Flipkart Coupons |Shopclues Coupons|Paytm Coupons|Amazon Coupons
Banks - Rabobank · Banks ... Leasing and Real Estate ... Figure 3 shows performance adjusted from...
Transcript of Banks - Rabobank · Banks ... Leasing and Real Estate ... Figure 3 shows performance adjusted from...
Banks
www.fitchratings.com 30 October 2012
Netherlands
Rabobank Group Full Rating Report
Key Rating Drivers
Strong Standalone Strength: The ratings of Rabobank Group reflect its robust capitalisation,
resilient earnings, strong risk management and generally moderate risk profile. Rabobank has
strong franchises in the Dutch retail market and internationally in the food and agriculture
business. Profitability is modest compared to peers‟. Its reliance on confidence-sensitive capital
markets for its funding needs is mitigated by its substantial and well-managed liquidity buffer.
Strong Capital: The bank has cut back on higher-risk international business to concentrate on
its core client base. Its robust track record in credit risk management has resulted in relatively
low risk-weightings for both its retail and corporate exposures; hence, its leverage ratio (defined
as equity/assets) lies in the middle of the range of similarly rated international peers‟.
Ample Liquidity: Rabobank‟s liquidity reserve amounted to around EUR160bn at end-June
2012, representing around 21% of its total balance sheet. Such a high level of liquidity has
underpinned wholesale investors‟ confidence in the bank.
Reliance on Wholesale Markets: Rabobank obtains only around half of its funding needs from
customer deposits, despite its 40% market share of Dutch retail deposits. This reflects the large
portion of Dutch savings placed outside the banking system. Its ability to access the unsecured
debt market has been strong and uninterrupted, making its funding base stable.
Consistent but Modest Profitability: Fitch Ratings expects Rabobank to continue to show
resilient performance. Management has implemented cost-reduction measures to offset the
pressure on income from depressed business volume. Fitch expects the current weak domestic
economic environment to put pressure on Rabobank‟s SME customers, which will result in
increases in loan impairment charges and weaken internal capital generation.
Healthy Asset Quality: Rabobank's loan book is fragmented, healthy and is backed by good
collateral, reflecting a large portfolio of domestic residential mortgages. These have historically
shown low losses, which should not rise much, given the still low Dutch unemployment. The
agribusiness book is well-diversified. Rabobank has a notable exposure to commercial real estate,
mainly Dutch, but also internationally.
Extremely High Expectation of Support: Given Rabobank's large size and importance to the
Dutch banking system, Fitch considers there to be an extremely high probability that the Dutch
authorities would support the bank, if ever needed.
What Could Trigger a Rating Action
Limited Upside Potential: Rabobank's ratings have limited upside potential, given their high
level, some reliance on wholesale funding and some constraint on the amount and type of
capital the bank can raise in times of stress, imposed by its mutual status.
Pronounced Economic Changes: Given the group‟s high exposure to the Dutch market, its
ratings are sensitive to changes in domestic economic assumptions or indicators, eg a
sustained recession with a significant rise in unemployment and fall in house prices.
Rabobank‟s ratings are sensitive to material reductions in the bank‟s capitalisation or liquidity,
to investor sentiment turning against the bank, or to a sharp deterioration in asset quality or
increases in market risk. Fitch expects Rabobank‟s capitalisation and liquidity to remain above
other large global banks‟.
Ratings
Rabobank Group
Foreign Currency Long-Term IDR AA Short-Term IDR F1+ Viability Rating aa Support Rating 1 Support Rating Floor A+
Friesland Bank N.V. Foreign Currency
Long-Term IDR AA Short-Term IDR F1+ Support Rating 1 XX
Sovereign Risk Long-Term Foreign-Currency IDR AAA Long-Term Local-Currency IDR AAA
Outlooks
Long-Term Foreign-Currency IDRs Stable Sovereign Long-Term Foreign-Currency IDR
Stable
Sovereign Long-Term Local-Currency IDR
Stable
Financial Data
Rabobank Group
30 Jun 12
31 Dec 11
Total assets (USDm) 970,537 946,649 Total assets (EURm) 770,898 731,665 Total equity (EURm) 35,992 35,790 Operating profit
a
(EURm) 1,071 1,753
Net incomea (EURm) 905 1,942
Comprehensive income
a (EURm)
879 1,962
Operating ROAAa (%) 0.29 0.28
Operating ROAEa (%) 6.00 5.00
Fitch core capital/ weighted risks (%)
11.52 11.81
Tier 1 ratio (%) 16.90 17.00
a Adjusted for coupons on hybrid capital securities
Related Research
2012 Mid-Year Review and Outlook: Major Dutch Banks (June 2012)
Analysts
Olivia Perney Guillot +33 1 44 29 91 74 [email protected] Phlippe Lamaud +33 1 44 29 91 26 [email protected]
Banks
Rabobank Group
October 2012 2
Profile: A Dutch Market Leader With an Established Position in Food and Agriculture Financing Internationally
Cooperative Banking Group with Deep Local Roots
Rabobank consists of 139 local cooperative banks, which own Rabobank Nederland (RNed),
their central bank. Individual local banks have 1.9 million members (clients who have a
meaningful relationship with their local bank), of which 170,000 are holders of member
certificates. As the local Rabobanks are not allowed to access the financial markets directly,
RNed manages funding and liquidity for the group, undertakes wholesale businesses for the
group, including securities, foreign-exchange (FX) and other foreign business transactions, as
well as relationships with large wholesale clients.
The Rabobank group accounts for around a quarter of the Dutch banking system and has
leading market shares in household savings (around 40%), residential mortgages (around
30%) and agricultural lending (around 80%); hence, Rabobank is considered a systemically
important bank by the Dutch authorities, underpinning Fitch‟s Support Rating and Support
Rating Floor.
The local Rabobanks and RNed are credit institutions licensed by the Dutch central bank (De
Nederlandse Bank; DNB). Given the mutual support scheme in place in the group, DNB only
directly supervises the group, and has delegated the supervision of local banks to RNed. This
mutual support scheme covers: the local Rabobanks; RNed; Rabohypotheekbank and the
mortgage bonds issued by it; Raiffeisenhypotheekbank NV; Schretlen & Co. NV; De Lage
Landen International BV; De Lage Landen Financiering BV; De Lage Landen Trade Service
BV; and De Lage Landen Financial Services BV. Under this arrangement, the aggregate equity
of all participants serves as a guarantee for the creditors of each participant. The scheme is
embedded in Dutch law and is regarded by DNB as legally binding. Individual banks that need
capital injections are supported by the rest of the group.
Earnings Dominated by Domestic Retail Banking
Rabobank provides all the services of a universal bank. The group has five business lines (see
Annex 1 for further details). Domestic Retail Banking includes the local Rabobanks, the
mortgage lender Obvion and the newly acquired Friesland Bank (see below). Wholesale
Banking and International Retail Banking (Rabobank International) consists mainly of corporate
banking in the Netherlands and food and agriculture business internationally (with a strong
focus on the US, Australia, and New Zealand, in addition to the Netherlands); international
retail operations include Irish ACC Bank and Polish Bank BGZ. The next three divisions are
Asset Management (mainly Robeco, for which strategic options are currently under review),
Leasing and Real Estate (including the brand Bouwfonds).
Following the turbulence in the financial markets since 2007, the group has decided to focus
more closely on domestic business: it is the clear leader in mass-market banking services for
individuals and SMEs in the Netherlands and continues to strengthen its already good position
with corporate customers. Internationally, the group specialises in the food and agriculture
business and continues to scale down its service provision to non-core clients. The group has
set itself a target of restricting lending granted overseas to 25% of total lending.
Corporate Governance Driven by Co-Operative Status
As a co-operative, non-listed mutual group, Rabobank is not subject to the Tabaksblat
corporate governance code. However, the group is committed to complying with the code
where possible. The supervisory board includes 12 members (of which 11 have to be
independent), who appoint the six-member executive board. The Rabobank parliament, with
representatives of all the local banks, convenes at least four times per year; key issues are pre-
discussed at smaller committees. The direct or indirect representation of each local Rabobank
in these decision-making bodies makes implementation of strategic decisions relatively smooth.
