 1 ratio,
i.e. the ratio between tier 1 capital and risk-weighted assets, stood at 13.8% (12.7%6), which is
amply above our ambitious target of 12.5%. Tier 1 capital was up 6% on balance, rising to
EUR 32.3 (30.4) billion thanks to retained earnings and issues of hybrid capital instruments.
The rise came in spite of an increase in deductible capital items. Changes in client ratings,
fine-tuning of risk models and progress in implementing the advanced internal rating based
approach were the reasons why the risk-weighted assets decreased by 2% to EUR 233.4
(238.1) billion on balance. Net profit in 2009 was down 17% on 2008. Return on equity stood
at 7.5% (9.7%).
11
Financial developments
