Personnel and other administrative expenses

Amounts in thousands of EUR

2022

2021

Personnel expenses

 

 

  • salary expenses

108,681

98,065

  • pension expenses

14,005

13,143

  • social security expenses

18,979

16,790

  • temporary co-workers

26,351

24,023

  • other staff costs

10,080

7,579

  • capitalised co-worker costs

-11,260

-9,670

Total personnel expenses

166,836

149,930

 

 

 

Average number FTE's during the year

1,632.6

1,532.7

Amounts in thousands of EUR

2022

2021

Other administrative expenses

 

 

  • IT costs

19,165

19,398

  • external administration costs

13,101

11,641

  • fees for advice

20,941

15,721

  • advertising charges

8,030

8,947

  • office costs

6,150

6,170

  • accommodation expenses

5,128

5,283

  • fees for independent auditor

2,471

2,439

  • travel and lodging expenses

1,546

931

  • other expenses1

12,902

7,809

Total other operating administrative expenses

89,434

78,339

 

 

 

Regulatory expenses

18,343

20,455

Total other administrative expenses

107,777

98,794

 

 

 

Operating expenses/total income

80%

80%

Operating expenses excluding regulatory expenses/total income

75%

75%

1

The other expenses has increased due to the creation of a reorganisation provision in the amount of EUR 5.0 million.

Accounting policy

Expenses are recorded at the moment when they are incurred, or over time if the expense relates to a period.

Pension expenses

Amounts in thousands of EUR

2022

2021

Pension expenses, defined contribution schemes

14,005

13,143

Total pension expenses

14,005

13,143

The pension expenses for the defined contribution schemes and the defined benefit pension schemes are based on the contributions owed for the financial year.

Accounting policy

Defined contribution plan

Triodos Bank has a number of defined contribution pension schemes. Premiums are paid based on contractual and voluntary basis to insurance companies on a defined contribution basis. Premiums are recognised as employee cost when they are due. Prepaid contributions are recognised as deferred assets if these lead to a refund or reduction of future payments. Contributions that are due but have not yet been paid are presented as liabilities.

Defined benefit plan

The Belgian Branch has a minimum yield requirement to their defined contribution pension scheme which results in an actuarial provision which is determined on each reporting date. Changes to the actuarial provision are charged to the other comprehensive income and are not recycled to the profit or loss accounts in subsequent periods. The increase in the provision due to the passage of time is recognised as interest expense.

Pension scheme per country

Triodos Bank's pension scheme in The Netherlands is a defined contribution scheme. The commitment to the participating co-workers consists of paying the outstanding contribution to a maximum of the gross annual salary of EUR 114,886.

In The Netherlands, co-workers of related parties also participate in the pension scheme. The total pension commitment and the resulting expenses are reported here in note 27. Part of the expenses are charged to the respective related parties, based on their share of the total salaries of the participating co-workers.

The Triodos Bank pension schemes in the United Kingdom, Spain and Germany are defined contribution schemes that have been placed with life insurance companies in those countries. The commitment to the participating co-workers consists of paying any outstanding contribution. Participation in the pension scheme is obligatory for co-workers in Belgium, Spain and  the United Kingdom. In Belgium the pension scheme is considered a defined benefit scheme for which co-workers' contribution is 2% of salary and the employer's contribution is 6%. In Spain, the pension contribution is 1.5% of salary, paid in full by the employer. In the United Kingdom, the co-workers’ contributions are optional with those who opt to do so contributing between 1% and 62% of their salary, and the employer's contribution amounts to 8% or 10% of salary depending on length of service.

In Germany, participation in the pension scheme is voluntary. The co-workers' contribution is 3.33% of the salary and the employer's contribution is 6.67%. In Germany 98% of the co-workers participate in the pension scheme.

Independent auditor’s fees

The table below specifies the fees of the PricewaterhouseCoopers Accountants N.V. (‘PwC Accountants NV’) audit firm that relates to services concerning the financial year. The comparable figures 2021 have been adjusted to take into account the invoices received after the reporting period.

