Interest income

Amounts in thousands of EUR

2022

2021

Loans and advances to customers

244,948

212,530

Loans and advances to banks

15,304

341

Debt securities at amortised cost

11,556

10,597

Negative interest expense on TLTRO III

9,757

13,703

Negative interest expense deposits from customers

5,683

6,441

Other interest income

631

2,708

Total interest income

287,879

246,320

The interest income includes income derived from loans and related transactions, as well as related commissions, which by their nature are similar to interest payments. The interest income on debt securities at amortised cost includes no sales result in 2022 (2021: EUR -236.0 thousand).

The negative interest expense on TLTRO III relates to the negative interest on the TLTRO III funding received from the ECB under Deposits from banks (refer to note 13 on page Deposits from banks).

Accounting policy

Interest income on financial instruments is determined using the effective interest rate method. The effective interest rate allocates the interest income over the expected life of the asset or liability at the rate that exactly discounts all estimated future cash flows to equal the instrument's initial carrying amount.

Calculation of the effective interest rate takes into account fees payable or receivable that are an integral part of the instrument's yield, and transaction costs. All contractual terms of a financial instrument are considered when estimating future cash flows.

Triodos Bank calculates interest income on financial assets, other than those considered credit-impaired, by applying the effective interest rate to the gross carrying amount. When a financial asset becomes credit impaired and is therefore regarded as 'Stage 3', the interest income is calculated by applying the effective interest rate to the net amortised cost.

Interest expense

Amounts in thousands of EUR

2022

2021

Deposits from customers

-12,070

-5,674

Subordinated liabilities

-6,297

-1,194

Deposits from banks

-1,041

-663

Negative interest income loans and advances to banks

-8,175

-13,598

Negative interest income debt securities

-1,463

-1,009

Other interest expense

-5,743

-2,712

Total interest expense

-34,789

-24,850

 

 

 

Net interest income

253,090

221,470

During 2022, interest rates on deposits from customers increased resulting in a sharp increase in interest expense on deposits from customers.

Negative interest income loans and advances to banks mainly relates to negative interest paid on cash at central banks up to July 2022. The decrease is caused by the increase in the ECB deposit rate from -0.5% to a positive deposit rate. The positive interest received on cash held at central banks is recorded in interest income.

In the other interest expense, a total of EUR 3.7 million (2021: EUR 1.3 million) was included for the interest on currency forward contracts.

Accounting policy

Interest expense on financial instruments is determined using the effective interest rate method. The effective interest rate allocates the interest expense over the expected life of the asset or liability at the rate that exactly discounts all estimated future cash flows to equal the instrument's initial carrying amount.

Investment income

Amounts in thousands of EUR

2022

2021

Dividend from investment securities

616

310

Investment income

616

310

Accounting policy

Investment income includes the dividend income from investments in equity instruments designated at fair value through other comprehensive income (FVOCI). Dividend income is recognised when the right to receive income is established. Usually, this is the ex-dividend date for quoted equity securities. Dividends on equity instruments designated as at FVOCI that clearly represent a recovery of part of the cost of the investment are presented in OCI.

Net fee and commission income

Disaggregation of fee and commission income

In the following table, fee and commission income from contracts with customers in the scope of IFRS 15 is disaggregated by major type of services. The table also includes a reconciliation of the disaggregated fee and commission income with the Group’s reportable segments.

The fees and commission presented in this note include income of EUR 15.7 million (2021: EUR 14.0 million) relating to financial assets and financial liabilities not measured at FVTPL. These figures exclude amounts incorporated in determining the effective interest rate on such financial assets and financial liabilities.

Asset management fees include fees earned by Triodos Bank on trust and fiduciary activities in which the Triodos Bank holds or invests assets on behalf of its customers.

For the year ended 31 December

Reportable segments

 

 

 

