* FY net profit of 2.012 bln euros, down 2 pct
* Real estate business posts 817 mln euro loss
(Adds details on outlook, CEO search, divestments)
By Sara Webb
AMSTERDAM, Feb 27 Dutch lender Rabobank
said net profit dipped 2 percent last year as a $1
billion fine for rigging benchmark interest rates and hefty real
estate impairments were only partly offset by the sale of its
fund management business.
The only major Dutch bank to survive the 2008 financial
crisis without a state bailout, Rabobank had a turbulent year
marked by job cuts, branch closures, and real estate losses.
But by far the biggest blow to its reputation among
customers and the Dutch public was its role in the London
Interbank Offered Rate (Libor) scandal - the cost of which,
Rabobank said, would not be borne by taxpayers.
The cooperatively owned bank paid 774 million euros ($1.06
billion) to British, U.S. and Dutch regulators after 30 staff
were found to have been involved in "inappropriate conduct" with
regard to Libor and its Euribor cousin - interest rates used as
benchmarks for more than $300 trillion of financial assets.
Traders' blatant manipulation of rates, revealed in dozens
of shocking emails, prompted a public outcry and led to the
resignations of Chief Executive Piet Moerland and Sipko Schat,
an executive responsible for Rabobank International's wholesale
"We are entitled to set off a very large portion of the
settlement amount of 774 million euros for tax purposes, both in
the Netherlands and abroad," Rinus Minderhoud, acting CEO, told
a press conference.
"We have voluntarily opted not to do so, however. This is a
bill we have to foot ourselves. The full amount will therefore
be paid by Rabobank and no one else, especially not the
taxpayer," he said.
The search for a permanent successor to Moerland, who quit
in October, is still in progress, Minderhoud said.
Rabobank, the country's second-largest bank by assets after
ING, said net profit fell 2 percent to 2.012 billion
euros in 2013. It said it expected operating results to improve
thanks to cost savings, while impairments on real estate and
land holdings and provisions would be lower this year.
On top of the Libor fine, Rabobank was hit by an 817 million
euro loss at its real estate business because of impairments and
revaluations, substantially increasing provisions in the second
half to reflect the deterioration of the quality of the
Those were partly offset by a 1.6 billion euro gain from the
sale of its fund management business, Robeco, to Japanese
financial services firm Orix Corp and a positive impact
from pension changes.
Rabobank, a mutual lender that finances Dutch cheese and
tulip producers, was stripped of its coveted triple-A credit
rating from Standard & Poor's in late 2011.
It divested Sarasin and Robeco, its private banking and fund
management businesses, to bolster its capital buffers, and has
agreed to sell its Polish unit, Bank BGZ, to BNP
Paribas for about 1 billion euros. The Polish
financial regulator was quoted this month as saying it would not
rule on the deal before August.
Rabobank Chief Financial Officer Bert Bruggink appeared
confident approval would be given.
"The Polish regulators sent us supplementary questions in
order to be satisfied about the stability of the banking system
... which is a perfectly usual thing to do," Bruggink said on a
conference call with reporters.
"I don't think we can say that the Polish government is
putting up all kinds of barriers for us that would make it
impossible to close the deal," he said.
Rabobank has announced sweeping job cuts, branch closures
and reductions in remuneration packages to save about 1 billion
euros in costs.
About 8,000 domestic retail banking jobs will go by 2016 -
reducing the headcount in those operations by nearly a third to
20,000 from 28,000, while Rabobank said it would close about 300
out of the 800 or so existing branches of its member banks.
($1 = 0.7317 euros)
(Additional reporting by Thomas Escritt; Editing by Tom
Pfeiffer and Susan Fenton)