Equity and liabilities

The deposits from banks concerns deposits received from Kreditanstalt für Wiederaufbau, Germany and Landwirtschaftliche Rentenbanken, Germany for interest-subsidised loans in the renewable energy sector.

The deposits from central banks relates to the TLTRO III (hereafter ‘TLTRO’) funding with the ECB. Up to 23 June 2022, the interest rate applied on all TLTRO operations outstanding was 50 basis points below the average interest rate on the deposit facility prevailing over the same period, and in any case not higher than -1%, if lending conditions under the program were met. The lending condition was met by Triodos Bank.

As of 23 June 2022 until maturity, the interest rate applied on all TLTRO operations outstanding was the average deposit rate over the lifetime of the TLTRO. The ECB has communicated on the 27th of October 2022 that the interest rate of TLTRO will match the rate at which the funds are placed at the ECB as of 23 November 2022. Additionally, the ECB added voluntary early repayment options. Because of this adjustment to the interest rates, Triodos Bank has decided to early repay the TLTRO per 23 November 2022. The interest rate between 23 June 2022 and 23 November 2022 was -0.31%.

Deposits from banks classified by residual maturity can be broken down as follows:

Deposits from customers classified by residual maturity can be broken down as follows:

The balance sheet value of the other liabilities as at 31 December can be broken down as follows:

The other liabilities fall due within one year for an amount of EUR 81 million (2021: EUR 55 million).

The increase of the other accruals and deferred income mainly relates to deposits from customers who cannot fulfil the requirements regarding the Customer Due Diligence. These deposits will be offboarded.

In May 2022, Triodos Bank announced its intention to optimise its resources and deliver increased impact for the bank’s customers and investors. This restructuring will help the bank to realise cost savings of approximately EUR 11-12 million. The restructuring is aiming to optimise the Bank through integration and enables Triodos Bank to reduce 130 to 150 positions across the banking activities by the end of 2024. The reduction of positions will be achieved through natural attrition, redeployment and redundancies. To enable this restructuring, Triodos Bank has recorded a restructuring provision of EUR 5.0 million, representing the cost related to redundancies. Any costs related to ongoing business such as retraining or relocating employees and consulting fees are not provided for.

In 2021, a provision of EUR 2.3 million was recorded in relation to a sale in 2019 of an investment within a managed investment fund that had been marked, in retrospect, for a fiscal claim, in which case part of the received management fee might need to be repaid. This provision has been released in 2022 due to developments that have made the probability of future payments highly unlikely.

An amount of EUR 5.1 million (2021: EUR 3.2 million) can be classified as shorter than one year.

The movement of the other provisions is as follows:

Loan commitments issued result in issued loans when offers are signed or when commitments are used. The following table shows the movements within the ECL on loan commitments issued.

In 2021, Triodos Bank realised a successful placement of a subordinated Green Bond. The Green Bond has a nominal value of EUR 250 million, a tenor of 10.25 years, and a coupon of 2.25% for the first five and a quarter years after which there is an option to early redeem the bond. If the bond is not early redeemed, the interest rate is reset to maturity at 2.4% above the annual Euro mid swap rate. The Green Bond has been placed below nominal value at 99.497%. The placement of the Green Bond results in an increase of the Tier 2 Capital which is a diversification of the Total Capital of Triodos Bank.

The Green Bond has been issued taking into account the ICMA Green Bond Principles, Climate Bond Initiative Standards and the EU Taxonomy recommendations. It has been assessed by a Second Party Opinion as best market practice on all components. This confirms Triodos Bank’s ambition to ‘finance change and change finance’ and underlines its position as frontrunner in sustainable banking.

The movement of the subordinated Green Bond issued is as follows:

The 10-year Triodos Bank UK Ltd. bond (retail investors) was issued in 2020 by Triodos Bank UK Ltd. The bond was issued at nominal value in GBP. The annual interest coupon is 4% for the first five years after which there is an option to early redeem the bond. If the bond is not early redeemed, the interest rate is reset to maturity at 3.9% above the Bank of England base rate. The bonds are subordinated to all other liabilities.

