Financial results of Wholesale, Rural and Retail
Notes to the financial results
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Results
in millions of euros
31-12-2017
31-12-2016
Change
Net interest income
2,367
2,355
1%
Net fee and commission income
432
491
-12%
Other results
861
812
6%
Income
3,660
3,658
0%
Staff costs
1,011
1,103
-8%
Other administrative expenses
1,312
919
43%
Depreciation
56
94
-40%
Operating expenses
2,379
2,116
12%
Gross result
1,281
1,542
-17%
Loan impairment charges
95
255
-63%
Regulatory levies
171
152
13%
Operating profit before tax
1,015
1,135
-11%
Taxation
416
369
13%
Net profit
599
766
-22%
Loan impairment charges (in basis points)
9
25
Ratios
Cost/income ratio exclusive regulatory levies
65.0%
57.8%
Cost/income ratio inclusive regulatory levies
69.7%
62.0%
Balance sheet (in EUR billion)
External assets
131.9
156.3
-16%
Private sector loan portfolio
101.5
108.6
-7%
Deposits from customers
111.4
123.7
-10%
Number of internal employees (in FTEs)
7,441
7,474
0%
Number of external employees (in FTEs)
468
348
34%
Total number of employees (in FTEs)
7,909
7,822
1%
Underlying profit before tax increased by 12%
Underlying performance improved
The underlying performance of WRR improved in 2017, as
illustrated by the development of the underlying operating
profit before tax, which increased to EUR 1,323 million.This is
an increase of EUR 174 million compared to 2016. In calculating
this underlying profit before tax, corrections were made for
restructuring costs and the provision of EUR 310 million taken
by RNA in December 2017.
Income remained stable
WRR total income increased to EUR 3,660 (2016: 3,658) million in
2017. At WRR, underlying commercial interest margins stabilised
and net interest income rose to EUR 2,367 (2016: 2,355) million.
Net fee and commission income decreased to EUR 432 (2016:491)
million. In 2016, the Markets division's net fee and commission
income reflected the higher levels of activity in that period, with
more transactions than in 2017. The Markets division's trading
results improved due to better market conditions than in 2016.
Consequently, other results increased to EUR 861 (2016: 812)
million.
Operating expenses increased by 12%
Operating expenses atWRR went up to EUR 2,379 (2016:2,116)
million in 2017. Due to the centralisation of IT services in 2016,
WRR staff was relocated to the central organisation, reducing staff
costs but increasing recharges from the central organisation,
and consequently raising other operating expenses. Staff costs
fell to EUR 1,011 (2016:1,103) million, a 8% decrease compared to
last year. Other administrative expenses increased to EUR 1,312
(2016: 919) million, mainly due to the previously mentioned
provision of EUR 310 million taken by RNA. Also the release of a
provision for legal issues lowered other administrative expenses
in 2016. Depreciation was down to EUR 56 (2016: 94) million.
Development of underlying operating profit before tax
Amounts in millions of euros
2017
2016
Income
3,660
3,658
Operating expenses
2,379
2,116
Adjustments on expenses
Restructuring
2
(14)
Provision RNA
(310)
0
Underlying expenses
2,071
2,102
Regulatory levies
171
152
Loan impairment charges
95
255
Operating profit before tax
1,015
1,135
Total adjustments
308
14
Underlying profit before tax
1,323
1,149
Increase in income tax
Income tax atWRR increased by 13% to minus EUR 416 million,
while the operating profit before tax decreased. This is the
result of the change in tax rates in the United States, which are
unfavorable for WRR.
Loan impairment charges down by 63%
WRR loan impairment charges decreased to EUR 95 (2016:
255) million in 2017. Decrease of loan impairment charges can
be largely assigned to the overall improvement of weather
circumstances and sector developments. Despite the overall
decrease, loan impairment charges remained relatively high in
Asia and increased in the Netherlands. Elowever, the portfolio
in Asia stabilised and Dutch loan impairment charges remained
below the long-term average on the back of positive economic
developments.Total loan impairment charges went down to 9
(2016:25) basis points of the average loan portfolio, well below
the long-term average of 57 basis points.
Rabobank Annual Report 2017 - Appendices
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