The column Other PwC network specifies the fees that were invoiced by PwC units with the exception of PwC Accountants NV.

2022

PwC

Other

 

Total

Amounts in thousands of EUR

Accountants N.V.

PwC network

 

PwC network

Audit of the financial statements

1,534

651

 

2,185

Other audit-related engagements

41

245

 

286

Tax-related advisory services

-

-

 

-

Other non-audit services

-

-

 

-

Total

1,575

896

 

2,471

 

 

 

 

 

2021

PwC

Other

 

Total

Amounts in thousands of EUR

Accountants N.V.

PwC network

 

PwC network

Audit of the financial statements

1,307

592

 

1,899

Other audit-related engagements

293

117

 

410

Tax-related advisory services

-

-

 

-

Other non-audit services

-

-

 

-

Total

1,600

709

 

2,309

Our independent auditor, PwC Accountants N.V., has rendered, for the period to which our statutory audit 2022 relates, in addition to the audit of the statutory financial statements the following services to the company and its controlled entities. 

Other audit services required by law or regulatory requirements:

  • Statutory audits of controlled entities

  • Audit of the regulatory returns to be submitted to the Dutch Central Bank and the National Bank of Belgium

  • Assurance engagement on cost price models to be submitted to the AFM

  • Assurance engagement on segregation of assets to be submitted to the AFM

  • Assurance engagement on TLTRO reporting to be submitted to the ECB

  • Client Money and Custody Asset (CASS) Assurance Report

  • Agreed upon procedures on interest rate risk to the Dutch Central Bank

  • ISAE type II on Deposit Guarantee Scheme reporting to the Dutch Central Bank

Other audit services:

  • Assurance engagement on the sustainability report

  • ISAE type II engagement relating to Triodos Investment B.V.

  • Assurance engagement on credit claims to the Dutch Central Bank

  • Assurance engagement on credit claims to the Spanish Central Bank

  • Comfort letter

  • Review engagement on the interim condensed consolidated financial statements as of and for the six month period ended 30 June 2022

Regulatory expenses

The regulatory expenses can be broken down as follows:

Amounts in thousands of EUR

2022

2021

Bank tax

3,454

3,557

Depository Guarantee Scheme

12,998

15,721

Single resolution fund

1,891

1,177

Total regulatory expenses

18,343

20,455

Depreciation, amortisation and value adjustments of property and equipment, and intangible assets

Amounts in thousands of EUR

2022

2021

Amortisation of intangible fixed assets

13,908

11,687

Impairment of intangible fixed assets

-

333

Amortisation & impairment charge for the year

13,908

12,020

 

 

 

Depreciation of property and equipment

8,103

8,549

Impairment of property and equipment

-142

2,274

Total depreciation of ROUA

3,214

3,352

Assets held-for-sale value adjustments

234

44

Depreciation of investment properties

164

239

Depreciation & impairment charge for the year

11,573

14,458

Impairment result on financial instruments

Amounts in thousands of EUR

2022

2021

Allowance for expected credit loss

8,023

-500

Other impairments on financial instruments

104

80

Total impairment result on financial instruments for the year

8,127

-420

Taxation on operating result

Total taxation expense

Amounts in thousands of EUR

2022

2021

Taxation to be paid

13,517

13,836

 

 

 

Origination and reversal of temporary differences

3,627

2,402

Changes in tax rates

-

152

Deferred taxation

3,627

2,554

 

 

 

Total taxation expense

17,144

16,390

Current tax receivable and payable

Amounts in thousands of EUR

2022

2021

Corporate tax receivable

1,113

1,364

Other tax receivable

362

366

Current tax receivable

1,475

1,730

Amounts in thousands of EUR

2022

2021

Corporate tax payable

5,335

5,740

Other tax payable

6,878

7,132

Current tax payable

12,213

12,872

Amounts recognised in OCI

 

 

2022

 

 

2021

 

