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 community. It brings a credible set of services to thousands of business and personal customers, and grows sustainable banking’s scale and impact.

While the values of the bank 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.

Against a backdrop of the debt crisis retail activities showed tremendous growth. This is in part due to increasing demands for change from society.

Funds entrusted

Statement of funds entrusted per branch

  (XLS:) Download XLS

Amounts in millions of EUR

31.12.2011

31.12.2010

 

EUR

%

EUR

%

 

 

 

 

 

The Netherlands

1,696.6

45

1,455.6

48

Belgium

966.5

26

794.8

26

United Kingdom

487.2

13

433.7

14

Spain

527.7

14

334.3

11

Germany

52.7

2

20.3

1

 

 

 

 

 

 

 

 

 

 

Total

3,730.7

100

3,038.7

100

 

 

 

 

 

Statement of funds entrusted per category

  (XLS:) Download XLS

Amounts in millions of EUR

31.12.2011

31.12.2010

 

EUR

%

EUR

%

 

 

 

 

 

Saving accounts

2,108.4

57

1,752.5

57

Deposits and time accounts

606.7

16

446.9

15

Other funds entrusted

1,015.6

27

839.3

28

 

 

 

 

 

 

 

 

 

 

Total

3,730.7

100

3,038.7

100

 

 

 

 

 

Funds entrusted, or 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.

This has continued to happen as an increasing number of people move away from a discredited mainstream banking industry, in search of a more transparent alternative that’s more closely connected to the real economy. The branches offer a variety of products and services to meet this demand, and increasingly offer a full set of services to their customers.

In Spain customer numbers doubled to 61,000, and five new commercial offices were opened during the year. (impact statistic)
 

The funds entrusted increased by EUR 692 million, or 23%, against expected growth of between 20 to 25%. Savers continued to respond to the financial crisis and wider discontent about the way many banks have handled their responsibilities and rewarded their employees. For many the financial crisis has prompted them to make a more conscious choice about where they bank.

This resulted in continuing growth in all the countries where Triodos Bank operates. This was due in part to a growing profile, more efficient and customer-friendly account opening processes, and an increasingly receptive market.

The speed of growth was most marked in Spain with customer numbers doubling to 61,000, and the opening of five new commercial offices during the year. In The Netherlands Triodos Bank now services 197,000 customers, again reflecting strong growth during the year.

In 2011, 440 organisations received total donations of EUR 0.5 million. (impact statistic)

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 2011, 440 organisations (2010: 438) received total donations of EUR 0.5 million (2010: EUR 0.4 million) in this way.

Loans

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

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 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.

Outstanding loans per sector in 2011

Outstanding loans per sector in 2011 (pie chart)

Environment (49%, 2010: 49%)

This sector consists of renewable energy projects such as wind and solar power, biomass, hydroelectric, 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 (28%, 2010: 28%)

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 (12%, 2010: 14%)

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 Triodos Investment Management).

The loan portfolio as a percentage of the total amount of funds entrusted rose to 76% in 2011 (2010: 70%). Triodos Bank’s goal is to lend between 70% and 80% of its funds entrusted.

The quality of the loan book remained satisfactory overall, notwithstanding the economic recession. However, energy production based on biomass was an exception. This new sector has been subject to volatile demand which is reflected by high price volatility. The increased loan loss provisions resulted in EUR 15.8 million (2010: EUR 9.8 million) value adjustments, of which EUR 6.8 million (2010: EUR 4.8 million) relate to biomass energy projects. Although the impact on the results is material, the net exposure to the biomass energy sector only represents 1% (EUR 34 million) of the total loan book. This contributed to the loan loss provision of 0.63% of the average loan book (2010: 0.52%). Our long-term internal benchmark for provisions is 0.25%. These provisions are taken to protect banks against losses resulting from defaults by borrowers.

Growth of the loan portfolio amounted to EUR 710 million, or 33%. (impact statistic)

 

Growth of the loan portfolio amounted to EUR 710 million, or 33%. Expected growth was between 20 and 25%. Competition between banks in the lending market has diminished because of the financial crisis and higher capital requirements. At the same time many banks regard sustainability as an emerging market and want to be involved in it.

Lending to a diverse range of sustainable enterprises was up in all branches, with particular growth in the UK, up by 40%, Belgium by 32%, and Spain by 23%. Germany, in its second full year of operation made loans of EUR 167 million, exceeding its target.

Prospects for the European branch network

Triodos Bank’s balance sheet total is expected to continue to grow by between 15 and 20%.

All branches will broaden their customer base. The number of customers is expected to grow by between 15 and 20% across the Group.

The loan portfolio and the funds entrusted are expected to increase by between 15 and 20%. Triodos Bank has a healthy growth ambition but does not want to realise it at all costs. The loans made in 2012 will reflect our 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 to a lower level.