Outlook for wholesale banking and international
retail banking
Other administrative expenses fell 31 to EUR 1,166 (1,736) million. This item was high in the
previous year because it included the settlements agreed by Rabobank in the wake of the Libor
investigations. This also led to a relatively high tax burden at that time. Lower amortisation of
intangible non-current assets and software led to a 31 decline in depreciation and amortisation
to EUR 87 (126) million.
Bad debt costs at 44 basis points
Last year saw economic growth around the world. The economy improved further, mainly in
countries outside Europe.This growth contributed to a 26% decline in bad debt costs at
wholesale banking and international rural and retail banking to EUR 420 (568) million.
The decline in bad debt costs occurred mainly at Rural Retail banking. Bad debt costs at
ACC Loan Management were down by EUR 135 million at EUR 190 (325) million. Total bad debt
costs amounted to 44 (57) basis points of the average loan portfolio and were thus below the
long-term average of 57 basis points.
Regulatory capital up 3%
The regulatory capital (the external capital requirement) for the wholesale banking and
international retail banking division rose 3% in 2014 to EUR 6.4 (6.2) billion, mainly due to
increased market risk arising from a changed capital calculation due to the introduction of
the CRR (CRD IV).The capital for credit risk remained more or less unchanged. The growth
in assets was offset by the sale of Bank BGZ.The economic capital, or the internal capital
requirement, amounted to EUR 7.3 (7.0) billion. The increase was mainly due to an increase in
the capital for market risk.
Bad debt costs are expected to be slightly lower in 2015 due to the improved economic
situation around the world. The transition to a flatter organisation with fewer management
layers and a smaller workforce will lead to lower costs. On the other hand, stricter regulatory
requirements in the United States and elsewhere will create upward pressure on costs.
The other results are expected to decline in 2015 in comparison to 2014. In 2014, the other
results were high due to the significant contraction in the illiquid assets portfolio. Income and
expense items are also now at a lower level due to the sale of Bank BGZ. Partly as a result of
these developments, the net profit of the wholesale banking and international retail banking
division will probably be lower in 2015 than in 2014. The loan portfolio will be brought further
in line with the food and agri strategy in 2015 and this will be accompanied by a further
reduction of the non-core activities. The strategy of the wholesale banking and international
retail banking division will be unchanged in 2015 from that in 2014: market leadership in the
Netherlands and a focus on the food and agri sector internationally.
Rock-solid bank: performance
