Van Lanschot announces reorganisation programme in response to changing market circumstances - investments to enhance quality coupled with significant cost savings
(Thomson Reuters ONE) -
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* Additional investments of ? 30 million in the quality of the organisation
and services
* Structural annual cost savings of ? 60 million as from 2015;
workforce reduction of 10-15% (2012-2015)
* Closer collaboration with subsidiary Kempen
* Marginal net profit realised in H2 2011 in difficult market conditions
* Financial targets maintained, but will not be achieved before 2015
* Solvency (Core Tier I: 11.0 %) and liquidity position remains strong
* CEO Floris Deckers to stand down in 2012; changing market environment and
duration of the programme call for new leadership
Floris Deckers, Chairman of the Board of Managing Directors of Van Lanschot:
"During the past few years, Van Lanschot has consciously opted to give priority
to further strengthening the bank's solvency and liquidity position, which is
consequently exceptionally strong. The market is not only turbulent, but has
also permanently altered. The earnings model of the financial sector is under
pressure. The continuing difficult market conditions have had an adverse impact
on the bank's profitability. Van Lanschot realised a profit in the second half
of 2011, however this was limited.
The economic outlook and sector developments are grounds for Van Lanschot to
adapt its organisation in response to these changing circumstances: it must
become more effective and efficient. We plan to invest in the quality of the
organisation, while at the same time implement efficiency measures to bring down
the cost base permanently. Unfortunately, the loss of job positions is
unavoidable in this situation. We will do our utmost to support the employees
concerned through this process.
I have come to realise that the changes affecting the sector and the start of
this new programme call for new leadership. For this reason I am announcing
today that I will step down as Chairman of the Board of Managing Directors in
the course of 2012."
Investments in quality
Van Lanschot is initiating a reorganisation programme in response to the
changing market conditions, increased competition and new client demands. This
programme has two areas of focus. Firstly, the bank will invest in its services,
building on its traditional focus on private banking and the client. In
addition, Van Lanschot will heighten its efficiency and permanently lower its
cost base.
Van Lanschot will invest an additional amount of ? 30 million in the next three
years in the quality of the organisation, in particular in its employees and
systems; this will further enhance the level of service it provides to its
clients. The relationship model of the private bank will be extended and
intensified. This will have consequences for the branch network. The lending
business will be used more exclusively for director-owners and their businesses,
which are an important feeder for the private bank. Additional efficiencies and
synergies will be achieved by further intensifying the collaboration between Van
Lanschot and its subsidiary Kempen.
Our ambitions in Belgium remain unchanged. In the other international activities
Van Lanschot is looking into opportunities to realise additional efficiencies
and synergies.
At the same time the bank plans to accelerate its investments in systems,
including a new securities system and online platform. Furthermore, new systems
in the mid and back offices will deliver substantial efficiency gains and
quality improvements in the coming years.
Long-term cost savings
In response to the continuing volatile economic conditions and the changing
earnings model in the financial sector, Van Lanschot plans to implement a
programme that will permanently lower its cost base by ? 60 million per annum as
from 2015 (basis 2012). These measures will mean a 10-15% reduction in the
number of job positions in the same period. This will partly be achieved through
natural attrition, but the bank cannot exclude the possibility of forced
redundancies. Van Lanschot expects to incur reorganisation charges of ? 25
million in the coming years in connection with this programme.
A number of measures are in the form of proposals that still have to be
submitted to the works council for advice. Discussions will be held with the
trade unions on a new redundancy plan for Van Lanschot.
Chairman of the Board of Managing Directors
Floris Deckers has announced his intention to step down as Chairman of the Board
of Managing Directors of Van Lanschot in 2012. The Supervisory Board will
shortly begin the process of finding a successor. Floris Deckers has been
Chairman of the Board of Managing Directors of Van Lanschot since 2 January
2004.
Results for H2 2011
The enduring uncertainty in the financial markets put severe pressure on the
bank's results in the second half of the year. As a result, a marginal net
profit was realised in the second half of 2011. This is in line with the trading
update on the third quarter of the year.
The lower results were largely due to the deterioration of market conditions
since summer 2011. Commission income remained under pressure in the second half
of the year. This was caused on the one hand by clients carrying out fewer
transactions and on the other by the falling equity markets worldwide which
adversely impacted the volume of managed assets, despite the inflow of new
money. The conscious decision to put solvency and liquidity before profitability
and therefore to avoid excess risk-taking also had an impact; this put pressure
on the bank's interest result in particular. The volatile markets, higher credit
spreads and realised and unrealised value changes, among other things, led to
negative 'results on financial transactions' and 'income from securities and
associates' in the second half of the year.
The costs in the second half of 2011 were down slightly on the first half of the
year. The addition to loan loss provision for 2011 was substantially down on
2010, despite showing a slight increase in the second half of 2011. A higher
impairment was taken on the participations portfolio compared with the first
half of 2011.
The position of the bank continues to be solid and strong. The Core Tier I ratio
at year-end 2011 increased further to 11.0% from 9.6% at the end of 2010. The
funding ratio (the extent to which the loan book is financed by customer
deposits) was around 92% at 31 December 2011, one of the highest ratios among
the Dutch banks. The bank's liquidity position also remains exceptionally
strong, as evidenced by the fact that Van Lanschot already comfortably meets the
proposed Basel III ratios.
Financial targets
The extent and pace of the economic recovery will determine in part the time it
will take for Van Lanschot to return to normalised profit levels. In view of the
uncertainty surrounding the current economic crisis, Van Lanschot expects that
the financial targets will not be achieved before 2015.
Annual results
Van Lanschot will present its 2011 annual results on 8 March 2012.
Presentation
The presentation for analysts can be found onwww.vanlanschot.nl/results2011.
's-Hertogenbosch, 30 January 2012
N.B. the 2011 figures are preliminary; not audited
Media Relations: Etienne te Brake, manager corporate communication
Telephone +31 (0)73 548 30 26; mobile +31 (0)6 12 50 51 10; e-
maile.tebrake(at)vanlanschot.com
Investor Relations: Geraldine Bakker-Grier, investor relations manager
Telephone +31 (0)73 548 33 50; mobile +31 (0)6 13 97 64 01; e-
mailg.a.m.bakker(at)vanlanschot.com
Van Lanschot NV is the holding company of F. van Lanschot Bankiers NV, the
oldest independent bank in the Netherlands with a history dating back to 1737.
The bank offers high-quality financial services to hig net-worth individuals,
entrepreneurs and their businesses and institutional investors. Van Lanschot NV
is listed on Euronext Amsterdam.
The press release can be downloaded from the following link:
Press release (PDF) :
http://hugin.info/133415/R/1580944/493734.pdf
This announcement is distributed by Thomson Reuters on behalf of
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(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Van Lanschot via Thomson Reuters ONE
[HUG#1580944]
Unternehmensinformation / Kurzprofil:
Datum: 30.01.2012 - 07:30 Uhr
Sprache: Deutsch
News-ID 108694
Anzahl Zeichen: 9700
contact information:
Town:
's-Hertogenbosch
Kategorie:
Business News
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