Growing impact through sustainable finance
Triodos Bank wants to maintain or establish itself as the leading bank for the sustainable sectors. Increased lending means more impact, both for sustainable businesses and households, via green mortgages. Lending continued to grow and diversify in most country operations during the year.
Triodos Bank in the Netherlands’ loan book grew, by 17 % or EUR 429 million, both in mortgages (38%) and in business loans (2%). The primary focus of mortgages is to incentivise making homes more sustainable.
Triodos Bank Germany’s loan book grew, by 18% (2018: 13%) or 84 EUR million. New lending was more diversified in 2019, including strong growth in the sustainable property sector and a first deal to provide easier access to finance and install rooftop solar-systems.
In Spain, our focus has been on balancing growth and profitability of our loan portfolio. While we lent over EUR 1.411 million (2018: 1.402 million), EUR 357 million was repaid, resulting in a moderate growth of 0.6%. Our sustainable mortgage portfolio grew by 18.2% to EUR 253 million.
The UK total loan book grew to GBP 976 million (EUR 1,152 million), an increase of 11% on 2018, with highlights including the launch of a new Creative Growth Finance fund to support the creative sector, lending to RSPB (the UK’s largest nature conservation charity) to help install renewable energy projects across its nature reserves and a strong year for a specialist smaller loans team.
In 2019, the net additions to the provision for doubtful debts, as a percentage of the average loan portfolio, was 0.05 % (2018: 0.05%). The total of provisions related to the outstanding credits is 0.4% (2018: 0.5%) as at the end of the year.
Triodos Bank has worked hard to deliver a better balance between deposits and loans, managing growth in the former and focusing on increasing the latter. This ratio increased in 2019, to 77% from 76% in 2018 and continues to be in a healthy balance.
Large numbers of people are attracted to the idea of using their money consciously and are, therefore, willing to open a new account with Triodos Bank. This awareness is thanks largely to the strength of the Triodos Bank brand and its solid reputation in all countries. Savings continued to grow in all countries where Triodos Bank operates during the year. However, downward pressure on interest rates, leading to low, and even no, interest on savings accounts – as well as more limited proactive marketing to make sure that loans and deposits grow in balance – has reduced this rate of growth.
Triodos Bank in The Netherlands increased its funds entrusted by EUR 633 million (2018: EUR 476 million). It was serving 370,000 customers at the year’s end.
Triodos Bank UK now has 61,000 customers following strong growth in recent years and the introduction of a personal current account in 2017. Funds entrusted increased by GBP 83 million (8%) to GBP 1,156 million (2018: GBP 98 million).
In Spain, awareness of social and environmental issues continued to grow including a peak at the end of the year with the Climate COP25 taking place in Madrid. This should be set against the resistance of some individuals and institutions to change lifestyles and business models in a meaningful way. This dilemma was reflected in Triodos Bank’s retail business where higher consciousness about the use of money and the culture of free banking co-exist. Triodos Bank Spain maintained funds entrusted at EUR 2.043 million. Business accounts’ fees were adjusted, bringing prices closer to market standards, while delivering unique social value.
Triodos Bank Germany increased the number of customers by 24% during the year. As a result, the funds entrusted grew by 26% in Germany (2018: 32%). It now serves almost 27,500 customers.