28 Subordinated liabilities 29 Con tin gen t liabilities Inhoudsopgave Voorwoord Bestuursverslag Corporate governance 2016 2015 Discount rate 1.7% 2.5% Salary increases 1.7% 1.6% Price inflation 1.7% 1.6% Sensitivity analysis Rabobank is exposed to risks regarding their defined benefit plans related to the assumptions disclosed in the table below. The sensitivity analysis of these most significant assumptions has been determined based on changes of the assumptions occurring at the end of the reporting period that are deemed reasonably possible. In millions of euros Change in assumption Effect on defined benefit obligation of increase Effect on defined benefit obligation of decrease 2016 2015 2016 2015 Discount rate 0.25% (25) (21) 27 23 Salary increases 0.25% 18 14 (17) (14) Price inflation 0.25% 9 8 (7) (8) Mortality 1 year 21 17 (20) (17) Asset-liability matching strategy The assets that would provide the closest match to the cashflows of the ACC Loan management defined benefit plan are a combination of fixed interest and index-linked bonds. Below is a comparison of the asset allocation at 31 December against the scheme's target asset allocation.The assets are all quoted in an active market. Asset allocation Target asset allocation 2016 2015 2016 2015 Shares and alternatives 10% 10% 10% 10% Interest-bearing securities 47% 45% 45% 45% Alternatives 41% 41% 42.5% 40% Other 2% 4% 2.5% 5% Total 100% 100% 100% 100% The alternatives are investments such as commodities, absolute return investments and hedge funds. Estimated contribution The estimated contributions to pension plans for 2017 are approximately 6 (2016: 6). 27.2 Other employee benefits Other employee benefits mainly comprise liabilities for future long-service awards for an amount of 35 (2015: 95). Consolidated Financial Statements Company Financial Statements Pillar 3 in millions of euros 2016 2015 Rabobank 16,847 15,479 Other 14 24 Total subordinated liabilities 16,861 15,503 In the following table details of the issues of subordinated liabilities are shown: Subordinated liabilities Notional (in millions) Currency Coupon Year of issuance Year of maturity 1,500 USD 3.75% 2016 2026 225 AUD 5.00% 2015 2025, early repayment 2020 475 AUD Variable 2015 2025, early repayment possible 2020 1,500 USD 4.375% 2015 2025 1,250 USD 5.25% 2015 2045 1,000 GBP 4.625% 2014 2029 2,000 EUR 2.50% 2014 2026, early repayment possible in 2019 50,800 JPY 1.429% 2014 2024 1,000 EUR 3.875% 2013 2023 1,750 USD 4.625% 2013 2023 1,250 USD 5.75% 2013 2043 1,000 EUR 4.125% 2012 2022 500 GBP 5.25% 2012 2027 1,500 USD 3.95% 2012 2022 1,000 EUR 3.75% 2010 2020 1,000 EUR 5.875% 2009 2019 Credit related off balance sheet commitments Loan commitments represent the unused portions of funds authorised for the granting of credit in the form of loans, financial guarantees, letters of credit and other lending related financial instruments. With regard to the credit risk exposure from loan commitments, Rabobank is potentially exposed to losses amounting to the unused portion of the authorised funds. The total expected loss is lower than the total of the unused funds.This is because loan commitments are subject to the clients in question continuing to meet specific standards of creditworthiness. Financial guarantees represent irrevocable undertakings that, provided certain conditions are met, Rabobank will make payments on behalf of clients if they are unable to meet their financial obligations to third parties. Rabobank also enters into credit arrangements in the form of credit facilities made available to safeguard clients' liquidity requirements, but which have not yet been drawn upon. 230 Rabobank Jaarverslag 2016

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Jaarverslagen Rabobank | 2016 | | pagina 231