Rabobank Said to Hold Talks for $4.9 Billion Leasing Sale

  • Deal could be concluded in second half of year, person says
  • Division finances cars, medical, agricultural equipment

Rabobank Group is in preliminary talks with banks, institutional investors and private-equity firms that may bid for its leasing unit, De Lage Landen International BV, in a sale that may fetch as much as 4.5 billion euros ($4.9 billion), according to a person with knowledge of the process.

The transaction could be concluded in the second half of 2016, said the person who asked not to be identified because the sale is private. The Dutch lender is also considering selling parts of the leasing unit, the person said.

Rabobank is seeking to cut as much as 150 billion euros of assets by 2020 in preparation for tougher European capital rules. The closely held Utrecht, Netherlands-based lender, which had a balance sheet of 675 billion euros at the end of June, is under pressure to cut costs as customers switch to mobile and Internet banking services.

“Rabobank doesn’t have it easy, financially,” Jos Versteeg, an analyst at Theodoor Gilissen Bankiers NV in Amsterdam, said by phone. “They’re way behind in slimming down their balance sheet and raising capital compared with the other Dutch banks, and now they’re trying to catch up.”

Job Cuts

Rabobank, a cooperative formed in 1898 to serve Dutch farmers, has struggled to keep pace with changes in banking because of its legal structure. The 106 local units of the lender agreed in December to work together as a single entity with one banking license and a common annual report. Chairman Wiebe Draijer, a 50-year-old former McKinsey & Co. partner who took up his first banking job in 2014, is planning to cut 9,000 jobs at the bank over the next three years.

De Lage Landen, which finances cars, medical equipment and agricultural equipment, reported net profit of 454 million euros in 2014, according to its annual report. The subsidiary makes up almost a quarter of the profit at Rabobank.

Dutch newspaper Het Financieele Dagblad reported the possible sale earlier. Hendrik Jan Eijpe, a spokesman for Rabobank, declined to comment.

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