Annual Report 2015 Rabobank Group Annual Report 2015 Rabobank Group March 2015 www.rabobank.com/annualreports ReportAnnual 2015 Rabobank Group Annual Report 2015 Management report Overview of the strategy, developments and financial results of Rabobank Group, including the annual corporate social responsibility report. 6 Management report Corporate governance Retrospective on 2015 by the Supervisory Board. Explanation of the new governance structure of Rabobank. 152 Corporate governance Financial statements 2015 Rabobank The balance sheet and the profit and loss statement of Rabobank, with notes. 170 298 Financial statements Consolidated financial Pillar 3 report statements 2015 An overview of the risk Rabobank Group management and the capital adequacy of Rabobank. The balance sheet and the profit and loss statement for Pillar 3 Rabobank Group, with notes. Consolidated financial statements Glossary of terms 403 252 Colophon 407 1 16 maart 2016 - 11:01 Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3 Chairman’s foreword In 2015, Rabobank, as a cooperative bank, took a number of steps that are crucial for a sound future for the bank and for our members and customers. We simplified our cooperative structure, making it more effective, and we established the road map to become the most customer-focused bank in the Netherlands as well as a leading global food and agri bank. A thorough decision-making procedure had to be completed first, in which all of the parties involved in our cooperative were consulted. The result was unanimous support for the chosen course. Rabobank is proud of this support. It gives us the confidence that we will achieve our goals for our members and customers. We are grateful for the effort and commitment of all of our employees and stakeholders in the past year, and we look forward to their continuing intensive involvement for the coming year, which will no doubt prove just as intensive. The strong financial results of 2015 provide us with an excellent For our investment customers, we have expanded the Rabo footing to successfully continue along the chosen path. Investment App to give customers even more information about The net profit of Rabobank Group for 2015 amounted to their portfolio. EUR 2,214 million, an increase of 20% compared to 2014. In the Netherlands, the decrease of loan impairment charges For payment we introduced Rabo SmartPin, an innovative app was a decisive factor for the recovery in earnings at the local that makes it possible to pin at the front door. We now also have Rabobanks. Thanks to economic growth, our customers fared the Rabo Wallet, a digital wallet that lets our Dutch customers better, which reflected positively on Rabobank. The number use their smartphones to pay in shops. Because most mobile of Dutch clients under special asset management decreased phones are not yet equipped to pay with the Rabo Wallet, we by 11%. The recovery in the housing market and lower also put chips on many of our debit cards in 2015, making loan impairment charges also led to growth in the results contactless payment possible. 1.8 million customers currently of FGH Bank and Rabo Real Estate Group. DLL also showed have one of these debit cards, enabling them to pay for items a strong result with an increased lease portfolio. The Wholesale, up to EUR 25 without needing to enter a PIN number. Rural & Retail profits fell due to a goodwill impairment for Rabobank National Association (RNA) in California. New governance model As from 1 January 2016, Rabobank has a different operating Innovation and customer satisfaction model. The new model will create a better bank and a better We were able to further improve our customer service in cooperative. We have restructured our cooperative organisation 2015 by investing heavily in innovation. Customers appreciate so as to enable the local Rabobanks to focus on their customers our online services more and more and have an increasingly with optimum efficiency. We will perform activities that do positive opinion of our advisors. Customer satisfaction has risen not have a direct added value for the customer centrally in but has not yet reached the level we are aiming for. Utrecht. By doing so, we are also anticipating future legislation and regulations. At the same time our new cooperative Our digital services became even more personalised in 2015. organisational model enhances the influence of members. Some 6,000 customers use the hugely successful chat function The members of all the local Rabobanks are represented in the on a daily basis. In 2015, a total of 1.1 million customers General Members Council, the highest decision-making body used the online Rabobank Mortgage File. The Mortgage File within the Rabobank organisation. The 106 local Rabobanks gives us the information we need in advance so that we can and Rabobank Nederland have merged into one cooperative give better customised advice in meetings with customers. Rabobank, which now operates with one single banking licence 2 Rabobank Annual Report 2015 Contents Management report Corporate governance Consolidated financial statements Financial statements Pillar 3 and a single set of financial statements. The unanimous support institutional investors who are interested in investing in our from the local Rabobanks reflects the broad consensus within Dutch food and agri clients. From 2015 onwards, businesses the cooperative for this development. which want to check whether their funding plans are realistic can use the funding indicator at www.rabobank.nl. In 2015 we Strategic Framework 2016 - 2020 introduced a new online environment for corporate banking Within the cooperative, there was also widespread support for our large corporates and wholesale clients: Rabo Corporate for the strategic direction we set out for the period up to Connect. Via this portal, they have access to their accounts, 2020. We focus determinedly on three priorities: excellent payments and an overview of interest and currency positions, customer service, a stronger balance sheet and flexible use of price information and other relevant knowledge. The platform the balance sheet, and an improvement of the financial results. is meant for customers who are located in the Netherlands, are As a customer-focused cooperative bank, it is our mission to internationally active or have complex product requirements. make a substantial contribution to welfare and prosperity in Rabobank is the first major Dutch bank to provide financial the Netherlands and to feeding the world sustainably. Through insight and an overview on a single corporate customer the vision set out in Banking for the Netherlands and Banking platform. for Food we substantiate our position as a social, cooperative bank. Banking for Food With this new strategic direction, Rabobank continues to With our Banking for Food programme, we want to contribute respond to social developments, such as changing consumer to sustainably feeding the world’s population. Various food behaviour, technological developments, financial innovation, and agri sectors have experienced further consolidation in the increased competition, a complex economic context and supply chain; Rabobank has actively supported customers with more stringent capital requirements. By implementing these advice and financing solutions. With our clients and partners, structural changes and strategy in view of these changes, we are working internationally on the four dimensions of Rabobank purposely fosters a cooperative customer service food security: improving the availability of food; improving model. Considering societal developments, we believe there is access to food; stimulating balanced, healthy nutrition; and a permanent and significant need for a bank organised along enhancing the stability of food production. Both Wholesale and cooperative lines. In 2015, Rabobank supported more than International Rural and Retail banking have further increased 1,600 local, relevant socially responsible initiatives. customer satisfaction. We offer global food chains financing, knowledge and our networks, supported by Rabobank Enhanced customer focus and closer to the customer Foundation and Rabo Development. More than 2 million small Rabobank is strengthening its position as the bank that farmers have a future thanks to access to financing, knowledge is closest to the customer and aims to be a meaningful and networks via Rabobank Foundation and Rabo Development. cooperative that is successful in the long term for members, customers, employees and the society in which the bank Loss of jobs operates. Providing excellent customer service through our As a result of ongoing improvement programmes, the number financing offering, knowledge and our network is central to this of employees decreased to fewer than 52,000 (in FTEs) in 2015. policy. In 2015, we conducted promising experiments with ‘new The local Rabobanks in the Netherlands saw a decline in customer proximity’. The majority of our customers are granted the number of staff. In view of the envisaged performance a mortgage interview within 24 hours. Over the next year, improvement, all the business units will implement efficiency Rabobank will invest in several new forms of contact points, in improvements. In the period 2016-2018, the number of jobs addition to the existing bank branches. This will include mobile will decrease by 9,000 mainly in the back office and the helpdesks, pop-up stores and advice at home.