Contents Foreword Management report Corporate governance
Consolidated Financial Statements
Company Financial Statements
Pillar 3
Data management: This entails timely, sufficient and
accurate data for business and regulatory purposes and
availability of in-depth information for client advice, reporting
and business decisions. Data quality is an important
concern and regulatory requirements (BCBS239) have also
increased substantially. We are unifying our steering of data
management and data governance projects.
Business conduct: Conduct issues impede public trust and
may affect Rabobank. Regulatory scrutiny has continued
to increase since the start of the financial crisis and has
resulted in hundreds of billions in fines for product suitability,
sanctions and market abuse in the financial services industry.
Moreover, strict adherence to legislation is no longer
sufficient. Most issues have long lead times, both in discovery
and in remediation so (legacy) conduct issues may continue
to emerge. We are further improving the implementation of
regulations, client onboarding, the risk control framework,
and customer integrity and employee awareness.
Employees: Keep staff fully engaged during a transition
period and maintain a healthy flow of key positions.
Although collaboration across and between departments
has improved, our staff reduction inevitably impacts all
employees. Staff mobility and a change-mindset are needed,
in addition to a sound risk culture in which risks are identified,
escalated and managed proactively and in a timely manner.
Our strategic HR improvements focus on performance
management, talent management, diversity and an adaptive
way of working.
Balance sheet: This includes funding gaps, capital availability
and respective pricing. Serving the Dutch society and the
F&A sector means continuously balancing of our strategic
focus and the potential risk of concentration in assets
and liabilities. We are reducing our balance sheet through
proactive portfolio management and advancing our planning
and budget process.
External environment: These factors include continuing
economic instability, climate change, serious geopolitical
unrest and emerging market contagion. A potential
economic downturn poses threats to worldwide growth
and adds to financial market uncertainty. Climate change
may negatively impact the business of our customers,
so sustainability is becoming increasingly important to
them. We support them in achieving a long-term social
and ecological balance. The Eurozone is under pressure, as
tensions increase between European countries, growth in
China is slowing down and developments in other emerging
markets could have a contagious effect on trade. This may
result in protectionism and the freezing of world trade. We are
monitoring macro-economic and geopolitical developments
closely and enhancing our focus on sustainability and
portfolio management, including stress testing.
Managing risks: Risk strategy
Rabobank's risk strategy supports management in the
realisation of the business strategy by defining the way in which
the business takes on risks to operate. Rabobank's risk strategy
is focused on the following goals:
Support business in delivering excellent and appropriate
customer focus.
Protect profit and profit growth: Rabobank's business strategy
is strongly related to its cooperative roots, achieving a healthy
profit generation and at the same time realising a high
standard in serving its members, clients and society.
Maintain a solid balance sheet: Sound balance sheet ratios are
essential to ensuring continuity in servicing our customers
under sustainable and favourable conditions.
Protect identity and reputation: A solid reputation is essential
to maintaining stakeholders' fundamental trust in the bank.
Make healthy risk-return decisions: Make transparent
choices related to where capital and resources can be used
most efficiently or appropriately with respect to sectors or
concentrations.
These goals are strongly interwoven and fully dependent
on maintaining sound governance and a strong risk culture
throughout the organisation. Long-term customer value
requires a solid balance sheet, minimised funding costs and
supporting the bank's profitability and reputation. Maintaining
a solid balance sheet, on the other hand, requires a healthy
profitability and a sound reputation.
Risk appetite
Rabobank's risk strategy is embedded in a number of Strategic
Risk Statements directly linked to the Strategic Framework 2016
2020 and provide a high level appetite towards risks impacting
this framework along the four themes of; complete customer
focus, rock-solid bank, meaningful cooperative and empowered
employees. These statements define the boundaries of the
risk appetite within which we must operate. The Risk Appetite
Statement (RAS) further specifies the Strategic Risk Statements
and defines the levels and types of risk Rabobank is willing
to accept in order to achieve its business objectives. The RAS
articulates Rabobank's overall desired level of risk exposure,
both quantitatively and qualitatively, and is used in all business
activities to assess the desired risk profile against the risk-reward
profile of a given activity.
57 Our output and impact: balancing risks and returns
