Contents Foreword Management report Corporate governance
Consolidated Financial Statements
Company Financial Statements
Pillar 3
- connected to the turmoil In China at that time) and
114.18% (highest price on 30 December 2016). The price on
31 December 2015 was at 111.58%.
Rabobank Certificates
in 2016
116
114
106
104
102
100
I I I I I I I I I I I I
Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec
Offering of new Rabobank Certificates
In January 2017, Rabobank announced the offering of newly
issued Rabobank Certificates. The nominal issued amount
was EUR 1.5 billion. As a result of the issuance, Rabobank has
met its target CET1 ratio of at least 14% early and anticipates
an expected increase in capital requirements. Rabobank
issued 60 million new Rabobank Certificates; each of these
newly issued Certificates was priced at 108% of the nominal
value of EUR 25. After the issuance, a total nominal amount
of approximately EUR 7.4 billion in Rabobank Certificates was
outstanding.
Tier 1 capital
Rabobank has responded to the stricter regulatory framework in
force since 2014 (i.e. the gradual implementation and phase-in
of CRD IV and the Capital Requirements Regulation (CRR)) by
issuing instruments that fully qualify as additional tier 1 capital.
In April 2016, Rabobank issued EUR 1.25 billion of additional
tier 1 instruments which comply with the CRR conditions.
In July 2016, the call of 2 billion US dollar capital securities
decreased tier 1 capital.
Tier 2 capital
New issues will shore up tier 2 capital, and this will lead to
an increase of the total capital ratio. For example, Rabobank
issued USD 1.5 billion of tier 2 instruments in July 2016.
Rabobank's capital strategy is designed to achieve high capital
ratios in anticipation of the expected consequences of the Basel
III reforms and the minimum requirement for own funds and
eligible liabilities (MREL) obligations.
Development of capital ratios in more detail
The CRR and CRD IV collectively form the European adoption
of the Basel capital and liquidity agreement of 2010 (Basel III).
These regulations have applied to Rabobank since 1 January
2014 and will be phased in over a number of years. The fully
loaded CET1 ratio is the CET1 ratio, assuming that CRD IV has
already been fully phased in. The fully loaded CET1 ratio reached
13.5% (12.0%) at 31 December 2016. The actual (or transitional)
CET1 ratio as of 31 December 2016 was 14.0% (13.5%).
This ratio mainly increased due to the retention of the 2016 net
profit (after deduction of payments on Rabobank Certificates and
hybrid capital instruments) and the sale of Athlon. This increase
is dampened by the phasing-in of CRD IV, whereby various
adjustments are being made to CET1 capital on 1 January of
each year during the transition period.
The leverage ratio is the tier 1 capital divided by balance sheet
positions and off-balance-sheet liabilities and is calculated based
on the definitions provided in CRR/CRD IV. At 31 December 2016,
the fully loaded leverage ratio stood at 4.6% (3.9%). The actual
(or transitional) leverage ratio at 31 December 2016 stood at
5.5% (5.1%). The actual leverage ratio is well above the minimum
leverage ratio of 3% according to the Basel III guidelines.
Capital ratios
Amounts in millions of euros
31-12-2016
1-1-2016
31-12-2015
Retained earnings
25,709
25,482
25,482
Expected dividends
(60)
(126)
(126)
Rabobank Certificates
5,948
5,949
5,949
Non-controlling interests
25
23
23
Reserves
112
224
224
Deductions
(3,302)
(5,668)
(5,539)
Transition guidance
1,186
1,884
2,741
Common equity tier 1 capital
29,618
27,768
28,754
CRD IV compliant instruments
2,728
1,488
1,488
Grandfathered instruments
5,462
5,462
6,373
Non-controlling interests
5
5
5
Deductions
(91)
(76)
(76)
Transition guidance
(643)
(1,017)
(1,492)
Total additional tier 1 capital
7,461
5,862
6,298
Tier 1 capital
37,079
33,630
35,052
Subordinated debt qualifying as
tier 2 capital
16,094
15,078
15,078
Non-controlling interests
7
6
6
Deductions
(99)
(85)
(85)
Transition guidance
(208)
(420)
(596)
Qualifying capital
52,873
48,209
49,455
Risk-weighted assets
211,226
212,768
213,092
Common equity tier 1 ratio
(transitional)
14.0%
13.1%
13.5%
Common equity tier 1 ratio
(fully loaded)
13.5%
12.0%
12.0%
Tier 1 ratio
17.6%
15.8%
16.4%
Total capital ratio
25.0%
22.7%
23.2%
Equity capital ratio
15.0%
14.8%
14.7%
51 Our output and impact: strengthening capital ratios