Figure 1 Profit by division
Pre-tax profit
(EURm) H112 2011 2010
Domestic retail banking
739 2,307 2,318
Wholesale and international banking
684 992 1,043
Asset management
164 127 238
Leasing 266 401 267 Real estate 50 57 63 Other, including equity interests and consolidation
-364 -832 -643
Total 1,539 3,052 3,286
Source: Rabobank
Related Criteria
Global Financial Institutions Rating Criteria (August 2012)
Rating Criteria for Banking Structures Backed by Mutual Support Mechanisms (April 2012)
Banks
Rabobank Group
October 2012 3
Friesland Bank (FB): FB was acquired by Rabobank on 1 April 2012. FB‟s operations are
planned to be gradually integrated into those of local Rabobanks over the next two years.
Based on Rabobank‟s commitment to assume joint and several liability for all FB‟s liabilities
under a “403-statement”, based on Article 2:403 of the Dutch Civil Code, Fitch has aligned the
ratings of all types of FB‟s unsecured debt securities with those of similar instruments issued by
Rabobank.
Resilient Performance but Only Modest Profitability
Low-Risk Strategy Provides Stability
In the context of lower economic growth for the next few years, Rabobank expects to report net
income at around the same levels as in the previous few years, based on a flat balance sheet,
loan repricing, large low-margin liquidity buffer, cost reduction and contained loan impairment
charges.
In Fitch‟s view, Rabobank‟s deep-rooted franchise in the Netherlands provides the bank with
significant pricing power, in particular in regions where other banks have been reducing their
local presence. In addition, Fitch expects strong risk management and expertise in food and
agriculture business to enable the bank to contain its loan impairment charges, both in the
domestic and international loan books. However, higher loan impairment charges will weaken
internal capital generation. The Dutch government is expected to implement a bank tax,
potentially of around EUR600m; Rabobank‟s share is expected to be around one-third.
Figure 3 shows performance adjusted from the coupons paid on hybrid capital securities, which
are reported after net income in the bank‟s accounts. Overall, adjusted profitability is modest,
compared to that of highly rated international peers of a similar size – see peer table in Annex 2.
Cost efficiency is lower, reflecting the bank's mutual cooperative nature (including less focus on
profit maximisation). Fitch expects the bank to further improve cost efficiency to strengthen
operating profitability, as demonstrated by the cost initiatives currently underway in its retail
network. Loan impairment charges absorbed almost half of pre-impairment operating profit in
H112, and similar levels are expected for the full year.
Cutting Costs to Offset Pressure on Income
The performance of Domestic Retail Banking is very much dependent on developments in the
Dutch economy, for which Fitch forecasts a recession in 2012 and low GDP growth for 2013
(+0.7%) and 2014 (+1.5%). In addition, Rabobank‟s sizeable mortgage loan book makes it
potentially vulnerable to changes in house prices or deterioration in the already very high
household indebtedness. However, in Fitch‟s view, the key factor remains unemployment levels,
which, although deteriorating, are forecast to remain between 6% and 7% over the next two
years.
Loan impairment charges as a proportion of the mortgage loan book have increased but from a
very low level: from 3bp to 4bp in H112 (annualised), mainly following the consolidation of FB,
while the bank has not noticed any material deterioration in its portfolio. SMEs have been more
vulnerable to the economic downturn, in particular those in the construction industry or exposed
to the commercial real estate sector. Fitch expects any increase in loan impairment charges to
be manageable.
Price competition has been fierce on deposits, leading to narrower margins, but the bank
benefits from its leading position in savings and deposits in the Netherlands. In addition,
Rabobank has continuously been repricing its Dutch retail and SME loan book. Given the
economic uncertainty, business volume will dampen revenues (both interest and commission
income); hence, management has initiated a cost-reduction programme to reduce the cost
base of Domestic Retail Banking to EUR4bn in 2016 (including staff and outlet reduction, a shift
toward more advisory services, and a stronger standardisation of products).
Figure 2
0
10
20
30
40
50
60
70
YE09 YE10 YE11 H112
0.0
0.4
0.8
1.2
1.6
Net interest margin (RHS)
Impairment charge/pre-impairment
profit (LHS)Internal capital generation (LHS)
Margins
(%)
Source: Fitch
(%)
Figure 3 Performance Adjusted for Coupons on Hybridsa (%) H112 2011 2010
Net interest margin
1.26 1.38 1.41
Cost/income 67.74 72.09 71.38 Pre-imp profit/equity
12.14 9.59 10.71
Pre-imp profit/assets
0.58 0.49 0.55
LIC/pre-imp profit
50.58 47.81 34.48
Op profit/equity 6.00 5.00 7.02 Op profit/assets 0.24 0.28 0.35 Coupons (EURm)
409 685 533
a Payments on hybrids included in interest
expenses Source: Fitch
Figure 4
0
2
4
6
8
10
YE09 YE10 YE11 H112
0
20
40
60
80
Cost/income (RHS)
Operating ROAE (LHS)
ROAE (LHS)
Key Profitability Metrics
(%)
Source: Fitch
(%)
Banks
Rabobank Group
October 2012 4
Stable Loan Impairment Charges at Rabobank International
Competition and sluggish transaction volumes in the Dutch large corporates segment mean
that lending margins and capital market revenue have remained under pressure. In addition,
these customers are not immune to the impact of a long-lasting eurozone crisis, although they
do benefit from Germany being one of the main export markets. This is somewhat offset by
lending increases in the food and agriculture sector internationally, which benefits from
maintained food prices.
Loan impairment charges as a proportion of Rabobank International‟s loan book have been
relatively stable over the past few years, at 59bp in H112 (annualised, according to the bank),
and are expected to remain at this level (normalised level of 50bp-60bp according to the bank).
Out of the EUR308m loan impairment charges in H112, EUR172m related to Rabobank‟s Irish
subsidiary ACC Bank (bringing loan impairment charges taken since 2008 to a total of
EUR1.9bn); management expects further charges to be modest. Further streamlining of
international operations, although of potentially relatively small scale, are expected, due to the
focus on core customers (such as the divestment of Rabobank‟s stake in India‟s Yes Bank –
EUR59m capital gain in H112).
Asset Management and Leasing Holding Up Well; Real Estate Suffering but Small Contribution
Assets under management increased by 15% in H112 to EUR212bn at end-June 2012
(excluding Bank Sarasin, in which Rabobank sold its stake in July 2012, as part of its strategy
to slim down peripheral activities). Leasing operations benefited from higher margins on lease
contracts and volume growth, boosting net interest income, while loan impairment charges was
stable at 57bp of loans in H112 (according to the bank - 2011: 58bp, 2010: 90bp – the
reduction from 2010 resulted from tighter risk policies). The real-estate operations have been
scaled down in the context of declining real-estate prices, in particular for commercial
properties, and low transaction levels in the Netherlands. The group is also active in France
and Germany, where property markets have been performing better. The contribution from
Real Estate is expected to be small for 2012.
While noticeable in 2009 (including exceptional items) and 2010, the contribution from
Rabobank‟s equity stake in the insurance company Eureko (the largest Dutch insurance
company, operating under the brand name Achmea) turned negative in 2011.
Strong Risk Management
The group's risk profile can be described as moderate and its risk policies as prudent.
Rabobank's executive board is responsible for managing risks and setting risk strategy, policy
principles and limits. The supervisory board regularly reviews the risk exposure of Rabobank's
activities and portfolio. Credit risk accounted for 89% of regulatory capital requirements at end-
2011 (Rabobank uses the advanced internal ratings-based approach to measure credit risk),
reflecting a relatively low appetite for market risk, with trading activities mainly driven by
customer flows.
Credit Risk: Cautious Attitude to Risk, With Focus on Collateral
The increases in Rabobank‟s total balance sheet in recent months have been driven by the
acquisition of FB (domestic lending has been stagnating, in line with the economic climate) and
a larger securities portfolio supporting the bank‟s liquidity buffer and higher cash balances (9%
of end-June 2012 total assets) reflecting higher short-term institutional deposits as Rabobank
has been benefiting from a flight to quality in the current financial crisis.
Residential Mortgages Constitute High Proportion of Loans
Lending accounted for around two-thirds of total assets at end-June 2012, of which a significant
proportion is backed by collateral. Around 45% of loans were Dutch residential mortgages at
end-June 2012 (see figure 7). Falling house prices in the Netherlands resulted in an increase in
Figure 5 Breakdown of Loan Book (%) H112 2011
Netherlands 75 74 America 11 12 Rest of Europe 8 9 Australia + New Zealand 5 4 Rest of World 1 1 Total (EURbn) 461.8 448.3
Source: Rabobank
Banks
Rabobank Group
October 2012 5
the average loan-to-value (LTV) ratio from around 65% in 2010 to around 70% in 2012. While
weak economic conditions will continue to put pressure on Dutch housing prices in the short
term, demographic growth and a growing shortage of houses (due to a slowdown in the
construction of new-builds) mean that there are better prospects for the Dutch residential real-
estate market in the medium term.
