Settlements in real estate fraud case The investigation into the Klim-op real estate fraud conducted by FIOD-ECD, the Dutch national fiscal and economic investigation service, again demanded a lot of attention from management in 2010. The enquiry into the real estate fraud continued in 2010, focusing increasingly on building our case for recourse against the suspects. As in 2009, Rabo Real Estate Group again took legal action in 2010 against the parties involved in the fraud, ranging from severing ties, and freezing and scaling down services, to reporting them to the police and seizing their cash and goods. An additional enquiry was conducted as part of the customer due diligence process ('Ken-uw-klant').The enquiries were performed with the help of external forensic investigators. We have spent some EUR 25 million on forensic investigations and external legal assistance since 2007. Pre-trial reviews were held in June and December 2010.The criminal court sessions relating to the case will be held in the spring of 2011Prior to the pre-trial review of June 2010, a Public Prosecutor-approved settlement was reached between Philips Pensioenfonds and Rabo Real Estate Group, two injured parties, and one of the prime suspects in the Klim-op case. Settlements have also been reached with a number of other suspects. Tentative recovery of the property market Rabo Real Estate Group was still suffering the consequences of the credit crunch in 2010. Demand for homes, property finance and property investment funds was significantly lower in 2009 and 2010 than before the recession. Throughput times for property developments became longer. Moreover, risk policy dictated that building activities could not start until most of a development had been leased or sold. It was essential that we continued to focus on non-performing loans in the finance portfolio, on reducing the number of unsold completed homes, and on managing properties. The first signs of a tentative recovery manifested themselves by mid-2010. More new builds were sold than in 2009 in France and Germany in particular, and although there was a slight increase in the construction of commercial real estate, there are signs that the true recovery will take longer than anticipated. Partnership between Rabo Real Estate Group and Rabobank Rabo Real Estate Group and various other divisions of Rabobank Group worked in close collaboration in 2010.The regional offices of Bouwfonds Property Development are increasingly working in tandem with Rabobank Nederland and the local Rabobanks, for instance when it comes to selling new builds, area rejuvenation or campaigns to give an impulse to local housing markets. Bouwfonds Property Development and Rabobank Nederland also joined forces to facilitate higher mortgages for customers wanting to buy an energy-efficient home. Customers who buy such a home lower their utility bill, i.e. their housing costs, so that Rabobank can issue a higher mortgage. MAB Development collaborates increasingly with the local Rabobanks in property issues, for instance in respect of small-scale commercial real estate and redevelopment of real estate for their clients. The partnership between FGH Bank and the local Rabobanks became closer as FGH Bank provided more support on issues concerning property finance. FGH Bank performed portfolio analyses and provided advisory services to the local Rabobanks with regard to location and market research, and portfolio and housing analysis. Bouwfonds REIM works with Robeco Germany in selling and distributing the Bouwfonds European Residential Fund. The placement of this fund with investors is a success. Fondsen- beheer Nederland collaborated with Rabobank Group on several social property projects. Corporate social responsibility at Rabo Real Estate Group For Rabo Real Estate Group, the pillars of corporate social responsibility are taking active ownership of green building, ethical business practices, responsible business practices and community involvement, all this while keeping the business financially sound. Rabo Real Estate Group aspires to a leading position in sustainability in the property sector. Active ownership of sustainable real estate All divisions of Rabo Real Estate Group seek to contribute to sustainable property and area development. In 2010, Bouwfonds Property Development and MAB Development structured their business processes such that, with effect from 1 January 2011, they will be 25% more energy-efficient than the requirements of the Buildings Decree 2010. FGH Bank evaluated in 2010 how one of its products, i.e. green finance, could be tailored better to the needs of the 53 Real estate

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Annual Reports Rabobank | 2010 | | pagina 54