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Mediacallpresentation

Interimresults2016

WiebeDraijerandBasBrouwers18August2016

StrategicFramework2016-2020enablesRabobanktostrengthenitscooperativemission

2.Flexibilityandbalancesheetreduction

3.Improvingperformance

2

Westrivetobenearbyatkeymomentsbyputtingproximityandtruecustomerfocusatthe

heartofourservice

Wemakeourbalancesheetmoreflexibleandreduceitsusewhilemaintainingandincreasing

ourclientoutreach

Weimproveperformancesignificantlyinthecoreofthebank,bothintermsofrevenuesand

incosts

1.Excellent

customerfocus

Performanceimprovementlevers

Enablers

Bettercooperativeorganisation

Empoweredemployees

Culturalchange

Makingprogressonimprovingclientsatisfactionandinteraction

3

19 1724

3337

Jun-14 Dec-14 Jun-15 Dec-15 Jun-16

NPSretailcustomers

2429 32

3743

Jun-14 Dec-14 Jun-15 Dec-15 Jun-16

NPSprivatebankingcustomers

1.Excellentcustomerfocus

Numerousnewflexiblecontactpoints

Highestrankedinvestmentapp

Excellenceincustomerservice The‘NewNearby’ Linkingpinroleforcustomers’needs

Mortgageinoneweek

PartnershipwithKeplerCheuvreuxforECM-transactions

11 1018

21

34

Jun-14 Dec-14 Jun-15 Dec-15 Jun-16

NPSbusinesscustomers

31-03-2016RabobankreducesbalancesheetbysellingpartofmortgageportfolioRabobankhassoldashareofitsmortgageportfolioworth€1billiontotheinsurancecompanyVIVATVerzekeringen.

14-07-2016FGHBanksellsrealestateloansFGHBank,asubsidiaryofRabobank,soldaportionofaportfolioofqualityrealestatetoalargeDutchinstitutionalinvestor.Thetransactionwillcreatefinancingcapacityfornewrealestateloans.

18-07-2016Obvionreducesbalancesheetbysecuritising€1billionofitsmortgageportfoliooff-balance

4

18-07-2016ObvionsellsaportfolioofDutchmortgagesworth€340milliontoBinckBank

01-07-2016DLLSharpensFocusonGlobalVendorFinanceBusinessSaleofAthlontoDaimlerFinancialServicesannounced

2.Flexibilityandbalancesheetreduction

Progressinreducingandmakingbalancesheetmoreflexible

27-07-2016RabobanksellspartmortgageportfoliotoDeltaLloydRabobankhassoldashareofitsmortgageportfoliofor€500milliontoDeltaLloyd.

04-08-2016Norfund,FMOandRabobankjoinforcesInvestinfinancialinstitutionstosupportgrowthinAfrica

Costreductionprogrammeaccelerateswithlowerheadcountasamajorcontributor

54,000

52,000

47,000

40,000

2,000

1,900

3,100

7,000

2014 Reduction 2015 Realised Currentinitiatives

YE2016forecast

Planned YE2018forecast

Numberofstaff(inFTEs,incl.externalhires)

•  Targetedreductionofstaff:12,000FTEsby2018•  RealisedH12016:~1,900FTEs(excluding~500FTEsof

redundanciesstillintheresignationprocess)•  Currentinitiativeshavebeenacceleratedtoachieve

5,000FTEsreductionin2016(versusinitialtargetof4,000FTEs)

•  Moreefficientprocessesandautomation,combinedwithsimplifiedstructuresanddelayering

2016:ayearofacceleration

-12,000

5

3.Improvingperformance

Solidnetprofitdrivenbyrobustrecurringincomeandlowloanimpairmentchargesaseconomicrecoverycontinues

6

-

2,017

852

1,133

H12015 H22015 H12016

Operatingprofitbeforetax(in€mn)

in€mn H12015 H22015 H12016

Netinterestincome 4,482 4,657 4,375

Netfeeandcommissionincome 962 930 982

Otherincome 1,483 500 446

Totalincome 6,927 6,087 5,803

Operatingexpenses -3,833 -4,312 -4,276

Regulatorylevies -121 -223 -246

Impairmentlossesongoodwill -600 -23 0

Loanimpairmentcharges -356 -677 -148

Operatingprofitbeforetax 2,017 852 1,133

Tax -495 -160 -209

Netprofit 1,522 692 924

Profit&Lossaccount

Marketvolatilityimpactsotherincome,whileoperatingexpensesincludesomeelevatedcharges

