s
1
Quantitative aspects
Profit and profit growth
Sound balance sheet ratios
Reputation and identity
4>
0
Continuity is a central tenet for Rabobank.
The cooperative strives to generate sufficient income
with as objective being able to serve members and
clients for the long term.
The willingness to accept a continual downward
tendency of profits as well as losses that can cause
concern to stakeholders is very limited.
Sound balance sheet ratios are essential for being able
to continually serve Rabobank's clients.This implies a
stable funding capability, strong liquidity buffers and
ample solvency.
Matched funding; Assets with long maturities being
funded with stable long-term liabilities.This stable
funding is based primarily on customer deposits.
Any funding gaps are closed by long-term contracts
concluded in the professional capital markets.
Rabobank is not prepared to accept risks that could
reasonably be assumed to damage its reputation or
identity. Through its attitude and behaviour Rabobank
wants to ensure that:
the fundamental trust the stakeholders have in
Rabobank is protected at all times;
Rabobank is not portrayed negatively in the news in
areas that are essential to Rabobank's core values.
"■C
c
Credit risk
Balance sheet risk
Operational risk
"5
3
a
Rabobank wants to continue its prudent credit policy and
controlled growth in the credit portfolio which is in line
with Rabobank's strategic framework and image. In order
to accomplish this:
the credit portfolio must retain a low risk profile;
the credit portfolio cannot grow without bounds;
capital and funding will need to be used selectively.
Rabobank wants to avoid any material unexpected
movements in the interest rate result and aims to be
able to withstand any extreme interest rate scenarios.
Early warning indicators are used to identify changes in
Rabobank's liquidity position or market disturbances at
the earliest stage possible.
Market risk is result of trading activities. For these
activities a complete set of limits and trading controls
have been set up.
Indicators and limits are monitored for the following
aspects:
clients, products and entrepreneurship;
execution, transfers and process management;
fraud and theft;
interruption of business and systems;
working conditions and workplace security;
damage of material goods;
modelling.
A number of the indicators that are measured, monitored and reported at a group level for
sound balance sheet ratios are included in the table below. Operational management uses
several additional indicators that may differ for individual group entities.
Risk appetite measure
Target (2016)
Achieved at 31 -Dec-2013
Core tier 1 ratio
14.0%
13.5%
Tier 1 ratio
17.5%
16.6%
Loan-to-deposit ratio
1.30
1.35
Capital ratio (BIS-ratio)
>20%
19.8%
EDTF recommendation 7 Rabobank strives to maintain a low risk profile. Predictable and consistent financial results and
solid balance sheet ratios as reflected for example in the high targets associated with core tier 1
ratio are essential in achieving this risk profile. Focus on Rabobank's reputation leads to restraint,
strong soft controls and occasionally requires a uniquely tailored approach. The low risk profile
should contribute to high revenue stability where large incidental losses are largely prevented.
65 FHigh level of creditworthiness: risk management