Amounts in thousands of EUR

Before tax

Tax
(expense) benefit

Net of tax

Before tax

Tax
(expense) benefit

Net of tax

Other comprehensive income that will not be reclassified to profit or loss

 

 

 

 

 

 

Revaluation gains/(losses) on equity instruments designated at fair value through other comprehensive income

5,279

-1,329

3,950

2,784

-677

2,107

 

 

 

 

 

 

 

Other comprehensive income that will be reclassified to profit or loss

 

 

 

 

 

 

Foreign operations – foreign currency translation differences

56

-

56

-97

-

-97

Foreign operations – Cost of hedging

252

-

252

172

-

172

Total items that will be reclassified to profit or loss

308

-

308

75

-

75

 

 

 

 

 

 

 

Total amounts recognised in OCI

5,587

-1,329

4,258

2,859

-677

2,182

The other comprehensive income for Triodos Bank consists of revaluations of equity instruments at fair value through OCI and foreign currency translation differences. The equity instruments at fair value through OCI are part of investment securities (refer to note 5 Investment securities), for which any realised result will not subsequently be taken into the profit or loss. The foreign currency translation difference relates to the UK subsidiary for the part not subject to the net investment hedge. Tax on both of these items can be subject to the participation exemption under Dutch Tax Law.

Reconciliation of effective tax rate

Amounts in thousands of EUR

2022

2021

Result before taxation

67,084

67,149

Statutory tax rate

25.8%

25.0%

 

 

 

Statutory tax amount

17,308

16,787

 

 

 

Income Non Taxable

-41

-222

Tax Deduction Not Expensed

-

-

Expenses Non Deductible

2,040

1,338

Impact tax rate differences - statutory rate foreign jurisdictions

-434

-327

Restatement of deferred taxation items as the result of amended tax rates

-

152

Incentives for gifts, community investment and innovation

-1,365

-1,408

Other reconciling items

-364

70

Effective tax amount

17,144

16,390

 

 

 

Effective tax rate

25.6%

24.4%

Triodos Bank’s approach to tax reflects its values. It sees paying taxes not as a burden, but as a contribution to the societies that the bank operates in. As such, Triodos Bank is not striving to reduce the effective tax rate. Triodos Bank is subject to income taxes in other jurisdictions which levy corporate income tax at different rates compared to the Dutch statutory rate (25%). Additionally, local taxation rules can also lead to differences in the effective tax rate. The effective tax rate amounted to 25.6% in 2022 (2021: 24.4%).

Movement in deferred tax balances

2022

 

 

 

Balance as at 31 December

Amounts in thousands of EUR

Net balance as at
1 January

Recognised
in profit or loss

Recognised
in OCI

Net

Deferred tax assets

Deferred tax liabilities

Property and equipment, and intangible assets

-6,380

-1,523

-

-7,903

1,435

9,338

Investment securities at FVOCI

-146

16

-1,330

-1,460

-53

1,408

Effective interest method application

4,791

-2,246

-

2,545

2,545

-

Allowance for expected credit losses

2,124

305

-

2,429

2,429

-

Employee benefits

193

-57

-

136

-

-136

Lease liability

123

2

-

125

46

-79

Loan modifications

38

-9

-

29

28

-1

Tax losses carried forward

6,036

-875

-

5,161

5,540

379

Other

520

760

-

1,280

1,215

-66

Tax assets (liabilities)

7,299

-3,627

-1,330

2,342

13,185

10,843

2021

 

 

 

Balance as at 31 December

Amounts in thousands of EUR

Net balance as at
1 January

Recognised
in profit or loss

Recognised
in OCI

Net

Deferred tax assets

Deferred tax liabilities

Property and equipment, and intangible assets

-4,860

-1,520

-

-6,380

1,879

8,259

Investment securities at FVOCI

665

-134

-677

-146

-57

89

Effective interest method application

4,543

248

-

4,791

2,766

-2,025

Allowance for expected credit losses

3,228

-1,104

-

2,124

1,466

-658

Employee benefits - Vitality leave

181

12

-

193

-

-193

Lease liability

128

-5

-

123

59

-64

Loan modifications

47

-9

-

38

37

-1

Tax losses carried forward

6,118

-82

-

6,036

7,084

1,048

Other

480

40

-

520

383

-137

Tax assets (liabilities)

