Van Lanschot NV Annual General Meeting of Shareholders ‘s-Hertogenbosch, 8 May 2008
Item 2a Report of the Board of Managing Directors for 2007 1
Van Lanschot’s strategy (I) Distinct positioning Real alternative to the large banks Independence is our distinguishing feature Full-service niche bank Large enough to provide full-service concept to target groups Small enough to ensure genuine personal service Client intim acy The client is key, also in terms of client due diligence Best in class products / full open architecture Private Banking Wealthy private individuals Business Banking Enterprises and entrepreneurs - combined Aligned to private banking 2
Van Lanschot’s strategy (II) - Objective: to be the best private bank in the Netherlands and Belgium - Increased focus on asset management and advice for the higher segments - Specialist teams offering tailor-made solutions - Emphasis on asset planning - Deliberate choice for a low risk profile 3
Van Lanschot’s strategy (III) - The statutory client due diligence requirements demand a great deal from the organisation - A strict and systematic approach is necessary - The Board of Managing Directors enforces the importance of risk management and client due diligence in the form of objectives and behaviour 4
Financial targets 2 0 0 7 Target Growth in EPS (% ) 8.4 > 10 Growth in income (% ) 28.6 > 5 Efficiency ratio (% ) (1) 64.0 50 – 60 Return on shareholders’ funds (% ) 16.9 18.0 * BIS total capital ratio (% ) 12.0 12.5 BIS Tier I ratio (% ) 9.0 9.5 BIS Core Tier I ratio (% ) 6.7 7.5 Credit rating A A (1) Excluding the amortisation of intangible assets arising on the acquisition of Kempen & Co, the efficiency ratio was 61.9% * On average 5
Net profit Net profit for 2007 rises 16.7% to € 215.4 million 215,369 CAGR 1 7 .7 % 184,488 152,398 119,400 106,664 97,576 90,008 80,759 62,443 49,583 1 9 9 8 1 9 9 9 2 0 0 0 * *2 0 0 1 * * 2 0 0 2 2 0 0 3 2 0 0 4 * 2 0 0 5 2 0 0 6 2 0 0 7 * Excluding effects of the acquisition of CenE Bankiers * * Excluding extraordinary income Net profit 1 9 9 8 – 2 0 0 7 ( € m illion) 6
Return on shareholders’ funds Target: average 18% 1 7 .4 1 7 .0 1 6 .9 1 6 .4 1 6 .3 1 6 .1 1 5 .7 1 5 .6 1 4 .9 1 3 .1 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 Return on shareholders’ funds 1 9 9 8 – 2 0 0 7 ( % ) 7
Earnings per share 8.4% growth in EPS in 2007 5 .9 4 Average number of 5 .4 8 outstanding shares + 7.9% CAGR 1 4 .7 % due to the acquisition of 4 .6 5 Kempen 4 .1 1 3 .6 6 3 .3 3 3 .0 0 2 .7 1 2 .1 2 1 .7 3 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 * 2 0 0 5 2 0 0 6 2 0 0 7 * Excluding effects of the acquisition of CenE Bankiers Earnings per share 1 9 9 8 – 2 0 0 7 ( € ) 8
Dividend per share Amount available to shareholders in 2007 € 6.04 3 .0 0 2 .7 5 Proposed dividend of CAGR 1 5 .2 % 2 .5 0 € 3.00 per share (+ 9.1% ) 2 .1 1 Pay-out ratio: 49.7% 1 .8 3 1 .6 3 1 .5 0 1 .3 5 0 .9 4 0 .8 4 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 Dividend per share 1 9 9 8 – 2 0 0 7 ( € ) 9
Van Lanschot: total return for shareholders (price increase + dividend) in 2007 of 6% 7 6 7 4 7 2 7 0 6 8 6 6 6 4 J A N F EB MAR APR MA Y J U N JU L AU G SEP O CT N O V D EC VAN L AN SCH O T S o u r ce : D A T A S T R E A M 10
Share price Van Lanschot vs SNS, ING and Fortis, January 2007 – to date 1 2 0 1 1 0 1 0 0 9 0 8 0 7 0 6 0 5 0 4 0 J F M A M J J A S O N D J F M A M Va n L a n sch o t Ba n k ie r s F o r t is I N G G r o e p SN S Re a a l S o u r ce : D A T A S T R E A M 11
Van Lanschot vs Julius Baer, Vontobel, Credit Suisse and UBS, January 2007 – to date 1 6 0 1 4 0 1 2 0 1 0 0 8 0 6 0 4 0 2 0 J F M A M J J A S O N D J F M A M Va n L a n sch o t Ba n k ie r s Cr e d it Su isse Ju liu s Ba e r U BS S o u r ce : D A T A S T R E A M Vo n t o b e l 12
Annual profit for 2007 climbs 16.7% - Strong growth in clients and funds entrusted continues - Income from operating activities rose 28.6% to € 648.0 million in particular thanks to substantially higher commission income - Net profit up 16.7% to € 215.4 million - Earnings per share € 5.94, an increase of 8.4% - Proposed dividend of € 3.00, an increase of 9.1% 13
