Banking in a changing environment The credit crisis has left deep marks on the environment within which Rabobank carries on its banking operations. Confidence in the financial sector has been adversely affected. In the Netherlands, the banking land scape has changed drastically and the economic outlook has deteriorated. Moreover, banks are facing stricter regulation in the areas of solvency and liquidity, making it harder for them to increase lending. Limits to the growth opportunities have resulted in an even greater focus on core activities at Rabobank Group. Investing in confidence Financial institutions around the world have had to contend with an image problem since the credit crisis began. The financial sector has been accused of not fulfilling its duties in the area of risk management, operating a bonus policy that the rest of society cannot understand, and failing to ensure that it performs its social role properly. Furthermore, the transparency of financial products had to be improved. Much of the criticism voiced in response to the credit crisis has been aimed at banking institutions that mainly operate in Anglo-Saxon nations, but there has also been criticism of European banks. The challenge for all involved is to find a way to re-establish the sector's relationship with society and politicians. Rabobank Group has also been affected by the credit crisis, although it has maintained its sound capital position. Rabobank Group continues to enjoy the confidence of the financial world, and in particular institutional investors, as shown by its success in raising over EUR 40 billion in long-term funding at relatively favourable rates during 2009. Rabobank will continue to invest in retaining, and where necessary regaining, the trust of its clients, particularly now the industry's image is damaged. Rabobank Group attaches great importance to its duty of care towards its clients, who can depend on it to offer high-quality, transparent products, provide appropriate expert advice and handle complaints properly. Clients in turn need to carefully consider their financial requirements and the risks they are prepared to accept. By following the Dutch Ombudsman for Financial Services' recommenda tions concerning OpMaatHypotheek-C (to-measure mortgage), Rabobank has tried to ensure its clients ongoing confidence in the services provided by the bank. Changing banking landscape The Dutch banking landscape has not escaped the credit crisis unscathed. Financial institutions have been nationalised by the government, received injections of capital and/or obtained guarantees for part of their investment portfolios, while at the same time they have made use of state guarantees for issuing debt securities. Rabobank did not make any use of arrangements of this kind. The bank has been able to operate in the market entirely independent, although it should be noted that a complete level playing field can hardly be said to exist anymore in such circumstances. The biggest banks that currently receive state aid are expected to focus on the Dutch market to a significant extent, and this will lead to fiercer competition in the domestic market. 9 Banking in a changing environment

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Annual Reports Rabobank | 2009 | | pagina 10