Domestic retail banking Drop in bad debt costs and a more efficient organisation The Dutch economy recovered in 2010, bringing about an improvement in outlook for our clients. Nevertheless, businesses in specific sectors were still suffering. Value adjustments at domestic retail banking were down 50%, dropping to EUR 358 million. This corresponds to bad debt costs of 13 basis points of average lending. Amounts due to customers increased by 4% to EUR 192.8 billion. Apart from lower bad debt costs, recovered margins on savings deposits and a decline in staff costs also contributed to higher earnings. Net profit was up 52% at domestic retail banking, rising to EUR 1,843 million. The efficiency ratio improved by 4.7 percentage points to 58.9% and RAROC rose to 23.8%. Consumers remained hesitant about borrowing money due to the still tentative economic recovery and government spending cuts. As a result, lending increased less sharply at the local Rabobanks and Obvion. Private sector lending stood at EUR 286.9 billion with market shares being virtually stable. More focus was placed on the wholesale market from 2010 onwards because of its growth potential. In the agricultural sector, Rabobank undertook networking efforts to play a role in key ethical issues. Rabobank's service offering is about delivering value to the customer. Independent surveys show that Rabobank proudly ranks among the top three European banks that deliver the most value to their customers. Strategy for domestic retail banking,,, Rabobank Group's ambition is to achieve financial market leadership in all segments of the Dutch market. Domestic retail banking contributes fully to this ambition by offering a comprehensive range of financial products and services. Rabobank occupies a strong position in the corporate market; there is particular growth potential in the wholesale market. Rabobank endeavours to maintain sound balance sheet ratios, meaning that the growth in lending is mostly funded using savings deposits.The Rabobank2010 internal project was launched to help Rabobank make it even easier for customers to achieve their ambitions. In addition, Rabobank Group plans to build on its position as a leading international food and agri bank. Rabobank Group strategy Contribution to group strategy All-finance market leader in the Netherlands - Strengthening the market leadership position in all-finance market segments - Building on the position in the corporate market - Offering Interpolis non-life, health and life insurance via local Rabobanks International food and agri bank - Maintaining a leading position in the Dutch agricultural sector - Maintaining a leading position in the insurance market for the Dutch food and agri sector via Interpolis, the market leader 24 Annual Report 2010 Rabobank Group Share in Rabobank Group's net profit for 2010 Domestic retail banking 66%

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Annual Reports Rabobank | 2010 | | pagina 25