Bank Netherlands

Bank Belgium

Bank United Kingdom

Bank Spain

Bank Germany

Total banking activities

Investment Management

Other

Total

Amounts in thousands of EUR

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

Transaction fee securities

1,249

1,318

-

-

-

-

-

1

-

-

1,249

1,319

-

-

-

-

1,249

1,319

Payment transactions1

24,415

23,974

121

105

187

175

4,004

3,309

2,634

2,007

31,361

29,570

-

-

-

-

31,361

29,570

Lending

6,760

5,037

2,076

2,340

1,550

1,837

2,715

2,629

1,940

1,302

15,041

13,145

-

-

-

-

15,041

13,145

Asset Management1

12,230

12,822

2,493

2,745

-

-

-

-

491

-

15,214

15,567

-

-

-

-

15,214

15,567

Management fees

-

-

3,442

3,266

844

615

315

269

65

-

4,666

4,150

59,160

54,383

1,476

1,482

65,302

60,015

Other commission income

-

-

-

1

2,550

2,297

2,934

3,581

1

764

5,485

6,643

-

-

3

4

5,488

6,647

Total fee and commission income from contracts with customers

44,654

43,151

8,132

8,457

5,131

4,924

9,968

9,789

5,131

4,073

73,016

70,394

59,160

54,383

1,479

1,486

133,655

126,263

Financial guarantee contracts and loan commitments

68

73

-

-

-

-

362

383

204

393

634

849

-

-

-

-

634

849

Total fee and commission income

44,722

43,224

8,132

8,457

5,131

4,924

10,330

10,172

5,335

4,466

73,650

71,243

59,160

54,383

1,479

1,486

134,289

127,112

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commission to agents

-

-

-34

-289

-

-

-5

-6

-

-

-39

-295

-

-

-

-

-39

-295

Asset Management

-441

-916

-

-

-

-

-

-

-

-

-441

-916

-4,532

-3,654

-

-

-4,973

-4,570

Other commission expense

-

-

-1,472

-651

-2,322

-1,774

-2,680

-2,450

-1,533

-1,259

-8,007

-6,134

-218

-65

-149

-

-8,374

-6,199

Total fee and commission expense

-441

-916

-1,506

-940

-2,322

-1,774

-2,685

-2,456

-1,533

-1,259

-8,487

-7,345

-4,750

-3,719

-149

-

-13,386

-11,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net fee and commission income

44,281

42,308

6,626

7,517

2,809

3,150

7,645

7,716

3,802

3,207

65,163

63,898

54,410

50,664

1,330

1,486

120,903

116,048

1

Service fees on investment accounts are reclassified from payment transactions to asset management. The comparative figures in the amount of EUR 6.5 million are adjusted accordingly.

Accounting policy

Fee and commission income from contracts with customers is measured based on the consideration specified in a contract with a customer. Triodos Bank recognises income when it transfers control over a service to a customer. The following table provides information about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related income recognition policies.

Type of service

Nature and timing of satisfaction of performance obligations, including significant payment terms

Income recognition

Transaction fee securities

Fee charged to customers for processing security transactions. Fee is charged when the transaction is settled.

Income related to transactions is recognised at the point in time when the transaction takes place.

Payment transactions:
Current and savings account subscriptions

Fee charged for opening and maintaining current and savings accounts. Fee is charged on a monthly basis for each month the account is active.

Income related to transactions is recognised at the point in time when the transaction takes place.

Payment transactions:
Transaction fees

Fee charged for processing payment transactions of customers. Fee is charged when the transaction is processed.

Income related to transactions is recognised at the point in time when the transaction takes place.

Lending

Fee charged as part of the lending process, not an integral part of the effective interest rate. These fees are charged either at the start of the loan of during the lifetime.

Income related to transactions is recognised at the point in time when the transaction takes place.

Asset Management

Asset management fees include fees earned by Triodos Bank on trust and fiduciary activities in which the Triodos Bank holds or invests assets on behalf of its customers. Payment is due on at least quarterly basis.

Income from account service and servicing fees is recognised over time as the services are provided, at the latest on the moment of payment.

Management fees

Asset management fees include fees earned by Triodos Investment Management on asset management activities for clients or Triodos Investment Funds. Payment is due on at least quarterly basis.

Income from account service and servicing fees is recognised over time as the services are provided, at the latest on the moment of payment.

Other

These are other fees charged to clients. Payment is mostly due when transactions are settled.

Income related to transactions is recognised at the point in time when the transaction takes place.

Net result from other financial instruments at FVTPL

Amounts in thousands of EUR

2022

2021

Hedge accounting ineffectiveness

1,245

34

Fair value movement of derivatives not yet in a hedge relationship

-1,461

1,017

Fair value movement of participating debt at fair value through profit or loss

116

986

Net result from other financial instruments at FVTPL

-100

2,037

For further details on hedge accounting, refer to Non-trading derivatives and hedge accounting within the risk management section.

Accounting policy

Net result from other financial instruments at FVTPL includes the fair value movements of derivatives not yet designated in a hedge relationship, ineffectiveness related to hedge accounting, transactions results on foreign exchange forwards and net result on investments in debt instruments designated at fair value through profit o loss, including the related interest income.

Other income

Amounts in thousands of EUR

2022

2021

Exchange results for foreign currency transactions

39

-44

Transaction results on currency forward contracts

17

23

Realised results assets not in use1

219

1,225

Income assets not in use1

70

183

Modification result

268

27

Other income

183

652

Total other income

796

2,066

1

Assets not in use relates to acquired collateral on written off loans.

For further information on the hedge accounting ineffectiveness, please refer to Non-trading derivatives and hedge accounting .

The other income relates to fees for other services performed and results from asset disposals.