4. Risk management
4.7 Risk Approach
Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
edtf 2 Rabobank Group operates a prudent approach to risk
with rigorous management controls to keep the bank
safe, support the sustainable risk strategy and minimise losses
within risk appetite.The Group has installed a strong risk
function and maintains a robust risk management framework to
identify and escalate emerging risks and to take decisions based
on a conscious and careful risk-return trade-off in line with the
risk strategy that should remain within risk appetite.
Risk strategy
Rabobank's risk strategy supports management in the
realisation of the business strategy by defining boundaries
within which the business must operate. An important starting
point for the risk strategy is that banking is about taking risks.
Each time business opportunities are discussed and decisions
are taken, risks are assessed against expected return. Without
taking risks no (profitable) banking activities are possible.
Therefore, not only accepting but also striving for a certain
degree of risk is a necessity.
Rabobank focuses its risk strategy on the following goals:
Support business in delivering excellent and appropriate
customer focus.
Protect profit and profit growth: Rabobank's business strategy
is strongly related to its cooperative roots, achieving a healthy
profit generation and at the same time realising a high
standard in serving its members, clients and society.
Maintain a solid balance sheet: Sound balance sheet ratios are
essential to ensuring continuity in servicing our customers
under sustainable and favourable conditions.
Protect identity and reputation: A solid reputation is essential
to maintaining stakeholders'fundamental trust in the bank.
Make healthy risk-return decisions: Make transparent
choices related to where capital and resources can be used
most efficiently or appropriately with respect to sectors or
concentrations.
These goals are strongly interwoven and fully dependent
on maintaining sound governance and a strong risk culture
throughout the organisation. Delivery of long-term customer
value requires a solid balance sheet, minimalising funding costs
and supporting the bank's profitability and reputation. In return,
maintaining a solid balance sheet requires a healthy profitability
and a sound reputation.
Risk culture
Risk is everybody's business. A sound risk culture is the basis
for good risk management. Rabobank expects all employees
to contribute to a sound risk culture focusing on long term
relationships with, and in the best interest of, our customers.
Employees are expected to deal responsibly with risks and
dilemmas, to carefully consider the interests of stakeholders,
to always be honest and reliable, and take responsibility for
their actions. Each individual employee contributes to the risk
profile of Rabobank and the way in which risks are managed.
Desirable behaviour is encouraged and undesirable behaviour
is corrected. An important baseline is to create an environment
in which risks are openly discussed and where openness exists
regarding dilemmas that arise in our work.Tunnel vision and
group bias needs to be avoided in the perception of risk. It is
vital, to learn from mistakes and to avoid repetition by removing
the causes and by sharing experiences. Risk management
activities actively keep risks within the established risk appetite
and support assessment of potential consequences of choices,
careful consideration of risk/return trade-offs and appropriate
measures based on up-to date risk analyses.
Rabobank's risk principles provide additional guidance
regarding risk behaviour to our core values: integrity, respect,
professionalism, sustainability and our aim to build long term
client relations while always acting in our client's interest.
The risk principles serve as a compass to guide our actions and
provide standards for the desired behaviour within Rabobank.
This is complemented with risk awareness and compliance
training programmes for all employees.
Risk Appetite
Rabobank's risk strategy is embedded in a number of strategic
risk statements directly linked to the Strategic Framework
2016-2020. These statements define the boundaries of
the risk appetite within which we must operate. The Risk
Appetite Statement (RAS) further specifies the Strategic Risk
Statements and define the levels and types of risk Rabobank
is willing to accept in order to achieve its business objectives.
It articulates Rabobank's desired level of overall risk exposure
313 4. Risk management