Financial results of real estate
Notes to financial results
Outlook
Contents Foreword Management report Corporate governance
Consolidated Financial Statements
Company Financial Statements
Pillar 3
Results
Amounts in millions of euros
2016
2015
Change
Net interest income
293
348
-16%
Net fee and commission income
16
29
-45%
Other income
379
302
25%
Total income
688
679
1%
Staff costs
215
196
10%
Other administrative expenses
142
124
15%
Depreciation
4
7
-43%
Total operating expenses
361
327
10%
Gross result
327
352
-7%
Impairment losses on goodwill and
investments in associates
0
1
-100%
Loan impairment charges
(75)
90
-183%
Contribution to resolution fund and DGS
6
7
-14%
Bank tax and levy
7
8
-13%
Operating profit before tax
389
246
58%
Income tax
101
65
55%
Net profit
288
181
59%
Loan impairment charges
(in basis points)
(54)
56
-196%
Ratios
Cost/income ratio
exclusive regulatory levies
52.5%
48.2%
Cost/income ratio
inclusive regulatory levies
54.4%
50.4%
Balance sheet (in EUR billion)
31-12-2016
31-12-2015
Loan portfolio
11.3
15.3
-26%
Assets under management
5.9
6.3
-6%
Number of houses sold
9,905
8,386
18%
Number of internal employees (in FTEs)
1,193
1,358
-12%
Number of external employees (in FTEs)
300
229
31%
Total number of employees (in FTEs)
1,493
1,587
-6%
Total income increased by 1%
In 2016, total income of the real estate segment increased to
EUR 688 (679) million. Net interest income fell to EUR 293 (348)
million. The decrease of the loan portfolio at FGH Bank resulted
in lower net interest income, which was partly offset by higher
income from penalty interest received in connection with the
early repayment of loans. The reduction in the loan portfolio and
the decrease in assets under management influenced net fee
and commission income, which dropped to EUR 16 (29) million.
Other income was positively influenced by the rise in the number
of residential units sold, and the sale of 'De Rotterdam' in June.
As a result, other income increased to EUR 379 (302) million.
Operating expenses increased by 10%
Total operating expenses in the real estate segment rose to
EUR 361 (327) million in 2016. At BPD, the increased commercial
activity led to a small increase of the number of employees,
more than neutralised by the decrease of personnel at RVG
Holding. The number of employees also increased at Rabo Real
Estate Finance: the integration of FGH Bank into Rabobank
resulted in additional activities, for which external employees
were taken on, increasing staff costs to EUR 215 (196) million.
Once the integration is finished, the number of employees is
expected to fall. Particularly the restructuring provision taken for
redundant employees at FGH Bank contributed to the increase
in other administrative expenses by 15% to EUR 142 (124)
million. Depreciation showed a decrease to EUR 4 (7) million.
Loan impairment charges negative
The economic recovery in the Netherlands positively impacted the
loan impairment charges in the real estate segment. These loan
impairment charges were EUR 75 million negative, so on a total
segment level provisions taken for loan losses in the past were
released. In 2015 EUR 90 million was added to these provisions.
Among others the economic recovery led to an increased demand
for logistic real estate and retail premises, while the property
investment market saw significant activity from both domestic
and foreign investors. Mainly due to initiatives to convert vacant
buildings, the number of vacant offices and retail premises is
decreasing. However, rental prices are still under pressure in areas
outside core locations in large cities. Loan impairment charges
amounted to minus 54 (plus 56) basis points of average lending.
The long-term average is 94 basis points.
For BPD we expect continued positive results in the core
countries; the Netherlands, Germany and France. Bouwfonds
IM will continue to focus on new initiatives and is expecting
moderate growth in managed assets. Provided there are no
unforeseen circumstances, the Rabo Real Estate Group will
continue its positive development. The overarching theme for
2017 at FGH Bank is the integration into Rabobank, and honouring
the commitments with clients who do not transfer to Rabobank.
Although the overall real estate exposure will decrease, the real
estate financing business will continue to represent a substantial
portion of Rabobank's activities in the Dutch market.
Rabobank has far-reaching financing ambitions and sees
opportunities in all segments of the commercial real estate
market. The related drive in this field is to contribute to welfare
and prosperity in the Netherlands. As a cooperative company
and, Rabobank has a clear focus on sustainability, conversion,
innovation and local communities. We link financial returns to
social returns to fulfil our mission both in large cities and in
towns and villages.
49 Our output and impact: improving performance
