Risk management is a core banking competency. Rabobank Group
pursues a prudent risk policy with an emphasis on a moderate risk profile.
Although the challenging economic conditions were seen to have an
impact, in the form of high bad debt costs and severe pressure on margins
on savings, Rabobank Group remained financially sound in what was a very
tough year. Rabobank Group's capital position improved, with its tier 1 ratio
rising to 13.8%, and its liquidity position continued to be more than
adequate. Rabobank Group also raised a record amount in long-term
funding during 2009.
Risk management
Prudent risk policy and moderate risk profile
Improvement in capital position
Ample liquidity position
Over EUR 40 billion raised in long-term funding
Impairment losses on distressed assets at EUR 297 million after taxation
Impact of EUR 196 million on net profit due to additional provisions relating to indirect exposure to
monoline insurers
Both Rabobank itself and the Dutch Central Bank have formulated standards concerning
Rabobank's organisation and control. Rabobank's organisation and control are subject to
the Dutch Financial Supervision Act, including subordinate legislation based thereon, and
regulations imposed by both the Dutch Central Bank and the Netherlands Authority for the
Financial Markets as supervisory authorities.These legal requirements and supervisors'
regulations form Rabobank Group's framework for the design and control of its activities.
In 2010, Rabobank Group, by virtue of its being a financial institution, will still be facing the
key risks described in this chapter. In addition, Rabobank Group is exposed to other risks, and
its profit and equity depend on the banking environment, general economic conditions, and
government policy and regulations.
Risk management organisation
Risk management is performed at various levels within Rabobank Group. At the highest level,
the Executive Board determines the risk strategy, policy principles and limits under the super
vision of the Supervisory Board and is advised by the Rabobank Group Balance Sheet and Risk
Management Committee (BRMC-RG) as well as the Rabobank Group Credit Policy Committee.
The Supervisory Board regularly reviews the risk exposure of Rabobank Group's activities and
portfolio. The CFO is responsible for the implementation of Rabobank Group's risk policy.
Within Rabobank Group, two directorates share the accountability for the risk policy. Group Risk
Management is responsible for the policy regarding interest rate, market, liquidity, currency
and operational risks, as well as for the credit risk policy at portfolio level. Credit Risk
Management is responsible for the policy for accepting new clients in terms of credit risk at
the individual customer level. Within each group entity, risk management is the responsibility
of independent risk control departments.