Outlook for De Lage Landen
Income up 1%
At De Lage Landen interest income increased by 11% to EUR 590 (530) million due to higher
margins on new business and growth in the lending volume. Total income was up 1 to
EUR 1,026 (1,015) million as a result. Lower agency commissions caused total commissions to
drop by 3% to EUR 59 (61) million. The downturn in the market for second-hand cars led to an
11% decline in other income to EUR 377 (424) million.
Operating expenses up 3%
Total operating expenses incurred in the leasing division in the reporting period increased by
3% to EUR 616 (596) million. Staff costs fell by 1% to EUR 375 (377) million. The acquisition of
Masterlease's Italian car leasing operations, which came with about 45 FTEs, was a factor in the
1% increase in the total employee base to 4,734 (4,667) FTEs. Other administrative expenses
rose by 10% to EUR 206 (188) million as a result of asset impairments.
Bad debt costs at 132 basis points
The poor economic situation caused value adjustments at De Lage Landen to rise by 182 million
to EUR 300 (118) million in 2009. Expressed in basis points of the average lending volume, bad
debt costs were 132 (56) basis points. This is above the long-term average of 56 basis points.
Capital requirement and RAROC
De Lage Landen's capital requirement increased by 9% in the year under review to EUR 1.2
(1.1) billion. The required economic capital, i.e. the internal capital requirement, stood at
EUR 1.1(1.0) billion. Risk Adjusted Return On Capital (RAROC) fell by 11.9 percentage points
to 10.4% (22.3%).
De Lage Landen anticipates further growth of its loan portfolio in 2010. Its focus is on the
Netherlands and on international food and agri. For the second-hand car market, De Lage
Landen expects some cautious recovery. Operating expenses will be lower as a result of cost
saving measures. The level of bad debt costs will remain high, as was the case in 2009. Closer
collaboration with other group entities will be pursued. For Consumer Finance, the focus will
be on the distribution of consumer loans through the local Rabobanks and the Freo label.
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Leasing
