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
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