Contents Foreword Management report Corporate governance
across Europe and included numerous diverse parties from the
Dutch and European parliaments to the European Commission
and employers' federations. We also engage with regulators
and supervisors in other parts of the world. Our position
papers regarding regulation are published on our corporate
website (see: section 'In society').
Engagement with investors and rating agencies
Rabobank is an active issuer in the debt capital markets. In 2016
Rabobank issued a total amount of EUR 14.2 billion in senior
unsecured funding including its inaugural EUR 500 million
green bond. In addition, we completed several subordinated
debt and capital transactions.
Good access to the capital markets at a fair price hinges on
good relationships with those who invest in these instruments
as well as agencies that assign credit ratings to banks.
This calls for a proactive approach and is pivotal to being
a rock-solid bank. Rabobank's Investor Relations Rating
Agencies department (IR&RA) is responsible for making these
stakeholders feel as comfortable as possible with Rabobank's
creditworthiness and what the group stands for.
IR&RA's primary responsibility is to build and maintain long
term relationships with both rating agencies and investors.
This is achieved by giving investors and rating agencies insight
into Rabobank's risk profile. Investors and rating agencies
are informed both proactively and at their request on all
internal and external developments, which (could) impact the
creditworthiness of Rabobank. This enables investors to take
a well-considered decision when investing in Rabobank's debt
or capital instruments. IR&RA also enables rating agencies
to make an accurate assessment of the current and future
creditworthiness of Rabobank.
Topics covered during 2016 with both investors and rating
agencies include Rabobank's financial performance, governance
change, Strategic Framework 2016-2020, capital position,
regulatory developments and asset quality. In addition to these
topics, the rating agencies also receive information attuned to
their specific needs and methodology.
Overall, the rating agencies are positive about the outlook
for stronger profitability underpinned by the bank's new
structure. In its most recent update, Fitch said that it expects
the improving trend in Rabobank's profitability to 'continue for
structural and cyclical reasons, and that the group will reduce
the profitability gap to similarly rated peers'. S&P notes that
Rabobank's 'capital position will continue to strengthen as it
Consolidated Financial Statements Company Financial Statements Pillar 3
executes its medium-term optimisation strategy to adapt to low
interest rates and regulatory challenges'. The bank's overall asset
quality is regarded as a credit positive by all rating agencies.
Moody's, for example, views Rabobank's asset quality as solid
although risks could increase 'due to renewed weakness in
the Dutch commercial real estate sector or rising deficiencies
in the corporate loan portfolio'. All rating agencies appreciate
Rabobank's strong position and franchise network in the
domestic market and the strong performance of the domestic
residential mortgage book.
More information on Rabobank's credit ratings is available here.
Dutch Banking Sector Agreement
In 2016 the Dutch Banking Sector reached an agreement on
international responsible business conduct regarding human
rights. Rabobank was one of the individual banks in the working
group that conducted the dialogue preparing the banking
sector agreement.
The working group consisted of participants from the four
parties to the agreement: industry association, unions, NGOs
and government, plus individual banks. The parties and the
banks that endorse the agreement aim to achieve a material,
positive impact for people (potentially) facing adverse human
rights conditions that are related to the activities of clients in
the Dutch banking sector. Rabobank is keen to jointly search
for solutions to address problems that an individual bank
cannot solve by itself. The parties have agreed that we wish to
learn from one another by undertaking a joint programme of
research and by sharing best practices, like successful methods
of influencing businesses in high-risk sectors. We also recognise
that we need up-to-date, detailed information about human
rights situations and any factors that might have a positive or
negative impact on them. We plan to draw on the knowledge
of all parties and develop a joint database for collecting reliable
information about human rights risks across countries and
sectors. Rabobank will be able to use this information project
and business financing decision-making. By combining forces,
we expect to be better equipped to achieve structural change.
The materiality matrix
Rabobank uses its dialogues with stakeholders as important
input for the materiality matrix. The materiality matrix provides
an overview and analysis of the topics we and our stakeholders
consider material. The topics identified in the matrix form
the backbone of this report, as set out in the Foreword.
For further information on the materiality matrix, please refer to
Appendix 1
76 Rabobank Annual Report 2016
