Glossary of terms Annual Report 2015 Rabobank Group Management report Corporate governance Consolidated financial statements Financial statements Loan impairment charges: Costs consisting of the amounts added to the loan impairment allowance and charged to the profit and loss account. Loan impairment charges represent the balance of addition, release and earnings after write-offs. Loan impairment charges are generally expressed in basis points of average lending. Total capital ratio: Regulatory capital divided by risk-weighted assets. BPV (basis point value): BPV represents the absolute loss of the market value of equity if the yield curve as a whole changes in parallel by one basis point. Cash flow: Inflows and outflows of cash and cash equivalents. Common equity tier 1 capital: This capital is determined based on the regulator's requirements. For Rabobank, this constitutes the sum of retained earnings, Rabobank Certificates, share of non- controlling interests, reserves and transitional provisions, less estimated dividends and deductions. Common equity tier 1 ratio: Common equity tier 1 capital related to the risk-weighted assets. Corporate governance: The system of rules, practices and processes by which a company is directed and controlled. The term refers to how a company is to be managed effectively, efficiently and soundly and to the management's responsibility to account for its policies to its stakeholders. Country risk: With respect to country risk, a distinction is drawn between transfer risk and collective debtor risk. Transfer risk relates to the possibility of foreign governments placing restrictions on funds transfers from debtors in their own country to creditors in other countries. Collective debtor risk is the risk that a large number of debtors in a particular country will all be unable to fulfil their obligations owing to the same cause. Credit risk: The risk of loss if the bank's counterparties are unable to meet their loan obligations to the bank. EAD (Exposure At Default): The bank's expected exposure in the event and at the time of a counterparty's default. EatR (Equity at Risk): Measure indicating the percentage by which the market value of equity will decrease if the yield curve increases (in parallel) by one percentage point. Economic capital or internal capital requirement: This refers to the minimum capital buffer required in order to offset all unexpected losses caused by the various risks to which a bank is exposed during a specific time period (one year), assuming a specific reliability interval. 403 13. Declaration Executive Board

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Annual Reports Rabobank | 2015 | | pagina 404