Around 22% of the portfolio at end-June 2012 had an LTV ratio of over 100%. High by
international comparison, these LTVs reflect the full tax-deductibility of interests paid on
mortgages. This tax incentive has led to very high levels of the household gross indebtedness
ratio, although this is offset by significant financial wealth (excluding real estate ownership).
However, a significant proportion of individuals‟ financial wealth comprises savings in private
pension scheme and insurance policies, meaning that the liquidity of these assets is limited.
Reforming the housing market is key for the Netherlands, and this is expected to include
changes in the tax deductibility of mortgage interests. Rabobank‟s lending policies include
limits in terms of debt servicing capacity and require additional security (including insurance
policies) for high-LTV loans; in addition, Rabobank has a lower proportion of interest-only loans
than the market average. Around 18% of loans at end-June 2012 benefited from a guarantee
from the national guarantee scheme (Nationale Hypotheek Garantie), while this proportion was
a high 42% of new production in 2012, reflecting the high proportion of first-time buyers in the
current market, versus home owners who usually have to sell their house as part of the
transaction. The historical peak in loan impairment charges for Dutch residential mortgage
lending at Rabobank reached 10bp of loans in the early 1980s crisis, but interest rates and
unemployment rates were much higher than today. Given the expectation that unemployment
will only rise slightly, Rabobank‟s management does not expect any deterioration in the
performance of the bank‟s residential mortgage book.
Deterioration in Commercial Real Estate has a Moderate Impact
Exposure to commercial real estate mainly consists of loans granted by FGH Bank,
Rabobank‟s Dutch commercial real-estate lender (EUR19bn at end-June 2012) and real-
estate-related loans to SMEs. Exposure to property development included EUR3.2bn of real-
estate development projects at end-2011, mostly residential housing but also commercial, both
under development and under construction, in the Netherlands, France and Germany. Fitch is
informed that the bulk of each project needs to be pre-sold before its start.
The downturn in the Dutch commercial real-estate market resulted in annualised loan
impairment charges rising to 105bp of FGH‟s loans in H112, but the absolute amount
(EUR99m) is easily manageable for the group; however, reserve coverage is highly reliant on
collateral. Impaired loans at FGH were 6.5% of loans at end-June 2012.
Exposure to Food and Agriculture Sector –Around 20% of Loans
In line with Rabobank‟s strategic orientation, there is concentration to the food and agriculture
sector (EUR92.6bn in loans at end-June 2012, of which around 65% was granted abroad),
although this appears relatively well-diversified by subsector. Abroad, Rabobank mainly
focuses on large-scale industrialised farms, mainly in Australia, New Zealand and the US, with
Brazil being a country where the group intends to expand its business. In this cyclical industry,
vulnerable to bad weather conditions, Rabobank benefits from its worldwide recognised
expertise. In the Netherlands, the horticulture glasshouses are far from recovery but only
represented 5% of Rabobank‟s lending to this sector.
Other corporate exposure (EUR150bn at end-June 2012) was split 30:70 between international
and Dutch exposure and was well spread by sector. The loan book remains highly fragmented,
with the 20 largest outstanding corporate risk exposures accounting for only 31% of equity at
end-June 2012. Irish ACC Bank‟s loan book declined to a net EUR3.7bn at end-2011 and
should only require limited additional provisions, in management‟s view. Overall, this is
manageable for the group.
Figure 6
0.0
0.5
1.0
1.5
2.0
2.5
YE09 YE10 YE11 H112
0.0
0.1
0.2
0.3
0.4
0.5
Impaired loans (LHS)
Reserves for impaired loans (LHS)
Impairment charge (RHS)
Credit Quality (As % of gross loans)
Source: Fitch
Figure 7 Breakdown of Loan Book (EURbn) H112 2011
Total retail loans 218.1 212.3 Trade industry and services
150.3 147.9
Of which Real estate related Real estate Lessors
8.2
30.1
8.4
31.0
Food and agriculture 92.6 88.2 Of which Food and agri business Netherlands Food and agri business international
32.1
60.5
32.0
56.2
Total loans 461.8 448.3
Source: Rabobank
Banks
Rabobank Group
October 2012 6
Quality of Lending is; Sound Reserve Coverage Highly Reliant on Collateral
Rabobank's impaired loans have been rising significantly in 2012, reflecting the consolidation of
FB and a deteriorating environment. Although lower than at domestic peers, the non-
performing loans / gross loans ratio is slightly higher than at similarly rated peers, a result of the
recession in the Dutch economy affecting SMEs in particular – core customers of local
Rabobanks, as well as the performance of commercial real-estate lending.
Impaired loans at Rabobank International amounted to 3% of loans at end-June 2012. The
overall coverage ratio is weaker than at other western European banks, but the level of
collateral backing loans is high. Unreserved impaired loans represented a higher proportion of
equity (21% at end-June 2012) than at some peers, making the bank‟s vulnerable to
deterioration in collateral values. However, in Fitch‟s view, this is mitigated by Rabobank‟s
strong risk culture and good track record.
Securities Portfolio to Provide an Ample Liquidity Buffer
Rabobank‟s debt securities portfolio (around 10% of total assets at end-June 2012) is mainly
invested in government bonds (around 60%) and driven by the Liquidity Coverage Ratio (LCR)
requirements. Exposure to government bonds is now highly concentrated on „AAA‟-rated
countries (essentially Dutch and German government bonds). Bank and government exposure
to peripheral European countries amounted to EUR1.7bn at end-June 2012, of which
EUR1.3bn was Spanish covered bonds and EUR188m Italian government bonds; net exposure
to the Greek government was EUR43m.
Exposure to structured finance, net of valuation adjustment, was reduced to EUR4.3bn at end-
June 2012 and underwent further migration to lower rating categories over the past 18 months:
only 21% was in the 'AAA' category; 33% in the „AA‟ category; 23% in the „A‟ category and 23%
below 'A'). Exposure to monoline insurers was reduced, due to the scaling down of the
portfolio: gross counterparty risk guaranteed by monoliners amounted to EUR896m at end-
June 2012, but net exposure only to EUR111m. The bank recognises its ABCP conduits on
balance sheet (EUR15bn outstanding at end-June 2012); these are largely for the refinancing
of its own loans as well as those of its clients, rather than for investing in structured finance
assets.
Interbank risk is limited, as Rabobank tends to deal with large, highly rated Dutch and
international financial institutions and to lend on the interbank market on a secured basis.
Excess liquidity is generally placed with the ECB. The group has substantial derivative
instruments both as assets and as liabilities; their value has been very volatile in recent years,
reflecting market conditions. Rabobank uses a wide range of derivative products, mostly to
hedge its lending portfolio. It also offers these products to its clients. Its counterparties are
mostly large international non-bank financial institutions and banks. Equity investments in
associates consist mainly of Eureko. The bank has a private-equity investment portfolio (mainly
Dutch) of around EUR1bn at end-June 2012.
Market Risk: Low Risk Appetite
Rabobank takes a cautious approach to market risk, and stringent controls are in place. Its
capital market operations mainly serve its large corporate customers. The bank is active as an
intermediary, seeking a stable flow of revenue, and has scaled back its market-making
activities. Pure trading risk at Rabobank is limited. Rabobank applies a range of internal limits,
and uses simulations to estimate the impact of sudden and severe market movements.
Guidelines and limits are established by the executive board upon the recommendation of a
balance sheet and risk management committee. The latter is also the group's central assets
and liabilities management committee, in charge of supervising interest-rate sensitivity and
liquidity. The local Rabobanks do not have securities portfolios.
Banks
Rabobank Group
October 2012 7
The focus is on interest-rate instruments, although the bank is also engaged in equities,
foreign-currency, derivatives trading and credit derivatives. Rabobank measures trading market
risk in terms of value at risk (VaR), which is calculated using a 97.5% confidence interval, 12
months of historical data and a one-day holding period. In 2011, the average VaR was a low
EUR16m; diversification effects of around one-third reflect a risk management at a very
granular level. Regulatory capital requirement for market risk (including stressed VAR)
amounted to EUR461m at end-2011.
