Before delivering the bank's interim results, Rabobank CEO Bert Heemskerk looked out the sixth story window in Utrecht and said, "It's a misty, foggy, rainy day outside, which looks a bit like the world economy. But, it is not that way here at Rabobank. We are high and dry."
Rabobank achieved a 12% increase in profits during a time when others are trying to shake the clouds and find cover.
The world economy may be like the gray, sunless summer in Holland. However, Rabobank has more to beam about than most banks. "Rabobank is one of the few banks in the world to have booked such a profit increase during a recession and credit crisis," said CFO Bert Bruggink.
"We exceeded our financial targets in the first six months of 2008, realised a further increase in profit and kept our returns up to standard. And, our net profit rose according to plan to more than 1.5 billion euros," said Heemskerk.
Savings market flood
Around the world, Rabo continues to have strong competition in both the mortgages and savings markets. Heemskerk admitted that the bank had a last minute flood of funds from the savings market. "In July 2008 alone, we attracted three billion euros in savings."
Safe place to land
For Rabobank, the silver lining on the credit crisis cloud has been the 'safe haven effect'. Customers are searching for a safe place to put their money, and consequently, businesses and individuals are paying more attention to safety ratings.
"Some have doubted the value of the AAA safety rating. Some have given us jealous glances, wondering if we were really worthy of the AAA rating," said Bruggink. "But, in the current climate that AAA rating have proved its worth and value."
Low subprime exposure
Rabobank's exposure to risky subprime-related investments has been extremely low. "We've written off 200 million euros in subprime-related activities. Compared to other banks, that is peanuts," said the CFO.
Still here
"Risky ventures are not in our blood here at the bank. Besides, we don't need to be or have to be adventurous," said Heemskerk. "For the past 100 years, we have been stable and solid. That hasn't changed. We are still here. And more importantly, still moving forward."