Rabobank Reports 39% Fall in First-Half Profit on Extra Provision

By Maarten van Tartwijk

AMSTERDAM--Rabobank Group on Wednesday posted a 39% drop in net profit for the first half of 2016, pulled lower by a provision related to an interest-rate derivatives mis-selling case in the Netherlands.

Net profit was 924 million euros ($1.04 billion), from 1.5 billion euros in the same period a year earlier, as the bank took a 541 million euro charge linked to the mis-selling issue. Higher restructuring costs also weighed on the results, as the bank is implementing a radical overhaul that will result in thousands of job losses.

Dutch banks said last month they would join a government-initiated arrangement to compensate thousands of small and medium-size businesses who suffered losses on interest-rate derivatives. The customers said they weren't properly informed about the risks of these products, a view that was backed by the Dutch financial markets regulator.

ABN Amro Group NV said this week it took an additional €271 million provision to settle the case, while ING Groep NV has set aside another 137 million euros. In total, Dutch banks have set aside more than 1 billion euros.

Write to Maarten van Tartwijk at [e-mail]

(END) Dow Jones Newswires

August 18, 2016 02:53 ET (06:53 GMT)

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