- - - - - - - - - - - - - - - - 5.2 Regulatory Capital Inhoudsopgave Voorwoord Bestuursverslag Corporate governance Table 1Reconciliation of qualifying capital with IFRS capital. Qualifying capital IFRS capital Retained earnings 25,709 25,709 Expected dividends (60) Rabobank certificates 5,948 5,948 Non-controlling interests 25 525 Reserves 112 112 Regulatory adjustments (3,302) Transitional adjustments 1,186 Common Equity Tier 1 capital 29,618 Trust preferred securities lll-IV 409 Capital Securities 7,821 CRD IV compliant Capital Securities 2,728 Grandfathered instruments 5,462 Non-controlling interests 5 Regulatory adjustments (91) Transitional adjustments (643) Tier 1-capital 37,079 Subordinated debt 16,094 Non-controlling interests 7 Regulatory adjustments (99) Transitional adjustments (208) Total IFRS equity/qualifying capital 52,873 40,524 The subordinated debt increased mainly due to the issuance of a subordinated debt (USD 1.5 billion). A detailed breakdown of CET1.T1 andT2, and additional information about the CET1-,T1 andT2 capital instruments can be found in Annex 14.1. Consolidated Financial Statements Company Financial Statements Pillar 3 Table 2: Overview of changes in qualifying capital. Overview of changes in qualifying capital Qualifying capital at 1 January 2016 CRD IV 49,455 Opening common equity Tier 1 capital at 1 January 2016 28,754 Retained earnings 227 Expected dividend 66 Rabobank Certificates (1) Non-controlling interests 3 Reserves (112) Regulatory adjustments 2,237 Transitional adjustments (1,556) Closing common equity Tier 1 capital at 31 December 2016 29,618 Opening additional Tier 1 capital at 1 January 2016 6,298 Capital Securities and grandfathered instruments 329 Regulatory transitional adjustments 834 Closing additional Tier 1 capital at 31 December 2016 7,461 Opening tier 2 capital at 1 January 2016 14,403 Subordinated debt 1,016 Regulatory transitional adjustments 375 Closing tier 2 capital at 31 December 2016 15,794 Qualifying capital at 31 December 2016 52,873 A general overview of the main features of the common equity Tier 1 and additional Tier 1 instruments and Tier 2 instruments is available in appendix 14.2. For the full terms and conditions of the capital instruments, we refer to the prospecti. edtf 12 Rabobank is using the most advanced calculation methods for calculating the Regulatory Capital (RC) requirements under Basel II and CRR (CRD IV) for credit, market and operational risks. The policy of Rabobank is aimed at applying the IRB approach for its credit portfolio as much as possible. Table 3 presents an overview of the Regulatory Capital requirements and the Risk Weighted Exposure Amounts (RWEA) at 31 December 2016 for the different risk types. The largest part of the capital requirement relates to credit risk (84%). Market risk accounts for 3% of the capital requirements and operational risk comprises 13% of the Regulatory Capital requirements. 321 5. Capital management

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Jaarverslagen Rabobank | 2016 | | pagina 322