* Russian sanctions hurt Rabo clients, unclear if losses to
* Provisions of 1.2 billion euros taken in 1H for property
* Private sector loan book slips by 1.5 billion to 433
(Adds comments from CFO, details on results)
By Anthony Deutsch
AMSTERDAM, Aug 21 Rabobank, the
leading Dutch lender in the agriculture sector, said on Thursday
its direct exposure to Russian sanctions was limited but some of
its clients were suffering big losses due to a ban on imports of
fruit and vegetables.
While there are signs of economic recovery, the outlook for
2014 is uncertain, the bank said, partly due to the Ukraine
crisis and the possible impact on the global economy.
Net profit slipped 3 percent to 1.1 billion euros ($1.4
billion) in the first half of 2014 due to a one-time 214 million
euros charge for the nationalisation of peer bank SNS Reaal.
After taking "considerable provisions" this year the number
of non-performing loans is expected to fall thanks to the
economic recovery, Rabobank chief financial officer Bert
Bruggink told journalists.
But Rabobank said the trade conflict between the West and
Russia over Ukraine, which had led to a series of sanctions and
counter-sanctions, "represents an uncertain factor."
"Some additional uncertainty came in the last few weeks,
mainly in the greenhouse sector, due to the Russian sanctions,"
Bruggink said. "We hope that this will not lead to additional
losses, but at the moment it's hard to predict."
The "sanctions can have an adverse impact on a number of our
business customers and may therefore also adversely affect
Rabobank's result to a limited extent."
Rabobank is the largest lender in the Dutch farms sector,
which had just started to benefit from an economic upswing, but
were now taking "a severe hit" caused by price falls and the
sanctions, he said.
The Dutch statistics office said this week the country's
agriculture sector will suffer about 300 million euros in lost
business, with Russia accounting for about 10 percent of all
Dutch exports of vegetables, fruit and meat.
Another European bank with exposure in the agriculture
sector is Austria's Raiffeisen Bank International, which said
Thursday it expects "no significant impact" from the trade
conflict with Moscow.
PROPERTY SLUMP CONTINUES
Bruggink said that "the largest part of the economy in the
Netherlands and elsewhere is doing better, with the clear
exception of the real estate sector."
The bank took provisions of 1.2 billion euros of its real
estate portfolio in the six-month period, he said and "we expect
that trend to continue in the second half of the year."
With the Dutch real estate market believed to have bottomed
out after a 20 percent fall in home prices since 2008, a
possible recovery is seen in 2015.
Rabobank, the largest Dutch mortgage lender, said in a
statement it was not yet able to give guidance on the possible
impact of the European Central Bank's asset quality review, or
"stress test" of European banks.
The bank said it "was expecting a cautiously continuing
economic recovery in the second half of the year," citing rising
consumer consumption and positive signs in the housing market.
The bank said its liquidity position remained strong in the
quarter, at 103 billion euros, while the private sector loan
portfolio decreased by 1.5 billion euros to 433 billion euros.
(Editing by Michael Urquhart)