Economic capital Economic capital by risk category Economic capital by group entity The RAROC ratio was calculated by linking up net profit to average economic capital for the year. RAROC7 Economic capital in billions of euros 2012 2011 31 -Dec-12 31-Dec-11 Domestic retail banking 16.3% 24.0% 9.1 7.2 Wholesale banking and international retail banking 8.4% 10.3% 7.9 8.8 Asset management and investment 68.9% 7.4% 0.3 0.3 Leasing 27.6% 25.4% 1.3 1.3 Real estate -12.8% 2.4% 1.8 1.7 Rabobank Group 9.0% 11.8% 24.3 22.8 Over and above regulatory capital, Rabobank Group uses an internal capital requirement based on an economic capital framework. The key difference with regulatory capital is that it makes allowance for any material risks and that it applies a higher confidence level for economic capital (99.99%) than dictated for regulatory capital (99.90%). A broad spectrum of risks is measured consistently to gain an understanding of those risks and to allow a rational weighing of risk and return. A series of models has been developed to weigh the risks incurred by Rabobank Group. These are credit, transfer, operational, interest rate and market risk. Market risk breaks down into trading book, private equity, currency, property and residual value risk. A separate risk model is used for the participation in Achmea. Economic capital rose from EUR 22.8 billion in 2011 to EUR 24.3 billion in 2012. This increase was primarily attributable to a change in interest rate risk modelling. The economic capital for credit risk exposure was down on balance, with a rise as a result of the consolidation of Friesland Bank being more than offset by portfolio movements and changes in the risk assumptions at other divisions. The available qualifying capital of EUR 42.4 (39.1billion that is being held to cover any potential losses was well above total economic capital. This sizeable buffer underscores the solidity of Rabobank Group. at year-end 2012, in c uat year-end 2012, in c, Credit and transfer risk Interest rate and market risk Operational and business risk Other risks Domestic retail banking Wholesale banking and international retail banking Real estate Leasing Asset management Other 9 Financial developments

Rabobank Bronnenarchief

Annual Reports Rabobank | 2012 | | pagina 10