Rabobank posted a net profit of €1.5bn in the first half of 2017, up 52% from the €997m in the same period in 2016. The common equity tier 1 ratio increased from 13.5% to 14.7%, due partly to the issuance of Rabobank Certificates, according to the bank's interim report 2017.

The negative effect of hedge accounting in the first half of 2017 was lower than it was in the first half of 2016, but this decline was more or less offset by lower results on structured notes, the bank reported. On balance, the gross result on structured notes and hedge accounting increased by €4m from a loss of €190m in the first half of 2016 to a loss of €186m in 2017. The result on structured notes in the first half of 2016 was adjusted upwards for comparison reasons by €97m due to the early adoption of a part of IFRS 9, an international financial reporting standard, according to the bank.

In the first six months of this year, Rabobank raised €10bn of senior unsecured long-term funding in 14 different currencies. By operating on a global scale, the bank said it aims to avoid becoming too reliant on a single source of funding. The average maturity of the newly raised unsecured, long-term funding is approximately five years (2016: 5.7 years). Of total wholesale funding, more than €36bn will have matured after five years or more as per mid-2017, according to the bank.

As at June 30, 2017, the bank's outstanding long-term wholesale funding stood at €132.6bn (December 30, 2016: €143.1bn). Long-term wholesale funding included medium-term notes (€94.7bn), residential mortgage-backed securities (RMBS) and other asset-backed securities (ABS) (€18.9bn), covered bonds (€2.5bn) and subordinated debt securities (€16.5bn).

The maturity of short-term debt securities, of which Rabobank is a frequent issuer, increased in the past six months, according to the bank. At the middle of 2017, the average maturity of short-term issued debt was 126 days (2016: 114).

'The progress on our three strategic priorities demonstrates that our transition is impacting all parts of Rabobank,' said Wiebe Draijer (pictured), chairman of the executive board, in a statement. 'We are seeing customer satisfaction trending upwards, improved financial results and further balance sheet optimisation. However, we are not there yet: we need to do a lot more to keep pace with the rapid changes around us. We are now shaping the next phase of our own change agenda, with even more emphasis on far-reaching digitisation and innovation.'

There are 1,015 structured products issued by Rabobank across 11 different jurisdictions listed on the SRP database. Of these, 38 products are still live, including 29 structures distributed by the bank in its domestic market, the Netherlands. The majority of Rabobank's Dutch products are linked to the interest rates (15), predominately Euribor, while the two outstanding Swiss products, which are due to mature in December this year, are linked to equities. Germany and Spain are two other markets where Rabobank still has live products.

In March 2013, Rabobank announced the closure of its equity derivatives division following a review of the business, however, the bank continues to offer interest-linked products to its clients, while the ability to offer equity-derivatives products via white-labelling has also been kept open.

Click the link to view the Rabobank interim report 2017.

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