Dutch financial institution Rabobank, which quit the retail banking sector here in 2018, has taken a €550 million cash dividend out of what is left of its Irish operation.
Rabobank said this week it remained committed to the Irish market, despite the large cash withdrawal. It continues to offer wholesale and corporate banking services here with a focus on the agrifood industry, a legacy of its history in the Irish market as the owner of ACC (Agricultural Credit Corporation) Bank.
The cash payment brings the total it has extracted in dividends from its Irish operation to more than €681 million since it quit the retail market in 2018. Rabobank sold the last of its loan book of commercial and SME loans for €800 million that year to a consortium including Goldman Sachs, CarVal and Cabot.
Dutch parent
Recently filed accounts for several of Rabobank’s Irish holding entities for 2021 reveal that the €550 million was paid to its Dutch parent in July last year. The windfall appears to be related to the maturation of a deposit account held by a Rabobank entity.
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As soon as the account matured last July, the cash was sent by a Rabobank entity, Flagpole Investments, to an intermediary company, Black Draught Investments. Flagpole was subsequently put into liquidation, along with another company, Red Liquid Finance, which led to a near-€55 million writedown in the bank’s books.
Black Draught then passed the cash on up the chain to another holding company, Black Liquid Investments (Ireland), which sent the €550 million on to the Netherlands as a dividend. Rabobank’s financial statements show it also sent €30 million to the Netherlands the previous year, on top of €81.3 million in 2018, after it quit the Irish retail banking market.
Rabobank was among a clutch of foreign banks to quit the Irish market in the years following the financial crisis and Ireland’s subsequent bailouts of other institutions, such as AIB, Bank of Ireland and Permanent TSB. It started to wind down its Irish retail operation in 2014. Danish bank Danske also quit the Irish market at around this time, following Bank of Scotland (Ireland).
Repatriation of capital
The exodus continued in recent years, with Belgian bank KBC and the NatWest-owned Ulster Bank deciding to leave last year.
“Rabobank continues to be fully committed to Ireland and its Irish customers and indeed continues to grow its Irish operations with the expansion of the Rabobank Global Service Centre in its offices in Dublin, for which recruitment continues,” said Colin Fuller, the head of legal for Rabobank Dublin and the company secretary of Black Liquid, which made the payment.
He said the €550 million is “the repatriation of capital that the Rabobank Group invested in its Irish group over a number of years which was returned to its Dutch parent as part of a simplification of the group structure”.
Rabobank’s latest group accounts say the corporate branch that remains in Dublin has revenues of €275 million.
