Van Lanschot today presents its results for the first six months of this year. Karl Guha, chairman of Van Lanschot: "Over the past six months we have again made important progress in the transformation of Van Lanschot to a specialist wealth management firm. This has enabled us to form a good basis for the further development of our client proposition, as well as for growth in the years ahead. The stability of the results achieved in the three core activities Private Banking, Asset Management and Merchant Banking reflects this.
Partly as a result of the positive stock market climate, our client assets have increased further to 56.1 billion. A positive development is the inflow of savings and assets under discretionary management. The introduction of our online savings and investment proposition Evi in October 2013 has delivered good results: the funds entrusted are growing towards 1 billion. Two Dutch pension funds have mandated Asset Management to advise on their international portfolios of unlisted real estate investments. Our securities commission amounted to 94.9 million. Partly thanks to the introduction of the new fee structure for investment advice, only 16% of this total relates to transactions.
Despite the low interest rate environment, interest income remains at roughly the same level as last year. The increase in income due to improved margins nearly compensated the run-off of the commercial and real estate loan book within Corporate Banking. The run-off of risk-weighted assets amounted to over 250 million in the first half of 2014, and is on schedule. As part of our regular activities, the sale of the 21% stake held by Van Lanschot Participaties in DORC Holding B.V. resulted in a material gain.
Total costs were reduced by around 9% in 2012 and 2013, and will stabilise this year. We will continue to invest in the further development of our client proposition. Several initiatives are taken and investments are being made, aimed at simplifying our processes, products and organisation, bringing our cost target in 2017 within reach.
The addition to the loan provision of 35.5 million is 14% lower than in the first half of 2013. The number of debtors for whom new provisions have to be taken is declining.
Our solid capital base and funding mix strengthened further in recent months. The Common Equity Tier I ratio rose to 13.8%. Taking into account the net profit for the current year, this ratio would be 14.2%. The fully loaded Common Equity Tier I ratio stands at 11.6%. The leverage ratio is now 4.9%. To support our balanced funding mix, comprising client savings and deposits and capital market funding, we raised an additional 200 million in long-term funding in the first three months of this year.
We are continuing to make progress in the transformation of Van Lanschot into a specialist wealth management firm. We will be introducing our new Savings & Deposit Account for our Dutch clients this autumn. This will allow clients to manage their savings and deposits to suit their own requirements. We will introduce an innovative wealth management proposition to our private banking clients and we will launch compliant proof investing for Business Professionals & Executives. Asset Management is continuing to build on its expertise and will open two new funds for investors: Global Smallcap Fund and Global Real Estate Fund.
These and other initiatives aim to further develop and innovate the service we provide to our clients and to grow our business. Furthermore, it is our intention to change the governance of the group to reflect the wealth management strategy, that we have presented last year. As a result, we will have a smaller Board of Managing Directors and we expect to appoint an Executive Board, that will manage our core activities. Ieko Sevinga, member of the Board of Managing Directors since 2007, will leave the bank at the end of his term of office in May 2015."
H1 2014 highlights
Solid balance sheet ratios at 30 June 2014
Van Lanschot share repurchase programme
On 26 August 2014 Van Lanschot will begin repurchasing a maximum of 150,000 of its own shares (depositary receipts for ordinary A shares). The share repurchase programme is being carried out in order to cover the depositary receipts for shares to be awarded to employees within the scope of the existing remuneration policy and share plan.
This repurchase programme will be implemented in accordance with the mandate granted during the General Meeting of Shareholders held on 15 May 2014. The programme will end on 31 December 2014, unless the repurchase of a maximum of 150,000 shares has been achieved before this date. Van Lanschot has instructed Rabobank International to implement the repurchase programme; this will ensure that trading decisions relating to the number of shares and the timing of transactions will take place independently of Van Lanschot.
The progress of the repurchase programme will be published weekly on the Van Lanschot website (www.vanlanschot.nl/inkoopaandelen).
 Basel III Common Equity Tier I ratio phase-in
 Fully loaded
 Recurring commission comprises management, advisory and service fees
 Based on Basel II rules
 The funding ratio is the extent to which the loan portfolio is funded by customer savings and deposits
For additional information, please visit corporate.vanlanschot.nl.
Financial report/ presentation
For a detailed explanation of the results and balance sheet of Van Lanschot NV, reference is made to the financial report and presentation on the 2014 half-year results at corporate.vanlanschot.nl/results.
2014 half-year financial statements F. Van Lanschot Bankiers NV
The 2014 half-year financial statements of F. Van Lanschot Bankiers NV are available on corporate.vanlanschot.nl/results as from Tuesday 26 August 2014.
Key dates 2014
Publication of trading update for Q3 2014 7 November 2014