EUR 12.3 billion
The total amount of assets
under management, including
Triodos Bank and the
investment funds and
Private Banking, grew by
EUR 1.7 billion, or 16%,
to EUR 12.3 billion.
In 2015, Triodos Bank’s income grew by a satisfactory 12% to EUR 212 million (2014: EUR 190 million). Triodos Investment Management and Investment Advisory Services contributed EUR 31 million to this figure (2014: EUR 31 million). In 2015, commission income amounted to 32% (2014: 33%) of total income, in line with expectations.
The total amount of assets under management including Triodos Bank and the investment funds and Private Banking grew by EUR 1.7 billion, or 16%, to EUR 12.3 billion, above expectations.
Triodos Bank’s balance sheet total grew by 15% to EUR 8.2 billion thanks to a steady growth of the funds entrusted and new capital raised during the year, in all branches. This represents a very positive outcome given growth of 5 to 15% was expected.
Triodos Bank’s total number of customers increased by 15%, against expected growth of between 10 to 15%, and now numbers 607,000 customers.
Last year we refined the definition of a customer so that this data is reported more consistently and accurately across all branches. We will continue to report the number of accounts in the annual report’s Key Figures section.
Continuing growth in deposits despite extremely low interest rates shows that a growing number of people are choosing to make a much more conscious choice about their bank and how it uses their money.
Operational expenses increased by 9% during the year. Without taking into account various net contributions made in 2014 and 2015 to the rescue of banks (including a special tax to rescue the Dutch SNS Bank in 2014), the increase of expenses would have been 15%. Operational expenses were in line with expectations. Growth has resulted from the growth of activities and meeting regulatory requirements.
The ratio of operating expenses against income was 71% (2014: 73%). Profit before tax and impairments for the loan portfolio increased to EUR 61.4 million (2014: EUR 51.2 million). The impairments for the loan portfolio decreased from EUR 11.1 million in 2014, to EUR 7.6 million.
Net profit of
EUR 40.7 million,
up 35% on 2014.
The net profit is EUR 40.7 million, up by 35% (2014: EUR 30.1 million).
Impairments for the loan portfolio decreased to 0.16% of the average loan book, compared to 0.28% in 2014, reflecting a high quality loan portfolio in all branches. This continues to be favourable and in line with our historical track record which is relatively low.
Triodos Bank delivered a Return on Equity of 5.5% in 2015 (2014: 4.4%). So far the medium-term objective has been to grow the return on equity to 7% of Triodos Bank’s equity in normal economic conditions. In that respect the 2015 return is satisfactory. This target should be seen as a realistic, long-term average for the type of banking activity that Triodos Bank engages in. However, we recognise that market conditions have changed. If the current trend of very low interest rates and increasing regulatory costs and capital requirements continues, a lower Return on Equity will be a much more likely outcome. In this context Triodos Bank will aim for a Return on Equity of between 3% and 5% in 2016.
In the current market, while Triodos Bank will continue to work on improving its profitability, it does not expect to outperform easily this target over the next three years; not least because investments will be made in the development of Socially Responsible Investment (SRI), the launch of a current account in the UK and the possible opening of a fully fledged French office in the coming years in particular. As capital and liquidity requirements may increase even further, we prefer to continue to maintain a relatively high equity base and a substantial liquidity surplus which puts downward pressure on the Return on Equity.
Earnings per share, calculated using the average number of outstanding shares during the financial year, were EUR 4.40 (2014: EUR 3.41), a 29% increase. The profit is placed at the disposal of the shareholders.
Triodos Bank’s total number
of customers increased by
15%, against expected
growth of between 10 to
15%, and now numbers
Triodos Bank proposes a dividend of EUR 1.95 per share (2014: EUR 1.95). This means that the pay-out ratio (the percentage of total profit distributed as dividends) will be 44% (2014: 57%). Our policy is to have a pay-out ratio of between 50% and 70% to deliver stability. Although 2015 has been an unusually good year, we have maintained the dividend at EUR 1.95 per share, even if that brings this year’s pay-out slightly below the 50% ratio of the policy.
Triodos Bank increased its share capital by EUR 40 million, or 7%, thanks to depository receipt issues targeting retail investors in particular, which ran throughout the year in The Netherlands, Belgium, the United Kingdom, Spain and Germany.
The number of individual depository receipt holders continued to increase in 2015 at the same time as some institutions, mainly pension funds, sold their participation. Overall growth has been satisfactory and sufficient to meet capital requirements. The number of depository receipt holders increased from 32,591 to 35,735. Equity increased by 11% from EUR 704 million to EUR 781 million. This increase includes net new capital and retained net profit. In 2015, Triodos Bank’s platform for trading in depository receipts continued to operate effectively. At the end of 2015, the net asset value for each depository receipt was EUR 81 (2014: EUR 78).
At the end of 2015 the total capital ratio was 19.0% (2014: 19.0%). Triodos Bank aims for a solvency ratio of 16%. The Core Tier 1 ratio was 19.0% (2014: 19.0%). The solvency ratio remains strong.