Interim Financial Information 2013
Rabobank Group – Press Conference
22 August 2013
Interim Financial Information 2013 – resultsPiet Moerland, Chairman of the Executive Board
22 August 2013
g
Rabobank GroupDecrease in profit amid continuing recession
Amounts in millions of euros 30‐Jun‐13 30‐Jun‐12 Change
Interest 4,455 4,473
Fees and commission 1,046 1,169
Other results 944 1,241
Income 6,445 6,883 ‐6%
Operating expenses 4,243 4,391 ‐3%
Value adjustments 1,106 1,096
Income tax expense 82 180
Net profit from continued operations 1,014 1,216 ‐17%
Net profit from discontinued operations 98 71
Net profit 1,112 1,287 ‐14%
• 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 (1)
Market shares in the Netherlands30‐Jun‐13 31‐Dec‐12
• Mortgages 31% (31%)
• Savings 39% (39%)
• Trade, industry and services 44% (43%)
Cooperative dividend
Developments in first half of 2013 (2)
g
Balance sheet developments and ratiosStrong positions
Amounts in billions of euros 30‐Jun‐13 30‐Jun‐12
CoreTier 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 divisionNet profit EUR 615 million; ‐3%
30‐Jun‐13
30‐Jun‐12
Net profit in millions of euros
30‐Jun‐13
31‐Dec‐12
In billions of euros
Amounts due to customers Loan portfolio
• Some recovery of margins on savings deposits• Increase in innovation costs• Slight rise in value adjustments
635
215307
218305
615
• 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%
30‐Jun‐13
30‐Jun‐12
Net profit in millions of euros
30‐Jun‐13
31‐Dec‐12
In billions of euros
Amounts due to customers Loan portfolio
• 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
543
496
118108
120105
• 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%
LeasingNet profit EUR 232 million; +21%
30‐Jun‐13
30‐Jun‐12
Net profit in millions of euros
30‐Jun‐13
31‐Dec‐12
Lease portfolio in billions of euros
• Increase in interest income• Limited rise in value adjustments
191
232
29.6
30.2
• Lease portfolio EUR 30.2 billion; +2.0%• Food and agri comprises 30% of the portfolio
Real EstateNet loss Rabo Real Estate Group EUR 198 million
30‐Jun‐13
30‐Jun‐12
Net profit in millions of euros • High(er) impairments on land• Phasing out MAB Development• Increase in bad debt costs
47
‐198
7341
17200
8982
1780030‐Jun‐13
31‐Dec‐12
In billions of euros
Loan portfolio Assets under management
• Number of homes sold 1,749; ‐30%• Loan portfolio EUR 19.3 billion; +0.5%• Assets under management EUR 5.7 billion; +4%
19.25.5
5.719.3
Interim Financial Information 2013 – analysisBert Bruggink , CFO
22 August 2013
Loan portfolio EUR 454 billion; ‐0.8%• Contraction at local Rabobanks and Rabobank International• Growth at Obvion and De Lage Landen
Lending
420
430
440
450
460
31‐Dec‐12 Private individuals TIS Food and agri 30‐Jun‐13
Private sector loan portfolio in billions of euros
+0% ‐1.2% ‐1.9%
Home mortgages in the Netherlands
30‐Jun‐13
31‐Dec‐12
Home mortgages in billions of euros
30‐Jun‐13
31‐Dec‐12
Value adjustments in millions of euros
First half Second half
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
209.6
113
68
210.1
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
g
Commercial real estate Netherlands (1)6% of lending; 26% of value adjustments
In millions of euros Portfolio Impaired loans Provisions Value adjustments
30 June 2013
Investment property 26,120 2,922 913 212
Property development
3,035 734 344 81
31 December 2012
Investment property 26,305 2,384 728 326
Property development
3,113 644 269 121
Commercial real estate Netherlands (2)Write‐downs versus value adjustments
0
50
100
150
200
250
300
350
400
450
500
2010 2011 2012 H1 2013
In millions of euros
Value adjustments Write‐downs
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%
FundingAmounts due to customers and debt securities in issue
310
320
330
340
350
31‐Dec‐12 Savings Other 30‐Jun‐13
Amounts due to customers in billions of euros
+4.3% ‐0.5%
g
Equity
In billions of euros
Equity at 31‐Dec‐12 42.3
Net profit 1.1
Payments on member certificates, hybrid capital and non‐controlling interests ‐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
g
Balance sheet
In billions of euros 30‐Jun‐13 31‐Dec‐12 30‐Jun‐13 31‐Dec‐12
Cash and cash equivalents
45 68 Due to customers 340 334
Loans to customers 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 698 751 Total liabilities 698 751
Rabobank capital strategy
retainedearnings &
reserves9.9%
retainedearnings &
reservesapprox.12%
Capital structure in % of risk-weighted assets
membercertificates
3%
membercertificatesapprox. 2%
hybridcapital
approx. 3.5%
hybridcapital
4%
T2 1.8% T2 >2.5%
Core Tier 112.9%
Core Tier 114%
Tier 117.5%
Tier 116.9%
Total capital ratio>20%Total capital ratio
18.7%
• Value adjustments 49 bp; long‐term average 28 bp• Increase primarily at local Rabobanks and Rabo Real Estate Group• Decrease at Rabobank International
Value adjustments
0
10
20
30
40
50
60
2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 2013
In basis points of average lending
Value adjustments
10‐year movingaverage
Profit development Rabobank Group
0
500
1.000
1.500
2.000
2.500
3.000
2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 2013
Net profit in millions of euros
First half of the year Second half of the year
Development of capital ratios
0
4
8
12
16
20
2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 2013*
Capital ratios in percentages
Core Tier 1 ratio Tier 1 ratio Capital ratio
* Excluding impact sale of Robeco on 1 July 2013
Interim Financial Information 2013 – current developmentsPiet Moerland, Chairman of the Executive Board
22 August 2013
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
Economic outlook
• Supervision on local Rabobanks for 90 years• Supervisory role is legally embedded and allocated to Rabobank Nederland• RabobankGroup 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
Local Rabobanks supervised by RN
• 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
Vision 2016
Interim Financial Information 2013
Thank you for your attention
Interim Financial Information 2013
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