Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
The following table shows the changes in deferred pront of the
financial assets held for trading. These were initially recognised
at a value determined using a valuation technique based on
data input not substantiated by market prices.
Provision for Day 1 profit
in millions of euros
2015
2014
Opening balance
6
27
Additions
Amortisation
(2)
(11)
Changes
(1)
(10)
Closing balance
3
6
4.10 Legal and arbitration proceedings
Rabobank Groep is active in a legal and regulatory environment
that exposes it to substantial risk of litigation. As a result of this,
Rabobank Groep is involved in legal cases, arbitrations and
regulatory procedures in the Netherlands and in other countries,
including the United States.The most relevant legal and
regulatory claims which could give rise to liability on the part
of Rabobank Groep are described below. If it appears necessary
on the basis of the applicable reporting criteria, provisions are
made based on current information; similar types of case are
grouped together and some cases may also consist of a number
of claims. The estimated loss for each individual case (for which
it is possible to make a useful estimate) is not reported, because
Rabobank Groep feels that information of this type could be
detrimental to the outcome of individual cases.
When determining which of the claims the likelihood of them
leading to an outflow of funds is higher than fifty percent,
and therefore an estimate is made of these losses, Rabobank
Groep takes into account a number of factors, including (but
limited to) the type of claim and the underlying facts, the
procedural process and history of each case, rulings from legal
and arbitration bodies, Rabobank Groep's experience and that
of third parties of similar cases (if known), earlier settlement
discussions, third-party settlements in similar cases (where
known), available indemnities and the advice and opinions for
legal advisors and other experts.
The estimate potential losses, and the existing provisions,
are based on the currently available information and are
forthe main part subject to judgements and a number of
different assumptions, variable and known and unknown
uncertainties.These uncertainties may include the inaccuracy
or incompleteness of the information available to Rabobank
Group (especially in the early stages of a case). In addition,
assumptions made by Rabobank Group about the future
rulings or legal or other instances or the likely actions or
attitudes of supervisory bodies or the parties opposing
Rabobank Group may turn out to be incorrect. Furthermore,
estimates of potential losses relating to the legal disputes
are frequently impossible to process using statistical or other
quantitative analysis instruments, that are frequently used to
make judgements and estimates. They are then subject to a still
greater level of uncertainly than many other areas where the
group needs to make judgements and estimates.
The group of cases for which Rabobank Group determines that
the risk of future outflows of funds is higher than fifty percent
will change from time to time, as will the cases for which
an estimate can be made and the estimated potential loss for
these cases. In practice the results achieved can turn out to be
considerably higher or lower than the estimates of potential
losses in those cases where an estimate of this kind was made.
In addition, losses may occur in cases where Rabobank Group
estimated that the risk of this occurring was low.
Rabobank Groep may settle legal cases or regulatory
procedures or investigations before reaching an (irrevocable)
fine or determination of liability. They may do so in order to
avoid costs, management effort at this level, or other negative
business consequences and/or regulatory or reputational
consequences of continuing with the disputes relating to
liability, even if Rabobank Group is of the opinion that it has
arguments to defend itself against such liability. It may also
do this when the potential consequences of losing a case are
disproportionate to the costs of a settlement. Furthermore,
Rabobank Group may, for the same reasons, compensate third
parties for their losses, even in situations where Rabobank
Group does not believe that it is legally required to do so.
Libor/Euribor
Rabobank has received a number of requests in recent years
from regulators in various countries to issue documents and
other information in relation to various issues, including issues
related to the provision of statements for laying down interest
rate benchmarks. Rabobank is cooperating, and will continue to
cooperate, with the regulators and authorities involved in these
global investigations.
On 29 October 2013, Rabobank entered into a settlement
agreement with various authorities in relation to their
investigations into the historical Libor and Euribor submission
processes of Rabobank. Additional information is available
on the bank's corporate website. All amounts payable under
this settlement agreement were fully paid and accounted for
by Rabobank in 2013. Additionally, some of these settlement
agreements required Rabobank to: (i) improve measures
or to continue their implementation; and (ii) to cooperate
on a continuous basis with ongoing investigations into the
conduct of Rabobank and of its current and former employees
and representatives (including managers and directors) in
respect of the manipulation, attempts of manipulation or
209 Notes to the consolidated financial statements
