Interim Financial Information 2013
Rabobank Group – Press Conference
22 August 2013
Interim Financial Information 2013
– results
Piet Moerland, Chairman of the Executive Board
22 August 2013
Rabobank Group
Decrease in profit amid continuing recession
Amounts in millions of euros
30-Jun-13
30-Jun-12
Interest
4,455
4,473
Fees and commission
1,046
1,169
944
1,241
Income
6,445
6,883
-6%
Operating expenses
4,243
4,391
-3%
Value adjustments
1,106
1,096
82
180
1,014
1,216
98
71
1,112
1,287
Other results
Income tax expense
Net profit from continued operations
Net profit from discontinued operations
Net profit
Change
-17%
-14%
Developments in first half of 2013 (1)
• Weak economic conditions in the Netherlands
• Benefit from strategic international focus on food and agri
• Robeco sold in July
• New Collective Labour Agreement and transition to new pension scheme
• LIBOR investigations
Developments in first half of 2013 (2)
Market shares in the Netherlands
30-Jun-13
31%
31-Dec-12
(31%)
•
Mortgages
•
Savings
39%
(39%)
•
Trade, industry and services
44%
(43%)
Cooperative dividend
Balance sheet developments and ratios
Strong positions
Amounts in billions of euros
30-Jun-13
30-Jun-12
Core Tier 1 ratio
12.9%
12.7%
Tier 1 ratio
16.9%
16.9%
Total capital ratio
18.7%
17.6%
Liquidity position
131
159
Loan-to-deposit ratio
1.35
1.38
Private sector loan portfolio
454
462
Amounts due to customers
340
341
Domestic retail banking division
Net profit EUR 615 million; -3%
635
• Some recovery of margins on savings deposits
• Increase in innovation costs
• Slight rise in value adjustments
615
215
307
218
305
• Loan portfolio EUR 305 billion; -0.5%
• Amounts due to customers EUR 218 billion;
+1.7%
Wholesale and international retail
Net profit EUR 496 million; -9%
543
496
118
108
120
105
• Sale of Yes Bank in the first half of 2012
• Lower results at Global Financial Markets
and Rabo Private Equity
• Decrease in value adjustments in Ireland
• Loan portfolio EUR 105 billion; -2.0%
• Food and agri comprises 50% of the portfolio
• Amounts due to customers EUR 120 billion;
+1.7%
• IDB savings EUR 27 billion; +12%
Leasing
Net profit EUR 232 million; +21%
191
• Increase in interest income
• Limited rise in value adjustments
232
• Lease portfolio EUR 30.2 billion; +2.0%
• Food and agri comprises 30% of the portfolio
29.6
30.2
Real Estate
Net loss Rabo Real Estate Group EUR 198 million
47
• High(er) impairments on land
• Phasing out MAB Development
• Increase in bad debt costs
-198
7341
19.2
5.5
5.7
17200
19.3
8982
17800
• Number of homes sold 1,749; -30%
• Loan portfolio EUR 19.3 billion; +0.5%
• Assets under management EUR 5.7 billion;
+4%
Interim Financial Information 2013
– analysis
Bert Bruggink , CFO
22 August 2013
Lending
+0%
-1.2%
Loan portfolio EUR 454 billion; -0.8%
• Contraction at local Rabobanks and Rabobank International
• Growth at Obvion and De Lage Landen
-1.9%
Home mortgages in the Netherlands
209.6
210.1
113
68
Home mortgages EUR 210 billion
• Few home sales, amended tax regulations and
additional repayments
• 46% of total lending
• Loan-to-value 83%
• 20% of portfolio financed with NHG
Value adjustments 6 basis points
• 6% of total value adjustments
• Approximately 7,000 or 0.56% customers have
a payment arrears of 90 days or more
• Recovery is no longer possible in the case of
approximately 2,800 or 0.23% customers
Commercial real estate Netherlands (1)
6% of lending; 26% of value adjustments
In millions of euros
Portfolio
Impaired loans
Provisions
Value
adjustments
26,120
2,922
913
212
3,035
734
344
81
26,305
2,384
728
326
3,113
644
269
121
30 June 2013
Investment property
Property
development
31 December 2012
Investment property
Property
development
Commercial real estate Netherlands (2)
Write-downs versus value adjustments
Funding
Amounts due to customers and debt securities in issue
Amounts due to customers EUR 340 billion; +1.6%
• Customer savings deposits EUR 156 billion; +4.3%
• Debt securities in issue EUR 198 billion; EUR -25 billion
• NSFR 102% and LCR 131%
Equity
In billions of euros
Equity at 31-Dec-12
Net profit
