{
  "url": "https://openlegislation.uk/eu-decision-2012-118/annex/division-10/division-10.5",
  "json_url": "https://openlegislation.uk/eu-decision-2012-118/annex/division-10/division-10.5.json",
  "legislation": "eudn/2012/118",
  "legislation_title": "Commission Decision of 18 July 2011 on State aid C 15/09 (ex N 196/09), which Germany implemented and is planning to implement for Hypo Real Estate (notified under document C(2011) 5157) (Only the German text is authentic) (Text with EEA relevance) (2012/118/EU)",
  "legislation_url": "https://openlegislation.uk/eu-decision-2012-118",
  "path": "annex/division/10/division/10.5",
  "kind": "division",
  "number": "10.5",
  "heading": "Commitment relating to RAROC",
  "text": "Germany will ensure that PBB's strategic new business does not issue any new loans that have a RAROC (risk adjusted return on capital) of less than 10 % on a transaction-by-transaction basis.\nThe RAROC will be calculated as the ratio between the net margin after tax and the economic capital. This commitment applies to new business without taking into account prolongations and restructuring.\nWithin the meaning of this Commitment Document,\n(i) the gross margin is the difference between the margin invoiced to the customer (expressed in basis points above the IBOR reference rate) and PBB's refinancing costs (expressed in basis points above the IBOR reference rate) represented by the internal transfer price, plus annualised fees;\n(ii) the internal transfer price will reflect the estimated cost of PBB's new refinancing from borrowed and own capital, taking account of the characteristics (maturity, currency, etc.) of the loans to customers;\n(iii) the net margin is equal to the gross margin minus:\n(a) additional costs of all kinds (overheads, salary costs, operating costs, amortisation and depreciation, etc.) estimated on the basis of the observation of the actual total costs of lending to customers;\n(b) cost of average risk calculated for each transaction in accordance with the Basel II methodology (or any banking regulation applicable thereafter) and a tax charge;\n(iv) the economic capital (capital adequacy requirements according to the Basel Committee on Banking Supervision Pillar 1) is calculated in accordance with the relevant Basel II methodology (or any applicable banking regulation applicable thereafter).",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/eudn/2012/118/annex/division/10/division/10.5",
    "retrieved_at": "2026-11-01T15:15:31.821595+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}