2017 Annual report - rabobank.com

1 Rabobank Annual report 2017 - 1 2017 Annual reportManagement reportOverview of the strategy, developments and financial results and corporate social responsibility and sustainability of Rabobank Group. Read moreConsolidated financial statementsThe balance sheet and the profit and loss statement for the entire Rabobank Group, with notes. Read moreCompany financial statementsThe balance sheet and the profit and loss statement of Rabobank, with notes. Read moreCorporate governanceRetrospective on 2017 by the Supervisory Board.

2 Explanation of the new governance structure of Rabobank. Read moreAppendicesMateriality matrix, Non-financial KPIs, Sustainability facts & figures, dialogue with organisations and clients, EU-directive, Global Reporting Initiative and financial performance. Read more696141162242 Introduction2 Chairman s foreword; About this report Read moreGlossary of terms 282 Rabobank Annual report 20172 Chairman s forewordStrong performance but some way to goWe are committed to being a meaningful cooperative bank, making a substantial contribution towards achieving welfare and prosperity in the Netherlands and to resolving the global food issue.

3 We are shaping our mission of Growing a better world together with passion and this is bearing fruit. In 2017 we accelerated our efforts to reach the goals set in our Strategic Framework 2016-2020. We further reinforced our position in Food & Agriculture in the Netherlands and around the world. The future Rabobank is taking shape with more satisfied customers, innovations, a stronger balance sheet and improved financial cooperative structure helps us identify and act upon the issues which matter to our million retail and corporate customers in the Netherlands.

4 Last year, for instance, we took specific measures to help starters and seniors in the housing market. Our recent efforts relating to livestock production rights (such as phosphate legislation) underscore our strong commitment to our clients and partners in the Dutch Food & Agri sector. Local Rabobanks allocated an amount of EUR 45 (2016: 40) million from their net profit for future investments in local community initiatives in the a leading global Food & Agri bank, that lends around EUR 98 billion to corporate and rural clients in the Food & Agri sector, we are uniquely positioned to help our clients to produce more and better quality food in a more sustainable way, while using fewer resources.

5 In October we launched the Kickstart Food programme. In collaboration with the UN Environment Programme, we are creating a USD 1 billion facility to help accelerate the transition to a sustainable food supply. Our Sustainably Stronger Together mission and our commitment to the UN Sustainable Development Goals guide us in helping clients around the world make their businesses more capital targets we set for 2020 were reached this year, which we consider prudent given upcoming new regulations and we posted a net profit over the year of EUR 2,674 million.

6 Our ratings are stable, as are our market shares and margins, despite external volatile realities. Our Net Promotor Score and other metrics have shownn even higher levels of client appreciation nearly all our businesses throughout 2017 . We have applied greater focus in our Food & Agri portfolios and, through the work of Rabo Development and with the help of the independent Rabobank Foundation1, we are helping 5 million poor small farmers in the developing world to achieve self-reliance. We have launched and driven forward numerous digital innovations (including our first block chain application in 2017 ) and our operational indicators on reliability and availability have improved sharply.

7 We have introduced many innovations in our client service offerings, and have improved the Rabobank digital experience across many domains. The Rabo banking App is now highly rated and offers the widest number of services provided on the platform. The vast majority of our segments and businesses have delivered higher performance this year compared to last. What s more, we have done this with a more diverse leadership team: 26% of our senior management positions are now occupied by women (up from 25%), while 40% of the Managing Board and 33% of the Supervisory Board are female.

8 We are deeply committed to diversity of all forms and will continue to champion this cause in employees make the difference. They are the people bringing about the bank s transition and we very much appreciate their efforts. Human Resources attention for talent is now represented at the highest management level, with Janine Vos being appointed as CHRO. The results of recent surveys show an inspiring rise in employee motivation, thanks in part to our new mission Growing a better world together. Our mission 1 The Rabobank Foundation is an independent foundation, founded about 40 years ago by local Rabobanks.

9 Up to this day the local banks donate a percentage of their profits to the foundation. The foundation s financial statements are not consolidated within Rabobank s consolidated financial reportCorporate governanceConsolidated Financial StatementsCompany Financial StatementsAppendicesRabobank Annual report 20173confirms the course we are taking and guides our actions as a cooperative bank. The increase in employee motivation is appropriate to the current phase of our overall transformation. We have confidence in the measures we are taking to address employee motivation and are grateful for their continued dedication to Rabobank in these turbulent all, we are proud that we are on track to achieving the goals set in the Strategic Framework 2016-2020.

10 Yet our ambitions go beyond the results to date. We must pick up even more speed, particularly in our digital transition and innovation efforts, to continue offering our customers the best possible service. We laid a solid foundation for this in 2017 . And like in any organisation in transition some things go according to plan while others are more challenging, and sometimes even present dilemma up with the implementation of new regulation needs attention. Rabobank runs a complex portfolio of IT change programmes.