Our financial performance
Rabobank booked net profit of EUR 2,674 million
The strong and broad-based recovery of the Dutch economy intensified in 2017, reaching a growth
of more than 3%, the highest economic growth in ten years. The continued increase in exports,
investments and consumption have all been major contributors to this economic upturn. These
favourable economic developments also benefited Rabobank. Loan impairment charges decreased
further in the Netherlands as well as in most other countries where Rabobank is active, falling by
EUR 500 million to minus EUR 190 million, or minus 5 basis points of the average loan portfolio
(the long-term average is 36 basis points). Reduced loan impairment charges had a positive impact
on Rabobank's net profit, which increased by EUR 650 million to EUR 2,674 million.
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Rabobank's private sector loan portfolio decreased by EUR 13.6
billion to EUR 411.0 billion.This reduction can largely be
explained by currency impacts (around EUR 11 billion). Also
the further reduction in non-strategic commercial real estate
lending contributed to this decrease. Deposits from customers
landed at EUR 340.7 billion. Private savings were stable at
EUR 142.1 billion.
Rabobank's underlying operating profit before tax was EUR 4,465
(2016: 3,979) million, an increase of EUR 486 million compared
to 2016. In calculating the underlying profit, corrections were
made for fair value items1, restructuring costs, the provision taken
for the interest rate derivatives framework, the provision taken
by Rabobank National Association (RNA) in December 2017, the
impairment on our equity stake in Achmea (taken in 2016) and
the book profit on the sale of Athlon in December 2016 and the
subsequent deconsolidation of this subsidiary. The decrease in
staff cost had a positive impact on the cost/income ratio.
However, the underlying cost/income ratio, including regulatory
levies landed at 65.3% (2016: 64.8%).The return on invested
capital (ROIC) amounted to 6.9% (2016: 5.2%).
Decrease in private sector loan portfolio largely caused
by currency effects
The weakening of the US dollar was the main driver behind
currency effects'downward impact on the lending book
expressed in euros (negative impact around EUR 11 billion).
At Domestic Retail Banking the mortgage portfolio decreased
due to a relative high level of repayments and the sale of some
small parts of the portfolio. In October 2017 a share of our
mortgage portfolio (around EUR 0.6 billion) was sold to La
Banque Postale and in December Rabobank sold its Roparco
mortgage loan business (around EUR 0.5 billion) to RNHB, a
former label of Rabobank subsidiary FGH Bank.The commercial
real estate loan exposure of Rabobank is actively managed down
and amounted to EUR 22.9 billion (EUR 23.8 billion). Excluding
currency effects, WRR's loan portfolio and the portfolio of
Rabobank's leasing subsidiary DLL saw modest growth.
Loan portfolio
in billions of euros
Total loans and advances to customers
Of which to government clients
Reserve repurchase transactions and securities
borrowings
Interest rate hedges (hedge accounting)
Private sector loan portfolio
31-12-2017 31-12-2016
432.6 452.8
2.3 3.3
12.9
6.4
411.0
16.3
8.6
424.6
The geographical breakdown of the loan portfolio as at
31 December 2017 was as follows: 73% in the Netherlands, 10%
in North America, 7% in Europe (outside the Netherlands), 5% in
Australia and New Zealand, 3% in Latin America, and 2% in Asia.
Loan portfolio by sector
in billions of euros
31-12-2017
31-12-2016
Volume of loans to private individuals
198.0
201.2
Volume of loans to TIS
115.2
121.3
of which in the Netherlands
81.2
84.6
of which in other countries
34.0
36.7
Volume of loans to Food Agri
97.8
102.0
of which in the Netherlands
36.9
37.5
of which in other countries
60.9
64.5
Private sector loan portfolio
411.0
424.6
1 Results on the fair value of debt instruments (structured notes) and
hedge accounting.
Rabobank Annual Report 2017 - Management report
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