Unlisted Dutch bank Rabobank said full-year 2007 net profit rose 14 per cent to €2.7 billion from €2.3 billion in 2006, while it also reported a €284 million negative profit and loss (P&L) impact due to its indirect exposure to the sub-prime crisis in the US.
The bank added that it also booked a €127 million negative impact on its balance sheet due to its indirect exposure to RMBS and CDOs in the US.
Rabobank also said it booked to its balance sheet a €697 million negative impact from its total investment portfolio as a result of the 'unrest in the financial markets', partly due to rising credit spreads.
"After an excellent first-half, the result in the second half of 2007 fell back, especially in the division Global Financial Markets," Rabobank said.
Despite a decline in net profit at Rabobank International - which includes Rabobank's wholesale and international retail banking activities - Rabobank said its 14 per cent rise in net group profit bested its targets, adding that its Tier 1-ratio is at 10.7 per cent.
The Dutch domestic retail banking operations saw net profit rise 24 per cent to €1.349 billion from €1.091 billion in 2006, while Rabobank International's net profit fell 43 per cent to €394 million from €687million.
Rabobank - which has the largest Dutch banking operations compared to peers - said it will continue to benefit from the relatively favourable developments in the Dutch economy in 2008.
But it added that growth will slow due to the global economic slowdown and ongoing turbulence in financial markets.