Rabobank post €41.7m profit due to impairment charges drop
Rabobank Ireland reversed its losses last year thanks to rising income and an end to massive impairment charges.
The bank, which traditionally lends to farmers and business, reported an after-tax profit of €41.7m for 2012, up from a loss of €21.6m in 2011. Most of these gains were due to a major drop in impairment charges related to a Greek sovereign bond, from €78.3m to €14.7m.
The figures place the bank back in its enviable 2010 position, when it bucked the Irish banking trend with a €43m profit.
These latest results will come as a balm to its parent, Dutch farming cooperative Rabobank Nederlands, whose other Irish subsidiary ACC Bank saw its losses widen as it continued to struggle with bad property loans. ACC reported a pre-tax loss of €219m, up from the €186m loss it saw in 2011.
Rabobank Ireland's operating income for 2012 was up 10pc, excluding a once-off €10m loss. The bank said it had made particular progress in lending to the food and agribusiness sector.
Despite this growth in lending to Irish customers, income from interest earned on Irish loans fell, as well as the rest of the world, though it rose in Europe. But declines in the amount paid out in interest in deposits meant net interest income jumped to €78m from €59m.
Assets dropped by a considerable €2.2bn to €13.5bn. The bank blamed this on reduced lending to other group subsidiaries and investment bond repayments.
"The environment continues to be challenging in Ireland and in the wider eurozone, but overall we are pleased with our progress," said chief executive Kevin Knightly.
Employee numbers at Rabobank Ireland stood at 81 during the year, up from 75. This meant staff costs were also slightly higher, at €8.8m compared to €8.1 in 2011.