Rabobank Group - Interim Results 2014
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  • 1. Press conference 21 August 2014 Interim financial figures 2014
  • 2. Interim financial figures 2014 Rinus Minderhoud, Chairman of the Executive Board
  • 3. Interim financial figures 2014 – analysis Bert Bruggink, CFO
  • 4. Balance sheet In billions of euros 30-Jun-14 31-Dec-13 30-Jun-14 31-Dec-13 Cash and cash Due to equivalents 41 43 customers 323 326 Loans to customers 463 456 Debt securities in issue 194 195 Financial assets 53 57 Due to other banks 18 15 Due from other Derivative financial instruments banks 41 41 and other trade liabilities 56 50 Derivative financial instruments 45 40 Other liabilities 49 43 Other assets 37 33 Equity 40 39 Total assets 680 669 Total liabilities 680 669
  • 5. Lending 420 425 430 435 440 31-Dec-13 Private individuals TIS Food and agri 30-Jun-14 Private sector loan portfolio in billions of euros Loan portfolio EUR 433 billion; -0.3% • Slight growth atWholesale, Rural & Retail, De Lage Landen and Obvion • FGH Bank virtually stable and decrease at local Rabobanks -1% -0% +2%
  • 6. Funding (1) Amounts due to customers and liquidity ratios 310 315 320 325 330 31-Dec-13 Savings Other 30-Jun-14 Amounts due to customers in billions of euros -2% 0% Amounts due to customers EUR 323 billion; -1% • Private savings EUR 148 billion; -2% • Loan-to-deposit ratio 1.36 (1.35) • Net stable funding ratio; NSFR 119% (114%) • Liquidity coverage ratio; LCR 161% (126%)
  • 7. Funding (2) Liquidity position at comfortable level In billions of euros 30-Jun-14 31-Dec-13 Change Domestic retail banking 214 216 -2 Wholesale and international retail banking 107 108 -1 Other group entities 2 2 0 Amounts due to customers 323 326 -3 Wholesale funding 221 219 +2 Liquidity position 103 121 -19
  • 8. Equity In billions of euros Equity at 31-Dec-13 39.4 Net profit +1.1 Distributions on certificates, hybrid capital and other non-controlling interests-0.6 Retained earnings +0.5 Issuance of Rabobank Certificates +0.1 Redemption of Capital Securities -0.2 Equity at 30-Jun-14 39.9
  • 9. Capital (1) Strategy 10.7% 9.7% 9.8% 12.0% 2.8% 2.8% 2.8% 2.0% 3.1% 2.5% 2.3% 3.5% 3.2% 3.5% 4.8% 4.5% 0% 5% 10% 15% 20% 25% 31 December 2013 1-1-2014 (CRD IV) 30-6-2014 (CRD IV) Target 2016 In percentages of RWA CET1 excluding certificates Rabobank Certificates Additional tier 1 Tier 2 • Target capital ratio >20%; 2014 H1: 19.7% • Target CET1 ratio 14%; 2014 H1: 12.6%
  • 10. Capital (2) Improved capital position • Transition to new pension scheme • Rabobank Member Certificates converted into Rabobank Certificates • Increased amount of tier 2 capital • Sale of subsidiaries • Stricter regulatory requirements - CRD IV
  • 11. Development of capital ratios Improvement of ratios in first half of 2014 0 4 8 12 16 20 24 2005 2006 2007 2008 2009 2010 2011 2012 2013 1-1-2014 (CRD IV) 30-6-2014 (CRD IV) Capital ratios in percentages Common equity tier 1 ratio Tier 1 ratio Capital ratio
  • 12. Financial results Rabobank Group In millions of euros 30-Jun-14 30-Jun-13 change Interest 4,522 4,453 +2% Commission 931 1,046 -11% Other results 945 956 -1% Total income 6,398 6,455 -1% Total operating expenses 3,946 4,240 -7% Value adjustments 1,188 1,106 +7% Taxation and resolution levy 184 97 Net profit from continued operations 1,080 1,012 +7% Net profit from discontinued operations - 98 Net profit 1,080 1,110 -3%
