Van Lanschot's 2009 half-year results
(Thomson Reuters ONE) - * Gross result for the first half of 2009 ? 38.9 million * Vigorous recovery of revenues in second quarter * Due to accelerated amortisation of IT costs (? 34.5 million before tax) and higher addition to loan loss provision (? 50.6 million before tax), net loss stands at ? 46.3 million * Assets under management for private clients up 4%Floris Deckers, Chairman of the Board of Managing Directors: "VanLanschot weathered the banking crisis well. The bank's liquidity hasremained at a high level and, with a BIS Tier I ratio of 9.2%, thecapital position continues to be strong. The crisis has now evolvedinto a severe economic recession, whose impact is reflected in higherloan loss provisions. Thanks to the high quality of our loansportfolio, Van Lanschot is only affected to a relatively limitedextent. In the first half of 2009, the addition to the loan lossprovision was 35 basis points of the risk-weighted assets. The factthat Van Lanschot did not and does not need any government supportallows us to determine and implement our own strategy."Private BankingThe credit crunch has in general cast serious doubt on the solidityof the banking industry. The government intervention at several banksonly partially dispelled this doubt. Due to their risk-aversebehaviour, private individuals tend not to be very willing to switchbanks. Spreading liquidities across several banks continues to becommon practice in the current environment. The number of targetgroup clients rose by 0.5% in the first half of 2009. These newclients mainly concern very high net-worth individuals,directors-owners and business professionals. Total client assets(assets under management plus savings accounts and deposits) ofprivate clients at 30 June 2009 remained flat compared with 31December 2008 figure at ? 26.6 billion. Savings accounts and depositswere down by 5% to ? 11.0 billion in the first half of the year. VanLanschot only partially went along with the war in the savingsaccounts and deposits arena in terms of its rates, considering itsabove-average liquidity position. Assets under management for privateclients rose 4% to ? 15.6 billion.Asset managementTotal assets under management rose from ? 24.6 billion as at year-end2008 to ? 25.2 billion as at 30 June 2009. In the first half of theyear, Kempen Capital Management was awarded new mandates involvingassets available for investment of ? 930 million. In the first halfof 2009, Kempen Capital Management received ? 130 million ininvestible assets from FRR. In the course of the second half of theyear, a total of around ? 800 million will be placed under Kempen'sfiduciairy management by parties such as the Boskalis pension fundand ZLTO.Business BankingIn the first six months of 2009, loans and advances to corporateclients rose 7% to ? 7.1 billion. Van Lanschot continues to grantloans to its target group clients. Improved margins are being earnedon new loans. The number of corporate target group clients was up0.4%.Corporate Finance and SecuritiesThe low risk profile of Kempen and the limited trading for ownaccount helped to support the bank's risk profile during the bankingcrisis. However, this means that the bank profits from the potentialupswing in revenues in the current market conditions only to alimited extent. The Securities department still faces lower tradingvolumes of institutional investors and thus lower commission incomecompared with the first half of 2008. The number of securitiestransactions by institutional investors seems to have stabilisedhowever since the second half of 2008.Second quarter marked by vigorous recovery of gross resultThe first half of 2009 was characterised by the distorted savingsmarket, where government-supported banks offered deposit and savingsrates which far exceeded the Euribor rates. As a result, the marginson new deposits deteriorated further in the first half of 2009. Aprivate bank such as Van Lanschot is relatively hard hit because itsclients hold a large part of their assets in the form of cash. Theinterest margin decreased from 1.35% in the first half of 2008 to1.22% in the first half of 2009. Although margins are expected toimprove in the second half of the year, the interest margin isexpected to recover only gradually. Interest income was 13% down onthe first half of 2008 to ? 127.3 million. Under normal savingsmarket conditions, a considerably healthier interest income wouldhave been generated.In the first half of 2009, 4% more securities transactions wereexecuted than in the first half of 2008. The revival of the financialmarkets and the share prices in the second quarter positivelyimpacted the portfolio values and thus also the management fees.Total securities commission and management fees amounted to ? 80.4million in the first half of the year; this was 7% down on the levelin the first half of 2008, but a stabilisation compared with thesecond half of 2008.Income from operating activities, which mainly comprises interest andcommission income, totalled ? 258.9 million in the first half of2009, i.e. a 9% decline on the first half of 2008. The income levelshows a clear upward trend from the low point in February 2009. Theoperating expenses came to ? 220.0 million, 8% up on the first halfof 2008. This includes the announced provision for the restructuringoperation of ? 3.6 million.The gross result totalled ? 38.9 million. The net loss for the firsthalf of 2009 of ? 46.3 million was driven by a number of one-offimpairments. As announced in the trading update of May 2009, anamount of ? 34.5 million (before tax) was written off on the ITproject. Van Lanschot also invests in its own in-house funds. Thesefunds have also suffered in the current investment climate, resultingin an unrealised impairment of ? 13.6 million (before tax) for theseinvestments and several shareholdings. In addition, ? 50.6 millionwas added to the loan loss provision.Strong loans portfolio, but not immune to the recessionVan Lanschot's loans portfolio totalled ? 17.5 billion at 30 June2009, i.e. a 2% growth compared with year-end 2008. This growth wasachieved mainly in the corporate sector.Of the total loans portfolio, ? 8.0 billion concerns mortgage loansto high net-worth individuals (year-end 2008: ? 