Financial results of domestic retail banking
-
Notes to financial results
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Strong increase in assets under management
In 2017, assets under management increased by EUR 4.4 billion
to EUR 43.8 billion. A third of this positive development is the
result of high cash inflows, mainly from Private Banking clients,
and the other two-thirds comes from positive investment
returns. On the back of global economic growth, most stock
markets had a good year: on average, shares brought positive
returns for clients.
Results
in millions of euros
31-12-2017
31-12-2016
Change
Net interest income
5,581
5,730
-3%
Net fee and commission income
1,398
1,343
4%
Other results
74
58
28%
Income
7,053
7,131
-1%
Staff costs
1,430
1,820
-21%
Other administrative expenses
2,783
3,165
-12%
Depreciation
98
117
-16%
Operating expenses
4,311
5,102
-16%
Gross result
2,742
2,029
35%
Loan impairment charges
(259)
32
-909%
Regulatory levies
270
282
-4%
Operating profit before tax
2,731
1,715
59%
Taxation
703
446
58%
Net profit
2,028
1,269
60%
Loan impairment charges (in basis points)
(9)
1
Ratios
Cost/income ratio exclusive regulatory levies
61.1%
71.5%
Cost/income ratio inclusive regulatory levies
65.0%
75.5%
Balance sheet (in EUR billion)
External assets
285.9
291.9
-2%
Private sector loan portfolio
280.0
285.2
-2%
Deposits from customers
228.8
223.3
2%
Number of internal employees (in FTEs)
12,466
16,475
-24%
Number of external employees (in FTEs)
1,169
1,402
-17%
Total number of employees (in FTEs)
13,635
17,877
-24%
Underlying profit before tax increased by 11%
Development of underlying operating profit before tax
Amounts in millions of euros
2017
2016
Income
7,053
7,131
Operating expenses
4,311
5,102
Adjustments on expenses
Restructuring
Derivatives
(52)
(325)
Framework
(51)
(514)
Underlying expenses
4,208
4,263
Regulatory levies
270
282
Loan impairment charges
(259)
32
Operating profit before tax
2,731
1,715
Total adjustments
103
839
Underlying profit before tax
2,834
2,554
Underlying performance improved
The underlying performance of domestic retail banking
improved in 2017, as illustrated by the development of the
underlying operating profit before tax, which increased by
EUR 280 million to EUR 2,834 million. In calculating this
underlying profit before tax, corrections were made for
restructuring costs and the addition to the provision for the
SME interest rate derivatives recovery framework.The lower
salary costs and a decrease in loan impairment charges
contributed to the net profit improvement.
Income decreased 1%
The total income of Rabobank's domestic retail banking
business decreased to EUR 7,053 (2016: 7,131) million in 2017.
As in 2016, we observed a positive impact from loan repricing.
At the same time, the volume of early interest rate revisions
in our mortgage book remained high. Combined with the
decrease in lending volumes due to early repayments, net
interest income was pressured and decreased to EUR 5,581
(2016: 5,730) million. Higher commissions on payment accounts
contributed to an increase in net fee and commission income
to EUR 1,398 (2016:1,343) million. In 2016 as well as in 2017,
the sale of mortgages to institutional investors had an upward
effect on other results. On balance, other results landed at
EUR 74 (2016: 58) million in 2017.
Operating expenses decreased by 16%
Total operating expenses for domestic retail banking decreased
to EUR 4,311 (2016: 5,102) million. Staff costs fell to EUR 1,430
(2016:1,820) million as the virtualisation and centralisation of
services impacted the size of the workforce. The number of
internal and external employees in the segment decreased to
13,635 (2016:17,877) FTEs in 2017. Part of this decrease is the
result of employees moving from local Rabobanks to the central
Rabobank Annual Report 2017 - Appendices
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