Wholesale banking and international retail banking Consistent performance thanks to drop in bad debt costs 2010 was the year of economic recovery after a deep recession. Value adjustments were down 36% to EUR 597 million at Rabobank International because of this recovery and good credit management. This corresponds to bad debt costs of 64 basis points of average lending. Lending rose by 6% to EUR 99.1 billion. Currency effects were a decisive factor in this rise. The share of the food and agri sector in the portfolio grew by 5.9 percentage points to 44.5%. The direct banking activities saw a considerable inflow of savings deposits, which rose to EUR 11.6 billion. The increase in other income was attributable in part to the sale of some of the equity interest in Indian-based Yes Bank and higher trading income at Global Financial Markets. Net profit was up 37% to EUR 774 million thanks to an increase in income and a drop in value adjustments. RAROC rose to 10.1 and the internal capital requirement landed at EUR 7.4 billion. Policy was formulated to make value chains more sustainable. A strategic alliance was formed with the Agricultural Bank of China; this alliance will allow Rabobank to strengthen its position in China. The purchase of three relatively small banks in California further boosted the retail activities outside the Netherlands. Rabo Development acquired a 30% equity interest in Sicredi, a Brazilian cooperative. This transaction is currently still subject to local regulatory approval. Strategy for Rabobank International www. ra bo ba n k.com Rabobank International's strategy focuses on maintaining and building on our market leadership position in the Netherlands and on the food and agri sector internationally. Strengthening the share of the wholesale market is the number one priority in achieving market leadership in the Netherlands. Rabobank International collaborates closely with the local Rabobanks to serve the top end of the market. Outside the Netherlands, the scaling- down of non-core activities brought about a further increase in the share of the agricultural sector in the total portfolio in 2010. Rabobank Group strategy Contribution to group strategy All-finance market leader in the Netherlands - Delivering products through local Rabobanks - Supporting local Rabobanks in their service provision to wholesale clients - Serving top corporates in the Netherlands - Providing risk-bearing capital - Supporting globally operating Dutch clients International food and agri bank - Broadening product offering and leveraging knowledge for food and agri clients - Broadening the retail banking network in key food and agri areas - Developing renewable energy and cleantech as specialist areas of expertise Share in Rabobank Group's net profit for 2010 Wholesale banking and international retail banking 28% 33 Wholesale banking and international retail banking

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Annual Reports Rabobank | 2010 | | pagina 34