Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Trade, industry and services loan portfolio analysed by
industry
in millions of euros
2017
2016
Lessors of real estate
14,925
20,670
Finance and insurance (except banks)
11,618
12,291
Wholesale
11,102
12,747
Activities related to real estate
8,689
5,340
Manufacturing
8,852
9,180
Transport and warehousing
6,317
6,729
Construction
4,647
5,014
Healthcare and social assistance
5,378
6,069
Professional, scientific and technical services
9,188
10,065
Retail (non-food)
4,417
4,520
Utilities
2,428
2,896
Information and communication
1,190
981
Arts, entertainment and leisure
1,217
1,164
Other TIS
25,224
23,670
Total loans granted to TIS
115,192
121,336
Food &Agri loan portfolio analysed by sector
in millions of euros
2017
2016
Grain and oil seeds
18,767
19,540
Animal protein
15,376
15,728
Dairy
22,175
22,713
Fruit and vegetables
10,251
10,628
Farm inputs
9,243
10,061
Food retail
4,727
4,527
Beverages
2,915
3,852
Flowers
1,662
1,682
Sugar
2,539
2,811
Miscellaneous crop farming
1,231
1,194
Other Food Agri
8,896
9,245
Total loans granted to Food Agri
97,782
101,981
4.3.2 Derivatives and credit related contingent liabilities
Derivatives
Rabobank sets strict limits for open positions, in amounts as
well as in terms. If ISDA (International Swaps and Derivatives
Association) standards apply or a master agreement including
equivalent terms has been concluded with the counterparty,
and if the jurisdiction of the counterparty permits offsetting,
the net open position is monitored and reported.This credit
risk is managed as part of the general lending limits for clients.
Where needed, Rabobank obtains collateral or other safeguards
to mitigate credit risks inherent in these transactions. The credit
risk exposure represents the current fair value of all open
derivative contracts showing a positive market value, taking
into account master netting agreements enforceable under law.
Credit related contingent liabilities
The financial guarantees and standby letters of credit that
Rabobank provides to third parties in the event of a client being
unable to fulfil its obligations to these third parties, are exposed
to credit risk. Documentary and commercial letters of credit
and written undertakings by Rabobank on behalf of clients
that authorise third parties to draw bills against Rabobank up
to a fixed amount and subject to specific conditions. As these
transactions are secured by the delivery of the underlying
goods to which they relate, the risk exposure of such an
instrument is less than that of a direct loan. From the moment
the documents have been accepted under the terms of the
letters of credit, Rabobank recognises an asset and a liability
until the moment of payment.
Loan commitments are firm commitments to provide credit
under pre-specified terms and conditions. Rabobank is exposed
to credit risk when it promises to grant loans.The amount
of any losses is likely to be less than the total of the unused
commitments because the commitments are made subject to
the clients meeting certain loan conditions. Rabobank monitors
the term to the expiry of loan commitments because long-term
commitments generally involve higher risk than short-term
commitments.
4.3.3 Collateral and credit management
Rabobank's credit risk exposure is partly mitigated by obtaining
collateral where necessary. The amount and nature of the
collateral required depends partly on the assessment of the
credit risk of the loan to the counterparty. Rabobank has
guidelines in place for the purpose of accepting and valuing
different types of collateral. The major types of collateral are:
Residential mortgage collateral;
Mortgage collateral on immovable property, pledges on
movable property, inventories and receivables, mainly for
business loans;
Cash and securities, mainly for securities lending activities
and reverse repurchase transactions.
Management monitors the market value of collateral obtained
and requires additional collateral where necessary. Rabobank
also uses credit derivatives to manage credit risks and it further
mitigates its exposure to credit risk by entering into master
netting arrangements with counterparties for a significant
volume of transactions. In general, master netting arrangements
do not lead to the offsetting of assets and liabilities included
in the statement of financial position because transactions
are usually settled gross except for transactions that meet the
offsetting criteria as mentioned in section 2.11.The credit risk is
limited by master netting arrangements, but only to the extent
that if an event or cancellation occurs, all amounts involving
the counterparty are frozen and settled net.The total credit risk
exposure from derivatives to which offsetting arrangements
apply is highly sensitive to the closure of new transactions,
the expiry of existing transactions and fluctuations in market
interest and exchange rates.
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