Net profit for 2007 H2: Gain on sale of Assurantiën of € 20.8 million 1 1 3 .8 Kempen had an excellent H1 2 0 .8 thanks to the positive stock markets and the performance fees received. Gain on sale The negative sentiment on Net profit the equity markets in H2 led 1 0 1 .6 to fewer securities 9 3 .0 transactions H 1 2 0 0 7 H 2 2 0 0 7 Net profit for 2 0 0 7 ( € m illion) 14
Kempen & Co - Acquisition of Kempen & Co reinforces private banking profile – Van Lanschot Kempen – Kempen Capital Management - Investment expertise of Kempen used to offer clients a wider range of products and services - Kempen is specialist in European property and European small and midcap equities; new funds were introduced in 2007: - Kempen Property Hedge Fund - Orange Global High Dividend Fund - Orange European Participations - Kempen Capital Management positioning itself as asset manager for Dutch institutional parties 15
Van Lanschot capitalises on consolidation battle Private banking strategy and takeover battle in the Dutch 7 .1 financial sector in 2007 led to substantial inflow of new clients and funds entrusted Savings accounts and 4 .0 deposits of private clients 3 .3 + 77.5% to € 7.1 billion 2 .4 2 .2 Assets under discretionary management for private clients + 10.5% to € 6.3 billion Number of private clients 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 increased by 7.2% Savings accounts and deposits of private clients 2 0 0 3 – 2 0 0 7 ( x € billion) 16
Assets under Management and funds entrusted 1 4 .6 2 9 .9 2 8 .1 4 .8 1 1 .4 4 .4 5 .8 5 .1 9 .8 Funds ent rust ed: In- house funds priv at e c lient s 6 .6 Funds ent rust ed: Inst it ut ions c orporat e 1 9 .3 1 8 .6 Priv at e c lient s 4 .8 4 .8 2 0 0 6 2 0 0 7 2 0 0 6 2 0 0 7 Total assets under m anagem ent ( x € billion) Funds entrusted ( x € billion) 17
Assets under Discretionary Management 1 5 .4 1 4 .7 0 .3 1 .0 4 .8 4 .4 In- house funds 4 .0 4 .9 Inst it ut ions 1 5 .4 1 4 .7 Priv at e c lient s 6 .3 5 .7 2 0 0 6 2 0 0 7 1 - 1 - 2 0 0 7 Ne t ne w Ma rke t 3 1 - 1 2 - 2 0 0 7 a sse t s pe rform a nce Assets under discretionary m anagem ent Developm ent in 2 0 0 7 ( x € billion) ( x € billion) 18
Low risk profile - Deliberate choice for low risk profile; in line with profile of a private bank - No direct or indirect investments in subprime sector, no CDOs, no SIVs - High-quality loans portfolio - Loans almost exclusively provided to Dutch companies and Dutch and Belgian wealthy private individuals - No loans to hedge funds - 138.6% of non-performing loans covered by provision for impairments - Lending on the interbank market to parties with at least a Single A rating; no loans to independent investment banks 19
Solid liquidity position Funding ratio in 2007 up 9 5 from 77.4% to 91.2% Target: further growth in 9 0 funding ratio in 2008 € 1.5 billion RMBS 8 5 securitisation in H1 2007 8 0 Repayment of € 1 billion in Floating Rate Notes in 2008: - Early repayment of € 600 7 5 million FRN 2012 - No refinancing of € 400 million FRN 2008 7 0 3 1 - 1 2 - 0 3 3 1 - 1 2 - 0 4 3 1 - 1 2 - 0 5 3 1 - 1 2 - 0 6 3 1 - 1 2 - 0 7 Funding ratio 2 0 0 3 – 2 0 0 7 ( % ) 20
Segment analysis 9% Other activities 25% 11% Corporate Finance and Securities 10% 26% Business Banking 19% Asset Management 17% 12% Private Banking 37% 34% 2006 2007 Operating profit before tax by segm ent 21
Solid financial position -- BIS total capital ratio 1 6 12.0% (target 12.5% ) 1 4 -- BIS Tier I ratio 9.0% (target 9.5% ) 1 2 -- BIS core Tier I ratio 6.7% 1 0 (target 7.5% ) 8 Basel II: standardised approach per 1-1-2008 6 4 Risk weighted assets + 16.2% to € 13.6 billion 2 Return on shareholders’ 0 funds 16.9% 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 (target average 18% ) Capital ratios 2 0 0 3 – 2 0 0 7 ( % ) 22
Developments in Q1 2008 (I) - Consolidation battle in the Netherlands provides opportunities for attracting new clients and new private bankers - Inflow of new clients continued in the first three months of 2008 - Inflow of funds entrusted continues, albeit at a slightly slower pace than last year - Further increase in funding ratio and capital ratios 23
Developments in Q1 2008 (II) - Financial markets are still continuing to feel the impact of the credit and confidence crisis - The unrest on the financial markets is putting pressure on commission income; in the first three months of 2008, commission income lagged strongly behind last year 24
Recommend
More recommend