  • 13. Net profit by business segment In millions of euros 30-Jun-14 30-Jun-13 change Domestic retail banking 341 615 -45% Wholesale and international retail banking 389 494 -21% Leasing 223 232 -4% Real estate -90 -189 Other 217 -42 Rabobank Group 1,080 1,110 -3% Resolution levy 214 - Profit excluding resolution levy 1,294 1,110 +17%
  • 14. Operating expenses Operating expenses down 7% compared to 2013 H1 0 1000 2000 3000 4000 5000 6000 2010-I 2010-II 2011-I 2011-II 2012-I 2012-II 2013-I 2013-II 2014-I In millions of euros • Efficiency ratio improved by 4.0 percentage points to 61.7% • Further decrease of number of staff at local Rabobanks
  • 15. Net interest income Net interest income up 2% compared to 2013 H1 0 1000 2000 3000 4000 5000 6000 2010-I 2010-II 2011-I 2011-II 2012-I 2012-II 2013-I 2013-II 2014-I In millions of euros • Improvement of net interest income at domestic retail banking
  • 16. Bad debt costs Above long-term average 0 10 20 30 40 50 60 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014-I In basis points of average lending Bad debt costs 10-year rolling average • Bad debt costs 54 (full-year 2013: 59) bp; long-term average 32 bp • Increase in bad debt costs mainly in real estate segment
  • 17. Residential mortgages in the Netherlands 48% of lending; 5% of value adjustments 30-Jun-14 31-Dec-13 Residential mortgages in billions of euros 30-Jun-14 30-Jun-13 Value adjustments in millions of euros Residential mortgages EUR 207.6 (209.1) billion • Decrease due to additional repayments • 20.6% (20.3%) of portfolio financed with National Mortgage Guarantee NHG • Loan-to-value 79.4% (80.7%) • Bad debt costs 5 (6) basis points 209.1 68 56 207.6
  • 18. Commercial real estate in the Netherlands Write-downs versus value adjustments 0 100 200 300 400 500 600 700 800 900 2010 2011 2012 2013 2014-I In millions of euros Value adjustments Write-downs
  • 19. Domestic retail banking Net profit EUR 341 million; -45% 30-Jun-14 30-Jun-13 Net profit in millions of euros 30-Jun-14 31-Dec-13 In billions of euros Amounts due to customers Loan portfolio • Result of domestic retail banking impacted mainly by resolution levy • EUR 183 million levy • Excluding this levy 15% decrease rather than 45% 615 215.7 303.1 214.0 298.8 341 • Loan portfolio EUR 298.8 billion; -1% • Amounts due to customers EUR 215.7 billion; -1%
  • 20. Wholesale and international retail Net profit EUR 389 million; -21% 30-Jun-14 30-Jun-13 Net profit in millions of euros 30-Jun-14 31-Dec-13 In billions of euros Amounts due to customers Loan portfolio • Value adjustments down • De-risking • Lower gross result and higher taxation 494 389 108.5 87.8 107.3 89.9 • Loan portfolio EUR 89.9 billion; +2% • Share of food and agri in portfolio 57% (56%) • Amounts due to customers EUR 107.3 billion; -1%
  • 21. Leasing Net profit EUR 223 million; -4% 30-Jun-14 30-Jun-13 Net profit in millions of euros 30-Jun-14 31-Dec-13 Lease portfolio in billions of euros • Net interest income down slightly • Lower level of value adjustments 232 223 30.2 31.3 • Lease portfolio EUR 31.3 billion; +4% • Share of food and agri in portfolio 32% (30%)
  • 22. Real estate Net loss EUR 90 million 30-Jun-14 30-Jun-13 Result of Rabo Real Estate Group in millions of euros • High level of value adjustments in current year • Last year also included impairments on land positions and revaluations of land operations -189 -90 7341 17200 8982 1780030-Jun-14 31-Dec-13 In billions of euros Loan portfolio • Number of houses sold 2,562; +46% • Loan portfolio EUR 19.6 billion; +1% 19.4 19.6
  • 23. 23 Thank you for your attention
  • 24. Interim financial figures 2014Interim financial figures 2014