i i i I 1 i 1 I I I I 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

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Annual Reports Rabobank | 2010 | | pagina 21