Rabobank cuts back on ECL overlays
Improved backtesting performance reduces add-ons to allowances to lowest in five years
Rabobank cut back on technical overlays to impairment allowances in the second half of 2023, a sign the bank’s loan-loss models may be getting better in their predictions, despite the tumult and unpredictability of the past few years.
The bank retained just under €330 million ($355 million) of what it calls ‘top-level adjustments’ (TLAs) to modelled provisions as of end-December, down from €557 billion at end-June and €499 million at end-2022.
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