8.0 billion). For themortgages, only 4 basis points of the risk-weighted assets had to beadded to the provision for loan losses. There are no payment arrearson the balances of the bank's credit card holders.In a recession, the largest losses are typically incurred early inthe cycle. In the first half of 2009, a total amount of? 50.6 million was added to the loan loss provision, representing35 basis points of the total risk-weighted assets. For the entireyear 2008, the total addition to the provision was 15 basis points.Thanks to the bank's prudent lending policy, the losses on theportfolio are relatively limited. Van Lanschot assumes that theaddition to the loans provision will amount to 15 basis points of therisk-weighted assets through the cycle.Capital and funding positionWith a BIS Tier 1 ratio of 9.2% and a BIS total capital ratio of11.2%, the bank continues to be comfortably capitalised. VanLanschot's robust capital position was one of the reasons why therating agency Standard & Poor's reconfirmed the bank's Single-Acredit rating in June. In line with the rating trends in the bankingsector as a whole, the outlook was revised downwards from stable tonegative. In addition, the bank has a Single-A credit rating (stableoutlook) from Fitch.As is typical for a private bank, Van Lanschot traditionally has ahigh funding ratio: 84% as at 30 June 2009 (31 December 2008: 90%).The high rates that had to be paid on deposits and savings accountsmakes this form of funding relatively expensive. The comfortablefunding position has allowed the bank to make the strategic choicefor alternative (cheaper) funding sources. In June, the banktherefore took out 1-year loans at a rate of 1% offered within thescope of the ECB's credit easing operation. Thanks to the bank'srobust liquidity position, ? 600 million of Floating Rate Notes wererepaid in May 2009 (for the third time).Events after the balance sheet dateOn 10 August 2009, Van Lanschot reached an agreement with theshareholder of Robein Leven NV on the acquisition of all shares inRobein Leven. Van Lanschot's investment in Robein Leven is not of astrategic nature. These shares had been pledged to Van Lanschot ascollateral for a loan. Robein Leven will continue to operate fullyindependently and separately from the group. Van Lanschot intends todispose of the shares in Robein Leven in due course.Outlook for 2009The current recession was triggered by the banking crisis. Only oncethe worst of the recession has passed will the government be able toformulate the exit strategy for its interests in the financialsector. The restructuring of the financial sector can only take placeonce there is more clarity on this exit and its implementation. SinceVan Lanschot does not depend on the government in any way whatsoever,it will be able to play a positive role in this restructuringprocess.The negative margins on deposits and savings accounts are puttingpressure on the improved margins on new loans and advances. A returnto 'normal' interest margins requires proper correlations on thesavings market, with a further fall in savings rates. The revival ofthe stock markets in the second quarter led to increased investortrading levels, resulting in a recovery of commission income.In these turbulent times, Van Lanschot focuses on three priorities.The first priority is keeping the capital position intact. The F-IRBmethod under Basel II whose implementation at the bank is expectedfor 1 January 2010 could lead to a further increase in the bank'shigh capital ratios. The second priority focuses on cost control.Finally, as a third priority, unabated attention will be devoted torisk management and the quality of the loans portfolio. A furtherweakening of the economy cannot be ruled out; the duration and depthof the recession will partly determine the development of the bank'sloan losses. Van Lanschot's conservative lending policy howeverensures that the loans portfolio is relatively well resistant to therecession.In view of the uncertainty surrounding the developments in the secondhalf of 2009, Van Lanschot does not make a pronouncement about theexpected results for the full year 2009.In response to the recommendations of the Maas Committee and theplanned Code for Banks, Van Lanschot will come up with concreteproposals in the course of 2009. An adjusted remuneration policy willbe drafted for the Annual General Meeting of Shareholders in 2010.2009 INTERIM FINANCIAL STATEMENTS OF F. VAN LANSCHOT BANKIERS NVThe 2009 interim financial statements of F. van Lanschot Bankiers NVare available online at the corporate website(www.vanlanschot.nl/aboutvanlanschot) from Tuesday 11 August 2009.KEY DATES 2009/2010Trading update Q3 2009 6 November 2009Publication of 2009 annual results 12 March 2010Annual General Meeting of Shareholders 6 May 2010Trading update Q1 2010 6 May 2010Publication of 2010 half-year results 10 August 2010's-Hertogenbosch, the Netherlands, 11 August 2009Van Lanschot Media Relations: Etienne te Brake, CorporateCommunication spokespersonTelephone +31 (0)73 548 3026; Mobile phone +31 (0)6 12 505 110;E-mail e.tebrake(at)vanlanschot.comVan Lanschot Investor Relations: Geraldine Bakker-Grier, InvestorRelations ManagerTelephone +31 (0)73 548 3350; Mobile phone +31 (0)6 13 976 401;E-mail g.a.m.bakker(at)vanlanschot.comVan Lanschot NV is the holding company of F. van Lanschot BankiersNV, the oldest independent bank in the Netherlands with a historydating back to 1737. The bank focuses on three target groups: highnet-worth individuals, medium-sized businesses (including familybusinesses) and institutional investors. Van Lanschot stands forhigh-quality services founded on integrated advice, personal serviceand customised solutions. Van Lanschot NV is listed on the EuronextAmsterdam Stock Market.DisclaimerForward looking statementsThis press release contains forward looking statements concerningfuture events. Those forward looking statements are based on thecurrent information and assumptions of the Van Lanschot managementconcerning known and unknown risks and uncertainties.Forward looking statements do not relate to definite facts and aresubject to risks and uncertainty. The actual results may differconsiderably as a result of risks and uncertainties relating to VanLanschot's expectations regarding such matters as the assessment ofmarket risk or possible acquisitions, or business expansion andpremium growth and investment income or cash flow predictions or,more generally, the economic climate and changes in the law andtaxation.Van Lanschot cautions that expectations are only valid on thespecific dates, and accepts no responsibility for the revision orupdating of any information following changes in policy,developments, expectations or the like.The financial data included in this press release have not beenaudited.Click the link below to read the complete press release including alltables and annexes:http://hugin.info/133415/R/1333787/316300.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 11.08.2009 - 07:30 Uhr
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