Rabobank joins interest rate derivatives recovery framework
Today Rabobank announces its decision to join the Dutch Derivatives Committee recovery framework. The decision is informed by Rabobank’s wish to take responsibility and participate in finding a rapid solution to this issue, and by its awareness of the extent of public support for the framework.
Since the framework was presented on 4 July, Rabobank as a major lender to SME companies has consulted intensively with a range of stakeholders. The decision to join the framework has been taken in the interests of Rabobank customers with an interest rate derivatives contract. The approach required by the framework gives them clarity as soon as possible. As a cooperative bank, Rabobank has sought and obtained internal support for the decision from local Rabobanks and the highest representative body of Rabobank members.
Wiebe Draijer, Chairman of the Executive Board: “Rabobank is demonstrating its desire to work towards a rapid solution for customers. Interest rate derivatives meet a need to manage interest rate risk. But things didn’t always go well in the past. We will start work on the reassessment process of interest rate derivative contracts in a way which people expect of a customer-oriented cooperative that takes its role in society seriously. By joining this framework we are putting a long-running issue for the sector behind us.”
The recovery framework is applicable to some 9,000 Rabobank commercial customers, with in total around 11,000 derivatives contracts, representing just over 1% of Rabobank’s total of 800,000 commercial customers. The reassessment of these contracts has been subject to considerable delay. Implementation of the new recovery framework is expected to last until mid-2017. Customers with an interest rate derivative will be informed about this in person.
The decision to take part in the framework means that Rabobank expects to make an additional provision of EUR 500 million in its interim figures for 2016.
This press release is made public with reference to article 17 paragraph 1 of Regulation (EU) 596/2014.