Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3 both quantitatively and qualitatively and is used in all business activities to assess the desired risk profile against the risk-reward profile of a given activity. Risk appetite is, among other things, defined in terms of core-tier 1 capital and return on capital credit risk single obligor and concentration limits for asset class and sectors market risk interest rate risk in the banking book operational risk liquidity risk The risk appetite at Rabobank Group level is an integral part of the bank's strategy. Entity-specific risk appetite statements further specify the Group risk appetite at entity level. The risk appetite is embedded across Rabobank Group within principles, policies, indicators, limits and controls.The Risk Appetite Statement is decided annually by the Executive Board and approved by the Supervisory Board. In 2016, sustainability was integrated in the Risk Appetite Statement for the first time and addresses non-compliance with Rabobank's sustainability policies. The RAS is monitored by benchmarking the actual risk profile against the risk appetite and discussed on a quarterly basis in the Executive Board and Supervisory Board Risk Committee. This ensures that day-to-day operations are executed within the boundaries set by the business and risk strategy. Breaches of the Risk Appetite will result in immediate action at the appropriate management level.The Risk Appetite is reviewed annually by the Executive and Supervisory Board. Significant risks and developments edtf3 Rabobank keeps track of external developments and closely monitors the risks that might affect the achievement of organisational objectives. Regular and structural top-down and bottom-up risk assessments are performed to identify various types of risks, and specific stress tests are conducted to calculate the impact of adverse scenarios. An integrated overview of the main risks, the changes to them and the measures taken to address them are regularly discussed in the Executive Board and Supervisory Board. Banking is all about taking and managing risks. When we do business, explore options or take decisions, we continually assess risks. Every day, Rabobank takes informed risk decisions on engaging with (new) customers, granting credit, entering into interest rate contracts and providing other services to customers. To manage the material risks, risk and control processes are designed to ensure that the risks incurred remain within the bank's risk appetite and that risk and return are appropriately matched.These processes coverthe regular banking risk types: credit risk, market risk, interest rate risk, liquidity risk and operational risks, including compliance risk. In addition, we acknowledge that we currently face uncertain, volatile and partially adverse market circumstances that create, among others, the following risks for the bank: Business model: Rabobank's earnings model needs to adapt to the changing economic and political environment, and to the demands of society. Narrowing spreads between funding and lending impact the profit margins needed fora sustainable future for the bank. This is amplified by increased competition of non-banks and market innovators using disruptive technologies. Regulatory requirements put additional (capital) strain on banks. The cumulative effects of these requirements influence the strategic choices available to Rabobank, but we manage this through excellent customer focus in support of our Banking for the Netherlands and Banking for Food visions, supplemented by a strong focus on sustainability through our clients. Internally, we are improving financial performance, strengthening innovativeness, empowering employees and examining our products and services portfolio. Execution power: This includes challenges to improve customer focus and performance and to meet regulatory requirements.The change agenda is ambitious and contains many interdependencies. While we need to preserve our cooperative heart and the uniqueness of Rabobank, we also need to be receptive to client behaviours, external developments and unexpected risks with serious long- term effects. Our (new) governance leads to more effective decision-making and timely responses. We manage this through close monitoring of change initiatives and by enabling the business in its first-line responsibilities. Technology continuity: A complex IT landscape, growing demands on continuity and increasing cyber threats are continuing challenges.The ongoing digitalisation of our services improves efficiency and adds value for our customers. Services need to keep running smoothly while at the same time systems need to be improved to keep up with requirements, trends and innovations. We use an integrated approach and manage dependencies for our core banking transformation, front-to-back processes and systems. We closely monitor cyber threats and data privacy. Data management:This entails timely, sufficient and accurate data for business and regulatory purposes and availability of in-depth information for client advice, reporting and business decisions. Data quality is an important concern and regulatory requirements (BCBS239) have also 314 Rabobank Jaarverslag 2016

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Jaarverslagen Rabobank | 2016 | | pagina 315