Personnel and other administrative expenses
Amounts in thousands of EUR | 2022 | 2021 |
|---|---|---|
Personnel expenses |
|
|
| 108,681 | 98,065 |
| 14,005 | 13,143 |
| 18,979 | 16,790 |
| 26,351 | 24,023 |
| 10,080 | 7,579 |
| -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 |
|
| |||||||
| 19,165 | 19,398 | |||||||
| 13,101 | 11,641 | |||||||
| 20,941 | 15,721 | |||||||
| 8,030 | 8,947 | |||||||
| 6,150 | 6,170 | |||||||
| 5,128 | 5,283 | |||||||
| 2,471 | 2,439 | |||||||
| 1,546 | 931 | |||||||
| 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% | |||||||
| |||||||||
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 | Net of tax | Before tax | Tax | 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 | Recognised | Recognised | 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 | Recognised | Recognised | 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 | |||||||
| |||||||||
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.