Rabobank made slightly less profit in the past six months. According to the bank, this is due to lower interest rates. However, customer savings increased by 5.6 billion euros.
Rabobank is dealing with lower interest rates due to the policy of the European Central Bank (ECB). The ECB has been gradually lowering the key interest rate of the European Union since June.
This also puts pressure on the interest rates that banks use. And the lower their interest rate, the less income they receive. As a result, Rabobank’s profits were slightly lower than in the same period last year.
In the first half of this year, the bank made a profit of 2.7 billion euros, Rabobank reports on Thursday. In the first half of last year, that was 2.8 billion euros.
According to CEO Stefaan Decraene, this is a good result “in a world characterized by increasing geopolitical tensions”. He cites conflicts, the trade war and “a political impasse in the Netherlands” as examples.
According to the CEO, Rabobank is in a strong financial position
The bank says it still has the largest market share in the Dutch mortgage market: 21 percent. In addition, Rabobank remained the market leader for loans to entrepreneurs in small and medium-sized enterprises (SMEs). Costs from those loans remained low at the same time.
The bank is in a strong financial position, according to Decraene. The same applies to ABN AMRO, the competing bank announced on Wednesday.
Savings increased: in total, customers have 355 billion euros and other entrusted funds outstanding with the bank. Savings also increased at other banks this week. In total, Dutch people had 429 billion euros in withdrawable savings in June, De Nederlandsche Bank (DNB) reported.
Due to the wage increase for staff, Rabobank did have slightly higher costs. This was partly offset by the fact that the number of employees decreased, the bank says.
Impact of trade war probably limited
Decraene is pleased with the trade deal between the EU and the United States. According to him, the import duties of 15 percent could still cause difficulties for some customers. If they want to export to the US, they will face higher costs.
Yet, according to the CEO, this will be relatively limited. This is because other countries face much higher import duties.
There is probably no economic recession coming, Decraene expects. The CEO points out that more investments will be made in Defense in the near future. “In the medium term, that should give a boost to the economy,” he says.