AMSTERDAM, Feb 15 (Reuters) - Dutch-based Rabobank said on Thursday net profit rose 32 percent to 2.67 billion euros ($3.3 billion) last year, helped by accelerating economic growth in the Netherlands and cost savings.
The strong Dutch economy helped cut loan impairments by 500 million euros, resulting in the release of earlier provisions as the bank had been too pessimistic in estimating loan losses.
Profit growth also strengthened Rabo’s capital buffers, with its core capital ratio improving by 2 percentage points to 15.5 percent.
The bank said this buffer will be pressured by new banking rules, dubbed Basel IV, as these could increase the risk-weighted assets on Rabo’s balance sheet by between 30 and 35 percent, when fully implemented in 2027.
To become more resilient to financial shocks, Rabo, best known internationally as an agricultural lender, two years ago said it would shed 9,000 jobs or a fifth of its workforce. It also said it would reduce its balance sheet by 150 billion euros by 2020.
In the past year the bank cut 1,757 jobs, or 4 percent of its workforce, reducing operating expenses by 6 percent.
Its cost to income ratio, however, increased slightly to 71.3 percent due to rising regulatory levies. ($1 = 0.8007 euros) (Reporting by Bart Meijer; Editing by David Holmes)