Contents Introduction Management report Appendices Corporate governance Consolidated Financial Statements Company Financial Statements
Rabobank Group may settle legal cases or regulatory
proceedings or investigations before any fine is imposed or
liability is determined. Reasons for settling could include (i)
the wish to avoid costs and/or management effort at this
level, (ii) to avoid other adverse business consequences and/
or (iii) pre-empt the regulatory or reputational consequences
of continuing with disputes relating to liability, even if
Rabobank Group believes it has good arguments in its defense.
Furthermore, Rabobank Group may, for the same reasons,
compensate third parties for their losses, even in situations
where Rabobank Group does not believe that it is legally
required to do so.
Interest rate derivatives
Rabobank concludes interest rate derivatives, such as interest
rate swaps, with Dutch business customers who wish to reduce
the interest rate risk associated with variable (e.g., Euribor-
indexed) loans. Such an interest rate swap protects customers
from rising variable interest rates and helps businesses to keep
their interest payments at an acceptable level. In March 2016
the Dutch Minister of Finance appointed an independent
committee which on 5 July 2016 published a recovery
framework (the Recovery Framework) on the reassessment of
Dutch SME interest rate derivatives. Rabobank announced its
decision to take part in the Recovery Framework on 7 July 2016.
The final version of the Recovery Framework was published
by the independent committee on 19 December 2016.
Implementation of the Recovery Framework is expected to be
finalised in 2018.
Rabobank is involved in civil proceedings in the Netherlands
relating to interest rate derivative instruments entered into
with Dutch business customers. The majority of these concern
individual cases. In addition, there is a collective action
regarding interest rate derivatives pending before the Court of
Appeal.These actions concern allegations relating to alleged
misconduct in connection with Rabobank's Euribor submissions
(as described below) and/or allegations of misinforming clients
with respect to interest rate derivatives. Rabobank will defend
itself against all these claims.
Furthermore, there are pending complaints and proceedings
against Rabobank regarding interest rate derivatives brought
before Kifid (Dutch Financial Services Complaints Authority,
which, in January 2015, opened a conflict resolution procedure
for SME businesses with interest rate derivatives).
With respect to the (re-)assessment of the interest rate derivatives
of its Dutch SME business customers and the advance payments
made, Rabobank recognised a provision of 450 (2016:664).
The scoping of clients is the most important parameter in
the calculations to estimate the provision. Furthermore, the
calculations regarding technical recovery are based on a
portfolio approach instead of individ-ual contract calculations.
Prospectus liability issues
In 2011, the Dutch Investors Association (VEB) issued a
summons against the company formerly known as Fortis N.V.
(currently trading as Ageas N.V.), the underwriters involved -
including Rabobank - and the former directors of Fortis N.V.
The VEB states in this summons that (i) investors were misled
by the prospectus published by Fortis N.V. in connection with
its rights issue in September 2007 and (ii) the impact and risks
of the subprime crisis for Fortis and its liquidity position were
misrepresented in the prospectus.The VEB has requested
a declaratory judgement stating that the defendants acted
illegitimately and must therefore be held liable for the loss
allegedly suffered by investors in Fortis, which according to
the VEB amounts to approximately EUR 18 billion. Rabobank
maintains the view that the aforementioned loss has not been
properly substantiated.The proceedings concern a settlement
of collective loss, which means that the court will only rule on
the question of whether the defendants (including Rabobank)
are liable.
Rabobank has been defending itself against the claim.
A hearing was scheduled to start on 14 March 2016. That day,
however, Ageas announced a settlement of EUR 1.2 billion with
claimant organisations VEB, Deminor, Stichting FortisEffect and
Stichting Investor Claims Against Fortis (SICAF) with respect to
all disputes and claims relating to various events in 2007 and
2008 in respect of the former Fortis group (including the VEB
claim described above).
On 23 May 2016, the parties to the settlement requested the
Amsterdam Court of Appeal to declare the settlement binding
for all eligible Fortis shareholders (in accordance with the Dutch
Law on the Collective Resolvement of Mass Damages ('Wet
Collectieve Afwikkeling Massaschade').The class action has
been suspended until this specific procedure is finalised.
On 16 June 2017, the Amsterdam Court of Appeal issued
an interim judgement stating that the proposed settlement
agreement cannot be declared binding.The court gave the
parties the opportunity to amend the settlement agreement
and file it for revaluation. The parties agreed upon an amended
settlement agreement. Under the amended agreement the
total amount of the compensation is increased by EUR 100
million to EUR 1.3 billion and certain key elements of the
compensation mechanism have been amended.The amended
settlement agreement has been filed on 12 December 2017
with the Amsterdam Court of Appeal with the same request
to declare the settlement binding. Following this request, the
Court of Appeal issued an interim judgement on 5 February
2018 stating that the amended proposed settlement agreement
cannot be declared binding.The court asks the claimant
organisations to provide more insight into their compensation
and whether their compensation is reasonable in comparison to
the total amount of the compensation available for all eligible
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