Zanders Updates DLL’s Hedge Accounting With a Faster, More Integrated Model

DLL (De Lage Landen) is a global asset finance company headquartered in Eindhoven, the Netherlands, and a wholly owned subsidiary of Rabobank. Operating in more than 25 countries, it delivers leasing and asset-based financing solutions across a variety of industry sectors, including agriculture, construction, energy transition, food, healthcare, industrial, technology, and transportation. With a strong focus on responsible finance, the company supports businesses to access capital, manage risk, and make the transition to more sustainable business models.

Central to the company’s financial infrastructure is its global treasury function, based in Dublin, Ireland. This team manages the liquidity and Treasury risk management needs of the group. The team consists of an experienced group of highly qualified financial services professionals who are dedicated to meeting the treasury needs of DLL, covering everything from cash management to foreign exchange and interest rate hedging.

A critical turning point

A core element of DLL’s risk strategy is the use of interest rate swaps to mitigate exposure to interest rate volatility. Given the size and complexity of its global lending portfolio and the direct impact that interest rate movements can have on company earnings, these instruments are essential for maintaining financial stability and predictability.

“We have two large portfolios – euro interest rate swaps and US dollar interest rate swaps,” explains Coyle, Head of Hedge Accounting at DLL. “To mitigate the fair value movements of those swaps, we run macro fair value hedge accounting models in euros and dollars.”

These models allow DLL to align the value of derivatives with the risks they offset. This reduces earnings volatility, provides a transparent view of the company’s risk position, and ensures compliance with accounting standards.

For years, DLL’s hedge accounting models were developed and maintained by a previous provider. Due to regulatory requirements they were no longer allowed to support the models beyond 2025.

Faced with a tight deadline to transition to a new solution, DLL launched a competitive tender process to identify a partner capable of building fair value macro hedge accounting models for both their euro and dollar swap portfolios. To prevent disruption to DLL’s hedge accounting process, replacement models needed to be ready for testing in early 2025, ahead of full deployment a few months later. This challenging timeline relied on delivering a complete, fully tested and operational solution as quickly as possible, rather than following a more gradual, phased approach.

Zanders’ approach stood out because they proposed building a Python-based application from the start – delivering the end product we needed, and within the timeline that we wanted.

Coyle, Head of Hedge Accounting at DLL.

“Another provider suggested an Excel build first, then a Python version later – essentially two separate projects, which would not only take a lot longer but also impacted on the price as well.”

Rapid prototyping and agile development

Once selected in late 2024, Zanders began working on replicating the models. Despite having no access to the original model’s codebase, the Zanders team was able to reverse engineer DLL’s hedge accounting methodology in just a few weeks based.

“They started in December, and by the end of January we had our first models ready for testing,” Coyle recalls.

From February to March, both Zanders and DLL conducted independent back testing using the legacy model as a benchmark to validate outputs. This rigorous comparison helped ensure consistency and build confidence in the new models.

“This gave us comfort that we were on the right road,” Coyle says. “We did find a few things that we wanted to change – such as adding certain risk controls  – and the Zanders team was very open to suggestions. These were implemented quickly, and it was a very easy process.”

By the end of March, the new Python-based applications was fully operational, enabling a seamless transition with no disruption to DLL’s interest rate risk strategy.

Faster, simpler, more integrated

While the primary focus of the project was the replication of DLL’s existing models, it ultimately evolved into an opportunity to streamline and modernize the company’s hedge accountancy processes.

“The new model is much quicker,” explains Marais, Treasury Hedge Accountant at DLL. “The old model had features we didn’t really use that slowed down performance. This was a chance to simplify and focus on what we needed.”

One of the most valuable technical gains was improved alignment with DLL’s internal treasury systems.

“With the new model, we are now able to utilize reports from our own treasury system – that was a significant improvement,” says Marais. Previously, the team had to rely on reports from Rabobank systems and model calculations, but the new model directly interfaces with DLL's internal system. “This makes our work process much quicker and more efficient compared to previously,” Marais adds.

Beyond the technical delivery, the project also stood out for the way it was executed. Working under a tight deadline, collaboration between the teams was critical and made a real difference to the overall experience. The DLL team particularly appreciated Zanders’ responsive and collaborative approach.

IT projects can be quite stressful, but this one was remarkably stress-free. That’s a reflection of a robust, collaborative process and great people. If someone asked whether we’d recommend the Zanders team for a project like this, we wouldn’t hesitate.

Coyle, Head of Hedge Accounting at DLL.

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