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European Branch Network
(retail and business banking)

Developing a European branch network is fundamental to Triodos Bank. It allows it to build and share expertise, and use it to benefit a fast-growing Triodos Bank community. It brings a credible set of values-based financial services to hundreds of thousands of business and personal customers, and grows sustainable banking’s scale and impact.

While Triodos Bank’s values bind customers and co-workers, there are important differences between countries. Regulations, tax incentives and government approaches to sustainability are sometimes markedly different in diverse markets. Local culture, within and between countries, also impacts on how Triodos Bank approaches its work.

Retail activities developed further in 2014 as people and sustainable enterprises continue to choose to partner with Triodos Bank.

Funds entrusted

Statement of funds entrusted per branch

Download XLS

Amounts in millions of EUR

31.12.2014

31.12.2013

 

EUR

%

EUR

%

 

 

 

 

 

The Netherlands

2,377.7

38

2,233.3

40

Belgium

1,361.3

22

1,274.2

23

United Kingdom

975.2

16

789.3

14

Spain

1,420.2

22

1,214.0

21

Germany

154.4

2

139.3

2

 

 

 

 

 

 

 

 

 

 

Total

6,288.8

100

5,650.1

100

 

 

 

 

 

Statement of funds entrusted per category

Download XLS

Amounts in millions of EUR

31.12.2014

31.12.2013

 

EUR

%

EUR

%

 

 

 

 

 

Saving accounts

3,036.2

48

2,757.3

49

Deposits and time accounts

1,356.7

22

1,250.0

22

Other funds entrusted

1,896.0

30

1,642.8

29

 

 

 

 

 

 

 

 

 

 

Total

6,288.9

100

5,650.1

100

 

 

 

 

 

Funds entrusted, including savings, enable Triodos Bank to finance companies and organisations that benefit people, the environment and culture. An increase of the funds entrusted is an important indicator of Triodos Bank’s ability to attract sufficient funds to finance sustainable organisations.

11%

Despite strong competition
in all savings markets,
funds entrusted grew by
11% across the European
branches.

For the reasons highlighted earlier in the report the branches offer a variety of sustainable financial products and services as part of its key strategic objective to offer a full set of services to customers. This has been achieved in some branches and is being developed in others, leading to a marked growth in funds entrusted which increased by EUR 639 million, or 11%, against expected growth of 15%.

Together, this resulted in continuing growth in all the countries where Triodos Bank operates due in part to a growing profile, more efficient and customer-friendly account opening processes, and a receptive market keen to use their money more consciously.

403

In 2014, 403 organisations
received total donations
of EUR 0.3 million.

Triodos Bank aims to be the first bank for its customers. To deliver this in Spain, for example, the number of new current accounts exceeded the number of new savings accounts for the first time during the year.

By offering our savers, in some countries, the opportunity to donate part of the interest they receive to a charity, many social organisations receive support every year. In 2014, 403 organisations (2013: 401) received total donations of EUR 0.3 million (2013: EUR 0.4 million) in this way.

Loans

Outstanding loans per sector in 2014

Outstanding loans per sector in 2014 (pie chart)

The growth of the quality and size of the loan portfolio is an important indicator of the contribution Triodos Bank makes towards a more sustainable economy. All the sectors it works in qualify as sustainable and the companies and projects it finances contribute to delivering Triodos Bank’s mission (as detailed below).

To make sure that Triodos Bank only finances sustainable enterprise, potential borrowers are first assessed on the added value they create in these areas. The commercial feasibility of a prospective loan is then assessed and a decision made about whether it is a responsible banking option. The criteria or guidelines Triodos Bank uses to assess companies can be viewed on Triodos Bank’s websites.

Triodos Bank’s main focus remains on the existing sectors in which it has already developed considerable expertise and where it considers more growth, diversification and innovation to be possible.

Environment (44%, 2013: 49%)

This sector consists of renewable energy projects such as wind and solar power, biomass, hydro-electric, and energy saving projects. It also includes organic agriculture, and projects across the entire agricultural chain, from farms, processors and wholesale companies to natural food shops. Environmental technology, such as recycling companies and nature conservation projects, is also represented.

Social (26%, 2013: 29%)

This sector includes loans to traditional businesses or non-profit organisations and innovative enterprises and service providers with clear social objectives, such as social housing, loans to fair trade businesses, integration for people with disabilities or at risk of social exclusion, and health care institutions.

Culture (14%, 2013: 15%)

This sector covers loans to organisations working in education, retreat centres, religious groups, cultural centres and organisations, and artists.

The remaining proportion of the loan book includes short-term loans to municipalities and private sustainable mortgages.

The lending sectors above describe the main sectors Triodos Bank is involved in. Parts of these sectors are also financed by both Triodos Bank itself and its investment funds (see investments below).

The loan portfolio as a percentage of the total amount of funds entrusted increased to 68% in 2014 (2013: 63%). Triodos Bank’s goal is to lend between 65% and 70% of its funds entrusted. This remains an important challenge for the bank. The increase in lending was primarily due to short term loans to municipalities. Without them the ratio would have remained at a similar level.

The quality of the loan book remained satisfactory overall, despite a wider economic environment of limited or no growth in some countries and a difficult economic environment. This and a continuing focus on maintaining and diversifying a high quality loan portfolio, led to a decline in total loan loss provision to 0.28 of the average loan book (2013: 0.49%). This is much closer to Triodos Bank’s long-term internal benchmark for provisions of 0.25%. These provisions are taken in case potential losses resulting from defaults by borrowers become a reality.

20%

Growth of the loan
portfolio amounted to
EUR 722 million, or 20%.

Growth of the loan portfolio amounted to EUR 722 million or 20%. Expected growth was 15%. An important part of this growth is a substantial increase in larger loans to Dutch municipalities, primarily because of liquidity management. These investments are included in the loan portfolio in accordance with regulations related to financial reporting. Without this the loan portfolio would have grown by approximately 12%, mainly because of the increase of the mortgage portfolio (47%) and limited increase in business loans (9.3%). The distribution of growth over these three sectors has been deliberate to achieve more diversification and to lower the risk profile.

Competition between banks in the conventional lending market has revived after a period of restructuring and recapitalization. Banks regard sustainability as an emerging market and want to be involved in it.

Prospects

Triodos Bank’s balance sheet total is expected to grow more modestly. Growth of between 5 and 15% is expected in 2015.

All branches will focus on continuing to deliver, or develop, a credible set of services. For example, preparations for the launch of a current account will take place in the UK in 2016. The number of customers is expected to grow by between 10 and 15% across the Group.

We intend to improve the loans to deposits ratio to between 65 and 70%, excluding short term investments.

The loan portfolio is expected to increase by between 5% and 15% and the funds entrusted by 10%. Triodos Bank’s ambitions are to focus primarily on the quality and diversification of its loan portfolio. We will concentrate on loans that reflect Triodos Bank’s efforts to finance front-runners in their fields; the entrepreneurs developing the sustainable industries of the future. We expect the levels of provisions for loans in the coming years to decrease modestly.