Tuesday, 6 August 2024 - 18:40
Rabobank's profit in the first half of the year was more than 2.8 billion euros. The bank managed to increase interest income despite the European Central Bank (ECB) recently starting to lower interest rates. According to CEO Stefaan Decraene, the bank is benefiting from the fact that more people have been saving recently.
In doing so, Rabobank managed to maintain its margins on savings. The bank also provided more loans to companies contributing to the energy transition. And the bank has set aside less money for loans that may never be repaid.
Around 2.5 billion euros in profit was still in the books in the first six months of last year. At that time, the bank set aside 339 million euros for possible credit losses. This time, only 279 million euros will go to the contingency fund. "The Dutch economy remains relatively robust, which resulted in the release of credit provisions in our domestic retail banking business."
Figures from De Nederlandsche Bank (DNB) recently showed an increase in people's savings. The total balance of savings accounts in the Netherlands now amounts to more than 480 billion euros, more than 100 billion euros in savings added in five years.
Rabobank's interest income increased by 6 percent to around 6.1 billion euros. Financial director Bas Brouwers says that interest rates on the financial markets are falling more slowly than previously expected. In addition, it always takes a while for interest rate cuts to be reflected in a bank's figures. This is because the interest rate cut does not immediately affect all interest rates that banks charge their customers.
However, Brouwers predicts Rabobank will feel the lower interest rates in the market. He expects interest income to fall in the course of next year. Brouwers could not say what impact this will have on savers. "It is really too early for that now. But in general, you do see that interest rate reductions are translated into savings interest rates with a delay."
Rabobank has also been working on a reorganization in recent months. According to Decraene, the goal is not to save costs but rather to increase the focus on customers. Decraene wants to reduce the number of organizational layers and wants the bank to be managed per customer segment instead of regionally. It is not clear exactly how many jobs will disappear. But Decraene states that it will not be many, at most a few dozen. The bank has approximately 48,000 employees worldwide.
