Financial results of leasing
Results (in millions of euros)
Income up 15%
Bad debt costs at 90 basis points
2010
2009
Change
Interest
658
590
12%
Commission
83
59
41%
Other results
440
377
17%
Total income
1,181
1,026
15%
Staff costs
416
375
11%
Other administrative expenses
244
206
18%
Depreciation and amortisation
40
35
14%
Operating expenses
700
616
14%
Gross result
481
410
17%
Value adjustments
214
300
-29%
Operating profit before taxation
267
110
Taxation
66
-2
Net profit
201
112
79%
Bad debt costs (in basis points) 90 132 -32%
Ratios
Efficiency ratio
59.3%
60.0%
RAROC
18.3%
10.4%
Balance sheet (in billions of euros)
31-Dec-10
31-Dec-09
Loan portfolio
25.7
24.1
7%
Capital requirements (in billions of euros)
Capital requirement
1.2
1.2
Economic capital 1.1 1.1
Number of employees (in FTEs)
4,835
4,734
2%
De Lage Landen saw its total income increase by 15%, rising to EUR 1,181 (1,026) million in
2010. About one-third of the increase was due to currency effects. Active portfolio management
led to a higher interest margin on new contracts.This, combined with growth in the portfolio,
raised De Lage Landen's interest income by 12% to EUR 658 (590) million. Contract renewals
caused commission to rise by 41% to EUR 83 (59) million.The increase in other results was
attributable to higher residual value gains on the second-hand car market. Other results
increased by 17% to EUR 440 (377) million as a result.
Operating expenses up 14%
Total operating expenses at De Lage Landen rose by 14% to EUR 700 (616) million. Currency
effects accounted for about one-third of this rise. After adjustment, a moderate increase in
operating expenses remains. Apart from currency effects, the 2% increase in headcount to
4,835 (4,734) contributed to the rise in staff costs by 11 to EUR 416 (375) million. Other
administrative expenses were up 18% to EUR 244 (206) million. The depreciation and
amortisation item increased by 14% to EUR 40 (35) million due to higher amortisation
charges of software.
Value adjustments were down EUR 86 million to EUR 214 (300) million at De Lage Landen in
2010 thanks to a tight risk management policy and supported by the tentative economic
recovery. Expressed in basis points of average lending, bad debt costs stood at 90 (132) basis
points, which is still above the long-term average of 63 basis points.
50
Annual Report 2010 Rabobank Group
