- - - - - - - - - - - - - - - - 54. Events after the Reporting Period 55. Management Report on Internal Control over Financial Reporting About this Report Chairman's Foreword Corporate Management Report Appendices Governance Consolidated Financial Company Financial Statements Statements Amounts in millions of euros On December 31,2018 On December 31,2017 Assets recognized by Rabobank Securitizations Other Total Securitizations Other Total Financial assets held for trading 7 52 59 2 63 65 Financial assets designated at fair value 106 106 Financial assets mandatorily at fair value 2 267 269 n/a n/a n/a Derivatives 131 131 246 246 Loans and advances to customers 798 798 501 501 Financial assets at fair value through other comprehensive income 142 142 n/a n/a n/a Available-for-sale financial assets n/a n/a n/a 28 28 56 Investments in associates 98 253 351 290 290 Total financial assets recognized by Rabobank 1,178 572 1,750 777 487 1,264 Liabilities recognized by Rabobank Derivatives 26 26 (1) (1) Deposits from customers 182 182 213 213 Total liabilities recognized by Rabobank 208 208 212 212 Income from sponsored, non-consolidated structured entities in which Rabobank holds no interest is nil (2017: nil). On 15th January 2019 the British Parliament voted against the Brexit deal. Although Rabobankstill believes that ultimately a hard Brexit will be avoided, the uncertainty has grown during the first months of 2019. Rabobank monitors the potential impact of Brexit and has prepared contingency plans on the basis of scenario analysis. As per the UK regulator PRA guidance, and to continue its banking activities in the UK post-Brexit, Rabobank submitted a Third Country Banking License application to the PRA/FCA and is actively engaged with home and host regulators (ECB, PRA and FCA) on the topic of Brexit preparedness. In the scenario of a hard Brexit, Rabobank expects a limited increase of the loan impairment allowance, as Rabobank's exposure to the UK is modest. Indirect effect ofa Brexit could be negative for the Dutch economy as the UK is an important trade partner of the Netherlands. In 2018 the Managing Board of Rabobank committed to a plan to sell part of its non-strategic business in the segment WRR. At December 31, 2018, a sale was not considered highly probable. At March 13, 2019, Rabobank is in the process of negotiating a transaction. The managementof Rabobankis responsibleforestablishing and maintaining adequate internal control over financial reporting. Management is also responsible for the preparation and fair presentation of the Consolidated Financial Statements. Rabobank's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements for external purposes in accordance with International Financial Reporting Standards as adopted by the European Union. All internal control systems, no matter how well designed, have inherent limitations. Due to the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. At the same time, future projections on the basis of any evaluation of the effectiveness of internal control are subject to the risk that the control measures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The management has assessed the effectiveness of the internal control over financial reporting in Rabobank as of December 31, 2018 based on the framework set out in 2013 by the Committee of Sponsoring Organisations oftheTreadway Commission (COSO), as defined in Internal Control - Integrated Framework. On the basis of that assessment, management concluded that, as of December 31, 2018, the internal controls on the internal Annual Report2018-Consolidated Financial Statements 213

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Annual Reports Rabobank | 2018 | | pagina 215