Outlook on 2019
Management Report Appendices Governance
Consolidated Financial Company Financial
Strategic priorities for 2019
The Managing Board has set 10 strategic priorities for 2019 and
beyond. Growth and top line development are high on the list
of priorities, along with digitalization and virtualization of the
entire bank, coupled with wide-scale innovation, operational
excellence and efficiency. Our positioning and the clear direction
we have taken will serve as a guiding principle for our employees
and our clients and form the basis of the choices we make in the
future. Rediscovering local community banking with specific
propositions for the future and the more active involvement of
clients, members and stakeholders are part and parcel of this
process. As one Rabobank, we take responsibility for the
performance of the group as a whole. Making the bank an agile
learning organization will to achieving the adaptivity we need to
take us forward. Continued performance improvements and the
implementation of complex IT improvement processes will equip
us to provide the services our customers demand.
Further execution of restructuring measures will reduce the
workforce more, lowering operating expenses in 2019.
Impairment charges on financial assets are expected to increase
but remain below the long-term average. Fligher 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 reach our performance
targets in 2019.
The global economic growth is decreasing slightly. There are still
some significant risks which require caution in 2019. The trade
war between the United States and China could negatively
impact the growth of the global economy. Brexit and difficulties
around the government budget in Italy are growing downside
risks. In the Eurozone, growth is gradually easing further.
RaboResearch expects the global economy to grow between 3%
and 4% in 2019.
Dutch economic growth is expected to decline to around 2% in
2019. Labor scarcity is starting to hinder production, especially
housing investments. In 2019, the household consumption will
continue to be an important driver for the Dutch economy. Lower
income tax will help households, but this will be offset to some
extent by the VAT increase. Wages are growing slowly, which,
combined with higher inflation, is limiting the increase in
consumer purchasing power. Furthermore, the international
uncertainties are undermining confidence and business
As in 2018, Rabobank will have to remain prepared in 2019 for
what is expected to remain a low interest rate environment.
Improving our income is challenging in such conditions, when
investing liabilities (such as current account balances) and equity
with zero or very low interest rates is less profitable.
Annual Report 2018 - Management Report