News Column

Lending Sanctions likely to hit Rabobank business

August 22, 2014

Shane Hickey and agencies

The conflict in Ukraine and its potential impact on the world economy has led Rabobank, the largest Dutch mortgage lender, to warn of possible knock-on effects to its business.

The bank said its net profit slipped by 3% to euros 1.1bn (pounds 880m) in the first half of the year, owing to charges related to the Dutch bank SNS, which was bailed out by the government.

The outlook for 2014 is uncertain, Rabobank said in a statement, partly because of the Ukrainian crisis and

the possible impact on the global economy.

"Russian 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," it said.

The sanctions are expected to cost

the agriculture sector more than euros 300m in lost business this year. 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, Rabobank said.

The bank said its net result in the first six months of 2014 was reduced by a one-time euros 214m levy imposed on Dutch banks and 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 eurozone banks.

Rabobank 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.

Shane Hickey and agencies

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Source: Guardian (UK)

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