Structural interest rate risk is monitored at RNed level. A 200bp parallel increase/decrease in
interest rates over one year would have resulted in a EUR434m increase/EUR191m decrease
in interest income in 2011. Structural interest risk has been reduced in 2012, given the low
interest-rate environment, flat yield curves and lengthened funding maturities. The bank hedges
almost all its currency risk.
Operational and Reputational Risks
Rabobank uses the advanced measurement approach to calculate operational risk capital
requirements (EUR1.4bn at end-2011). Rabobank has received various requests from several
regulators about the submission process for the LIBOR, as the bank is a member of the LIBOR
panels for GBP, USD and EUR. The potential outcomes of the current investigations are so far
very difficult to predict.
Funding and Capital
Large, Diversified Funding Mix
Although Rabobank has a strong market share of retail deposits in the Netherlands, deposits
accounted for just over half of all funding, and just under half of these were obtained from retail
customers. In comparison to some highly rated Swedish peers, its loans/deposits ratio is better,
although in line with similarly rated Australian banks, while highly rated Canadian banks have a
much higher proportion of customer funding; Rabobank‟s ratio, at around 140%-150% does
reflect some capital market funding needs. Retail deposits have tended to be very stable.
Competition is expected to remain strong, but Rabobank's network, franchise and reputation
position it well to deal with this. Because of low consumer confidence and low consumption in
the Netherlands, the group gathered higher volumes of retail deposits in H112 than it expected.
It has also a direct bank channel since 2002.
The balance of funding is obtained in the form of senior unsecured debt under a number of
funding programmes in Europe, the US and Asia, both short- and medium-term. The bank is
one of the largest issuers of senior unsecured debt worldwide: issuance volumes have reached
around EUR40bn in the past three years, but are expected to reduce in line with lower funding
needs (around EUR20bn in 2012, entirely raised in H112).
Figure 10 provides a breakdown of maturing debt. Over the past few years, Rabobank had
been extending the maturity profile of its funds, although this was shortened in H112 to an
average of 4.7 years at end-June 2012 (from 5.3 years at mid-2011). Short-term funding has
been reduced and funds less than 15% of the total balance sheet. Securitisations are mainly
used to fund the mortgages generated through Obvion (EUR11bn at end-2011) and for liquidity
purposes (mainly EUR50bn of self-retained Dutch RMBS). Asset encumbrance, including repos
but excluding the previous EUR50bn for liquidity purpose, is modest, at around 4% of the
balance sheet. Rabobank is one of the few financial institutions that had access to the money
and capital markets even during difficult market conditions.
Figure 9
Other10%
Non-Equity Funding MixEnd June 2012
Source: Fitch
Customerdeposits
49%
Debtsecurities
37%
Interbank4%
Figure 8
0
50
100
150
200
YE09 YE10 YE11 H112
Loans/customer funding (LHS)
Liquid assets/short-term wholesale
funding (LHS)
Funding Dependencies
(%)
Source: Fitch
Banks
Rabobank Group
October 2012 8
Figure 10
0
5
10
15
20
25
30
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022+
Maturity Profile
(EURbn)
Source: Rabobank
Strong Liquidity Position
RNed's treasury department manages liquidity for the entire group. Liquidity is deliberately kept
strong, supported by a portfolio of high-quality, fixed-income securities that can be repoed with
the ECB. At end-June 2012, Rabobank had EUR160bn of assets that could be used to
generate liquidity immediately – either by immediate sale or through discounting with central
banks or in repo transactions; these assets included around EUR70bn of cash, the EUR50bn of
self-retained RMBS and around EUR50bn of (mainly Dutch and German) government bonds.
Rabobank estimates it already complies with the LCR and NSFR requirements.
Capitalisation is Robust
The equity of each local Rabobank consists of retained earnings and other reserves.
Furthermore, since 2000, Rabobank has been raising a limited amount of capital by issuing so-
called “member certificates” to the local Rabobanks' members as well as to the group's
employees. This capital is available to Rabobank on a perpetual basis and is not callable by its
members. Consequently, it is included in equity under IFRS, is considered core capital by the
DNB and is expected to be considered core capital under Basel III guidelines. Although by-laws
do not permit the distribution of retained earnings to members, the bank pays dividends on
member certificates. It also distributes a proportion of its earnings to charitable/community
causes annually. Due to its cooperative structure, Rabobank does not have access to the stock
market to raise equity; however, as only 170,000 of members have member certificates,
management considers there is some potential to tap its 1.9 million members.
Rabobank‟s regulatory capital includes various hybrid instruments, including USD4bn of hybrid
Tier 1 instruments issued in 2011, which the bank expects to be Basel III compliant for capital
purposes. Fitch has given 100% equity credit to those securities, reflecting the loss-absorption
feature of the securities including the relatively high trigger point which will cause both an
interest cancellation event and/or loss absorption to take place.
Overall, Fitch considers Rabobank's capitalisation to be robust, underpinned by resilient
internal capital generation. Fitch expects Rabobank to further bolster its capitalisation, in light of
the additional capital requirements under Basel III/CRD IV. Its reported core Tier 1 ratio
reached 12.7% at end-June 2012. In September 2012, Rabobank was among the few
European banks to have issued Lower Tier 2 debt to build up an extra layer of buffer to mitigate
the potential risk of higher losses for senior bond holders in the future. Rabobank targets a total
capital ratio of 18% to maintain the confidence of senior bond investors. Management has been
taking measures to limit the impact of Basel III, by reducing speculative-grade securities
investments as well as the bank‟s equity stake in Eureko.
A strong track record of low credit risk losses has resulted in relatively low risk-weightings under
the advanced internal ratings-based approach. Rabobank‟s leverage ratio (its equity/assets ratio
was 4.7% at end-June 2012, Fitch‟s calculation) lies between those of similarly rated Nordic (on
the lower side) and Australian and Canadian (on the higher side) peers.
Figure 12
0
3
6
9
12
15
18
YE09 YE10 YE11 H112
Tier 1 ratio
Fitch core capital/RWA
Equity/assets
Capital & Leverage
Source: Fitch
(%)
Figure 11 IFRS Equity Composition
(EURm) End-Jun
12
Retained earnings and other reserves
26,830
Member certificates 6,607 Non-controlling interest 2,555 Total G1, equity 35,992 Capital securities 7,872 Trust preferred securities 1,355 Total hybrid capital included in equity
9,227
Source: Rabobank
Banks
Rabobank Group
October 2012 9
Annex 1: Description of Business Divisions
Domestic Retail Banking
Domestic retail banking by the local Rabobanks is the group's core activity, with strong – if not
leading – market shares for a number of products and a particular strength in the SME lending
segment. This business, which remains the bank's major source of consolidated revenue, has
shown relative stability in its results.
Wholesale Banking and International Retail Banking
Managed by Rabobank International (a trading name but not a separate legal entity), this
activity consists of Rabobank's wholesale banking operations in the Netherlands and abroad
(providing M&A, and trade and commodity finance, corporate finance and private equity
services), and international retail and food and agriculture activities (in 30 countries outside the
Netherlands).
Rabobank International has been scaling down its lending to the non-food and agribusiness
sector outside the Netherlands but will continue to give priority to existing major agricultural
areas in Australia, New Zealand, Brazil, Chile and the US. Some retail/SME banking is
undertaken in California, Ireland, Indonesia and Poland, where Rabobank has increased its
stake in the specialist agricultural bank, BGZ Bank, to 98% in summer 2012. In California, it
acquired the assets and liabilities of three small banks in 2010, and in India, it received a
banking licence, with the consequent sale of its participation in the Indian Yes Bank. Through
Rabobank Development, Rabobank has small minority stakes in rural banks in Tanzania, China,
Zambia, Mozambique, Paraguay, Rwanda and Brazil.
This division also includes the group's direct banking (EUR19bn of international deposits at
end-June 2012, raised mostly from Belgium, Ireland, New Zealand, Australia, and more
recently from Poland and Germany) and global financial markets (GFM) businesses. The latter
manages the group's liquidity positions, structures money-market, bonds and energy products
for clients, and manages its own financial investments.
Asset Management, Leasing and Real Estate
Asset management is now provided mostly by Robeco, following the sale of Bank Sarasin (a
small Swiss private bank in which Rabobank acquired 46.1% of share capital in 2007).
Robeco's strong market position (35% market share) positions it well to gain from any positive
developments in the future assignation of pension fund contracts. In January 2012, it was
selected to manage the pension funds of the Dutch transport sector. Rabobank is currently
reviewing potential strategic options for Robeco.
Rabobank's leasing activities (car leasing, consumer finance and factoring) are performed in
around 35 countries by De Lage Landen.
