42 Loan impairment charges 44 Taxes
-
43 Regulatory levies
45 Transactions with related parties
Inhoudsopgave Voorwoord Bestuursverslag Corporate governance
Consolidated Financial Statements Company Financial Statements Pillar 3
in millions of euros
2016
2015
in millions of euros
2016
2015
Loans and advances to banks
(10)
Income tax
Loans and advances to customers
474
1,087
Reporting period
527
555
Recoveries following write-downs
(157)
(101)
Adjustments of previous years
(6)
(17)
Credit related contingent liabilities
(7)
57
Recognition of previously unrecognised tax
Loan impairment charges
310
1,033
losses
(1)
(4)
Deferred tax
174
121
Total income tax
694
655
In 2016 loan impairment charges were at a lower level
compared to 2015, especially for the Dutch portfolio. The is
mainly caused by the recovery of the economy which leads to
a limited number of new defaults, recovery of existing defaults
and adequate allowances for existing impaired clients.
The effective tax rate was 25.5% (2015: 22.8%) and differs from
the theoretical rate that would arise using the Dutch corporate
tax rate.This difference is explained as follows:
in millions of euros 2016 2015
Operating profit before
taxation
2,718
2,869
Applicable tax rate 25.0%
(2015:25.0%)
25.0%
680
25.0%
717
I lncrease/(decrease) in taxes
resulting from:
Tax-exempt income
(4.2%)
(116)
(3.7%)
(105)
Tax rate differences
2.6%
73
3.6%
104
Non-deductible expenses
2.6%
72
2.1%
60
Recognition of previously
unrecognised tax losses
(0.1%)
(1)
(0.1%)
(4)
Other permanent differences
(0.4%)
(12)
(2.5%)
(72)
Adjustments of previous years
(0.2%)
(6)
(0.6%)
(17)
Other non-recurring tax items
0.2%
4
(1.0%)
(28)
Total income tax
25.5%
694
22.8%
655
The other permanent differences mainly comprise of the
deduction of interest payments on Capital Securities and the
impairment of Achmea.
The regulatory levies consist of bank tax, contributions to the
single resolution fund and the deposit guarantee scheme.
Banks operating in the Netherlands on 1 October of the
current year are required to pay bank tax. There are two rates
of bank tax: A rate of 0.044% for current liabilities and a rate
of 0.022% for long-term liabilities, based on the balance on
December 2015. In 2016, Rabobank Group was charged a total
of 166 (2015:168). In 2016, the bank levy in Ireland amounted to
4(2015:4).
On 1 January 2016 the European Single Resolution Fund (SRF)
was set up. This fund will for a large part replace the National
Resolution Funds, including the Dutch National Resolution
Fund (NRF) that was set up on the 27 November 2015.
Both funds have been established to improve the effectiveness
of resolution instruments. Banks and investment firms that are
in the scope of the SRM-regulation are obliged to contribute
to the SRF.The NRF is build up exclusively by lump-sum
contributions. In 2016, the contribution to the Single Resolution
Fund amounted to 180. In 2015, the contribution to the
National Resolution Fund amounted to 172.
Per the end of 2015, the new pre-funded deposit guarantee
scheme was introduced. In 2016, banks have to pay a premium
on a quarterly basis. Target size of the scheme is 0.8% of
total guaranteed deposits of all banks together. In 2016, the
contribution to the Deposit Guarantee Scheme amounted
to 133.
Two parties are considered related if one party exercises control
or has significant influence over the other party with regard
to financial or operating decisions. In the normal course of
business, Rabobank conducts a wide variety of transactions
with related entities which involve different types of loans,
deposits and transactions in foreign currencies.Transactions
between related parties also includes transactions with
associates, pension funds, joint ventures, the Executive Board
and the Supervisory Board.These transactions are conducted
against commercial terms and conditions and market prices.
In accordance with IAS 24.4, transactions within Rabobank
Group are not disclosed in the consolidated financial statements.
238 Rabobank Jaarverslag 2016