Financial frameworks
These themes were selected on the basis of Rabobank Group's market position, knowledge,
ambitions and cooperative roots. They are consistent with the most important local and
global environmental, social and economic challenges facing Rabobank and its stakeholders.
Rabobank uses these themes as a basis on which it can build a leading position in the area of
sustainability. Rabobank will flesh out these starting points with a large number of internal
and external stakeholders in 2013 to arrive at specific targets for the next few years.
Adequate capital and liquidity buffers are the determinants of financial robustness. They are
therefore prerequisites and are vital for retaining a high credit rating and good access to
professional funding. Although Rabobank does not seek to maximise profit, healthy profit
growth is important for ensuring continuity, certainty and further growth. Earnings will be
under pressure in the next few years owing to low asset growth, fierce competition in the
savings market, increased legislation and regulations, the costs of the ex-ante deposit
guarantee scheme, the bank tax and the resolution levy. A group-wide focus on restraint
and cost reduction is necessary to achieve the desired profit growth.
There will be little scope for growth in lending up to and including 2016. Demand for loans
will be limited in the Netherlands owing to the state of the economy and the housing market.
Elsewhere, opportunities for growth will be utilised on a selective basis. For instance, the
international rural and retail banking business will grow slightly in order to shore up activities
in several key countries. The wholesale banking business and De Lage Landen have limited
scope for growth. As it is, the emphasis currently is on increasing amounts due to customers
and on the further diversification of professional funding.
In the new Strategic Framework, Rabobank Group has specifically set itself the following
financial targets in the areas of profitability, solvency and liquidity:
- a return on tier 1 capital of 8%;
- a core tier 1 ratio of 14% at year-end 2016;
- a loan-to-deposit ratio of 1.3 at year-end 2016.
The loan-to-deposit ratio is the ratio of total loans to amounts due to customers. Investments
in the workforce and ICT will need to be made over the next few years in order for these
ambitious targets to be achieved on schedule. It will be difficult to achieve these targets if
the low economic growth seen in recent years continues until 2016.
14 Annual Report 2012 Rabobank Group
