About this
Report
Chairman's
Foreword
Corporate
Management Report Appendices Governance
Consolidated Financial Company Financial
Statements Statements
a minimum. We assess the integrity of our customers and of
our business objectively, we provide suitable products to our
customers and we do not engage in non-sustainable business
activities.
Protect profit and profit growth. Rabobank's business
strategy is strongly related to its cooperative roots. We aim to
generate healthy profits while also realizing the highest
standards for our members, customers and for society.
Maintain a solid balance sheet. Sound balance sheet ratios
are essential to ensuring continuity in servicing our customers
under sustainable and favorable conditions.
Protect Rabobank's identity and reputation. A solid
reputation is essential to maintaining stakeholders'
fundamental trust in the bank.
Make healthy risk-return decisions in line with the strategic
objectives. Make transparent choices based on where capital
and resources can be used most efficiently or appropriately
with respect to sectors or concentrations.
These priorities are strongly interwoven, and fully depend on
maintaining sound governance and risk culture throughout the
Top Risks
Risk The Risk of
Digital change
Cyber Security IT
Disruption
Sustainability
Economic
uncertainties
Regulatory impact
Perception
skills
Risk Appetite
Rabobank's Risk Strategy is embedded in a set of Strategic Risk
Statements directly linked to the Strategic Framework 2016-2020
along the four strategic themes of complete customer focus,
rock-solid bank, meaningful cooperative and empowered
employees.These themes define the high-level boundaries ofthe
risk appetite within which we must operate. The Risk Appetite
Statement (RAS) further specifies the Strategic Risk Statements
and defines the levels and types of risk Rabobank is willing to
accept to achieve its business objectives. The RAS articulates
Rabobank's overall desired level of risk exposure, both
quantitatively and qualitatively, and is used in all business
activities to assess the desired risk profile against the risk-reward
profile of a given activity. Rabobank's Group level risk appetite is
an integral part ofthe bank's strategy and is incorporated in the
organization. Delivering long-term customer value requires a
solid balance sheet, cost efficient funding and supporting the
bank's profitability and a good reputation. At the same time,
maintaining a solid balance sheet requires healthy profitability
and a sound reputation.
Risks Related to Our Strategy
Rabobank's risk management activities are an integral part of
strategy design and execution. New strategic initiatives may open
exciting opportunities, but the expected rewards must be
balanced against the related risks. The digitalization ofthe
banking environment does bring along risks not encountered
before. Rabobank keeps track of external developments and
closely monitors how (future) risks might impact the realization
of our strategic objectives. Regular, structural top-down and
bottom-up risk assessments are performed to identify various
types of risks, and specific stress tests are conducted to calculate
the impact of adverse scenarios. An integrated overview of these
risks, changes to them and measures taken to address them are
discussed periodically in the Managing Board and Supervisory
Board:
Group Information Security Office, Cloud Strategy, Cyber Security Threat Elimination
Program (STEP), Controlled test attacks on our live critical core systems, Integrated
protection for Rabobank websites
Department Sustainability, Climate Change Oversight Committee, Deep dives Climate
Change Impact (Credit),
Regulatory Oversight, Capital prioritization, MTP, Regulatory Markets Infrastructure
(RMI), CARE (incl. COB CDD), Risk Control Framework (RCF), Enhancing Control,
Modelling Landscape
Rabo RIGHT, Speak up, Integrity (SIRA) culture assessments, Projects: Risk Control
Framework (RCF), Performance Health, XFT Leadership, KPIs, Ethics Office, Diversity
inclusion
organization's budget planning where it influences day-to-day
risk-taking. Entity-specific risk appetite statements further specify
the group risk appetite at entity level.
The several material types of risk inherent in the bank's business
model and strategic plan are actively identified, assessed,
mitigated and monitored. Nevertheless, unforeseen
developments could always impede the overall business plan. On
an aggregated level however, the risk appetite is articulated for
capital, profitability and reputational impact with the following
guiding principles:
We are a strongly capitalized bank, with prudent buffers above
regulatory requirements to protect senior bond holders
against the (unlikely) event of bail-in. We do this cost-
Increased competition in financial services enabled by
lowered barriers and technical possibilities
Loss of data or disruption of our services caused by cyber
security threats and the changing IT landscape
Climate events and transition to a more sustainable
society
Economic conditions and (geo)political tensions
Tightened and additive effect of regulations
Dissatisfied customers and outrage in society caused by
our own behavior and inadaptability to change
Economic conditions and (geo)political tensions Portfolio management, Medium Term Planning (MTP) process, risk appetite, Risk
assessments, Limits, Stress testing, Capital and liquidity planning
Managed by e.g.
Bankieren 3.0, IT Portfolio management. Digital Transformation projects
Annual Report 2018 - Management Report
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