The recovery will remain limited in these countries in 2010 also; it will certainly not be enough
to make up for the contraction in the market that we have experienced over the past few
years. We have governments and central banks to thank for the fact that we can even talk
about economic recovery. After all, they bailed out the financial sector, citizens and businesses
when they were about to topple over.This did lead, however, to high budget deficits, which
caused the national debt to mount rapidly in these countries. Concerns about the solvency of
businesses have been replaced by concerns about the financial soundness of governments.
In 2010, governments will have to provide clarity about how they plan to reduce their
soaring budget deficits. Central banks will also make the first attempts at scaling down their
emergency measures.
The Dutch economy contracted by 4% in 2009 compared with 2008, the highest rate of
contraction in one year ever recorded by Statistics Netherlands. There were an increasing
number of business failures and the unemployment rate was up. Thanks to the recovery of the
world economy, exports helped the Netherlands take the first step away from the recession in
the third quarter of 2009. Domestic spending and investments were low throughout the year.
The Dutch economy will begin to show growth again in 2010, driven by an upswing in
world trade. Although the unemployment rate will continue to rise, it will not go as high as
initially feared. As consumers' purchasing power and, thus, consumer spending will still be
weighed down, the recovery will be moderate.The Dutch property market is expected to
return to calmer waters in 2010. Prices are stabilising and the number of transactions will see
a slight increase.
Limited growth in lending due to low activity level and stricter regulation
Assuming that the economy will recover at a moderate pace, our clients'activity level will
remain low. In addition, banks are expected to have to grapple with more stringent solvency
and liquidity requirements in the future.These developments will repress growth in lending.
Bad debt costs for Rabobank Group are expected to drop compared to 2009, but they will
likely remain above the long-term average in 2010. In order to maintain our robust capital
position, which is a precondition for upholding our client service level in the future, Rabobank
Group needs to achieve sound margins and continue to focus on curbing costs in 2010.
Our headcount will be aligned to the expected activity level. Costs will be reduced also by
greater leveraging of virtual channels and by further process standardisation. At Rabobank,
we will continue to put the interests of our clients and members centre-stage, never losing
sight of our role in society.
Word of thanks to Bert Heemskerk
We said goodbye to Bert Heemskerk during the Annual General Meeting of Shareholders of
18 June 2009. The former Chairman of the Executive Board retired from the bank to enjoy
his pension as of 1 July 2009. Mr Heemskerk has been a key player in the development of
Rabobank Group over the past nearly seven years. I also speak for my colleagues when I
express my sincere gratitude and immense appreciation for his efforts.
Piet Moerland, Chairman of the Executive Board of Rabobank Nederland
8
Report 2009 Rabobank Group
