Impaired loans and allowance for loan losses
Impaired loans and allowance for loan losses
Value adjustments by group entity
Over and above these allowances, additional coverage was raised through collateral and other
securities. Rabobank Group applies the one-obligor principle, which means that the exposure to
the debtor and all counterparties belonging to the same group is taken into account. In addition,
the full exposure to the client is qualified as impaired, even if adequate coverage is available for
part of the exposure in the form of collateral. Finally, Rabobank Group always takes allowances
at an early stage within the rules of IFRS. At year-end 2013, impaired loans corresponded to
2.9% (2.4%) of the private sector loan portfolio.
in millions of euros 31 -Dec-13
impaired loans
impaired loans in
of loan portfolio
allowances
allowances in %of
impaired loans
Domestic retail banking
6,651
2.2%
2,275
34%
Wholesale banking and international
retail banking
2,670
2.9%
708
27%
Leasing
721
2.9%
480
67%
Real estate
2,767
15.1%
842
30%
Rabobank Group
12,809
2.9%
4,306
34%
in millions of euros
31-Dec-12
impaired loans
impaired loans in
of loan portfolio
allowances
allowances in %of
impaired loans
Domestic retail banking
5,317
1.7%
2,027
38%
Wholesale banking and international
retail banking
3,456
3.2%
951
28%
Leasing
905
3.6%
488
54%
Real estate
1,525
8.2%
376
25%
Rabobank Group
11,203
2.4%
3,842
34%
Despite the slight improvement in economic conditions, particularly in the Netherlands, value
adjustments rose relatively sharply in the second half of 2013. Expressed in basis points of
average private sector lending, bad debt costs stood at 49 in the first half of 2013 and at 69 in
the second half of the year. The ten-year average (period 2003-2012) for bad debt costs is 28
basis points. This movement was seen primarily at the Dutch and Irish real estate activities, as a
result of a thorough review of the overall portfolio in this area.
in millions of euros
2013
2012
Domestic retail banking
1,384
1,329
Wholesale banking and international retail banking
568
621
Leasing
170
147
Real estate
513
237
Other
8
16
Rabobank Group
2,643
2,350
71 High level of creditworthiness: risk management
