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Outlook on 2018
Growing a better world together
Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Strategic priorities for 2018
The Managing Board has set ten strategic priorities for 2018 and
beyond. Growth and top line transformation are high on the list
of priorities, together with digitalisation and virtualisation of the
bank as a whole coupled with wide-scale innovation and
operational excellence and efficiency. Our new positioning and
clear direction will act as a source of guiding principle for our
employees and our clients and represent the basis for the choices
we make in the future. Rediscovering local community banking
with specific propositions for the future and more active
involvement of clients, members and stakeholders will be part
of this. For our employees we will create a share culture, one
Rabobank in which we take more responsibility for the
performance of the group as a whole. Making us an agile learning
organisation will be key to achieving the adaptivity we need to
take us forward. Continued performance improvements and
implementing complex IT improvement processes will equip us
'under the bonnet'to provide the services our clients demand.
Financial outlook
Political calm has apparently returned in Europe, but the
geopolitical tensions between North Korea, the US and China
continue.This situation gives caution in 2018, but is not expected
to impact the global economy much, even though a potential
trade war between the US and China remains a concern.
The positive economic developments of recent years are
expected to continue in 2018. The global economy is forecast
to see between 3% and 4% growth. RaboResearch expects
the Dutch economy to return to full capacity in 2018, growing
somewhat below 3% after a record year of growth in 2017, the
highest in ten years at more than 3%. Rabobank will continue
to focus on its clients, balance sheet optimisation and further
performance improvement.
Dutch household disposable incomes will continue to rise,
further increasing consumption. House prices are expected to
continue climbing in 2018, but the rate of growth may slow
down. High consumer confidence, a shortage in supply, and
high mortgage repayments due to low interest rates on savings
will shape this development. Continuing low mortgage interest
rates may increase slightly in 2018 and further slow down the
rate of price rises in the housing market.
As in 2017, Rabobank will have to remain prepared in 2018 for
what is expected to remain a low interest rate environment.
Improving our income is challenging in such conditions, when
investing liabilities with zero or very low interest rates (such
as current account balances) and equity is less profitable.
Low interest rate environments are often accompanied by a
flattening of the interest rate curve, making it harder for banks
to make a profit on transforming short-term liabilities into
longer term assets.
Further execution of restructuring measures will reduce
the workforce more, lowering operating expenses in 2018.
Loan impairment charges are expected to remain below the
long-term average. Higher capital requirements are lowering
returns on equity in the banking sector. Long-term measures
are being taken to manage operating costs and improve net
profit, but efficiency and effectiveness must undergo further
improvement to support the performance in 2018.
Mission
Vision
Banking for the Netherlands
Banking for Food
Strategy
Excellent customer focus H Meaningful cooperative
rOMio.ii] mi i.
Empowered employees
Priorities
100% digital convenience
in everything
Top customer advice nearby
Growth with innovation
v
Concrete socially responsible
contribution
Involved members and
communities
V
Top performance
Optimal balance sheet
Exceptionally good
execution
v
x
Inspired employees
One-Rabobank culture