10,530

-2,554

-677

7,299

13,617

6,318

Deferred tax balances

 

2022

2021

Amounts in thousands of EUR

Deferred tax assets

Deferred tax liabilities

Deferred tax assets

Deferred tax liabilities

Current balance

303

1,822

233

1,002

Non-current balance

12,882

9,021

13,384

5,316

Total

13,185

10,843

13,617

6,318

The deferred tax asset relates for an amount of EUR 5.5 million (2021: EUR 6.4 million) to tax losses incurred by the German branch for which it is expected that these will be fully recovered against future taxable profits. Under the German corporate income tax code, tax losses have no expiration date. The remaining deferred tax asset relates to temporary differences because of differences between accounting rules and tax rules.

The deferred tax liability relates for an amount of EUR 9.4 million (2021: 8.3 million) to taxable temporary differences on self-developed software. From an accounting perspective these assets are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to profit or loss over the asset's estimated economic life using the straight-line method that best reflect the pattern of economic benefits. For Dutch tax purposes the Dutch corporate income tax act 1969 allows to fully expense self-developed software in the year developed.

Fiscal unity

Triodos Bank, as a parent company, forms a tax unity for corporate income tax purposes with Triodos Investment Management as subsidiary. The method chosen for the taxation set-off between Triodos Bank and its subsidiary is that of proceeding as if the legal entities were independently liable to pay tax. In fact, the legal entities are jointly and severally liable for the tax liabilities of the companies belonging to the fiscal unity.

Accounting policy

Income tax on the result for the year consists of current and deferred tax. Income tax is recognised in the statement of profit or loss and in the statement of other comprehensive income in the period in which profits arise. Current tax is measured using tax rates enacted at the balance sheet date.

Deferred income tax is provided, using the liability method, on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is calculated using tax rates expected to apply in the periods when the assets will be realised or the liabilities settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date. Deferred tax assets and liabilities are not discounted.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences can be utilized. The tax effects of income tax losses available for carry forward are recognised as an asset to the extent that it is probable that future taxable profits will be available against which these losses can be utilised.

Current tax receivables and payables are offset where there is a legally enforceable right to offset and where simultaneous treatment or settlement is intended. Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset and where they relate to the same tax authority and arise within the same taxable entity.

Related Parties

Triodos Bank enters into various transactions with related parties, as part of the normal course of business,

Related parties of Triodos Bank include, among others, its subsidiaries, associates and key management personnel. Transactions between related parties include rendering or receiving of services, deposits, transfers under finance arrangements and provisions of guarantees or collateral. All transactions with related parties took place at arm's length.

There are no significant provisions for doubtful debts or individually significant bad debt expenses recognised on outstanding balances with related parties.

Overview of related parties transactions

Amounts in thousands of EUR

Other related parties

Commission income

64,438

Commission expenses

-5,280

Deposits

103,381

Interest income

1,403

Interest expense

-23

Loan facilities and loan commitments (off balance)

167,997

Loans

24,531

Transactions with related parties

The commission income and commission expenses are related to fund management activities. The deposits and interest income are transactions following from regular banking activities, which are offered to the related parties at competitive rates. These transactions are interest fee and unsecured and are to be settled in cash.

Loans

The loans granted to other related parties are provided to Hivos-Triodos Fund Foundation, Triodos SICAV II (TMF), Legal Owner Triodos Funds B.V., Sun Roof Limited and to several related parties from the Spanish branch.

The EUR 10.4 million loan provided to Hivos-Triodos Fund Foundation matures on January 1, 2027 and has an interest rate of 3.15%. Furthermore, Hivos-Triodos Fund Foundation has drawn EUR 7 million from an overdraft facility with an agreed limit of EUR 10 million and an interest rate of 6.06%.

