DUTCH BANK Rabobank saw its net profit decline by 29 per cent in the first six months of the year, to €1.3 billion from the “relatively high figure” it reported for the same period in 2011. According to the bank, the decline was due “in particular to an increase in value adjustments by €478 million to €1.1 billion”.

Rabobank operates in Ireland through ACCBank, international bank Rabobank Ireland and online retail banking arm Rabodirect.

While the bank gave no break-down for its Irish operations, it did indicate deposits at Rabodirect, which operates in six countries including Ireland, increased by 16 per cent on 2011, up to €19.1 billion. Rabobank International, of which Irish operation Rabobank Ireland is a subsidiary, increased its net profit by 7 per cent to €543 million. It grew lending by 4 per cent to €111 billion, with most of the increase relating to the food and agri sector.

Significantly, the group reported a drop in its effective tax rate from 20.4 per cent to 14.6 per cent, which led to its total tax bill falling from €474 million on profits of €1.9 billion in the first half of 2011, to €225 million. The drop in tax rate was “partly the result of the tax gain that Rabobank International recognised for Ireland”.

The group reduced its exposure to Irish government bonds by €5 million since December 2011, with total holdings standing at €55 million as of June 31st.

In total, the bank has an exposure of €252 million to peripheral European sovereign debt, down from €349 million as of the end of December 2011.

The bank, which is AAA rated, raised more than €20 billion in long-term loans in the first half of the year, “amply meeting the funding requirements for 2012”.

Rabobank noted it is co-operating with government authorities in various jurisdictions with regards to ongoing investigations in connection with the Libor and Euribor setting process.

“European banks specifically are faced with having to weather the economic downturn . . . The debt crisis continues to cause uncertainty in the financial markets,” said Piet Moerland, chairman of the executive board of Rabobank. However, he added that the direct effect on Rabobank of the crisis was “limited”.