By Maarten van Tartwijk AMSTERDAM--Dutch lender Rabobank Wednesday launched an internet savings bank in Germany as it seeks to bolster its footprint in Europe's largest economy, a move that could help it reduce its reliance on wholesale funding. The Netherlands' second-largest bank by assets, Rabobank said it will use its internet bank RaboDirect to offer savings accounts to German retail clients. The German savings market has strong growth prospects and Rabobank aims to attract 10 billion euros ($12.63 billion) in deposits within five years, a spokesman said. He noted the German market is worth around EUR1.8 trillion ($2.27 trillion), which is six times larger than the Dutch market. The move comes days after Rabobank was stripped of its triple-A credit rating by Moody's Investors Service as part of a wave of European bank downgrades. Moody's, which also downgraded other big Dutch banks, blamed Rabobank's heavy reliance on wholesale funding, which has become a potential risk in light of the current turmoil in financial markets. The rating firm also cited pressure on deposit margins in its domestic market. The savings market in the Netherlands has limited growth potential and is characterized by fierce competition, with savings rates among the highest in Europe. The Rabobank spokesman said German deposits can help diversify the bank's funding profile, but stressed that the launch was planned long before the Moody's downgrade. Rabobank, a cooperative lender, follows the footsteps of Dutch rival ING Groep NV (INGA.AE), which has built up a significant presence in the German savings market through its ING-DiBa unit. RaboDirect is also active in Belgium, Ireland, Poland, Australia and New Zealand. In total the business has 550,000 clients and EUR19 billion in deposits. Rabobank doesn't plan to further expand the business in Europe, but is considering launching it in the U.S. and South America, the spokesman said. Write to Maarten van Tartwijk at maarten.vantartwijk@dowjones.com
