About this Report Chairman's Foreword Corporate Management Report Appendices Governance Consolidated Financial Company Financial Statements Statements 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 Rabobankconcludes 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. An interest rate swap protects businesses from rising variable interest rates and helps them to keep their interest payments at an acceptable level. In March 2016 the Dutch Minister of Finance appointed an independent committee which on July 5, 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 July 7,2016. The final version of the Recovery Framework was published by the independent committee on December 19, 2016. Rabobank is involved in civil proceedings in the Netherlands relating to interest rate derivatives 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 (for which a standstill was agreed to, due to the Recovery Framework; the few remaining out-of-scope customers will be assessed on an individual basis). These actions concern allegations of misinforming clients with respect to interest rate derivatives. Some of these actions also concern allegations in connection with Rabobank's Euribor submissions (as described below). Rabobankwill 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 recognized at December 31, a provision of EUR 316 million (2017: EUR 450 million). At year-end 2018 Rabobank provided all qualifying clients clarity on the outcome. At year-end 2018, Rabobank's payments to clients under the Recovery Framework amounted to EUR 532 million. imtech On January 30, 2018, Rabobank received a letter indicating that legal proceedings may be started at a later stage with respect to a potential collective action in relation to certain share offerings of Royal Imtech N.V. in which Rabobank was involved. This situation has remained unchanged. Furthermore, the receivers sent a letter (10 August) in which they describe on what (possible) grounds their (future) claim(s) towards Rabobank in its capacity of lender will be based. Rabobank is of the opinion that no provision should be recognised per 31 December 2018. Libor/Euribor Rabobank has been involved for a number of years in several regulatory proceedings in relation to benchmark-related issues. Rabobank is cooperating, and will continue to cooperate, with the regulators and authorities involved in these investigations. On October 29,2013, Rabobank entered into settlement agreements with a number of these authorities in relation to their investigations into the historical Libor and Euribor submission processes of Rabobank. All amounts payable under these settlement agreements were fully paid and accounted for by Rabobank in 2013. Rabobank, along with a large number of other panel banks and inter-dealer brokers, has been named as a defendant in a number of putative class action suits and individual civil court cases brought before the Federal Courts in the United States. These proceedings relate to U.S. Dollar (USD) Libor, British Pound Sterling (GBP) Libor, Japanese Yen (JPY) Libor, Tibor (note: Rabobank was never a member of the TIBOR panel), and Euribor. Rabobank and/or its subsidiaries have also received complaints and writs of summons ordering Rabobank to appear before various Dutch, Argentine, United Kingdom, Irish, and Israeli courts in civil proceedings (inc. class action suits) relating to interest rate benchmarks. Since the class action suits and civil proceedings listed above are intrinsically subject to uncertainties, it is difficult to predict their outcomes. Rabobank takes the stance that it has substantive and convincing legal and factual defenses against these claims. Rabobank has the intention to continue to defend itself against these claims. Rabobank Group considers the Libor/Euribor case to be a contingent liability. No provision has been made. Other Cases Rabobank Group is subject to other legal proceedings for which provisions have been recognized.These cases are individually less significant in size and are therefore not separately disclosed. The total provision for those cases amounts to EUR 153 million. In addition to the contingent liability cases described above for which an assessment regarding a possible outflow is not yet Annual Report 2018 - Consolidated Financial Statements 170

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Annual Reports Rabobank | 2018 | | pagina 172