7

-

* InterestRateDerivativesRecoveryFramework(IRDF)€21mnchargedtotheP&Lin2014.** Resultsonthefairvalueofissueddebtinstruments(structurednotes)andhedgeaccounting

2.017

852

1,133

160

563

990

H12015 H22015 H12016

Underlyingprofitbeforetax(in€mn)

In€mn H12015 H22015 H12016

GoodwillimpairmentRNA -600 -3

Restructuring -26 -219 -190

DerivativesFramework* -150 -514

FairValueitems** 466 -190 -286

Totaleffect -160 -563 -990

2,177

1,415

2,123

Exceptionalitemsincludedinoperatingprofitbeforetax

Coreincomeitemsremainstable

8

4.482 4.657 4.375

962 930982

1.017 690732

466

-190 -286

H12015 H22015 H12016

Totalincome(in€mn)

6,927

6,0875,803

Otherincomeexcl.FVitems

Netfeeand

commissionincome

Netinterestincome

Interestincomedown,feeandcommissionup

•  Netinterestincome:-2%vs.1H2015;netinterestmarginstable

•  Netfeeandcommissionincome:+2%vs.H12015:•  DomesticRetail:highercommissionincomeon

paymentservices•  WRR:highernetfeeandcommissionincomeinline

withstrategyofmorefee-generatingbusiness•  Leasing:growthoftheloanportfoliocontributedto

higherincome•  Otherincome(excl.fairvalueitems):-28%vs.H12015:

•  WRR:otherincomereturnedtomorehistoriclevelsafteraverygoodH12015(e.g.positiverevaluationsintheprivateequityportfolioandsaleoflargepartofourstakeinABC)

•  ResultfromourparticipationinAchmeawaslower

FVItems

6,2776,4616,089

Impactlowinterestrateenvironmentstilllimited

9

4.4534.643 4.522 4.596 4.482

4.6574.375

1,23%

1,29%1,36% 1,35%

1,32%1,33% 1,33%

1,23%1,36% 1,35% 1,35%

1,29%1,38%

1,29%

H12013 H22013 H12014 H22014 H12015 H22015 H12016

Netinterestincome(NII)andnetinterestmargin(NIM) Maindriverslowernetinterestincome

•  DomesticRetail:netinterestincomewasdown1%causedbyalowerloanportfolio,andlowermarginsonpaymentaccountsvs.H12015

•  WRR:netinterestincomedecreasedduetolowerresultsintheTreasuryarea,partlyasaresultofthecurrentrateenvironment

•  Leasing:stablenetinterestincomeandmargin

•  RealEstate:-14%duetoadeclineinFGHBank’sloanportfolio

NIM6m-rollingaverage

NIM12m-rollingaverage

Restructuringmeasuresarebearingfruit

10

2,407 2,379 2,264

1,400 1,5641,308

26219

190

150514

H12015 H22015 H12016

Operatingexpenses(in€mn)

3,833

4,312 4,276

Underlyingoperatingexpensesdevelopfavorable

•  Staffcostsareonadownwardtrendduetorestructuringefforts;inH12016headcountwasreducedby~1,900FTEs

•  Inaddition,employeebenefitswerecutback•  Releaseofaprovisioncontributedtoadeclineinother

operatingcosts

IRDF

OtherOpex

Restructuring

Staffcosts

H12015 H22015 H12016

C/Iexcl.regulatorylevies 55 71 74

UnderlyingC/Iexcl.regulatorylevies 59 63 59

Cost/incomeratiodevelopment

3,807 3,9433,572

349273

253

117

48

37

44

47

43

H12015 H22015 H12016

Loanimpairmentcharges(LIC)(in€mnandinbpsofaveragelending)

Loanimpairmentchargesreach10-yearlow

11

7bps16bps 32bps

Allsegmentsbenefitfromeconomicrecovery

•  Varioussectorsbenefitedfromtheeconomicgrowthandtheaccompanyinghigherconsumerspendingandexports

•  DomesticresidentialmortgageloanscontinuetoperformwellwithLICat4bps

•  VerylowLICindomesticbusinesslendingduetopositivedevelopmentofalltheindustriesthatRabobankfinances,exceptforgreenhousehorticultureandshipping

•  DespitestructuralproblemsinsomepartsoftheDutchCREmarket,theoverallqualityoftheCREloanbookimprovedfurther.LICwerenegativeduetomorereleasesthanadditionstoallowancesforloanlosses

