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Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
Maximum gross
credit risk
Credit risk
reduction
in millions of euros
2016
2015
2016 2015
Cash and balances at central banks
84,405
64,943
0% 0%
Loans and advances to banks
25,444
32,434
48% 51%
Derivatives
42,372
48,113
88% 88%
Loans and advances to customers
452,807
465,993
75% 75%
Available-for-sale financial assets
33,745
36,838
0% 0%
Subtotal
638,773
648,321
61% 63%
Credit related off balance sheet
commitments
62,760
62,056
18% 18%
Total
701,533
710,377
57% 59%
4.3.4 Off-balance-sheet financial instruments
The guarantees and standby letters of credit that Rabobank
provides to third parties in the event of a client being unable
to fulfil its obligations to these third parties, are also exposed
to credit risk. Documentary and commercial letters of credit
and written undertakings by Rabobank on behalf of clients
authorise third parties to draw bills against Rabobank up to
a fixed amount and subject to specific conditions. As these
transactions are secured by the delivery of the underlying
goods to which they relate, the risk exposure of such
an instrument is less than that of a direct loan.
Loan commitments are firm commitments to provide credit
under pre-specified terms and conditions and are included
in credit related contingent liabilities. Rabobank is exposed
to credit risk when it promises to grant loans.The amount
of any losses is likely to be less than the total of the unused
commitments because the commitments are made subject to
the clients meeting certain loan conditions. Rabobank monitors
the term to the expiry of loan commitments because long-term
commitments generally involve higher risk than short-term
commitments.
4.3.5 Credit quality of financial assets
In its financing approval process, Rabobank Group uses the
Rabobank Risk Rating, which reflects the risk of failure or the
probability of default (PD) of the loan relation over a period of
one year. The table below shows the loan quality of the loan-
related balance sheet items after deduction of the impairment
allowance.The loan-quality categories are determined on
the basis ofthe internal Rabobank Risk Rating.The Rabobank
Risk Rating consists of 21 performance ratings (R0-R20) and
four default ratings (D1-D4).The performance ratings assess
the probability of default within a period of one year and the
rating is determined, in principle, on a cyclically neutral basis.
D1-D4 ratings refer to default classifications. D1 represents
90 days' past due (depending on local conditions this may be
extended to more than 90 days); D2 indicates high probability
that the debtor is unable to pay; D3 indicates that the debtor's
assets will most likely need to be liquidated due to default; and
D4 indicates bankruptcy status. The default ratings make up the
total impaired exposure. The 'vulnerable'category consists of
performance ratings which are not (yet) classified as impaired.
The other financial assets with a counterparty risk (e.g. cash and
balances at central banks, available for sale assets) are of good
quality as the exposure is with central banks or consist of
quoted government bonds.
Credit quality of financial assets
in millions of euros
(Virtually)
no risk
Adequate to
good
Vulnerable
Impaired
Total
On 31 December 2016
Loans and advances to banks
18,257
7,113
73
1
25,444
Loans and advances to customers
Loans to government clients
2,370
801
59
4
3,234
Loans to private clients:
- overdrafts
1,229
18,150
514
762
20,655
- mortgages
40,257
162,491
2,319
1,056
206,123
- leases
606
17,819
1,223
204
19,852
- reverse repurchase transactions and securities borrowing agreements
7,605
8,463
16,068
- corporate loans
8,176
157,852
4,709
7,936
178,673
- other
299
7,427
58
7,784
Total
78,799
380,116
8,955
9,963
477,833
On 31 December 2015
Loans and advances to banks
25,249
7,133
50
2
32,434
Loans and advances to customers
Loans to government clients
2,428
815
49
8
3,300
Loans to private clients:
- overdrafts
5,407
22,430
596
1,020
29,453
- mortgages
39,880
167,049
3,579
1,658
212,166
- leases
652
23,118
1,579
376
25,725
- reverse repurchase transactions and securities borrowing agreements
4,367
14,560
18,927
- corporate loans
7,636
149,844
2,742
7,491
167,713
- other
3,655
4,204
45
23
7,927
Total
89,274
389,153
8,640
10,578
497,645
196 Rabobank Jaarverslag 2016
