After deduction of the payments on Rabobank Certificates, Member Certificates, hybrid
capital instruments and payments to other non-controlling interests, the amount remaining
is EUR 620 (929) million. This amount has been added to the equity of Rabobank Group.
Tax amounted to a negative item of EUR 161 million, whereby the effective tax rate amounted
to -9.6% (20.5%). The low tax rate in 2014 was mainly due to deferred tax assets as a result of the
past losses incurred at ACC Loan Management.
Income down 1%
Rabobank Group's total income fell by EUR 174 million to EUR 12,857 (13,030) million in 2014.
Interest profit rose by EUR 23 million to EUR 9,118 (9,095) million. Interest profit in the domestic
retail banking business rose due to a modest restoration of the margin on savings. This increase
was partly offset by the decline in interest profit at the wholesale banking and international
retail banking business, which was partly due to the sale of Bank BGZ. Commission income fell
by EUR 122 million in 2014to EUR 1,879 (2,001) million, mainly due to lower commission profit
on insurance and investment products at the domestic retail banking business. In 2013, the
other results were pressured by impairments on land holdings and negative revaluations of real
estate. The result on hedge accounting improved in 2014 due to the development in the yield
curve. On the other hand, the result on structured notes was down due to a narrowing of the
credit spread. Moreover, pension income arising from the transition to a new pension scheme
was recognised under other results in 2013. On balance, the other results fell by EUR 74 million
to EUR 1,860 (1,934) million.
Operating expenses down 17%
Total operating expenses fell by EUR 1,705 million in 2014 to EUR 8,055 (9,760) million. The number
of employees at Rabobank Group declined by 15% or 8,616 FTE in 2014 to 48,254 (56,870) FTE,
with 5,276 FTE of the decline being due to the sale of Bank BGZ. The workforce at the local
Rabobanks also declined further due to the implementation of Vision 2016. Mainly due to this
development, staff costs fell by EUR 236 million to EUR 5,086 (5,322) million. Other administrative
expenses declined by EUR 1,378 million to EUR 2,532 (3,910) million. In 2013, the settlement
amount of EUR 774 million following the Libor investigations was recognised under other
administrative expenses. Reorganisation expenses were also lower in 2014, and part of the
provision previously formed for DSB Bank was released. Reorganisation expenses were lower at
both the local Rabobanks and at Rabo Real Estate Group. Depreciation and amortisation was
down EUR 91 million to EUR 437 (528) million, due in part to the sale of Bank BGZ.
Bad debt costs at 60 basis points
Rabobank Group's bad debt costs fell by EUR 10 million to EUR 2,633 (2,643) million in 2014.
In relation to the average loan portfolio, bad debt costs amounted to 60 (59) basis points. This is
significantly higher than the long-term average of 32 basis points. In addition, the AQR led to an
expense of EUR 448 million. This expense was mainly expressed in the figures for the domestic
retail banking business (the local Rabobanks) and in the figures for Rabo Real Estate Group
(FGH Bank). At the local Rabobanks, sectors such as manufacturing and wholesale benefited
from the increase in exports. Other sectors such as commercial real estate and greenhouse
horticulture continued to experience difficulties in 2014. The total bad debt costs at the domestic
retail banking business rose slightly on balance. At Wholesale, Rural Retail, bad debt costs at
Rural Retail declined, mainly due to lower bad debt costs at ACC Loan Management. Bad debt
costs also declined at DLL. Bad debt costs on commercial real estate at Rabo Real Estate Group
remained ata high level in 2014and were higher than in 2013.
Annual Report 2014 Rabobank Group