Real-estate activities are performed by Rabobank's Real Estate Group and involve real-estate
development (Bouwfonds Property Development and MAB Development), property financing
(FGH Bank and Rabobank) and real-estate investment management (Bouwfonds REIM and
Fondsenbeheer Nederland, with total assets under management of EUR7.2bn). Real-estate
development projects tend to be retail developments, which are then converted into mortgages
financed by the group, as well as commercial projects. Apart from the Netherlands, real-estate
development is undertaken in Germany and France.
Rabobank's shareholding in Eureko (Achmea N.V.), the largest insurance company in the
Netherlands, was reduced from 39% at end-2009 to 29% at end-2011, because of Basel III
capital requirements rather than reduced strategic importance, as, commercially, Eureko
remains an important partner for Rabobank.
Banks
Rabobank Group
October 2012 10
Annex 2 - Peer Table Data
Figure 13 Peer Comparison
Rabobank group
f ('AA')
Handelsbankenb
('AA−') Nordea Bank
('AA−') HSBC Holdings
('AA') Average
Australianc
Average Canadian
d
Unless otherwise specified (%) H112 2011 H112 2011 H112 2011 H112 2011 6M12e 2011 6M12
e 2011
Total assets (USDbn) 970 947 365 356 892 926 2,652 2,555 702 673 560 531 Equity (USDbn) 45 46 14 13 34 34 165 157 41 38 27 25 Net income (USDm) 1,139
f 2,554
f 970 1,789 2,009 3,408 9,108 17,994 2,997 6,034 1,193 4,202
Cost/income (%) 67.74f 72.09
f 45.3 47.2 50.3 55.2 54.34 58.85 46.8 46.1 59.5 60.4
Operating ROE (%) 6.00f 5.00
f 19.3 18.4 16.3 14.2 16.04 12.15 18.9 21.2 17.7 15.7
Operating ROA (%) 0.29f 0.26
f 0.7 0.7 0.6 0.6 1.01 0.74 1.18 1.27 0.84 0.82
Loan imp. charge/gross loans (%) 0.46 0.35 0.07 0.05 0.25 0.2 0.99 1.16 0.32 0.29 0.36 0.4 Impaired loans/gross loans (%) 2.34 2.07 0.4 0.4 1.8 1.6 4.11 4.34 1.12 1.14 0.79 0.82 Fitch core capital ratio
a (%) 11.5 11.8
16.2 16.3 11.9 11.7 10.28 9.26 9.75 8.9 9.5 9
Tier 1 ratioa (%) 16.9 17
19.4 18.4 14.3 12.2 12.67 11.54 10.3 10 12.3 13.1
a Excluding Basel II transitional floors
b Svenska Handelsbanken
c Average of: Commonwealth Bank of Australia, National Australia Bank Limited, Westpac Banking Corporation, Australia & New Zealand Banking Group
d Average of: Royal Bank of Canada, The Toronto-Dominion Bank, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Bank of Montreal, National Bank of Canada
e 6M12: Six months from October 2011 to end of March 2012
f adjusted for coupons on hybrids – included in interest expenses
Source: Fitch
Banks
Rabobank Group
October 2012 11
Rabobank Group
Income Statement
6 Months - Interim 6 Months - Interim As % of Year End As % of Year End As % of Year End As % of Year End As % of
USDm EURm Earning EURm Earning EURm Earning EURm Earning EURm Earning
Unaudited Unaudited Assets Unqualified Assets Unqualified Assets Unqualified AssetsAudited/Report not seen Assets
1. Interest Income on Loans n.a. n.a. - 18,321.0 2.94 16,462.0 2.67 17,163.0 3.02 21,748.0 3.73
2. Other Interest Income 5,596.1 4,445.0 1.35 3,890.0 0.62 3,466.0 0.56 2,632.0 0.46 5,497.0 0.94
3. Dividend Income n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
4. Gross Interest and Dividend Income 5,596.1 4,445.0 1.35 22,211.0 3.56 19,928.0 3.24 19,795.0 3.48 27,245.0 4.67
5. Interest Expense on Customer Deposits n.a. n.a. - 5,244.0 0.84 4,902.0 0.80 6,143.0 1.08 9,959.0 1.71
6. Other Interest Expense n.a. n.a. - 7,738.0 1.24 6,412.0 1.04 5,577.0 0.98 8,769.0 1.50
7. Total Interest Expense n.a. n.a. - 12,982.0 2.08 11,314.0 1.84 11,720.0 2.06 18,728.0 3.21
8. Net Interest Income 5,596.1 4,445.0 1.35 9,229.0 1.48 8,614.0 1.40 8,075.0 1.42 8,517.0 1.46
9. Net Gains (Losses) on Trading and Derivatives n.a. n.a. - -169.0 -0.03 -47.0 -0.01 n.a. - -9.0 0.00
10. Net Gains (Losses) on Other Securities n.a. n.a. - n.a. - n.a. - 138.0 0.02 -51.0 -0.01
11. Net Gains (Losses) on Assets at FV through Income Statement n.a. n.a. - 26.0 0.00 -25.0 0.00 596.0 0.10 n.a. -
12. Net Insurance Income n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
13. Net Fees and Commissions 1,880.9 1,494.0 0.45 2,981.0 0.48 2,831.0 0.46 2,575.0 0.45 2,889.0 0.50
14. Other Operating Income 1,495.7 1,188.0 0.36 714.0 0.11 643.0 0.10 1,476.0 0.26 1,102.0 0.19
15. Total Non-Interest Operating Income 3,376.6 2,682.0 0.82 3,552.0 0.57 3,402.0 0.55 4,785.0 0.84 3,931.0 0.67
16. Personnel Expenses 3,580.5 2,844.0 0.87 5,141.0 0.82 4,919.0 0.80 4,603.0 0.81 4,290.0 0.74
17. Other Operating Expenses 2,149.1 1,707.0 0.52 3,579.0 0.57 3,277.0 0.53 3,435.0 0.60 3,321.0 0.57
18. Total Non-Interest Expenses 5,729.6 4,551.0 1.39 8,720.0 1.40 8,196.0 1.33 8,038.0 1.41 7,611.0 1.31
19. Equity-accounted Profit/ Loss - Operating n.a. n.a. - -17.0 0.00 292.0 0.05 592.0 0.10 -26.0 0.00
20. Pre-Impairment Operating Profit 3,243.1 2,576.0 0.78 4,044.0 0.65 4,112.0 0.67 5,414.0 0.95 4,811.0 0.83
21. Loan Impairment Charge 1,379.8 1,096.0 0.33 1,606.0 0.26 1,234.0 0.20 1,959.0 0.34 1,189.0 0.20
22. Securities and Other Credit Impairment Charges n.a. n.a. - n.a. - n.a. - 1,285.0 0.23 1,882.0 0.32
23. Operating Profit 1,863.3 1,480.0 0.45 2,438.0 0.39 2,878.0 0.47 2,170.0 0.38 1,740.0 0.30
24. Equity-accounted Profit/ Loss - Non-operating n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
25. Non-recurring Income 74.3 59.0 0.02 n.a. - n.a. - 450.0 0.08 376.0 0.06
26. Non-recurring Expense n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
27. Change in Fair Value of Own Debt n.a. n.a. - 614.0 0.10 256.0 0.04 -183.0 -0.03 736.0 0.13
28. Other Non-operating Income and Expenses n.a. n.a. - n.a. - 152.0 0.02 n.a. - n.a. -
29. Pre-tax Profit 1,937.6 1,539.0 0.47 3,052.0 0.49 3,286.0 0.53 2,437.0 0.43 2,852.0 0.49
30. Tax expense 283.3 225.0 0.07 425.0 0.07 514.0 0.08 229.0 0.04 98.0 0.02
31. Profit/Loss from Discontinued Operations n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
32. Net Income 1,654.3 1,314.0 0.40 2,627.0 0.42 2,772.0 0.45 2,208.0 0.39 2,754.0 0.47
33. Change in Value of AFS Investments -226.6 -180.0 -0.05 34.0 0.01 407.0 0.07 530.0 0.09 -1,387.0 -0.24
34. Revaluation of Fixed Assets n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
35. Currency Translation Differences 89.4 71.0 0.02 118.0 0.02 679.0 0.11 45.0 0.01 127.0 0.02
36. Remaining OCI Gains/(losses) 104.5 83.0 0.03 -132.0 -0.02 -11.0 0.00 -29.0 -0.01 -1.0 0.00
37. Fitch Comprehensive Income 1,621.6 1,288.0 0.39 2,647.0 0.42 3,847.0 0.62 2,754.0 0.48 1,493.0 0.26
38. Memo: Profit Allocation to Non-controlling Interests 66.7 53.0 0.02 78.0 0.01 90.0 0.01 109.0 0.02 155.0 0.03
39. Memo: Net Income after Allocation to Non-controlling Interests 1,587.6 1,261.0 0.38 2,549.0 0.41 2,682.0 0.44 2,099.0 0.37 2,599.0 0.45
40. Memo: Common Dividends Relating to the Period 207.7 165.0 0.05 315.0 0.05 303.0 0.05 318.0 0.06 316.0 0.05
41. Memo: Preferred Dividends Related to the Period 514.9 409.0 0.12 685.0 0.11 533.0 0.09 386.0 0.07 194.0 0.03
Exchange rate
31 Dec 2009
USD1 = EUR0.69416
31 Dec 2008
USD1 = EUR0.71855
30 Jun 2012
USD1 = EUR0.79430
31 Dec 2011
USD1 = EUR0.77290
31 Dec 2010
USD1 = EUR0.74840
Banks
Rabobank Group
October 2012 12
Rabobank Group
Balance Sheet
6 Months - Interim 6 Months - Interim As % of Year End As % of Year End As % of Year End As % of Year End As % of
