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

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Annual Reports Rabobank | 2018 | | pagina 236