Outlook for wholesale banking and international
retail banking
Operating expenses up 30%
Total operating expenses at wholesale banking and international rural and retail banking were
up 30% in 2013, rising to EUR 3,134 (2,416) million. The increase was due to the 78% increase in
other administrative expenses to EUR 1,737 (976) million as a result of the settlements agreed
by Rabobank in the wake of the Libor investigations. Rabobank is not applying the amount paid
for the settlements as a deduction for tax purposes. Operating expenses at the rural and retail
banking division were virtually unchanged. There was a one-off increase in pension costs in
2012, and partly because this item returned to normal levels in 2013, staff costs declined by 4%
compared to 2012 to EUR 1,270 (1,320) million. Depreciation and amortisation rose 6% to
EUR 127 (120) million, mainly due to increased write-offs on proprietary software.
Bad debt costs at 57 basis points
There was economic growth internationally last year, mainly driven by emerging markets.
Dutch companies doing business abroad were able to benefit from higher exports.These factors
contributed to the 9% decline in value adjustments at wholesale banking and international rural
and retail banking to EUR 568 (621million in 2013. Value adjustments at ACCESank amounted to
EUR 325 (301) million. Bad debt costs came to 57 (59) basis points of average lending, and were
thus higher than the long-term average of 54 basis points.
Regulatory capital down 5%
Regulatory capital at wholesale banking and international retail banking was down 5% to
EUR 6.2 (6.5) billion in 2013, as a result of the phasing out of non-core portfolios and lower
market risk. The economic capital came to EUR 7 (7.9) billion. This decline was mainly due to
the aforementioned phasing out of non-core portfolios.
The focus will continue to be on market leadership in the Netherlands and on the food and agri
sector internationally. The rural and retail banking division will continue to look for investment
opportunities in important food and agri countries in 2014. In addition, the wholesale and
international rural and retail banking business will focus on expanding its services to existing
clients and further improvement in the quality of the loan portfolio. This will be accompanied
by a phasing out of non-core activities. Value adjustments are expected to be in line with those
in 2013. The regulatory capital is expected to be lower compared to 2013, due to the sale of
Bank BGZ.The result in 2013 was significantly affected by the settlements in relation to the Libor
investigations.The result should rise substantially in 2014, and return to a more normal level.
Finally, much attention will be devoted in 2014 to the reforming of Rabobank International from
a separately managed division into an integral part of Rabobank Nederland.
Leading food and agri bank at international level
