Dutch economic growth lifts Rabobank first half profit
Dutch lender Rabobank reported a 41-percent rise in first half profits, fuelled by the country's resumed economic growth and lower provisions for bad loans.
"The recovery in the Dutch economy contributed to a sharp fall in loan impairment charges at the local Rabobanks and at real estate subsidiary FGH Bank," the bank said in a statement.
It announced that net profits for the first six months of 2015 increased to 1.52 billion euros ($1.7 billion) -- a rise of 41 percent compared to the same period last year.
The second-largest Dutch bank behind ING said impairment charges set aside for bad loans decreased by 70 percent to 356 million compared to the first half of 2014.
In the previous period, Rabobank had been required to pay 214 million euros to the government to help finance the 2013 nationalisation of stricken lender SNS Reaal.
Rabobank also said its tier one solvency ratio remained even at 13.2 percent, though its capital ratio increased to 21.5 percent compared to 20.8 percent at the start of the year.
The bank credited resumed growth in the Netherlands, which the national statistics agency last week pegged at 1.6 percent for the year, "practically the same level it was before the (financial) crisis exploded in the second half of 2008."
"The Dutch economy is steadily recovering. Our customers are feeling this and we can observe this in the sharp decline in loan impairment charges," said Rabobank executive board chairman Wiebe Draijer.
However, Draijer noted the improving economy had not yet kick-started spending by businesses that would further improve the bank's bottom line.
"(The recovery) has not yet led to a marked growth in business investment. As a consequence, lending edged down slightly in the Netherlands. In our international markets the loan portfolio increased, partly due to the depreciation of the euro," he said.
© 2015 AFP