Rabobank has no idea yet how much the settlement of the OM criminal investigation into inadequate supervision of money laundering will cost. The bank has not yet set aside any money for a possible settlement, said financial director Bas Brouwers on Thursday at the presentation of the annual figures.
In December it was announced that the judiciary is conducting a criminal investigation into Rabobank, as previously happened at ABN Amro and ING. They eventually reached settlements of hundreds of millions of euros.
The number of employees that the bank deploys to screen customers for possible money laundering risks and to clear backlogs in files, the so-called Know Your Customer(KYC) policy, rose again in 2022. In total, more than 7,000 employees worldwide are now working on this subject (2,300 more than a year earlier), excluding subsidiaries, the figure is 6,600 employees.
Read here: Money laundering remained under the radar at Rabobank for years
The costs that this entails – banks compete with each other for KYC employees and that drives up salaries – partly depressed the profit for 2022. At 2.78 billion euros, it was almost a quarter lower than a year earlier. The bank was able to improve margins on savings and checking accounts due to the rise in interest rates. “Costs are not an issue in this case. We’re going to deliver. Only when we have this in order will we look at how we can organize it more efficiently,” said new CEO Stefaan Decraene on Thursday. At the beginning of this year, he succeeded Wiebe Draijer, who stepped down last fall after eight years.
Decraene left the presentation of the annual figures to financial director Bas Brouwers. In a short introduction, the Belgian said of “this beauty [mooie] bank one of the best banks in the world”. “One of my assignments is to make this bank flawless.”
Nitrogen
Another thorny issue for Rabobank is the nitrogen dossier. The bank is by far the most important financier of farmers in the Netherlands and is involved in discussions about an agricultural agreement, among other things. Earlier, an adopted parliamentary motion called for the cancellation of part of the debts of farmers. Rabobank does not want that.
The portfolio in the so-called industry food & agri grew by 10 percent worldwide last year to 113.3 billion euros. According to Brouwers, this increase was mainly due to investments in the food processing industry. According to the financial director, lending to dairy farmers and meat producers, for example, declined.
Straw pot
Rabobank was cautious on Thursday about the macroeconomic outlook for the Netherlands. The bank expects a slight contraction of the economy this year. Rabobank is therefore setting aside an extra EUR 344 million for businesses and consumers who may no longer be able to repay their loans. That is considerably more than a year ago, when part of the reservations for the strop became available because the corona crisis had led to fewer bankruptcies than previously expected. The phasing out of activities from Russia also led to 200 million euros in write-offs for the bank. Rabobank no longer wants to be active there as a result of the war in Ukraine.