In response to instructions from De Nederlandsche Bank (DNB), Rabobank is allocating an extra 249 million euros to improve its anti-money laundering policy. According to the bank, the money is needed for, for example, eliminating backlogs in customer surveys and monitoring transactions.
“We have already made many improvements, but there is still a lot of work to be done,” says CEO Wiebe Draijer. According to him, 4,900 people are already working to combat money laundering. But he estimates that an additional 1,000 to 1,500 people will be needed this year. Rabobank will probably have to recruit a large part of this externally.
The money laundering rules have been causing problems for Dutch banks for years. ING and ABN AMRO both had to pay hundreds of millions of euros after settlements with the Public Prosecution Service (OM). Draijer cannot say whether such a monetary penalty also threatens Rabobank. “We don’t know,” he says.
penalty payment
Rabobank had not met the requirements for some time. Earlier, the group therefore had to pay a penalty of 500,000 euros. Rabobank subsequently announced in November that DNB would start an enforcement process because of the shortcomings in combating money laundering. The outcome of this is still unknown and Draijer does not want to prejudge it yet.
The cooperative group has significantly increased its profits last year. Nearly 3.7 billion euros remained below the line, where in the first corona year 2020 just under 1.1 billion euros profit was recorded. Rabobank owes this profit jump mainly to the economic recovery. As a result, the bank was also able to release a lot of money that had previously been set aside for imminent credit losses.
Compensation scheme
The costs did go up. The bank has also made a provision of 333 million euros for offsetting credit products with a variable interest rate. It was already known that Rabobank would come up with a compensation scheme for customers who have paid too much interest on certain loans in the past. Rabobank previously said that the scheme probably involved about 100 million euros, excluding costs for interest on interest and implementation costs. But a more detailed calculation would follow later. “We have now been able to make a better estimate,” says financial director Bas Brouwers.
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