Net profit at EUR 1.3 billion
Equity up 10% to EUR 37 billion
Tier 1 ratio higher, at 13%
Private sector loan portfolio up EUR 7 billion, at EUR 415 billion
Bad debt costs at 55 basis points due to adverse economic conditions
Solid results in unusual times
"While some economists have spotted a swallow, I, for one, do not see an economic recovery yet. Many western countries are battling with recession, including the Netherlands, which is experiencing its most severe economic decline since World War II. This has created serious problems for customers, which in turn is reflected in Rabobank Group's results. Despite difficult economic conditions, Rabobank Group has achieved solid results for the first six months of 2009, with net profit at EUR 1.3 billion and an improved capital position.
Our Tier 1 ratio has improved towards 13%.
In a market in which growth in both mortgage lending and corporate lending slowed down, the local Rabobanks succeeded in strengthening their market positions. More loans were extended to food & agri clients by Rabobank International and De Lage Landen. The private sector loan portfolio grew by 7 billion to EUR 415 billion. As a result of lower levels of activity among our clients in the second half of 2009, growth in lending is likely to level off further. In addition, bad debt costs are expected to continue to be higher than the long-term average. Interest income at local Rabobanks came under severe pressure owing to fierce competition in the Dutch savings market. Improved margins, accelerated execution of the Rabobank 2010 …