Payments on member certificates, hybrid capital and non-controlling interests
42.3
1.1
-0.5
Earnings retention
0.6
Revaluation of liability for pension entitlements
-0.7
Repayments of hybrid capital and change in member certificates
-0.5
Other changes (including exchange rates and IAS19R for Robeco and
ACCBank)
-1.0
Equity at 30-Jun-13
40.7
Balance sheet
In billions of euros
Cash and cash
equivalents
Loans to customers
30-Jun-13 31-Dec-12
30-Jun-13 31-Dec-12
45
68 Due to customers
340
334
479
485 Debt securities in
issue
198
223
Financial assets
63
63 Due to other banks
19
27
Due from other banks
34
35 Derivative financial
instruments and
other trade liabilities
59
75
Derivative financial
instruments
48
65 Other liabilities
41
49
Other assets
29
35 Equity
41
42
Total assets
698
698
751
751 Total liabilities
Rabobank capital strategy
Capital structure in % of risk-weighted assets
Total capital ratio
18.7%
Tier 1
16.9%
Core Tier 1
12.9%
T2 1.8%
hybrid
capital
4%
member
certificates
3%
retained
earnings &
reserves
9.9%
T2 >2.5%
hybrid
capital
approx. 3.5%
member
certificates
approx. 2%
retained
earnings &
reserves
approx.12%
Total capital ratio
>20%
Tier 1
17.5%
Core Tier 1
14%
Value adjustments
• Value adjustments 49 bp; long-term average 28 bp
• Increase primarily at local Rabobanks and Rabo Real Estate Group
• Decrease at Rabobank International
Profit development Rabobank Group
Development of capital ratios
* Excluding impact sale of Robeco on 1 July 2013
Interim Financial Information 2013
– current developments
Piet Moerland, Chairman of the Executive Board
22 August 2013
Economic outlook
Slight improvement in worldwide growth
Global economy improves slightly
• Growth emerging markets limited
• Outlook US and UK considerably better
• The Eurozone is pulling out of recession
Dutch growth hindered by decrease in domestic spending
• Higher export growth prospects due to higher growth in the US and the UK and return to
growth in Eurozone
• Government austerity measures continue to put pressure on spending
• Further drop in consumer spending, because of decrease in disposable income
• Hope is placed in recovery of housing market
Local Rabobanks supervised by RN
• Supervision on local Rabobanks for 90 years.
• Supervisory role is legally embedded and allocated to Rabobank Nederland.
• Rabobank Group encompasses 136 autonomous local Rabobanks. They are the foundation of
the Rabobank organisation. Each local Rabobank is autonomous and has its own banking
licence.
• Local Rabobanks guarantee each other’s obligations. They can fall back on their centralised
organisation Rabobank Nederland.
• Delegated supervision on behalf of De Nederlandsche Bank has existed since the early 1950s.
Supervision pertains to controlled and honest business operations, solvency and liquidity.
• The principle is that each local Rabobank performs well. If a bank does not perform well,
additional guidance is provided by Rabobank Nederland to the local Rabobank concerned. This
is a normal part of the continuous improvement for which the local Rabobanks strive.
• On average 5-10% of the local Rabobanks need additional guidance.
Vision 2016
• The world and customer behaviour are changing dramatically.
• Customers have a need for simple and transparent financial services and want to be able to take
care of their financial affairs anytime and anywhere.
• We are streamlining processes, simplifying the product portfolio and providing self-service
online and via mobile phones.
• This way of serving the customer goes with an efficient organization with a structural higher
profitability.
• From 28,000 to 20,000 jobs and from 136 to 100 local Rabobanks.
• This will also lower our cost base by EUR 1 billion.
• Number of branch offices will be halved to approximately 400. Rabobank will still have the most
dense branch office network in the Netherlands.
• Rabobank will look different in 2016, but it is and will remain the cooperative, sound and
sustainable bank for its customers.
Interim Financial Information 2013
Thank you for your attention
Interim Financial Information 2013