Risk management
Rabobank pursues a risk policy aimed at maintaining a moderate risk profile. The risk strategy focuses
on continuity and realises protection of our profits and profit growth, the retention of robust balance
sheet ratios and the protection of our identity and reputation. This is reflected, for instance, in the
comfortable liquidity position and our strong capital position, as can be seen for example from our
standards capital ratio and liquidity coverage ratio.
Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3
Risk strategy
edtf6 Rabobank's risk strategy supports the management in
the realisation of the business strategy by defining
boundaries within which the bank must operate. An important
starting point for the risk strategy is that running risks is
an inherent part of banking. Without risks (profitable) banking
activities are not possible.Therefore, it is natural to not only
accept a certain degree of risk but also to pursue it.The risk
strategy focuses on
a healthy risk-return ratio;
protection of profit and growth in profits - Rabobank's
business strategy is based on its cooperative background, and
thus maximisation of profit is not an objective;
retention of solid balance sheet ratios: solid balance sheet
ratios are essential to ensure continuity in the provision
of services to customers on sustainable and favourable
conditions, and
protection of Rabobank's identity and reputation: Rabobank
wants stakeholders to continue to have confidence in
the bank.
The mission of the Risk Management department is to ensure
the financial stability and continuity of Rabobank by monitoring
its risk profile.The Risk Management department ensures
that risk management is implemented correctly, in line with
legislation and best practices in the market.
Risk culture
Risk is everybody's business. Rabobank expects all employees
to contribute to a sound risk culture focused on long term
relationships with customers and on the best interest of the
customer. Employees are explicitly expected to deal responsibly
with risks and dilemmas, make careful considerations in the
interests of stakeholders, to always be honest and reliable
and take responsibility. Each individual employee contributes
to Rabobank's risk profile and the way in which risks are
managed. Desired behaviour is encouraged and undesirable
behaviour is corrected. An important principle is that we
create an environment where staff can freely discuss risks and
be open about dilemmas that arise at work.Tunnel vision
must be avoided when assessing risks. It is important to learn
from mistakes and avoid repetition by removing causes and
sharing learning experiences. Risk management activities
ensure that risks stay within the set risk appetite and support
the assessment of possible consequences of choices, careful
risk/return considerations and appropriate measures based on
current risk analyses.
The risk culture is further elaborated in the codes for different
topics such as integrity, credit risk, information security, privacy
and sustainability.
Risk appetite
edtf 7 Rabobank uses an integral risk management model and
a clearly defined risk management cycle, both at group
level and within group entities. This consists of the
determination of the risk appetite, the preparation of integrated
risk analyses and the measurement and monitoring of risks.
The risk appetite is in line with the risk strategy and provides
insight into the types and level of risks that Rabobank is
prepared to take in realising the business objectives.
Significant risks and developments
Rabobank follows external developments and closely monitors
the risks which could impede the organisation in achieving its
objectives.Top-down and bottom-up risk analyses are regularly
carried out to identify various types of risks and specific
stress tests are conducted to calculate the impact of negative
scenarios. The integral overview of the most important risks, the
changes therein and the measures taken are a regular subject of
discussion in the Executive Board and Supervisory Board.
86 Rabobank Annual Report 2015