USDm EURm Assets EURm Assets EURm Assets EURm Assets EURm Assets
AssetsA. Loans
1. Residential Mortgage Loans n.a. n.a. - 216,081.0 29.53 209,803.0 32.15 201,291.0 33.14 192,675.0 31.48
2. Other Mortgage Loans n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
3. Other Consumer/ Retail Loans n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
4. Corporate & Commercial Loans n.a. n.a. - 196,893.0 26.91 181,427.0 27.80 145,618.0 23.97 152,424.0 24.90
5. Other Loans 619,891.7 492,380.0 63.87 58,200.0 7.95 67,321.0 10.32 90,847.0 14.95 84,314.0 13.77
6. Less: Reserves for Impaired Loans/ NPLs 4,955.3 3,936.0 0.51 3,089.0 0.42 2,610.0 0.40 4,399.0 0.72 3,130.0 0.51
7. Net Loans 614,936.4 488,444.0 63.36 468,085.0 63.98 455,941.0 69.87 433,357.0 71.34 426,283.0 69.64
8. Gross Loans 619,891.7 492,380.0 63.87 471,174.0 64.40 458,551.0 70.27 437,756.0 72.06 429,413.0 70.15
9. Memo: Impaired Loans included above 14,478.2 11,500.0 1.49 9,747.0 1.33 7,853.0 1.20 9,294.0 1.53 6,573.0 1.07
10. Memo: Loans at Fair Value included above n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
B. Other Earning Assets
1. Loans and Advances to Banks 42,934.7 34,103.0 4.42 25,221.0 3.45 33,511.0 5.14 35,641.0 5.87 33,776.0 5.52
2. Reverse Repos and Cash Collateral n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
3. Trading Securities and at FV through Income 18,532.0 14,720.0 1.91 15,127.0 2.07 22,575.0 3.46 21,883.0 3.60 19,472.0 3.18
4. Derivatives 82,350.5 65,411.0 8.49 58,973.0 8.06 43,947.0 6.73 39,091.0 6.43 66,759.0 10.91
5. Available for Sale Securities 67,315.9 53,469.0 6.94 51,930.0 7.10 55,458.0 8.50 33,349.0 5.49 31,665.0 5.17
6. Held to Maturity Securities 64.2 51.0 0.01 109.0 0.01 218.0 0.03 418.0 0.07 497.0 0.08
7. At-equity Investments in Associates 4,390.0 3,487.0 0.45 3,340.0 0.46 3,539.0 0.54 4,056.0 0.67 3,455.0 0.56
8. Other Securities n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
9. Total Securities 172,652.7 137,138.0 17.79 129,479.0 17.70 125,737.0 19.27 98,797.0 16.26 121,848.0 19.91
10. Memo: Government Securities included Above n.a. n.a. - 45,508.0 6.22 49,576.0 7.60 16,773.0 2.76 21,926.0 3.58
11. Memo: Total Securities Pledged n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
12. Investments in Property 951.8 756.0 0.10 784.0 0.11 816.0 0.13 1,363.0 0.22 1,038.0 0.17
13. Insurance Assets n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
14. Other Earning Assets n.a. n.a. - n.a. - n.a. - 0.0 0.00 0.0 0.00
15. Total Earning Assets 831,475.5 660,441.0 85.67 623,569.0 85.23 616,005.0 94.40 569,158.0 93.69 582,945.0 95.23
C. Non-Earning Assets
1. Cash and Due From Banks 85,803.9 68,154.0 8.84 70,430.0 9.63 13,471.0 2.06 16,565.0 2.73 7,105.0 1.16
2. Memo: Mandatory Reserves included above n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
3. Foreclosed Real Estate n.a. n.a. - n.a. - n.a. - n.a. - 234.0 0.04
4. Fixed Assets 8,175.8 6,494.0 0.84 6,132.0 0.84 6,006.0 0.92 6,124.0 1.01 5,870.0 0.96
5. Goodwill n.a. n.a. - 2,802.0 0.38 3,675.0 0.56 2,363.0 0.39 2,408.0 0.39
6. Other Intangibles 3,769.4 2,994.0 0.39 n.a. - n.a. - 1,373.0 0.23 1,320.0 0.22
7. Current Tax Assets 978.2 777.0 0.10 571.0 0.08 357.0 0.05 240.0 0.04 298.0 0.05
8. Deferred Tax Assets 1,187.2 943.0 0.12 995.0 0.14 1,200.0 0.18 1,358.0 0.22 1,619.0 0.26
9. Discontinued Operations 20,929.1 16,624.0 2.16 14,956.0 2.04 n.a. - n.a. - n.a. -
10. Other Assets 18,218.6 14,471.0 1.88 12,210.0 1.67 11,822.0 1.81 10,302.0 1.70 10,321.0 1.69
11. Total Assets 970,537.6 770,898.0 100.00 731,665.0 100.00 652,536.0 100.00 607,483.0 100.00 612,120.0 100.00
Liabilities and Equity
D. Interest-Bearing Liabilities
1. Customer Deposits - Current 429,227.0 340,935.0 44.23 130,933.0 17.90 120,987.0 18.54 117,068.0 19.27 107,980.0 17.64
2. Customer Deposits - Savings n.a. n.a. - 140,028.0 19.14 130,928.0 20.06 121,373.0 19.98 114,680.0 18.73
3. Customer Deposits - Term n.a. n.a. - 58,931.0 8.05 46,846.0 7.18 47,897.0 7.88 58,554.0 9.57
4. Total Customer Deposits 429,227.0 340,935.0 44.23 329,892.0 45.09 298,761.0 45.78 286,338.0 47.14 281,214.0 45.94
5. Deposits from Banks 36,119.9 28,690.0 3.72 23,497.0 3.21 21,613.0 3.31 22,429.0 3.69 46,891.0 7.66
6. Repos and Cash Collateral n.a. n.a. - 2,762.0 0.38 1,863.0 0.29 n.a. - n.a. -
7. Other Deposits and Short-term Borrowings n.a. n.a. - 114,132.0 15.60 103,992.0 15.94 n.a. - 55,349.0 9.04
8. Total Deposits, Money Market and Short-term Funding 465,346.8 369,625.0 47.95 470,283.0 64.28 426,229.0 65.32 308,767.0 50.83 383,454.0 62.64
9. Senior Debt Maturing after 1 Year 317,191.2 251,945.0 32.68 123,770.0 16.92 121,879.0 18.68 198,329.0 32.65 129,288.0 21.12
10. Subordinated Borrowing 3,365.2 2,673.0 0.35 1,984.0 0.27 2,062.0 0.32 1,971.0 0.32 902.0 0.15
11. Other Funding n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
12. Total Long Term Funding 320,556.5 254,618.0 33.03 125,754.0 17.19 123,941.0 18.99 200,300.0 32.97 130,190.0 21.27
13. Derivatives 90,823.4 72,141.0 9.36 64,931.0 8.87 49,640.0 7.61 10,165.0 1.67 36,985.0 6.04
14. Trading Liabilities n.a. n.a. - n.a. - n.a. - 38,600.0 6.35 15,448.0 2.52
15. Total Funding 876,726.7 696,384.0 90.33 660,968.0 90.34 599,810.0 91.92 557,832.0 91.83 566,077.0 92.48
E. Non-Interest Bearing Liabilities
1. Fair Value Portion of Debt 1,717.2 1,364.0 0.18 1,428.0 0.20 815.0 0.12 742.0 0.12 736.0 0.12
2. Credit impairment reserves n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
3. Reserves for Pensions and Other 917.8 729.0 0.09 1,101.0 0.15 1,445.0 0.22 1,595.0 0.26 1,246.0 0.20
4. Current Tax Liabilities 384.0 305.0 0.04 324.0 0.04 359.0 0.06 468.0 0.08 227.0 0.04
5. Deferred Tax Liabilities 1,090.3 866.0 0.11 893.0 0.12 731.0 0.11 489.0 0.08 474.0 0.08
6. Other Deferred Liabilities n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
7. Discontinued Operations 18,884.6 15,000.0 1.95 13,435.0 1.84 n.a. - n.a. - n.a. -
8. Insurance Liabilities n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
9. Other Liabilities 13,887.7 11,031.0 1.43 8,086.0 1.11 8,199.0 1.26 8,083.0 1.33 8,644.0 1.41
10. Total Liabilities 913,608.2 725,679.0 94.13 686,235.0 93.79 611,359.0 93.69 569,209.0 93.70 577,404.0 94.33
F. Hybrid Capital
1. Pref. Shares and Hybrid Capital accounted for as Debt n.a. n.a. - 429.0 0.06 420.0 0.06 391.0 0.06 1,257.0 0.21
2. Pref. Shares and Hybrid Capital accounted for as Equity 11,616.5 9,227.0 1.20 9,211.0 1.26 6,306.0 0.97 6,182.0 1.02 3,510.0 0.57
G. Equity
1. Common Equity 42,096.2 33,437.0 4.34 32,981.0 4.51 31,204.0 4.78 27,760.0 4.57 27,540.0 4.50
2. Non-controlling Interest 3,216.7 2,555.0 0.33 2,676.0 0.37 3,119.0 0.48 3,423.0 0.56 3,639.0 0.59
3. Securities Revaluation Reserves n.a. n.a. - 93.0 0.01 48.0 0.01 419.0 0.07 -898.0 -0.15
4. Foreign Exchange Revaluation Reserves n.a. n.a. - 86.0 0.01 -6.0 0.00 45.0 0.01 -464.0 -0.08
5. Fixed Asset Revaluations and Other Accumulated OCI n.a. n.a. - -46.0 -0.01 86.0 0.01 54.0 0.01 132.0 0.02
6. Total Equity 45,312.9 35,992.0 4.67 35,790.0 4.89 34,451.0 5.28 31,701.0 5.22 29,949.0 4.89
7. Total Liabilities and Equity 970,537.6 770,898.0 100.00 731,665.0 100.00 652,536.0 100.00 607,483.0 100.00 612,120.0 100.00
