âWhile 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 Groupâs 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%," says Piet Moerland Chairman of Rabobank Group. 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 "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 EUR 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 Programme and further cost reductions are therefore absolutely necessary, not only to maintain our sound capital position but also to be able to continue to service our clients well, now and in the future,â says Mr Moerland. http://www.rabobank.com/content/news/news_archive/012-RabobankNetprofitEUR13billionTier1ratio.jsp Probably the safest bank in the world?
Moerland is brilliant, and an example of the responsible Chairman. He is also realistic about how bad things are, and because he is so, is taking the necessary medicine to ensure his institution survives this downturn, when many of his peers won't.