Furthermore, the EUR 193 thousand loan provided to Sun Roof Limited matures on November 10, 2027 and has an interest rate of 6.5%. A total of EUR 14 million has been provided as loans to several related parties from the Spanish branch, including a EUR 5.5 million loan to Caprio Fotovoltaica, S.L.U. (maturity date of January 1, 2033 and an interest rate of 2.85%), a EUR 8.4 million loan to Lucentun Energia S.L. (maturity date of January 1, 2034 and an interest rate of 3.85%).

In 2022, the Netherlands branch purchased 9 business loans with a nominal value of EUR 73.4 million from Triodos Groenfonds NV. The loans were transferred at the fair value of EUR 63 million. The price of the transaction was at arm's length and externally validated. These business loans are with third parties and are therefore per year-end not a related party exposure.

Loan commitments and facilities off balance

The loan commitments and facilities are off balance sheet credit facilities of Triodos Bank the Netherlands branch that can be drawn upon by the other related parties.

These facilities are secured by means of collateral in the form of fund assets that cover the facility provided in full.

Key management personnel compensation

Transactions with key management personnel are transactions with related parties. The members of the Executive Board, supervisory board and the board of Stichting Administratiekantoor Aandelen Triodos Bank ("SAAT") are considered to be key management personnel and their compensation is therefore included in the tables below.

The remuneration paid to the members of the Executive Board is as follows:

Amounts in thousands of EUR

2022

2021

Fixed salary expenses

1,334

1,131

Pension expenses

129

99

Pension allowance for salary above EUR 100.000

135

128

Private use company car

32

12

Social security expenses

71

53

Severance payment1

-

264

Total key management personnel compensation

1,701

1,687

1

In consultation with the Supervisory Board Jellie Banga stepped down from her position as a Member of the Executive Board of Triodos Bank N.V. as per 1 May 2021. A severance payment of 100% of her yearly salary was granted. The severance payment is in line with applicable regulations.

Remuneration paid to the Supervisory Board:

Amounts in thousands of EUR

2022

2021

Total compensation

182

179

Remuneration paid to the Board of SAAT

Amounts in thousands of EUR

2022

2021

Total compensation

59

46

Loans and advances to key management personnel

There are no loans and advances provided to Executive Board members that were outstanding on 31 December 2022 and 2021. No other loans, advances or guarantees have been granted to members of the Executive Board, Supervisory Board members or members of Board of SAAT. For reasons of principle, no share option scheme is offered to members of the Executive Board, Supervisory Board members or members of Board of SAAT.

Segregation of capital

Triodos Bank N.V. holds securities on behalf of its customers segregated from the assets and liabilities of the bank. A part of these securities are held by its related party Triodos Nominees Ltd.

The following securities are segregated from the assets and liabilities of the bank:

Amounts in thousands of EUR

2022

2021

Triodos Fair Share Fund

319,046

331,457

Triodos Groenfonds N.V.

485,666

620,803

Triodos Sicav I

628,292

1,154,878

Triodos Sicav II

7,820

32,898

Triodos Impact Strategies N.V.

173,351

26,345

Triodos Impact Strategies II N.V.

100,092

71,982

Total as at 31 December

1,714,267

2,238,363

Triodos Impact Strategies N.V. holds on behalf of its sub-fund Triodos Multi Impact Fund as at 31 December 2022 EUR 5,633 thousand (2021: 6,807 thousand) of securities Triodos Fair Share Fund and EUR 3,759 thousand (2021: 3,913 thousand) of securities Triodos Groenfonds N.V.. These securities are included in the above mentioned values of securities in Triodos Fair Share Fund and Triodos Groenfonds N.V.

Accounting policy

All legal entities that can be controlled, jointly controlled or significantly influenced are considered to be a related party. Also entities which can control Triodos Bank are considered to be a related party. In addition, statutory directors and close relatives are regarded as related parties. The nature, extent and other information is disclosed if this is necessary in order to provide the required insight.

Subsequent events

There are no subsequent events that are of material nature for the annual accounts.