Dutch lender Rabobank has reported a 14 per cent drop in net profit in the first half of the year following slow growth in its home market and the provision for settlements with regulators over alleged interest rate manipulation (release).
Net profit fell to €1.112bn (£950m) in the first six months of the year from €1.287bn in the same period the year before. Return on equity fell by one percentage point to 5.8 per cent.
Chairman of the executive board Piet Moerland said Rabobank “can look back on a difficult first half of 2013”.
The Dutch economy remained in recession and the prospects for recovery continue to be poor. The prolonged nature of the economic downturn is particularly taking its toll. This led, for instance, to an increase in the number of bankruptcies and a rise in unemployment.
Our customers’ financial situation did not improve in general. This had a negative effect on our net profit. Value adjustments on our loans remained at a high level at EUR 1,106 million. On an annualised basis, this amounts to a loss item of 49 basis points, which is the same level as last year.
Rabobank emerged from the financial crisis relatively healthy, and is currently restructuring its operations in response to the economic slowdown and tougher capital rules. It plans to cut 8,000 jobs, or 13 per cent of headcount.