* Comparative figures have been adjusted in response to the adjustments in IAS 19R from 1 January 2013.

Transcription

1 Date: 20 February 2014 For information: M.G.F.M.V. Janssen Secretary to the Managing Board T: I: Total profit 13% lower at EUR 12.3 million as a result of reorganisation costs of approx. EUR 8 million gross; excluding the reorganisation costs, total profit amounted to EUR 18 million, an increase of more than 25% Banking result at EUR 12.8 million approx. 10% higher than in 2012, operating profit one third lower, primarily as a result of lower market interest rates Revenue fractionally lower, partly as a result of a 14% diminution in interest income. Assets under Administration increased by 7% in 2013 to EUR 325 billion Operating costs (excluding non-operational items, including the reorganisation costs) were 3.5% lower in comparison with 2012 BIS ratio rose to an average of 23% (2012: 21%); leverage ratio at year-end 2013 well above 5% Dividend proposal for 2013 unchanged, at EUR 0.64 per share, representing a pay-out ratio of more than 75% Key figures * Movement Profit 12.3 m 14.2 m -13% Banking result 12.8 m 11.6 m 10% Result from operations 4.8 m 7.2 m -33% Income m m -3% Assets under Administration 325 bn 303 bn 7% Total earnings per share % Dividend per share % BIS-ratio (year-end) 29% 23% BIS-ratio (average) 23% 21%

2 Quote from the chairman "KAS BANK performed well in 2013, in a market that remains unstable. Our position in the institutional market is improving each year, both in terms of growth in the Assets under Administration, which increased by 7% to EUR 325 billion, and in appreciation of the high quality services regarding risk management and transparent reports. The recovery of the European banking sector is progressing slowly, as a result of which the ECB is keeping interest rates as low as possible and still places a great deal of liquidity in the market for low margins. As a result, KAS BANK cannot obtain the normal fees for its surplus liquidity, which places profit margins under pressure," says Albert Röell, chairman of the KAS BANK Managing Board. "Because no change is expected in this situation in the coming years, we decided on an additional reorganisation. We made a start on this in 2013 by selling one of our Amsterdam offices and by including a reorganisation charge of approximately EUR 8 million in the results for 2013." General In European terms, 2013 can be described as a transitional year. The euro crisis appears to have been averted, but it is still far too early to say that Europe and the banking sector within Europe have fully recovered. Confidence in the sector remains fragile, as shown partly by the almost complete absence of an inter-bank market. A favourable development for KAS BANK here is that financial markets are increasingly resorting to collateral-driven transactions. As a custodian, the bank has long experience with such low-risk transactions and therefore increasingly acts as an intermediary for its institutional clients. With the arrival of EMIR, the need for day-to-day collateral and sound registration of collateral will also become a legal requirement for the derivatives markets from KAS BANK plays an important role for the institutional market here, as the market leader in the Dutch market. The arrival of AIFMD in 2013, making it obligatory for funds to appoint a local custodian separate from the administrator, which independently supervises these funds, means that KAS BANK can further expand its role as a specialist in its core markets, the Netherlands, the UK and Germany. Particularly in the Netherlands, where the Securities Giro Act (WGE) forms a strong legal foundation, it is important for institutional parties, from a risk point of view, to keep the custody chain as close as possible in the Netherlands in order to prevent the possibility of assets of e.g. pension funds being blocked in the event of severe unrest in the financial markets. On the whole, in 2013 the outsourcing agreement with dwpbank progressed on time and according to plan. Although KAS BANK now provides wholesale services to a number of German clients, we did not yet succeed to grow our asset base as intended. In The Netherlands, Secpoint, the joint venture of dwpbank and KAS BANK, which is targeted initially on retail processing for banks, was launched in September. In the years , the Basel III rules concerning solvency and liquidity shall become applicable to KAS BANK. Even under these more stringent rules, KAS BANK s solvency and liquidity ratios lie well above the minimum levels. Through the sale of one of our offices, the Tier 1 ratio the core ratio measuring the strongest form of capital rose to 28% for 2013, an increase

