30 March 2006

Rabobank Australia & New Zealand has recorded a pre-tax operating profit of A$161 million for the year ending December 31, 2005.

Continuing strong growth in Rabobank's rural lending operations saw revenue increase by six per cent to A$374 million for the year, while the bank's assets grew 11 per cent to A$18.8 billion.

Announcing the results, Rabobank Australia & New Zealand CEO Bruce Dick said despite the healthy growth in revenue, the bank's pre-tax operating profit was down on the previous year.

This outcome reflected out-of-the ordinary expenditure for the year - including significant infrastructure investment as the bank expanded its operations in Australasia and a major one-off bad debt provision - along with a flat result in the corporate business.

Rabobank Australia & New Zealand recorded a pre-tax operating profit of A$187 million in 2004.

"These additional expenses were one-off 'extraordinary' items which we do not envisage will impact on the business into the future," Mr Dick said. Overall, expense control within the group was good.

The local operations of the world's leading food and agribusiness bank, Rabobank Australia & New Zealand is the second largest lender to rural Australia and equal third in the New Zealand market. Rabobank is also a major provider of corporate financial services to Australasia's food and agribusiness sectors.

Mr Dick said 2005 had seen continued strong development in the rural banking business across Australia and New Zealand, with assets growing by 12.7 per cent.

"Overall, revenue growth in 2005 was restrained by flat results in the bank's corporate business, reflecting generally difficult conditions in the corporate banking market," he said.

Looking ahead, Mr Dick said, 2006 was shaping up to be another positive year for the Rural operations, with client demand expected to remain strong.

"In Corporate Financial Services, there is an encouraging pipeline of new business going forward as the bank moves to expand its offering in this part of the market," he said.

Mr Dick said the bank's 2005 results had been impacted by higher than usual provisions due to an exposure to the failed company Sam's Seafood in the Business Banking area, as well as a $6.3 million provision to comply with new International Financial Reporting Standards.

A significant investment had been made in infrastructure to support the bank's future growth in the Australasian region, including new systems to support a new Global Financial Markets division.

"This is in line with Rabobank's ongoing commitment to this region of the world," Mr Dick said.

Other major milestones for the year included:

• The sale of the bank's A$1.58 billion Landmark-managed loan portfolio to AWB for A$25 million.
• The successful take-up in the market of the bank's transactional banking service, launched in late 2004. By the end of 2005, some 50 per cent of Rabobank's Australian clients had converted to the transactional All in One product, with similar positive response in the New Zealand market.
• The establishment of a Global Financial Markets operation in Australia to assist the bank's Australasian clients to manage currency, commodity price and interest rate risk, leveraging the global Rabobank's GFM expertise.
• The development of new business capabilities, including Rabo Life, a new life insurance advisory business for the rural market, and the ongoing development of specialist rural financial advisory business Rabo Financial Advisors (RFA). Considerable work was also undertaken during the year to develop a new direct online banking business in New Zealand, RaboPlus, which was launched in February 2006. This new business, which replicates successful direct banking operations recently launched by Rabobank in Belgium and Ireland, represents a significant expansion of the bank into the broader New Zealand financial services market.
• Continuing strong growth in Rabobank's brand awareness and position in the market. In November 2005, the bank's premier position in the Australian agribusiness banking market was confirmed by an independent report, Merrill Lynch's Business Banking Franchise Review, which rated Rabobank as the best agribusiness bank in Australia 'on all dimensions by a considerable margin'.
• Completion of openings and refurbishments of the currently-planned new locations in the bank's branch network expansion program. Rabobank now has 75 branches throughout Australia and New Zealand.

* Pre head office charges and risk provisions.

Rabobank Australia & New Zealand's results announcement follows the international Rabobank Group reporting a net profit of EUR 2.1 billion (approximately A$3.4 billion) for the year to December 31, 2005, an increase of 16 per cent on the previous year. The Rabobank Group's total income rose two per cent for the year to EUR 9.3 billion (approximately A$15.4 billion).

Rabobank Australia & New Zealand is a part of the international Rabobank Group, the world's leading specialist in food and agribusiness banking. Rabobank has more than 100 years' experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank has a AAA credit rating and, in recent years, has twice been awarded the title of the world's safest bank by Global Finance magazine. Rabobank operates in 35 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1500 offices and branches. Rabobank Australia & New Zealand is one of Australasia's leading rural lenders and a significant provider of business and corporate banking and financial services to the region's food and agribusiness sector. The bank has 75 branches throughout Australasia.

Contact

For further information please contact Denise Shaw, Public Relations Manager (Tel: +61 2 8233 8744) or email on sydney.mediarelations@rabobank.com.