Notes to financial results
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Development of underlying operating profit before tax
Amounts in millions of euros
2017
2016
Income
595
538
Operating expenses
341
339
Adjustment on expenses Restructuring
(29)
(15)
Underlying expenses
312
324
Regulatory levies
4
4
Loan impairment charges
(116)
(75)
Operating profit before tax
366
270
Total adjustments
29
75
Underlying profit before tax
395
285
Income increased by 11%
In 2017, the total income of the real estate segment increased
to EUR 595 (2016: 538) million. Corrected for integration of parts
of the loan portfolio of FGH Bank within Rabobank, FGH Bank's
average loan portfolio was smaller. Consequently, net interest
income fell to EUR 57 (2016:143) million. Net fee and commission
income increased to EUR 59 (2016:16) million due to higher
performance fees at Bouwfonds IM, which are related to the
reduction of non-strategic activities. The increase in the number
of houses sold had an upward effect on other results at the real
estate segment which increased by EUR 100 million to EUR 479
(2016:379) million.
Operating expenses remained stable
Total operating expenses in the real estate segment remained
stable at EUR 341 (2016: 339) million in 2017. Staff costs
decreased by EUR 20 million to EUR 180 (2016: 200) million.
The increased commercial activity led to a small increase
in the number of employees at BPD and the number of
employees at FGH Bank decreased as part of the integration
into Rabobank. The number of employees at Bouwfonds IM
decreased as a result of the sale of several significant portfolios.
The other administrative expenses increased to EUR 154 (2016:
135) million in 2017 due to higher expenses at all divisions.
Depreciation landed at EUR 7 (2016:4) million.
Loan impairment charges remain negative
Just like in 2016, favourable economic developments in the
Netherlands had a positive impact on the loan impairment
charges in the real estate segment. Over 2017, the loan
impairment charges amounted to minus EUR 116 (2016:
minus 75) million, which entails a release of loan impairment
allowances. Loan impairment charges amounted to minus 521
(2016: minus 141) basis points of average lending. The long-
term average is 80 basis points.
Rabobank Annual Report 2017 - Appendices
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