Presentation

Bank J.Van Breda & C° NV

AvH: 78.75%

(€ 1,000) 2017 2016
Bank product 141,380 133,964
Net result 39,081 37,736
Shareholders' equity 538,718 518,257
Balance sheet total 5,424,639 4,992,240
Client assets 13,742,754 12,448,468
Loan portfolio 4,528,679 4,223,318
Net loan loss provision (%) 0.04 0.01
Cost-income ratio (%) 59.1 59.4
Return on equity (%) 7.4 7.4
Core Tier1-capital ratio (%) 14.2 14.8
Solvency ratio (RAR) (%) 14.9 15.8
Personnel 471 471

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Management

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Bank J.Van Breda & C°

Beneficial interest AvH: 78.75%
AvH Contact: Jan Suykens
www.bankvanbreda.be

Bank J.Van Breda & C° is a specialized advisory bank focusing exclusively on entrepreneurs and liberal professionals. ABK bank positions itself as an asset manager for private clients. Van Breda Car Finance offers car finance and leasing services through car dealers.

Information from the 2017 annual report

Financial overview 2017

In 2017, Bank J.Van Breda & C° again reported a solid commercial performance. The commercial volumes (total invested by client + lending to clients) increased by 10%, from 16.7 billion euros at year-end 2016 to 18.3 billion euros at year-end 2017.

The bank’s equity increased to 539 million euros, with a 7.4% return on equity (ROE). The consolidated net profit amounted to 39.1 million euros (+4% compared with 2016), which is a good performance given the bank’s conservative investment policy and the persistently low interest rates.

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Growth in off-balance sheet investments and bank product

The consolidated bank product increased by 6% to 141 million euros. Realized capital gains, dividends and results of hedging instruments represent less than 3% of the total bank product, which is hence almost entirely commercially driven. The interest result decreased by 2%, despite the increase in deposits (+8%) and loans (+7%). This is a consequence of a flat yield curve, the pressure on the interest margin, and the bank’s strategy of prioritizing security over performance in its investment portfolio. The net fee income increased by 16%, driven by a 12% growth in off-balance sheet products of clients.

The investment trajectory of previous years continued unabated. The bank’s own fully integrated IT platform puts Bank J.Van Breda & Co in an excellent position to take full advantage of the opportunities presented by the digitization. The bank also continues to invest in new branch offices and in commercial strength.

The costs increased by 5% to 83.6 million euros, primarily as a result of those forward-looking investments in commercial strength. Thanks to a high level of efficiency, the cost-income ratio decreased further from 59.4% in 2016 to 59.1% in 2017.

 

Increase in invested funds and lending

The total invested by clients increased by 1.3 billion euros, or 10%, to more than 13.7 billion euros. This testifies to the clients’ confidence in their bank. The total loan portfolio increased by 7% to more than 4.5 billion euros.

The provisions for loan losses remained limited to 0.04% of the average loan portfolio, or 1.7 million euros. Nevertheless, this cautious policy didn’t limit lending, causing the consolidated loan portfolio to grow by 7%.

 

Strong liquidity and solvency

Its cautious approach guarantees a comfortable liquidity position for Bank J.Van Breda & Co at all times. The Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) stood at 143% and 121% respectively, which is well above the requisite lower limit of 100%. The Core Tier1 capital ratio amounted to 14.2%. The loan portfolio is financed entirely from client deposits, making the bank independent from external funding on the international markets.

The equity (group share) increased from 518 million euros to 539 million euros. This allows the bank to sustain commercial growth without losing a healthy leverage, which is the best protection for the depositors. The solvency expressed as equity to assets (leverage ratio) stood at 8.9%, well above the 3% which the regulator wants to introduce at the earliest by 2018 under Basel III.

Operational overview 2017

Bank J.Van Breda & C°

The trend of steady commercial growth continued in 2017. With an overall increase of 1.3 billion euros (+11%), the total invested by entrepreneurs and liberal professionals amounted to 13.4 billion euros.

Despite a context of low interest income, the client deposits increased by 325 million euros (+8%) to a total volume of 4.3 billion euros. The growth is virtually entirely attributable to the current accounts. Thanks to its asset management strategy, Bank J.Van Breda & C° also has a substantial volume of long-term deposits. Despite the low interest rates, the outflow of those deposits remained limited.

The off-balance sheet products increased by 1 billion euros (+12%) to 9.1 billion euros, of which 5.4 billion euros is managed by Delen Private Bank.

Thanks in part to the improved economic climate and despite stiff competition, the volume of lending to entrepreneurs and liberal professionals increased by 274 million euros (+7%) to 4.1 billion euros.

 

ABK bank

As a result of a merger with Bank J.Van Breda & C° on 17/11/2017, ABK bank is now a division of Bank J.Van Breda & C°. Since the acquisition in 2011, ABK bank has repositioned itself as a premium bank for individuals. ABK assists clients in building up, managing and protecting their assets with a view to the long-term. In so doing, ABK bank continues to honour the tradition of simple and transparent products.

ABK bank reported a strong commercial performance by attracting new clients with investments. The bank’s external profile was reinforced by its sponsoring of the Belgian Bullets, the successful Belgian women’s bobsleigh team. The contract runs until the 2018 Winter Olympics.

At year-end 2017, clients had entrusted 358 million euros worth of assets (+4%). Within the category of client deposits, there was an outflow of non-core clients, which was more than compensated by the increase in off-balance sheet products of the core clients. This increase was to be found in asset management and the funds of Delen Private Bank as well as in investment insurance.

The loan portfolio decreased by 16.6 million euros to 108 million euros. This decrease is almost entirely attributable to the decrease of professional loans, which has ceased to be the strategic focus since the acquisition.

Despite all the investments and the development of greater commercial strength, the costs decreased by 6%.

 

Van Breda Car Finance

In a slightly growing car market (+1.3% in new passenger car registrations), Van Breda Car Finance recorded a strong commercial performance. The new production volume increased by 20% in 2017, while the portfolio increased by 15% to 367 million euros. Thanks to the further increase of the share of financial leasing in the total production volume, the interest margin increased.

Provisions for loan losses increased, but still remained low at just 0.14% of the average loan portfolio. This means that Van Breda Car Finance reported a good result in 2017 as well.

 

Outlook 2018

The strong financial results of 2017 were supported by the good stock market climate and a renewed optimism among European consumers and businesses. The European economy is currently being driven by a widespread positive momentum, inspiring the European Central Bank (ECB) to start tightening its policy after the example of the Federal Reserve (US central bank). This turnaround, however, may be accompanied by some degree of nervousness. It should also be remembered that the present recovery cycle is now the second longest in the modern economic era.

The continuing pressure on interest margins, the high bank taxes and the necessary investments in the future affect profit growth. Nevertheless, Bank J.Van Breda & C° remains well equipped for the future in each of its three areas of activity.

The goodwill, reputation, positioning, constant investments and sound financial structure of the bank constitute a solid basis for a long-term financial growth.

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