The movement of the Triodos Bank UK Ltd. bond issued is as follows:

Share capital

The equity stated on the consolidated balance sheet is equal to that stated on the parent company balance sheet. The authorised capital totals to an amount of EUR 1.5 billion and is divided into 30 million ordinary shares, each with a nominal value of EUR 50. At year-end, there were 14,467,056 ordinary shares (2021: 14,467,056 shares), each of EUR 50, issued to and fully paid up by Stichting Administratiekantoor Aandelen Triodos Bank. As at the same date, Stichting Administratiekantoor Aandelen Triodos Bank had also issued 14,467,056 depository receipts (2021: 14,467,056 depository receipts), each with a nominal value of EUR 50.

The purchasing and reissuing of depository receipts for own shares is charged or credited respectively to the Other reserves. Any balance remaining after the re-issuing of all own depository receipts purchased shall be placed at the disposal of the Annual General Meeting. More details on capital ratios are included in the Pillar 3 report which can be found on the website of Triodos Bank.

The movement of the number of shares is as follows:

Share premium reserve

This item includes the share premium reserve, which is composed of deposits that exceed the nominal capital. The full balance of the share premium reserve has been recognised as such for tax purposes.

Translation reserve

The translation reserve includes the currency translation result of foreign operations and the effective portion of the net investment hedge on foreign operations.

Cost of hedging reserve

The cost of hedging reserve relates to the forward component of the net investment hedges which are recognised as cost of hedging.

Fair value reserve

The fair value reserve relates to the unrealised value adjustments in respect of the acquisition price for participating interests.

Other reserve

The other reserve is a regulatory reserve for in-house developed intangible assets and is not available for distribution to shareholders. The movement in the other reserve for development costs of internally developed intangible assets is as follows:

The following table shows the movement in the other reserve related to the in-house developed intangibles assets.

Retained earnings

The movement in retained earnings includes purchasing of own depository receipts, the addition of prior year profit appropriation to retained earnings, and the payment an of extraordinary dividend. At year-end 2022, Triodos Bank had purchased 250,634 own depository receipts amounting to EUR 21,556 thousand (2021: 250,634 own depository receipts amounting to EUR 21,556 thousand).

Following the announcement on 1 August 2022 of the withdrawal of the restricted buyback programme of DRs, Triodos Bank announced a proposal to pay an extraordinary dividend payment of EUR 1.01 (before withholding tax, where applicable) per DR, to the amount of EUR 14.4 million. This amount equals the capital reserved for the buyback programme and solidarity arrangement, which was withdrawn. The amount reserved for this programme was thus paid back to DR holders.

Profit appropriation

As set out in the Articles of Association, the appropriation of profit is as follows:

Part of the profit as reported in the adopted profit or loss account shall be used by the Executive Board to form or add to the reserves to the extent that this is deemed desirable. The remaining profit shall be distributed to the shareholders, unless the General Meeting decides otherwise.

The Board of SAAT invited the Executive Board during the AGM of 20 May 2022 to carefully consider its dividend decisions and explore the possibility of an interim dividend during the financial year. The Executive Board has considered the request and decided to pay an interim cash dividend of EUR 0.35 (before withholding tax, where applicable). The Interim Cash dividend was paid at the same time as the proposed Extraordinary dividend of EUR 1.01 following the Extraordinary General meeting on October 11, 2022, where the updated dividend policy, and the considerations made in this regard was shared.

The proposed appropriation of profit is based on the number of depository receipts issued as at 31 December 2022, minus the number of depository receipts purchased by Triodos Bank. The final proposal will be submitted at the Annual General Meeting.

The proposed appropriation of profit (in thousands of EUR) is as follows:

For the year result of 2022, Triodos Bank proposes a final dividend of EUR 1.76 per depository receipt, equivalent to a 50% pay-out ratio (the percentage of total profit distributed as dividends). This proposed final dividend is on top of the interim dividend of EUR 0.35 per depository receipt that has been paid out in October 2022. The proposed final dividend has been approved by the Dutch Central Bank.