Glossary of terms
Annual Report 2016 Rabobank
Contents Foreword Management report Corporate governance Consolidated Financial Statements Company Financial Statements Pillar 3
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.
Carbon footprint:
The total of greenhouse gas emissions expressed in tonnes of carbon dioxide for
Scope 1, 2 and 3.
Cash flow:
Inflows and outflows of cash and cash equivalents.
Circular economy:
Economic system where products and services are traded in closed loops. It's
characterized as an economy which is regenerative by design, with the aim to retain as
much value as possible of products, parts and materials.
Clean technology:
Technology regarding renewable energy, energy efficiency, lighting, water and
waste management.
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.
Cost/income ratio:
Country risk:
Operating expenses related to income.
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.
393 Glossary of terms
