Tuesday 27 September 2016

Rabobank plans to dramatically shrink loan book by up to €150bn

David de Jong

Published 15/10/2015 | 02:30

Rabobank’s head office in the Dutch city of Utrecht
Rabobank’s head office in the Dutch city of Utrecht

Dutch lender Rabobank plans to reduce the loans on its books by as much as €150bn as the Netherlands' biggest mortgage lender seeks to comply with increased capital requirements.

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Two years ago Rabobank began to exit much of its Irish business when it closed its ACC Bank unit to new business.

The bank now needs to reduce loans by €100bn to €150bn by 2020, Rabobank spokesman Hendrik-Jan Eijpe said by phone.

The cuts may involve residential mortgages or commercial loans, he said. Rabobank had assets of €675bn on its balance sheet at the end of June.

"The capital demands are going up," said Mr Eijpe. "You can then either shore up capital or remove activities from the balance sheet. We'll be selling loans to investors."

Rabobank chief executive officer Wiebe Draijer, who took over last year, is overseeing efforts to cut as many as 10,000 jobs, about a fifth of the workforce, by next year.

He is also trying to repair Rabobank's reputation after the century-old cooperative bank admitted wrongdoing in a 2013 settlement over interest-rate manipulation.

"All the European banks are shrinking their loan exposures because of capital requirements," Jos Versteeg, an analyst for Theodoor Gilissen Bankiers NV said.

"Rabobank has always had a very strong balance sheet, now even they have to consider toning it down." (Bloomberg)

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