How the world looked in 2014
Historically low central bank interest rates, and even negative interest rates on some savings products for the first time in countries such as Germany, characterised another difficult economic year. Despite this, sustainability has become more deeply linked to many people’s lives.
This trend has led some banks to launch high profile campaigns to position themselves as more ethical and transparent. Challenger banks have emerged in the UK in particular, increasing diversity in some areas of the financial sector. Many of these newer entrants promote themselves as offering an alternative to the status quo in banking, and tap into some of the public’s appetite for more fundamental change in the banking industry.
Greater diversity is good for the financial industry and, when these commitments to sustainability are genuine, good for the wider banking industry. Increasingly people choose Triodos Bank as their first bank because it meets most of their financial needs and is aligned with their values. This has resulted in growth in savings, lending and investments during the year.
Balanced and sustained growth since it was established means Triodos Bank is now a mid-sized bank. It is subject to significant regulation as a result, and wants to continue to be a well-run, effective organisation with a long term perspective. These internal and external pressures led to an important programme of internal governance improvements during the year, at Triodos Bank’s head office as well as in its branches. Triodos Bank is better positioned to increase its positive impact as a result.
While branches were able to grow the loan book, ensuring a healthy balance between them and the inflow of deposits continues to create a longer-term challenge.
How we did
Becoming the First Bank for our Customers
Offering a full set of services and high quality customer service to personal and business customers, and increasing the volume of our transactions with them, is crucial for Triodos Bank to increase its impact and fulfill its mission. Sustainable mortgages, for example, continue to be a unique product in some markets. Triodos Bank’s mortgage in Spain was celebrated as one of the 100 best business ideas in a high profile economic magazine.
In The Netherlands in particular small and medium-sized enterprises increasingly have embraced a more sustainable economy, with many entrepreneurs applying for both loans and also transferring their business banking needs such as current account services.
In Spain, the balance sheet grew by 15% (2013: 38%). Growth in clients, funds entrusted and loans was lower than expected as a result of changes in the financial sector such as higher costs involved in meeting regulation and lower margins in an increasingly competitive lending market. The use of a full set of banking services extended substantially with 1,000 more Point of Sale machines in use and approximately 200 new sustainable mortgages.
Work continued on developing a personal current account in the UK. The account is planned for launch in early 2016.
Triodos Bank wants to grow its capital so it can continue to develop and expand its activities, particularly lending.
In 2014 a total of EUR 23 million in new capital was raised in The Netherlands, Belgium, Spain the UK and Germany, attracting over 1,200 new depository receipt holders. Depository receipts were actively sold to clients and prospects in Germany for the first time, raising over EUR 2 million.
In Belgium growth was strong in loans (20% 2013: 15%), Triodos Investment Management funds (63% 2013: 65%) and Private Banking (33% 2013: 61%). In a context of low interest rates, the funds entrusted and new clients (7% 2013: 16%) grew less than during the previous year. The introduction of a current account for retail clients in Belgium was postponed following an in-depth feasibility study.
Triodos Bank’s representative office in France continued to develop its activities in line with plans, but is not yet a fully-fledged branch.
Engaging in a learning organisation
Triodos Bank encourages co-workers to participate in a co-creative way.
To this end it was accredited as a Living Wage employer in the UK during 2014, guaranteeing that all permanent co-workers, third-party contractors and suppliers working at Triodos Bank receive pay which is significantly higher than the national minimum wage. It also moved to a new office in Scotland, which will be the base for an expanding business banking team in the country from 2015.
A co-worker’s conference is organised every year bringing a broad group of co-workers together. In 2014 it was hosted in Belgium in close cooperation between the head office and the Belgian branch. The Belgian branch organised a theme day focused on ‘health and social care’ during the year, bringing internal and external experts together to help develop the important sector.
The Spanish branch improved its internal communication to better engage coworkers. Meetings between co-workers and borrowers started to take place on a monthly basis within the bank, helping to build a connected Triodos Bank community. They will continue in 2015.