•  LICatWRRmorethanhalved(23bps),mainlyduetolowerlossesintheNetherlands(Wholesale)

•  Longterm(10-year)averageLICstoodat36bpsofaveragelending

148

677

356

DomesticRetail

WRR

RealEstate

Leasing

Other

Loan-to-depositratioimprovedslightly

12

287

212

282

212

279

219

101

115

99

124

104

123

29 30 3016 15 14

1,32

1,25 1,24

Lending Duetocustomers

Lending Duetocustomers

Lending Duetocustomers

H12015 H22015 H12016

LeasingRealEstate

Domesticretail

WRR

427426

328

434

338 343

LtDratioMaindriversimprovementinloan-to-depositratio

•  Loanportfolioincreasedby€1bncomparedtoyear-end2015:•  DomesticRetail:residentialmortgageloanportfolio

decreasedby€2bnduetoloansalesandextrarepayments,whereasloanstobusinesseswere€1bndown

•  WRR:loanportfolioincreasedby€5bn.AmongstothersgrowthinRuralBankingandTrade&CommodityFinance

•  Leasing:loanportfolioslightlyuponthebackofbettereconomicconditions

•  RealEstate:loanportfoliodecreasedby€1bn

•  Duetocustomersincreasedby€5bncomparedto2015:

•  DomesticRetail:duetocustomersup€7bnpartlyasaresultofholidayallowancesreceivedinMayandanincreaseincurrentaccountsheldbybusinessclients.

•  WRR:duetocustomersalmost€2bnlower.AtFYE2015RabobankhadalargeinflowofmoneyfromWholesale-customers.Partofthesedepositswerewithdrawnatthebeginningof2016.

Domesticretail

WRR

CommonEquityTier1-ratiowellaboveregulatoryrequirements

13

13,2% 13,5%13,1% 13,4%

>14.0%

0,2% 0,1%0.4%

30-06-15 31-12-15Phase-inCRDIV

01-01-16 RWAchange

Profit 30-06-16 Target2020

CommonEquityTier-1(CET1)Ratio(in%)

10.25%

12.5%

Maindevelopments•  TransitionalCET1ratio30June2016:13.4%•  FullyloadedCET1ratio30June2016:12.4%•  CRDIVimpact1January2016:-0.4%-point•  Pro-formaimpactsaleAthlon(tobefinalisedinH2

2016):+0.4%-point•  InJuly2016theEBAconfirmedthatPillar2

requirementswillbesplitbetweenrequirements(P2R)andguidance(P2G)

Targets•  Rabobanktargetsa14%minimumCET1ratio,which

offersaminimummanagementbufferof1.5%-pointoverandabovefullyphasedinminimumrequirementsof12.5%

•  CurrentCET1ratioof13.4%impliesabufferof3.15%-point(€6.5bn)overminimumCET1requirements

•  Asat30June2016distributableitemswere€25.4bn

SREP+SystemicRiskBufferphase-in

Rabobankwellontracktoreach>25%TotalCapitaltarget

14

Highlights

•  RabobankisanoutperformerintermsofitsTotalCapitalRatio

•  Rabobanktargetshighcapitalratiostoprotectseniorbondholdersagainstthe(unlikely)eventofabail-in

•  RabobankiswellontrackinmeetingsitsTotalCapitaltargetandMRELrequirements

•  IndicativeMRELrequirementsexpectedbytheendof2016

•  Rabobankstronglysupportsthe‘FrenchProposal’forcreditorhierarchyinEurope

•  InH12016,Rabobanksuccessfullyissued€1.25bnofPerpNC5AdditionalTier1

•  InJuly2016RabobankissuedUS$1.5bnof10ybulletTier2securitiespro-formaadding0.6%-pointtotheTotalCapitalRatio

•  Transitionalratiosasat30June2016:•  Tier1ratio16.8%

•  TotalCapitalratio23.5%•  Leverageratio5.1%

13,5% 13,6% 13,5% 13,4%

>25.0%

3,1% 2,4% 2,9% 3,4%

3,2%5,3%

6,8% 6,7%

FY2013 FY2014 FY2015 H12016(inc.July2016T2issue)

Target2020

Capitalstructure(in%)

24.1%

23.5%

19.8%21.3%

23.2%

CET1

AT1

Tier2

JulyTier2issue(+0.6%-point)

Mediacallpresentation

Interimresults2016

WiebeDraijerandBasBrouwers18August2016