Rabobank, the biggest mortgage lender in the Netherlands, announced a 20 per cent decline in profit and more job cuts after bad-loan provisions increased in its domestic market and the Dutch government imposed a bank tax.

Full-year net income fell to €2.11 billion from €2.63 billion a year-earlier, the Utrecht-based lender said in a statement today.

Loan-loss provisions rose by €744 million to €2.4 billion euros as real estate, construction, transport and greenhouse-horticulture clients suffered from a weak economy in the Netherlands. Rabobank said matching

2012's results this year will be difficult as it expects limited economic growth while cost pressure continues. The lender, formed in 1898 as a co-operative to lend to Dutch farmers, will cut 3,000 jobs in its retail bank in the Netherlands in 2013 and 2014, and said it must "scale down" worker pay and benefits to reduce costs as customers switch to online and mobile banking.

"We expect job reductions will continue at a similar pace after 2014," partly through attrition, with at least 1,500 cuts a year from 2015, chairman Piet Moerland said in the statement.

The company now has about 28,000 workers in its Dutch retail banking unit.