8. Memo: Fitch Core Capital 33,410.6 26,538.0 3.44 26,401.0 3.61 23,647.0 3.62 19,294.0 3.18 21,001.0 3.43
9. Memo: Fitch Eligible Capital 37,061.6 29,438.0 3.82 29,301.0 4.00 23,647.0 3.62 19,294.0 3.18 21,001.0 3.43
Exchange rate
31 Dec 2009
USD1 = EUR0.69416
31 Dec 2008
USD1 = EUR0.71855
30 Jun 2012
USD1 = EUR0.79430
31 Dec 2011
USD1 = EUR0.77290
31 Dec 2010
USD1 = EUR0.74840
Banks
Rabobank Group
October 2012 13
Rabobank Group
Summary Analytics30 Jun 2012 31 Dec 2011 31 Dec 2010 31 Dec 2009 31 Dec 2008
6 Months - Interim Year End Year End Year End Year End
A. Interest Ratios
1. Interest Income on Loans/ Average Gross Loans n.a. 3.94 3.64 3.94 5.50
2. Interest Expense on Customer Deposits/ Average Customer Deposits n.a. 1.68 1.67 2.16 3.79
3. Interest Income/ Average Earning Assets 1.39 3.60 3.27 3.44 4.93
4. Interest Expense/ Average Interest-bearing Liabilities n.a. 2.08 1.91 2.08 3.51
5. Net Interest Income/ Average Earning Assets 1.39 1.49 1.41 1.40 1.54
6. Net Int. Inc Less Loan Impairment Charges/ Av. Earning Assets 1.05 1.23 1.21 1.06 1.33
7. Net Interest Inc Less Preferred Stock Dividend/ Average Earning Assets 1.26 1.38 1.33 1.33 1.51
B. Other Operating Profitability Ratios
1. Non-Interest Income/ Gross Revenues 37.63 27.79 28.31 37.21 31.58
2. Non-Interest Expense/ Gross Revenues 63.86 68.23 68.21 62.50 61.14
3. Non-Interest Expense/ Average Assets 1.22 1.28 1.27 1.31 1.31
4. Pre-impairment Op. Profit/ Average Equity 14.43 11.54 12.30 17.50 16.57
5. Pre-impairment Op. Profit/ Average Total Assets 0.69 0.59 0.64 0.89 0.83
6. Loans and securities impairment charges/ Pre-impairment Op. Profit 42.55 39.71 30.01 59.92 63.83
7. Operating Profit/ Average Equity 8.29 6.96 8.61 7.01 5.99
8. Operating Profit/ Average Total Assets 0.40 0.36 0.45 0.35 0.30
9. Taxes/ Pre-tax Profit 14.62 13.93 15.64 9.40 3.44
10. Pre-Impairment Operating Profit / Risk Weighted Assets 2.25 1.81 1.87 2.32 2.02
11. Operating Profit / Risk Weighted Assets 1.29 1.09 1.31 0.93 0.73
C. Other Profitability Ratios
1. Net Income/ Average Total Equity 7.36 7.50 8.29 7.14 9.49
2. Net Income/ Average Total Assets 0.35 0.38 0.43 0.36 0.48
3. Fitch Comprehensive Income/ Average Total Equity 7.22 7.56 11.51 8.90 5.14
4. Fitch Comprehensive Income/ Average Total Assets 0.34 0.39 0.60 0.45 0.26
5. Net Income/ Av. Total Assets plus Av. Managed Securitized Assets n.a. n.a. n.a. n.a. n.a.
6. Net Income/ Risk Weighted Assets 1.15 1.17 1.26 0.95 1.16
7. Fitch Comprehensive Income/ Risk Weighted Assets 1.12 1.18 1.75 1.18 0.63
D. Capitalization
1. Fitch Core Capital/Weighted Risks 11.52 11.81 10.77 8.27 8.82
2. Fitch Eligible Capital/ Weighted Risks 12.78 13.10 10.77 8.27 8.82
3. Tangible Common Equity/ Tangible Assets 4.30 4.53 4.74 4.45 4.05
4. Tier 1 Regulatory Capital Ratio 16.90 17.00 15.70 13.80 12.75
5. Total Regulatory Capital Ratio 17.60 17.50 16.30 14.10 12.98
6. Core Tier 1 Regulatory Capital Ratio 12.70 12.70 12.60 12.40 n.a.
7. Equity/ Total Assets 4.67 4.89 5.28 5.22 4.89
8. Cash Dividends Paid & Declared/ Net Income 43.68 38.07 30.16 31.88 18.52
9. Cash Dividend Paid & Declared/ Fitch Comprehensive Income 44.57 37.78 21.73 25.56 34.16
10. Cash Dividends & Share Repurchase/Net Income n.a. n.a. n.a. n.a. n.a.
11. Net Income - Cash Dividends/ Total Equity 4.13 4.55 5.62 4.74 7.49
E. Loan Quality
1. Growth of Total Assets 5.36 12.13 7.42 -0.76 7.29
2. Growth of Gross Loans 4.50 2.75 4.75 1.94 14.43
3. Impaired Loans(NPLs)/ Gross Loans 2.34 2.07 1.71 2.12 1.53
4. Reserves for Impaired Loans/ Gross loans 0.80 0.66 0.57 1.00 0.73
5. Reserves for Impaired Loans/ Impaired Loans 34.23 31.69 33.24 47.33 47.62
6. Impaired Loans less Reserves for Imp Loans/ Equity 21.02 18.60 15.22 15.44 11.50
7. Loan Impairment Charges/ Average Gross Loans 0.46 0.35 0.27 0.45 0.30
8. Net Charge-offs/ Average Gross Loans n.a. 0.29 0.45 0.18 0.11
9. Impaired Loans + Foreclosed Assets/ Gross Loans + Foreclosed Assets 2.34 2.07 1.71 2.12 1.58
F. Funding
1. Loans/ Customer Deposits 144.42 142.83 153.48 152.88 152.70
2. Interbank Assets/ Interbank Liabilities 118.87 107.34 155.05 158.91 72.03
3. Customer Deposits/ Total Funding excl Derivatives 54.62 55.35 54.30 52.28 53.15
Banks
Rabobank Group
October 2012 14
Rabobank Group
Reference Data
6 Months - Interim 6 Months - Interim As % of Year End As % of Year End As % of Year End As % of Year End As % of
USDm EURm Assets EURm Assets EURm Assets EURm Assets EURm Assets
A. Off-Balance Sheet Items
1. Managed Securitized Assets Reported Off-Balance Sheet n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
2. Other off-balance sheet exposure to securitizations n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
3. Guarantees n.a. n.a. - n.a. - n.a. - 10,117.0 1.67 9,515.0 1.55
4. Acceptances and documentary credits reported off-balance sheet n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
5. Committed Credit Lines n.a. n.a. - n.a. - n.a. - 30,420.0 5.01 31,388.0 5.13
6. Other Contingent Liabilities n.a. n.a. - n.a. - n.a. - 4,127.0 0.68 1,748.0 0.29
7. Total Business Volume 970,537.6 770,898.0 100.00 731,665.0 100.00 652,536.0 100.00 652,147.0 107.35 654,771.0 106.97
8. Memo: Total Weighted Risks 289,967.3 230,321.0 29.88 223,613.0 30.56 219,568.0 33.65 233,372.0 38.42 238,080.0 38.89
9. Fitch Adjustments to Weighted Risks. n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
10. Fitch Adjusted Weighted Risks 289,967.3 230,321.0 29.88 223,613.0 30.56 219,568.0 33.65 233,372.0 38.42 238,080.0 38.89
B. Average Balance Sheet
Average Loans 606,542.9 481,777.0 62.50 464,698.3 63.51 451,698.0 69.22 435,753.3 71.73 395,204.5 64.56
Average Earning Assets 808,265.1 642,005.0 83.28 617,740.3 84.43 608,836.7 93.30 576,103.0 94.83 552,988.5 90.34
Average Assets 945,841.0 751,281.5 97.46 683,051.3 93.36 645,288.7 98.89 611,654.7 100.69 579,519.8 94.67
Average Managed Securitized Assets (OBS) n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Average Interest-Bearing Liabilities 854,432.8 678,676.0 88.04 623,331.3 85.19 593,460.7 90.95 563,038.7 92.68 533,969.3 87.23
Average Common equity 41,809.1 33,209.0 4.31 32,122.7 4.39 29,701.7 4.55 27,965.0 4.60 26,346.8 4.30
