Appendix 7 Our financial performance - segment reporting
Real estate
Strong results and continuous changes within real estate segment
The real estate segment within Rabobank currently comprises of Bouwfonds Property Development
(BPD), Rabo Real Estate Group (Bouwfonds Investment Management (Bouwfonds IM) and a financial
holding) and FGH Bank. As per 1 July 2017 BPD is positioned as a direct subsidiary of Rabobank and
a large part of the FGH Bank clients were transferred from the real estate segment to the domestic
retail banking segment and wholesale (part of the WRR segment). Rabo Real Estate group changed
significantly over the last few years and currently consists of the real asset investment management
division Bouwfonds Investment Management and a small financial holding.
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Income increased, mainly as a result of higher other income
due to an increase in the number of transactions by BPD. Loan
impairment charges decreased by EUR 41 million to minus
EUR 116 million and remain therefore on a historically low level.
This corresponds with minus 521 basis points of the average
loan portfolio and is well below the long-term average of 80
basis points.
Net profit of the real estate segment increased by EUR 93
million to EUR293 million in 2017. BPD contributed EUR 151
million to the real estate segment's profits, Rabo Real Estate
Group contributed EUR 71 million and FGH Bank net profit
amounted to EUR 135 million in 2017. In line with the transfer
of assets, part of the result of FGH Bank was transferred to the
domestic retail banking segment and wholesale (part of the
WRR segment).
Bouwfonds IM worked on several first, second closings and new
funds in 2017, but due to the sale of a number of significant
portfolios and the reduction of non-strategic activities the
assets under management decreased by EUR 1.9 billion to
EUR 4.0 billion at year-end 2017.
Real estate segment
The real estate segment results comprise the results of BPD,
Rabo Real Estate Group (Bouwfonds IM and a financial holding)
and FGH Bank.
BPD
Responsible for developing residential real estate areas, BPD
focuses on integral residential areas, multifunctional projects
and public facilities. With a local presence in the Netherlands,
France and Germany, BPD strives for managed growth in
economically strong regions. BPD is market leader in the
Netherlands and Germany and is a top-10 player in France.
BPD has been positioned as a direct subsidiary of Rabobank
since 1 July 2017, a development which ensures even
closer alignment with the bank's commitment to residential
development activities and a continuous stable platform to
build its future business on.
Bouwfonds IM
As real asset investment management division Bouwfonds IM
delivers sustainable value by investing capital raised from its
clients through investment funds and by actively managing
these portfolios.
FGH Bank
In 2017, a large part of the FGH Bank clients were transferred from
the real estate segment to the domestic retail banking segment
and wholesale (part of the WRR segment). In line with the
Rabobank real estate strategy, real estate financier FGH Bank's
expertise will remain within the bank, in the real estate finance
organisation. Rabo Real Estate Finance is a centre of expertise in
the area of commercial real estate financing. They advise local
Rabobanks about commercial real estate lending. For more
information on Rabo Real Estate Finance click here.
Residential real estate developments
In 2017, house prices rose approximately 8% in the Netherlands,
driven by the limited supply, household growth in the larger
cities, the economic recovery and persistently low interest rates.
The number of transactions remained high but after a record
number of sales, the growth rate stagnated in the second
half of the year. There are likely to be fewer transactions next
year because the number of homes for sale has also fallen
significantly. Significant regional differences include a shortage
of owner-occupied homes for sale in certain parts of the
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