-
-
-
-
The additional expense recognised as a result of the AQR amounts to EUR 522 million (see table
below). The AQR adjustment is not fully reflected in the financial statements.
AQR
in millions of euros
AQR
result
Ordinarily recognised in the
profit or loss account
Extra impact of AQR on the
profit or loss account
Total Credit File Review
1,137
111
Collective allowance
690
448
CVA
122
74
Fair value review
143
34
Total gross adjustment
2,093
811
522
Offsetting tax effect
203
130
Total adjustment to net income
608
392
In addition to the AQR, a bank-wide stress test was also carried out.This stress test was
requested by both the EBA and the ECB, whereby the ECB connected the point-in-time AQR
and the forward-looking stress test by adjusting the starting balance sheet positions in line with
the findings of the AQR. The results showed that Rabobank comfortably met the minimum
capital requirements set for banks in both the baseline and adverse stress scenarios.
Negative interest on deposits
On 5 June 2014, the Governing Council of the ECB decided to reduce the deposit interest rate
that had stood at 0% since July 2012 to -0.10% with effect from 11 June 2014. This is a highly
unusual measure, since it means that banks, including Rabobank, will have to pay if they hold
surplus funds overnight at the ECB. On 10 September 2014 the ECB reduced the deposit rate by
a further tenth of a percentage point, bringing the rate to -0.20%.
The negative deposit interest rate has led to negative values for Eonia and Euribor, the reference
rates for the interbank money market in the eurozone. In the case of Eonia, this had already
happened in August 2014. 1-month Euribor turned negative for the first time in January 2015.
This means that banks will pay interest rather than receive it if they lend money to other banks
for short periods. Since the ECB decided on 22 January 2015 to start purchasing bonds on a
much larger scale than it previously did by focusing on government bonds with effect from
March 2015, there may be further downward pressure on the reference interest rates which may
in turn lead to rates for other maturities turning negative.
Since the interest rates on some of Rabobank's products are linked to Eonia and Euribor, the
negative reference rates have also led to some customer groups no longer receiving interest
and having to pay interest on the credit balances they hold at the bank. This mainly concerns
financial institutions and large corporates. Most customers with a business current account for
which the interest rate is linked to Eonia or Euribor will however not have to pay anything if the
calculated customer interest rate falls below zero. Among private customers with residential
mortgages, a very small proportion will be affected by the reference interest rates turning
negative. Interest rates on private savings accounts may be reduced further if the reference
rates continue to decline.
Development of capital ratios
EDTF11 The Capital Requirements Regulation (CRR) and the Capital Requirements Directive IV (CRD IV)
collectively form the European conversion of the Basel capital and liquidity agreement of 2010
(Basel III).These rules have been in force since 1 January 2014 and Rabobank applies them in its
reporting, taking account of the fact that the rules are to be phased in over the coming years.
The 2013 figures are based on the CRD III regulations applying at the time.
47 Rock-solid bank: performance
