Other Notes to the Financial Statements
27. Professional Securities
Transactions and Assets Not Freely
Available
28. Contingent Liabilities
About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
Reverse repurchase transactions and securities borrowing
agreements concluded by Rabobank are included under "Loans
and advances to credit institutions" or "Loans and advances to
customers" and as per December 31 st amount to:
Amounts in millions of euros
Loans and advances to credit institutions
Loans and advances to customers
Total
2018 2017
8,238 16,786
13,120 13,076
21,358 29,862
Amounts in millions of euros
Contingent liabilities consist of:
Financial guarantees
Loan commitments
Other commitments
Total contingent liabilities
Of which:
Contingent liabilities of group companies
2018
2017
7,712 7,412
33,839 33,967
22,791 20,656
64,342 62,035
15,667 14,975
Liabilities Relating to Operating Leases
Rabobank has concluded various operating lease contracts as
lessee, mainly with respect to properties, information systems and
cars. The future net minimum lease payments under non-
cancellable operating leases can be broken down as follows:
Repurchase transactions and securities lending agreements
concluded by Rabobank are included under "Due to credit
institutions" and "Due to customers" as of December 31 st totaled:
Amounts in millions of euros
Due to credit institutions
Due to customers
Total
2018
80
13
93
2017
359
107
466
The assets referred to in the table below (with exception to
professional securities transactions) were provided to
counterparties as security for (contingent) liabilities. If Rabobank
would enter into default the counterparties may use the security
to settle the debt.
Amounts In millions of euros
2018 2017
Assets not freely available:
Related to type of liabilities:
Loans and advances to credit
institutions
Derivatives
2,536 3,297
Loans and advances to
Due to customers, Debt
18,667 8,020
customers
securities in issue
Interest-bearing securities
Due to customers
3,286 4,195
Total
24,48915,512
Rabobank enters into irrevocable loan commitments as well as
contingent liabilities consisting of financial guarantees and
standby letters of credit on behalf of its customers. Under these
contracts Rabobank is required to perform under an obligation
agreement or to make payments to the beneficiary on third
party's failure to meet its obligations. The following table shows
the amount of the maximum potential utilization of contingent
liabilities.
Amounts in millions of euros
2018
2017
Not later than 1 year
67
93
Later than 1 year but not later than 5 years
225
312
Later than 5 years
178
233
Total liabilities relating to operating leases
470
638
The gross minimum lease payments The expected future
minimum lease payments receivable from sub-leases are nil
(2017: nil). The operating lease expenses are nil (2017:
EUR 12 million) and included in "Other administrative expenses"
in the statement of income.
Contingent Liabilities Related to Income Tax
The Dutch government abolished article 29a of the Dutch
Corporate Income Tax Code as of January 1, 2019. Article 29a of
the Dutch Corporate IncomeTax Code was included in the Dutch
Corporate IncomeTax Code so that capital instruments issued by
credit institutions and which are covered by EU regulation
575/2013 would be considered tax deductible. As a result of the
abolition the payment on these capital instruments will not be tax
deductible anymore as from January 1, 2019.
It seems that the abolition has no consequences for previous
years. However, if the European Commission would decide to
start a formal investigation anyway and ultimately would
conclude that this is a case of state aid for the previous years,
Rabobank may have to repay tax benefits it received from 2015
until 2018.
In this context, Rabobank issued Capital Securities in January
2015, April 2016 and September 2018, amounting respectively to
EUR 1.5 billion at a fixed interest rate of 5.5%, EUR 1.25 billion at a
fixed interest rate of 6.625%, and EUR 1.0 billion at a fixed interest
Annual Report 2018 - Company Financial Statements
234