The tidal wave of the financial crisis has not spared Europe - and The Netherlands is one of the European countries caught by the ripcurl. None of its banks have escaped unharmed: pre-tax profits and return on equity (ROE) shrank across the board; in some cases dramatically.

At the five biggest Netherlands banks in the The Banker's Top 1000 bank rankings this year, pre-tax profits fell to -€3.11bn and return on equity to -14.13%.

ABN Amro's losses are the most striking. No sooner had it been acquired by the three-bank consortium of Royal Bank of Scotland, Santander and Fortis Bank in 2007, than its pre-tax profit began to drop: from €5.07bn in 2006 to €1.75bn in 2007. By year-end 2008, pre-tax profits had plunged to -€15.47bn. The bank's ROE was also severely hit, decreasing to -80.79% in 2008's full-year figures. Its Tier 1 capital was even lower in 2008 than it was in 2004 and its total assets decreased from €1025bn in last year's ranking to €666.8bn in 2009.

At ING Bank, the financial crisis has done nothing to halt its decline. Although the Amsterdam-based financial institution is still showing signs of growth, having increased Tier 1 capital in the 2009 ranking to €32.02bn, its pre-tax profit has been on a downward trajectory for several years, falling from €5.02bn in 2006 to €4.45bn in 2007. Amidst the financial meltdown, the bank's pre-tax profits fell further to -€1.49bn.

Only a couple of The Netherlands' banks offer light relief to this gloomy picture. Co-operative bank Rabobank still posted a decent profit (albeit a lot lower than the year before), maintained its Tier 1 ratio and kept its AAA rating in a difficult year. It was also the first bank to issue European subordinated bank debt this year when it sold $1.5bn perpetual Tier 1 securities with an 11% coupon in late May. Bank Nederlandse Gemeenten also kept its head above water, although pre-tax profit dropped from €238m in 2007 to €182m in 2008. and its ROE fell to 9.5% in 2008, its lowest level since 2004.

The Netherlands' banking sector as a whole has been hit hard by the financial crisis, with average pre-tax profit tumbling to -€3.114bn in 2008. However, even before the credit crunch, local institutions were already on a downward spriral: average pre-tax profits began slipping from 2005 onwards, falling from €2.75bn to €2.66bn in 2006.

After four years of slowdown, the biggest challenge for The Netherlands' banks will be to halt this decline. Next year's Top 1000 will reveal whether they have been successful or not.

Netherlands Banks\' Pre-Tax Profits (Em) 2004-2008

Netherlands Banks' Pre-Tax Profits (Em) 2004-2008

Netherlands Banks\' Roe (Em) 2004-2008

Netherlands Banks' Roe (Em) 2004-2008

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