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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