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Rabobank and Eureko strengthen ties
Breakdown of amounts
due to customers
in billions of euros
Other
Corporate time deposits
Current accounts/
settlement accounts
Savings
350
250
200
150
100
50
0
Amounts due to customers
by group entity
at year-end 2010
Domestic retail banking 64%
Wholesale banking
and international
retail banking 30%
Asset management 6%
2006 2007 2008 2009 2010
Equity
in billions of euros
Other non-controlling interests
Hybrid capital
Rabo Member Certificates
Reserves and retained earnings
Capital requirements
in billions of euros
at year-end 2010
Other risks
Operational and business risk
Interest rate and market risk
Credit and transfer risk
Increase in equity due to retained earnings
Rabobank Group's equity was up 8% in 2010, rising to
EUR 40.8 (37.9) billion.This was due in particular to
retained earnings for 2010. Rabo Member Certificates
increased by EUR 0.2 billion following the conversion of
Rabo Extra Member Bonds into Member Certificates.
Equity is comprised mostly of reserves and retained
earnings (61%) and of Rabobank Member Certificates
(16%), hybrid capital (15%) and other non-controlling
interests (8%).
2006 2007 2008 2009 2010
The commercial alliance between Rabobank and Eureko, insurer Achmea's parent company,
has been strengthened. The new arrangements were formalised in a collaboration agreement
that took effect on 31 December 2010 and supersedes the existing agreement of 2005.
The obsolete agreement mentioned the two parties' intent to merge. It has now become clear
that there is no need for a merger to achieve strategic targets in a shared effort. A merger is
no longer being pursued due to the changes in the financial landscape. Among other reasons,
the pending capital requirements for banks prompted a reduction in the equity interest in
Eureko from 39% to 31% at year-end 2010. With this equity interest, Rabobank will still be able
to provide input into any important decisions that are taken at Eureko.
40
30
25
15
10
5
0
f
External capital requirement
Rabobank Group's external capital requirement
amounted to EUR 17.6 (18.7) billion at year-end 2010.
The drop in the external capital requirement was
caused by the further roll-out of Basel II, portfolio
developments and stricter control of risk-weighted
assets. Of the total capital requirement, 92% relates
to credit and transfer risk, 7% to operational risk and
1% to market risk.
gig Rabobank Group uses the Advanced Internal Rating
f 'I c Approach, which has been approved by the Dutch
O
2 Central Bank, to calculate the external capital requirement
g for credit risk for virtually the entire lending portfolio.
The standard approach is still being applied to a number
S of smaller foreign portfolios pending the introduction of
the Advanced Internal Rating Approach. Operational risk
is determined using the regulator-approved internal model based on the Advanced
Measurement Approach, and the CAD II Approach is used for market risk.
20
Annual Report 2010 Rabobank Group