6.4 Developments in the real
estate portfolio
Inhoudsopgave Bestuursverslag Corporate governance
Exposure on credit default swaps
This section provides the notional amounts of sold and bought
protection via CDS broken down by industry of the reference
name. Figures for protection bought and sold are shown in
Table 37 without being netted.
Table 37: Credit default swaps notional exposures by
Industry type
Credit default swaps notional exposures by Industry type
Protection
Protection
Industry type
sold
bought
Bank
5
5
Corporate
95
96
NBFI
0
105
Sovereign
70
139
Total
170
345
Rabobank participates in the CDS trading market, primarily
as a net purchaser of credit risk protection from other
counterparties, to hedge credit risk arising from bond positions.
The figures above represent the notional amount of CDS that
Rabobank entered into on a gross basis without any netting.
6.4.1 Domestic retail real estate
The housing market
The recovery in the housing market continued at a rapid rate
in the Netherlands. In each province the number of residential
property transactions rose compared to the previous year.
The price index for private homes for sale rose in almost all
provinces. Only in Zeeland and Flevoland did the index fall.
The more urban provinces of North-Flolland, South-Flolland
and Utrecht showed the sharpest price increases. For 2016 we
expect moderate growth in the number of residential property
transactions and an increase in the price index for current
private homes. This positive development is mainly the result of
high Consumer confidence, historically low mortgage rates and
the economic recovery.The problems of remaining debts and
the tightening of lending criteria have applied a limited brake
to this growth.
Market share
The share of Rabobank Group in the Dutch mortgage market
amounted to 19.7% (21.5%) of new mortgage production in
2015.The market shares of the local Rabobanks and Obvion fell
to 15.5% (16.3%) and 4.2% (5.2%) respectively. In recent years,
Jaarrekening Rabobank Groep Jaarrekening Rabobank
insurers and pension funds have sharply increased their market
share in new mortgages.
Mortgage portfolio
The additional repayments on mortgages remained relatively
high in 2015. While savings rates remain low, a number of
households will continue to opt to accelerate paying off their
mortgages. On balance, the Dutch mortgage portfolio of
Rabobank Group contracted to 201.5 (205.0) billion in 2015.
National Mortgage Guarantee (Nationale Flypotheek Garantie,
or NHG) financing accounts for 21.4% (21.1%) of the mortgage
portfolio. The revised tax treatment of owner-occupied
homes introduced on 1 January 2013 has led to an increase
in the number of annuity-based and straight-line loans in
the mortgage portfolio. The changes to the tax regime have
made mortgages with capital accumulation and interest-only
mortgages less attractive. Customers with 100% interest-only
finance accounted for 23.9% (24.6%) of the mortgage portfolio
at the end of 2015. The weighted average indexed loan-
to-value (LTV) of the mortgage portfolio improved to 73% (78%)
in 2015.This was due to (additional) repayments, an increase
in pledged savings and a small increase in the average price of
existing private homes. The LTV exceeds 100% for approximately
13% (18%) of the mortgage portfolio, excluding NHG.
Concern for affordability
Rabobank wishes to avoid as much as possible customers
having payment difficulties. This actually begins with good
advice leading to a suitable mortgage. During its lifetime,
Rabobank regularly checks whether the mortgage is still
suitable for their personal situation. Nevertheless, it sometimes
happens that a customer can no longer meet his payment
obligations. Where there are arrears (or a threat of arrears),
Rabobank wants to talk to the customer as early as possible in
order to seek a solution. In most cases, the customer and the
bank find a solution together and the customer can continue to
live in his home. In 2015, for 0.48% (2014: 0.40%), of mortgage
customers recovery was no longer a possibility and there were
no prospects of continuing the mortgage in a stable manner.
In these cases the homes had to be sold.The preferred option
here is to do this in cooperation with the customer by means
of a private sale. In exceptional circumstances we will use
a public auction.
Loan impairment charges and write-downs
Two non-recurring changes affected the loan impairment
charges and the allowances for residential mortgages.
Rabobank developed a new capital model for residential
mortgages; this model is also used to define the level of
352 Rabobank Jaarverslag 2015
