Argenta Spaarbank Financial results second half 2018 March 2019 - PowerPoint PPT Presentation

Argenta Spaarbank Financial results second half 2018 March 2019

Disclaimer This document has been prepared by the management of Argenta Spaarbank NV (hereafter “ Argenta Spaarbank ”) and contains general information and information with regard to the results of Argenta Spaarbank of the second half of 2018. The financial statements are prepared in accordance with IFRS and the figures are audited. This document does not constitute or form part of, and should not be construed as, an offer, solicitation or invitation to subscribe for, underwrite or otherwise acquire, any securities of Argenta Spaarbank or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of Argenta Spaarbank or any member of its group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Argenta Spaarbank shall not be responsible for the use of the (content of the) document or decisions based thereon. This document includes non-IFRS information and forward-looking statements that reflect Argenta Spaarbank's intentions, beliefs or current expectations concerning, among other things, the results, financial condition, liquidity, performance, prospects, growth, strategies and the industry in which Argenta Spaarbank operates. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause the actual results, financial condition, liquidity, performance, prospects, growth or opportunities, as well as those of the markets it serves or intends to serve, to differ materially from those expressed in, or suggested by, these forward-looking statements. These forward-looking statements are no guarantees of future performance and that its actual results, financial condition and liquidity and the development of the industry in which Argenta Spaarbank operates may differ materially from those made in or suggested by the forward-looking statements contained in this document. In addition, even if Argenta Spaarbank's results, financial condition, liquidity and growth and the development of the industry in which Argenta Spaarbank operates are consistent with the forward-looking statements contained in this document, those results or developments may not be indicative of results or developments in future periods. The information included in this document has been provided to you solely for your information and background and is subject to updating, completion, revision and amendment and such information may change materially. Unless required by applicable law or regulation, no person is under any obligation to update or keep current the information contained in this document and any opinions expressed in relation thereto are subject to change without notice. No representation or warranty, express or implied, is made as to the fairness, accuracy, reasonableness or completeness of the information contained herein. Neither Argenta Spaarbank nor any other person accepts any liability for any loss howsoever arising, directly or indirectly, from this document or its contents. 2

Agenda 1. Key takeaways 2. Strategy and Business Profile 3. Financial Performance 4. Asset Quality 5. Solvency and Liquidity 6. Wrap up 7. Appendices 3

1. Key takeaways 2H 2018  Solid financial performance in 2H 2018 despite persisting low interest rate environment:  Adjusted 1 net profit of 59 million EUR in 2H 2018, leading to a FY 2018 result of 130 million EUR and ROE of 6.8%.  2.7 billion EUR 2 new loans granted in 2H 2018 to the Belgian and Dutch households, up 3% yoy in Belgium and even 110% yoy in the Netherlands. Retail mortgage loan production market share at 6.5% in Belgium and 2.5% in the Netherlands.  Net interest margin increased to 1.35%, up 5 basis points yoy.  Funds under management remained stable at 39.7 billion EUR with a decrease of 3% to 6.3 billion EUR mainly as a result of adverse stock market movements in 2H 2018. Fee income further increased to 48 million EUR compared to 2H 2017 (+7% yoy) and stable in comparison with 1H 2018.  Higher net interest income and net fee and commission result were compensated by lower net financial gains on debt securities and higher operating expenses, leading to an increase of the cost/income ratio for FY 2018 to 56% (excluding bank levies).  Robust capital and liquidity position:  Fully loaded BIII IRB CET 1 at 23.1%, TCR of 29.0%, well in excess of the SREP requirement.  Sound liquidity position with LCR of 170% and NSFR of 141%. (1) Adjusted for IFRIC21 (which requires full year bank levies to be recognised on 1 January) – linear amortization of levies over FY2018 (2) New loans granted, excluding internal refinancing 4

2. Strategy and Business Profile 5

2. Argenta Group Strategy and Business Profile simple and easy-to-understand business model  Integrated bank-insurance business model focussed on fruitful long term Market share 1 relationships with its retail clients, employees, tied agents, family shareholders Deposits 0,7% and investors. Mortgage loans 2,5%  Offering simple and transparent bank and insurance products and free of charge payment and custodial services.  Broad reach through a strong network of independent agents in Belgium, third party distribution in the Netherlands, complemented by a user-friendly digital platform.  Unrivalled levels of customer satisfaction, loyalty and brand strength:  Internal and external NPS surveys show top notch results.  Voted best Savings and Current Account by Bankshopper.be in 2017 and 2018.  Voted best bank – General Satisfaction by the independent inquiry by Spaargids.be in Market share 1 2018.  Voted best bank of Belgium by Spaargids.be in 2017 Deposits 8,3% Investment funds 3,8%  Identified as strongest bank brand strength in Flanders in 2016 in a study published by Mortgage loans 2 5,6% Life insurance 5,9% the Benchmark Company. Non-life insurance 2,2%  Integrated operating model creating cost synergies and efficiencies. (1) Total portfolio for Banking and Investment products 6 (2) Adjusted source data compared to 1H 2018

2. Overview of Key Financial Data FY 2018 Argenta Group 1 Argenta Assuranties 3 Argenta Spaarbank 1 Net result 174.4 m Net result 130.0 m Net result 52.5 m Return on Equity 6.7% Return on Equity 6.8% Return on Equity 13,0% Total assets 45.9 bn Total assets 39.6 bn Total assets 6.6 bn Total equity 2.7 bn Total equity 2.0 bn Total equity 0.5 bn Cost / Income 2 Cost / Income 2 64% Premium Life 4 69% 656 m Total funds under mgmt 45.0 bn Total funds under mgmt 39.7 bn Premium Non-life 141 m CET 1 (BIII fully loaded) 3 23.0% CET 1 (BIII fully loaded) 23,1% Solvency II 273% Credit Rating Standard & Poor’s Short-term A-2 Long-term A- Outlook Positive Note: all numbers are stated in EUR (1) Consolidated (2) Cost / Income ratios excluding bank levies are 52% for Argenta Group and 56% for Argenta Spaarbank – see next slide (3) BGAAP 7 (4) Including universal life unit linked

2. Financial Objectives FY 2018 Argenta Spaarbank FY 2017 FY 2018 Target Return on Equity 7.5% 6.8% >8% Leverage Ratio (fully loaded) 4.9% 4.7% >4% Cost / Income Ratio (excluding bank levies) 51% 56% 40% CET 1 Ratio (BIII fully loaded) 25.9% 23.1% >18% Total Capital Ratio (BIII fully loaded) 32.6% 29.0% >20% Net Interest Margin (NIM) 1.34% 1.37% >1.4% NSFR 143% 143% >120% LCR 162% 170% >125% 8

3. Financial performance 9

3. Overview FY result 2018 Net result (mEUR) Net result walk Actual - Actual (mEUR) 16 3 2 36 193 190 34 173 8 4 139 130 139 130 instruments Net result Net interest commission Bank levies Operating expenses Impairments Taxes Net result Dec/17 Net fee & Dec/18 financial G/L on result result 2014 2015 2016 2017 2018  FY 2018 result of 130 million EUR compared to 139 million EUR in the previous year.  Net financial and fee income up 5% yoy due to increase in net interest income (up 7%), net fee and commission income (up 6%) and despite lower realized gains on financial assets.  Operating expenses (including net other operating result and bank levies) up 15% mainly driven by digital and IT investments.  Continuing decreases in non-performing loans ratios for mortgage loans and maintaining of conservative credit and impairment standards, combined with a zero default investment portfolio results in a positive cost of risk of 3 mio. 10