Chairman's foreword
Rabobank's transition got off to a good start in 2016. We are a leading customer-oriented cooperative
bank in the Netherlands and in food agri worldwide. We are committed to making a substantial
contribution towards achieving wealth and prosperity in the Netherlands and to resolving the food
issue worldwide. I am proud that, thanks to the enormous efforts of our professionals, all businesses
have generated improved results, both in the Netherlands and abroad, and that surveys among our
8.7 million customers show that customer satisfaction has risen. Based on the developments in 2016,
we look to the future with confidence.
Contents Foreword Management report Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
Satisfied customers
Our strategic direction for 2020 rests on three pillars: excellent
customer service, improving our financial results, and a more
flexible and stronger balance sheet. In 2016, we achieved
what we set out to do in all three areas. Customer satisfaction
rose thanks to the efforts of our employees, investments in
digitalisation, organisational changes, and improvements in our
service and product offering. In the Netherlands, our market
shares rose or maintained their strong position, and outside
the Netherlands, we further expanded our leadership in food
agri. In 2016 we took several new initiatives to improve our
customer service and to innovate. A good example of this is
the fact that we now give our customers the opportunity to
obtain a mortgage offer in one week. Since 1 July 2016, we have
offered interest rate averaging to our mortgage customers.
Commercial customers whose funding needs are less than
EUR 1 million have benefited from our service that offers clarity
on their funding request within one day. In sectors experiencing
structural problems, such as glass horticulture, pig farming and
the dairy industry, Rabobank is taking the lead in the search
for solutions. We are taking responsibility, in partnership with
the sector.
For our Wholesale clients, we were able to play a leading role in
many major food agri and other transactions in the Netherlands
and worldwide. We were recently named the Best Commodity
Bank by Global Finance Magazine. 2016 was also a successful
year for the international Rural business, with high customer
satisfaction scores and growth in the loan portfolio. One of the
highlights was the Farm to Fork event on innovation in food
agri. The event was a showcase for how the bank brings clients
together and shares knowledge.
New cooperative structure
On 1 January 2016, our new cooperative structure came into
effect, making us more customer-oriented and more effective.
In the new governance model, the local Rabobanks have
a maximum focus on serving our customers in the Netherlands.
Where possible, we perform support functions centrally.
We put intensive effort into this transition in 2016.
Good results, strong bank
2016 was a year of contrast for Rabobank in financial terms.
Thanks to a good operational result, our net profit amounted
to EUR 2,024 million. As the economy picked up, we saw
a sharp reduction in loan impairment charges. We also
succeeded in bringing down costs. The result came under
substantial downward pressure from non-recurring items such
as restructuring costs, an extra provision for compensating
commercial customers with an interest rate derivatives contract,
and an impairment on the stake in Achmea. The underlying
operating profit before tax was EUR 4,090 million, 14% higher
than in 2015.
A strong capital base is one of the main pillars of Rabobank's
strategy. Our objective is to achieve a common equity tier 1
ratio of at least 14% in 2020 and a total capital ratio of at least
25%. In 2016, we once again reinforced our strong capital
position, partly through the sale of Athlon. The recent issue
of new Rabobank Certificates with a nominal amount of
EUR 1.5 billion also impacts the fully loaded common equity
tier 1 ratio, thereby accelerating the realisation of our target
of at least 14% in anticipation of a possible increase in capital
requirements.
2 Rabobank Annual Report 2016
