New Year speech Floris Deckers, ’s-Hertogenbosch, 8 January 2010
Van Lanschot maintains its solid position
'“Confidence in the banking sector has been seriously dented in the past period. One of the most important objectives for the sector as a whole is the return of the public’s confidence in the banking sector. Restoring this confidence should be given the highest priority since this is essential for the proper functioning of banks and for the services their clients expect from them. It is a fact that matters have permanently changed, and that confidence will not be restored if banks believe they can continue to pursue their former course. Sector-wide changes are imperative. For banks, the past two years are lost years from a financial perspective, but let us at least try to learn from this.
As a private bank and a bank built upon long-term relationships with clients, we are determined to learn from the financial crisis. I will therefore continue to communicate what I believe are our shortcomings and where we can make improvements. Clients can expect us to provide committed, professional and high-quality advice consistent with their needs and characteristics, and good and transparent products. We will also explain transparently to our clients why we do things they way we have to do, for which purposes we use the bank’s balance sheet, which risks are taken, and which role we wish to play in society. All the more since the balance sheet is there for the client.
Banks have been called to account by the public, politicians and the media. We are prepared to show that we have the ability to change. However, restoring the public’s confidence will be a gradual process.
One of the recommendations published by the Maas Committee is putting the client first. Even though we at Van Lanschot feel that this is encoded into our DNA, we will have to go the extra mile as well. We will interpret these recommendations broadly. In good consultation with the Supervisory Board, we are currently amending the remuneration policy for the Board of Managing Directors, including any necessary changes in the current contracts."
2009 results: the recovery continues
"The economy was in dire financial straits in 2009. After the credit crisis already weakened the balance sheets of many banks, the gloom of the recession is now taking its toll on the banks. But the credit crisis is over. Van Lanschot managed to weather it without too much damage. Following the low point in March/April 2009, income during the remainder of the year showed an upward trend, partly thanks to the improvement in the interest margin. Assets under Management increased by some 14%, due to higher share prices as well as a net inflow of new money. The effect of the cost-saving measures announced earlier will become fully visible in 2010. In the course of 2009 the workforce was reduced by some 9%.
On balance, these measures and the recovery of income led to Van Lanschot clearly being back on track in the second half of the year. While in the first half of 2009 a loss was reported, the second half of the year was profitable. Our capital position at 31 December 2009 remained solid, with a BIS total capital ratio of almost 12%. The liquidity of Van Lanschot (as a private bank) remained extremely strong. The funding ratio (around 80%) is virtually the highest among the banks operating in the Netherlands.
Despite Van Lanschot being well-placed after the credit crisis, we are also feeling the impact of the recession. That is why our loan loss provisions can be termed high for us. However, recessions will always happen. Banks are well equipped and have the right tools to handle even severe recessions. The major difference with the banking crisis is that the unpredictable element has disappeared; the uncertainty about the system’s stability has vanished.
Van Lanschot took a conscious decision in late 2008/early 2009 to weather this crisis by relying on its own strength. We strongly believe that Van Lanschot’s decision not to seek state support is in the best interests of Van Lanschot and its clients. In our opinion, this is a sign of strength.”
Transparency and Corporate Social Responsibility
"Van Lanschot took a number of important steps in 2009 towards achieving transparency and Corporate Social Responsibility (CSR). To improve our client service provision, Van Lanschot decided to change its fee structure for asset management services. Van Lanschot is the first large asset manager to pass on fees on assets invested received from fund operators to its asset management clients. In this fee structure, the bank receives a fee only from its clients.
Van Lanschot also signed both the UN Global Compact Principles and the UN Principles for Responsible Investment in 2009. This marks an important step for us towards incorporating sustainability into all our banking activities in keeping with the bank's core values. From 2010 onwards, Van Lanschot will include these sustainability criteria in its investment and credit policies, among other procedures.”
Outlook on the economy
"Amid a broad array of predictions expressed by players ranging from Merrill Lynch to the CPB Netherlands Bureau for Economic Policy Analysis, I will not venture to make a forecast for 2010. It would seem clear, however, that we have left the recession behind us and that there are unmistakable impulses for a further growth in world trade. It is equally clear that there are still a number of large countries in Europe where the risk of downward adjustments is greater than in the Netherlands and Germany. Making forecasts is always a difficult exercise, which makes it extremely challenging to express an outlook for economic growth. Personally, I firmly believe that the psychological effect of the onset of a recovery is generally underestimated.
For a bank such as ours, economic recovery and sentiments across markets are two different things. I expect that the returns on our clients’ investments that were excellent on average in 2009 compared with the benchmarks, which we achieved with the outstanding team of Private Investments and Kempen Capital Management, will be comparable in 2010.”
Closing comments
“A number of young, ambitious and committed people, most from our own talent pool, were appointed to the Board of Managing Directors and to the group of general managers at the end of 2009. I am convinced that we have now created the best and most expert team to help us face the challenges of the future. With this new team and together with all our people we are going to achieve Van Lanschot’s ambition to become the best private bank in the Netherlands and Belgium within four years.”
