Cooperatieve Rabobank U.A.

The stable outlook reflects our expectation that, over the next 24 months, Rabobank will continue restoring its profitability. Rabobank benefits from a strong domestic position, a solid global food and agricultural franchise, robust capitalization, and healthy liquidity thanks to continued access to the wholesale market. Nevertheless, we remain cautious on certain pockets of risk in domestic SMEs and global clients operating in vulnerable sectors if new logistical disruptions were to dampen our current expectations. We could lower the ratings in the next two years if we revised downward our assessment of the group stand-alone credit profile (SACP), and if this is not offset by higher external support via the bank's buffer of bail-in-able debt. This could happen if Rabobank encounters

...Rabobank is a leading Dutch bank with a clearly defined strategy focusing on banking in the Netherlands and financing the global food industry. We view positively Rabobank's strategy to focus on its leading franchise in the Dutch retail banking market and the financing of the food and agriculture business globally. International activities, with a clear sector focus, add to the diversity of its domestic business, which has a good track record of sound operating performance. In addition, we consider the strategy as prudent, notably its financial planning and balance sheet management, resulting in predictable earnings generation capacity. The cooperative status supports Rabobank's strong capitalization, although we expect pressure on earnings will persist. Rabobank's cooperative structure favors long-term value generation over short-term returns. We believe that the cooperative status provides Rabobank with flexibility for its distribution policy, resulting in lower cost of capital than...

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