45. Impairment Charges on
Financial Assets and Loan
Impairment Charges
47. Income Taxes
46. Regulatory Levies
48. Transactions with Related
Parties
About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
contribution to the Deposit Guarantee Scheme amounted to
EUR 118 million (2017: EUR 142 million).
45a Impairment Charges on Financial Assets
Amounts in millions of euros 2018
Loans and advances to customers and credit institutions 315
Financial assets at fair value through other comprehensive income (5)
Recoveries following write-off (117)
Loan commitments and financial guarantees (3)
Impairment charges on financial assets 190
45b Loan Impairment Charges
Amounts in millions of euros
2017
Loans and advances to credit institutions
1
Loans and advances to customers
(38)
Recoveries following write-off
(152)
Credit related contingent liabilities
(1)
Loan impairment charges
(190)
The regulatory levies consist of bank tax, bank levies and
contributions to the Single Resolution Fund and contributions to
the Deposit Guarantee Scheme.
Banks operating in the Netherlands on October 1 st of the current
year are required to pay bank tax. There are two rates of bank tax
applicable: A rate of 0.044% for current liabilities and a rate of
0.022% for long-term liabilities, based on the balance on
December 2017. In 2018, Rabobank Group was charged a total
of EUR 139 million (2017: EUR 161 million).
In 2018, the bank levy in Ireland amounted to EUR 20 million
(2017: EUR 7 million). In 2018, the bank levy in Belgium amounted
to EUR 11 million (2017: EUR 11 million).
On January 1, 2016 the European Single Resolution Fund (SRF)
was set up. This fund has been established to improve the
effectiveness of resolution instruments. Banks and investment
firms that are in the scope of the SRM Regulation are obliged to
contribute to the SRF. In 2018, the contribution to the SRF
amounted to EUR 190 million (2017: EUR 184 million).
Per the end of 2015, the new pre-funded Deposit Guarantee
Scheme was introduced. As of 2016, banks have to pay a premium
on a quarterly basis. Target size of the scheme is 0.8% of total
guaranteed deposits of all banks together. In 2018, the
Amounts in millions of euros
Income tax
Reporting period
Adjustments of previous years
Recognition of previously unrecognised tax
losses
Deferred tax
Total income tax
2018
727
(26)
(10)
211
902
2017
833
(11)
(8)
144
958
The effective tax rate was 23.1 (2017:26.4%) and differs from the
theoretical rate that would arise using the Dutch corporate tax
rate. This difference is explained as follows:
Amounts in millions of euros
2018
2017
Operating profit before taxation
3,906
3,632
Applicable tax rate
25%
977
25%
908
lncrease/(decrease) in taxes resulting
from:
Tax-exempt income
(2.6%)
(101)
(3.1%)
(112)
Impact of foreign tax rates
1.3%
52
0.8%
29
Non-deductible expenses
1.7%
65
1.8%
66
Recognition of previously
unrecognised tax losses
(0.3%)
(10)
(0.2%)
(8)
Other permanent differences
(4.5%)
(174)
(0.1%)
(3)
Adjustments of previous years
(0.5%)
(18)
(0.3%)
(11)
Adjustment due to changes in tax
rates
1.3%
51
(1.6%)
(59)
Other non-recurring tax items
1.5%
60
4.1%
148
Total income tax
23.1%
902
26.4%
958
The other permanent differences mainly comprise of the
deduction of interest payments on Capital Securities and in 2017
a local provision for an expected settlement regarding RNA.
Two parties are considered related if one party exercises control
or has significant influence over the other party regarding
financial oroperating decisions. In the normal course of business,
Rabobank conducts a wide variety of transactions with related
entities which involve different types of loans, deposits and
transactions in foreign currencies. Transactions between related
parties also includes transactions with associates, pension funds,
joint ventures, the Managing Board and the Supervisory Board.
These transactions are conducted against commercial terms and
conditions and market prices. In accordance with IAS 24.4,
transactions within Rabobank Group are not disclosed in the
consolidated financial statements.
Annual Report 2018 - Consolidated Financial Statements
206