Average Equity 45,185.7 35,891.0 4.66 35,028.3 4.79 33,425.3 5.12 30,941.7 5.09 29,032.8 4.74
Average Customer Deposits 422,275.6 335,413.5 43.51 311,337.7 42.55 294,288.0 45.10 284,153.3 46.78 262,445.8 42.87
C. Maturities
Asset Maturities:
Loans & Advances < 3 months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Loans & Advances 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Loans and Advances 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Loans & Advances > 5 years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Debt Securities < 3 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Debt Securities 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Debt Securities 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Debt Securities > 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Interbank < 3 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Interbank 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Interbank 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Interbank > 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Liability Maturities:
Retail Deposits < 3 months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Retail Deposits 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Retail Deposits 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Retail Deposits > 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Other Deposits < 3 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Other Deposits 3 - 12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Other Deposits 1 - 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Other Deposits > 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Interbank < 3 Months n.a. n.a. - n.a. - n.a. - 19,236.0 3.17 16,203.0 2.65
Interbank 3 - 12 Months n.a. n.a. - n.a. - n.a. - 1,833.0 0.30 2,229.0 0.36
Interbank 1 - 5 Years n.a. n.a. - n.a. - n.a. - 2,078.0 0.34 3,124.0 0.51
Interbank > 5 Years n.a. n.a. - n.a. - n.a. - 1,094.0 0.18 1,051.0 0.17
Senior Debt Maturing < 3 months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Senior Debt Maturing 3-12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Senior Debt Maturing 1- 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Senior Debt Maturing > 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Total Senior Debt on Balance Sheet n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Fair Value Portion of Senior Debt n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Covered Bonds n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Subordinated Debt Maturing < 3 months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Subordinated Debt Maturing 3-12 Months n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Subordinated Debt Maturing 1- 5 Year n.a. n.a. - n.a. - n.a. - 1,971.0 0.32 n.a. -
Subordinated Debt Maturing > 5 Years n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
Total Subordinated Debt on Balance Sheet 3,365.2 2,673.0 0.35 1,984.0 0.27 2,062.0 0.32 1,971.0 0.32 902.0 0.15
Fair Value Portion of Subordinated Debt n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
D. Equity Reconciliation
1. Equity 45,312.9 35,992.0 4.67 35,790.0 4.89 34,451.0 5.28 31,701.0 5.22 29,949.0 4.89
2. Add: Pref. Shares and Hybrid Capital accounted for as Equity 11,616.5 9,227.0 1.20 9,211.0 1.26 6,306.0 0.97 6,182.0 1.02 3,510.0 0.57
3. Add: Other Adjustments n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
4. Published Equity n.a. n.a. - n.a. - n.a. - n.a. - n.a. -
E. Fitch Eligible Capital Reconciliation
1. Total Equity as reported (including non-controlling interests) 45,312.9 35,992.0 4.67 35,790.0 4.89 34,451.0 5.28 31,701.0 5.22 29,949.0 4.89
2. Fair value effect incl in own debt/borrowings at fv on the B/S- CC only -1,717.2 -1,364.0 -0.18 -1,428.0 -0.20 -815.0 -0.12 -742.0 -0.12 -736.0 -0.12
3. Non-loss-absorbing non-controlling interests 3,216.7 2,555.0 0.33 2,676.0 0.37 3,119.0 0.48 3,423.0 0.56 0.0 0.00
4. Goodwill 3,769.4 2,994.0 0.39 2,802.0 0.38 3,675.0 0.56 2,363.0 0.39 2,408.0 0.39
5. Other intangibles 0.0 0.0 0.00 0.0 0.00 0.0 0.00 1,373.0 0.23 1,320.0 0.22
6. Deferred tax assets deduction 96.9 77.0 0.01 102.0 0.01 469.0 0.07 1,174.0 0.19 1,619.0 0.26
7. Net asset value of insurance subsidiaries 3,102.1 2,464.0 0.32 2,381.0 0.33 2,726.0 0.42 3,332.0 0.55 2,865.0 0.47
8. First loss tranches of off-balance sheet securitizations 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
9. Fitch Core Capital 33,410.6 26,538.0 3.44 26,401.0 3.61 23,647.0 3.62 19,294.0 3.18 21,001.0 3.43
10. Eligible weighted Hybrid capital 3,651.0 2,900.0 0.38 2,900.0 0.40 0.0 0.00 0.0 0.00 0.0 0.00
11. Government held Hybrid Capital 0.0 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00 0.0 0.00
12. Fitch Eligible Capital 37,061.6 29,438.0 3.82 29,301.0 4.00 23,647.0 3.62 19,294.0 3.18 21,001.0 3.43
13. Eligible Hybrid Capital Limit 14,318.8 11,373.4 1.48 11,314.7 1.55 10,134.4 1.55 8,268.8 1.36 9,000.4 1.47
Exchange Rate
31 Dec 2009
USD1 = EUR0.69416
31 Dec 2008
USD1 = EUR0.71855
30 Jun 2012
USD1 = EUR0.79430
31 Dec 2011
USD1 = EUR0.77290
31 Dec 2010
USD1 = EUR0.74840
Banks
Rabobank Group
October 2012 15
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE.
Copyright © 2012 by Fitch, Inc., Fitch Ratings Ltd. and its subsidiaries. One State Street Plaza, NY, NY 10004.Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings, Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch‟s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third-party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch‟s ratings should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings can be affected by future events or conditions that were not anticipated at the time a rating was issued or affirmed.
The information in this report is provided “as is” without any representation or warranty of any kind. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion is based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at anytime for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers.
The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.