Our key objectives in 2022

How we performed

Progress at a glance

1. Business model enhancement: safeguarding our long-term sustainable business model.

Keep focus on profitable business lending growth and close monitoring of the portfolio

Growth of our business lending portfolio in 2022 was determined by balancing the maximisation of positive impact with the need to meet a minimum profitability hurdle, which in 2022 we increased to 6% on average. Despite the challenging environment, leading to modest loan production in the first half of the year, close monitoring of the portfolio combined with the increasing interest rate environment resulted in solid returns by year-end.

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Further enlarge our assets under management and related fee income and leverage the bank investment distribution strategy

Together with the lingering effects of the COVID-19 pandemic, the geopolitical crisis in Ukraine and energy price-induced inflation have adversely affected stock markets and asset valuations across the globe. This was no different for Triodos Bank. We experienced a significant decrease in funds under management inflow, leaving growth levels below desired levels. Nonetheless, we made progress in the realisation of this objective by further implementing our distribution strategy and by launching the Triodos Future Generations Fund, aimed at improving the well-being and development of children worldwide.

Pursue balanced growth in mortgages, carefully considering impact, risk and return

Overall, our mortgages portfolio developed according to expectations, with average yields surpassing the targets we set for 2022. As a key milestone, we launched the first-ever bio-based mortgage proposition in the Netherlands, stimulating homeowners to use ecological building materials and offering a reduced interest rate for bio-based homes.

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Take measures to ensure balance between rates and fees

As has been the case for many financial institutions, the historic change in interest rates by the ECB as of July 2022 required close monitoring of developments to ensure the best course of action in bringing rates and fees more in line with economic reality. We reacted appropriately to rising short-term interest rates in the second half of the year, which allowed for us to maintain balanced pricing power and realise our volume targets.

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2. Operational optimisation: building the cultural foundations for optimisation and improving operational processes.

Achieve the change roadmap business cases of:

  • digitalising the banking operating model,

  • protecting our licence to operate,

  • improving customer experience,

  • reducing costs.

We implement projects in our change portfolio that allow us to remain compliant, while improving customer experience and organisational efficiency through digitalisation and process optimisation. Last year, we made important progress in all these areas. Financial and non-financial value was notably delivered through our Mobile, Investments and Customer Experience initiatives. We realised step-ups in our digital onboarding and the digitalisation of our investment proposition in the United Kingdom.

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Create efficiency by implementing our Triodos Operating Model

In 2021, we developed cases to structurally harmonise processes across our organisation. These aim to strengthen our organisation so that we can live up to our mission and respond to client needs more effectively in the long term. In 2022, the necessary preparations for implementation of these initiatives were made and we successfully deployed the first process harmonisation and governance-related changes in the organisation.

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3. Risk management optimisation: safeguarding our licence to operate and managing inherent banking business risks to stay within our modest risk appetite.

Living up to our responsibility by strengthening our control environment

Our focus continues in 2022 on strengthening our control environment through investments in our co-workers and the implementation of process and technology. Overall, we remained on track with our KYC and FC maturity improvement plan. We developed and deployed standards related to policy, data, portfolio risk and client due diligence reporting across the Group. Further, we have improved risk management across the organisation with the launch of a new governance and risk control tool. This new tool will allow for improving risk controls and system-embedded process flows to enhance collaboration across the organisation, thereby living up to our ambition to further strengthen our control environment.

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4. Financial management optimisation: managing our balance sheet and profitability effectively and efficiently.

Execute the capital strategy as decided upon end-year 2021

In 2021, we announced the decision to work towards listing our Depository Receipts (DR) on a Multilateral Trading Facility (MTF). In 2022, we developed and communicated a detailed roadmap which was implemented according to plan. At the end of last year, we reached a critical milestone in this process and invited Dutch DR holders to access the MTF platform operated by Captin for the first time. This allows DR holders to experience first-hand that we are making tangible progress towards listing of the Depository Receipts on the platform and restoring tradability. Lastly, we expanded the retained residential mortgage-backed securitisation (RMBS) Sinopel 2019 in November 2022. This supports us in increasing our liquidity resilience and allows for using more of the funds entrusted to us to create additional positive impact.

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