Global, European and national action has brought sustainability to the heart of government, business and individual’s lives. Despite the backdrop of an increasingly polarized political environment, in many countries where Triodos Bank operates dialogue about the role of business and finance in society, continued to be prominent throughout 2018 demonstrating an appetite for change increasingly supported by real action.
This continuing trend has also led many banks to promote themselves as more ethical and transparent and to compete more actively for sustainable loans and investments in 2018, which continues to create more competition for Triodos Bank in all the countries where it operates. This provides more motivation for Triodos Bank to promote itself as an authentic, values-based bank of the new economy.
Large numbers of people continue to choose Triodos Bank as their first bank because it meets their financial needs and is aligned with their values. Savings, lending and investments again grew during the year on the strength of this continuing interest in using money more consciously.
Higher costs, lower margins and greater impact: the challenge for the banking sector.
Historically low central bank interest rates continued throughout 2018, in part because of the oversupply of money from quantitative easing – the authority’s monetary answer to a lack of economic growth during the year. The European Central Bank made a commitment to end its quantitative easing (QE), subject to various financial conditions being met and the Bank of England made a small increase to its base rate during the year. This was, however, only the second increase in a decade. While low interest rates are good for borrowers, they are generally bad news for ordinary depositors.
The higher costs of meeting regulation and lower margins because of low interest rates and competition for personal and business customers (either solely on price or from banks eager to lend to attractive ‘sustainable’ loans) increased during the year. Collectively, these issues continue to put pressure on Triodos Bank’s profitability. For many banks, including on occasion Triodos Bank, this has meant increasing fees to their customers for products and services.
Despite a challenging environment for lending the branches grew the loan book, which is critical to increasing Triodos Bank’s impact. Ensuring a healthy balance between the growth of the loan portfolio and a relatively strong inflow of deposits continues to be an important point of attention.
How we did
Triodos Bank continued to extend its impact during the year across all its sustainable sectors.
Offering sustainable products and services with a purpose, as well as 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 fulfil its mission.
In some countries, such as The Netherlands and Spain, Triodos Bank provides a full set of services. In Belgium, a new mobile app was launched, providing private and professional customers with both mobile access to their accounts and fully transparent information about which projects are financed thanks to their deposits. While in the UK a new Triodos crowdfunding platform now provides direct investment opportunities in pioneering organisations delivering positive change.
Triodos Bank expanded its presence and impact during the year.
Triodos Bank wants to grow its capital so it can continue to develop and expand its activities, particularly lending. In 2018 a total of EUR 83 million in new capital was raised across Triodos Bank’s European network (2017: EUR 77 million), attracting over 2,300 (or 2,339) net new depository receipt holders.
Triodos Banks’ activities in Triodos Finance in France continued to develop successfully during 2018.
Customer satisfaction research, conducted during the year, showed Triodos Bank continues to develop and benefit from strong relationships and customer’s willingness to recommend it. The organisation’s Net Promoter Score (NPS), based on asking retail customers in all the countries where Triodos Bank operates whether they would recommend Triodos Bank to a friend or colleague remained almost the same at 25 (2017: 27). The figure, which calculates the difference between Triodos Bank ‘promoters’ and ‘detractors’ continues to outperform the average for large banks, although it not as good as some direct banks. Triodos Bank’s principles as a sustainable bank are the main reason to recommend the bank according to the research and are becoming even more important. Almost all of our customers (97%) cite this as the main reason to recommend Triodos Bank to others. There was also a significant improvement in the NPS for business clients up from 14 in 2017 to 20 this year. We also assessed Triodos Investment Management for the first time, with a notably high NPS of 53.
In Germany Triodos Bank was recognised as the ‘best sustainable bank’ for the third year in a row by Banking Check, a leading voluntary organisation monitoring banking performance. The award results from customer feedback.
Triodos Bank in the UK was named ‘Investor of the Year’ at BusinessGreen Leaders awards, recognising support and financing for the roll out of clean technologies, green infrastructure and sustainable business models across Europe.
Being a learning organisation
Triodos Bank fosters a co-creative culture rooted in its values-based mission. Process improvement training took place across the organisation to underpin Triodos Bank’s work during the year.
During 2018, it continued to send participants to work with colleagues from other sustainable banks across Europe, under the auspices of the Institute of Social Banking.
In Belgium a number of colleagues engaged in local Process Improvement Training, as part of a Group-wide Process Improvement Pioneers Programme. The Customer Administration team initiated a continuous process improvement path, in parallel, with internal customer, employee and enhanced client satisfaction as key goals.