The Dutch bank reported net profit of €924m for the first half of 2016, down 39 per cent compared with €1.5bn the year before. The bank blamed restructuring expenses, market volatility and increased regulatory costs for the fall in profits.
Meanwhile, the bank reported income of €5.8bn, down 16 per cent on the prior year's €6.9bn.
Rabobank has also had to slash its headcount during the period as well, reducing the number of full time equivalent employees by 1,888 to 49,971.
Why it's interesting
Banks are not huge fans of uncertainty, as it often leads to clients putting off big ticket investments. Unfortunately, there's been rather a lot of uncertainty to go around as of late, with Rabobank highlighting not only June's Brexit vote, but also the upcoming US elections and potential wobbles in China as some of the things it would be keeping a close eye on throughout the rest of 2016.
Aside from the uncertainty, banks have also been struggling through a lower for longer interest rate environment, crimping how much they can hope to rake in as revenues and causing many to take a closer look at their costs.
What Rabobank said
Executive board chairman Wiebe Draijer said:
Rabobank’s transition clearly took off in the first half of 2016. We are making significant progress towards achieving our strategic goals: excellent customer service, a flexible and stronger balance sheet and improved financial results. While there’s still much to do, we are well on track regarding the fundamental strengthening of our cooperative bank.
With regards to the job losses, Draijer continued:
The digitisation of our services and the implementation of necessary improvements to efficiency, especially in the back office and supporting departments, are proceeding at a rapid pace. The very large loss of jobs associated with this presents a huge challenge to both remaining and departing employees. We are doing our utmost to ensure that this process is effected with care and attention.
Banks have a lot on their plate at the moment.