3 of six percentage points in comparison with The BIS-ratio - the ratio measuring total capital in relation to the risk-weighted assets was among the strongest in the market at year-end 2013, at 29%. KAS BANK s leverage ratio amounted to more than 5% at year-end Dividend proposal KAS BANK will propose a final cash dividend for 2013 to the General Meeting of Shareholders of EUR 0.31 per ordinary KAS BANK share. EUR 0.33 per ordinary share has already been paid out as an interim dividend for This meets the objective of paying out dividends of 60-80% of the total profit under normal market conditions. Given the developments in the financial sector and the importance of a strong capital position, we shall review this objective on an annual basis. Outlook for 2014 KAS BANK expects no improvement in market interest rates in 2014, which means that market conditions in 2014 will not be easy. As a result of the reorganisation that we commenced in the second half of 2013, we expect the operating result to improve. In view of the continuing uncertainty in the market, we can make no statements regarding the total result. We reiterate the bank s aim of meeting the external objectives that we have set ourselves for the longer term. Financial objectives Standard * Growth in income versus growth in expenses** 3% -5.8% 2.7% Efficiency ratio** 70-77% 89.3% 84.3% Return on equity*** 10-jrs interest % 7.9% 8% Growth in earnings per share >8% -13% 59% Dividend pay-out 60-80% 75% 66% Solvency (av.) BIS ratio 16% 23% 21% ** Excluding impairments. *** 10-year interest rates 2013: 1.8%, 2012: 2.2%. Results In millions of euros * change % Profit % Non-operating items % Banking result % Sales from AFS portfolio - bonds % Result from operations %

4 KAS BANK s net result decreased by 13% in 2013 to EUR 12.3 million (2012: EUR 14.2 million), while the banking result increased by 10% to EUR 12.8 million (2012: EUR 11.6 million). Operating profit decreased by 33% to EUR 4.8 million (2012: EUR 7.2 million). The positive impact of growth of Assets under Administration, client wins and rising transaction volumes was not sufficient to compensate the negative effects of continuous low interest rates and price constraints. Total income decreased by 3% to EUR million (2012: EUR million). The main drivers of the decrease were interest income, with a decrease of 14% to EUR 21.2 million (2012: EUR 24.6 million), and fee and commission income, with a decrease of 3% to EUR 67.3 million (2012: EUR 69.7 million). The investment result in 2013 was more than EUR 6 million higher than in 2012 (2013: EUR 21.9 million; 2012: EUR 15.9 million), primarily through the sale of bonds and equities from the investment portfolio and increases in the fair value of perpetuals. Total operating expenses increased by 3% to EUR million (2012: EUR 98.5 million), mainly caused by non-operating items. Without non-operating items, total operating expenses decreased by 4% to EUR 93.7 million (2012: EUR 97.1 million). The total impact of non-operating items on the net result was EUR -0.5 million (2012: EUR 2.6 million). These items consisted of sales and movements in the fair value of securities in the investments portfolio, (the reversal of) impairments, and HR-related items (retrenchment in the pension scheme and reorganisations). In line with IFRS, the majority of the proceeds of the sale of the Spuistraat premises were taken directly to the balance sheet. The proceeds exceeded the revaluation reserve, as a result of which the excess (EUR 0.9 million) was shown in the income statement. The return on equity amounted to 6.3% in 2013 (2012: 7.9%) and the efficiency ratio to 89% (2012: 84%). Solvency Our low risk profile is reflected in the quality of the balance sheet and the high solvency ratio. The average BIS ratio in 2013 was equal to 23% (2012: 21%). At the end of 2013, the BIS ratio was 29% (at the end of 2012: 23%) and the Tier 1 ratio was 28% (at the end of 2012: 22%). As of 2014, KAS BANK must comply with some of the new Basel requirements (Basel III). Under these new requirements, our BIS ratio would have been 27% at year-end 2013 and the leverage ratio (capital versus assets) would be 5%. Income Income decreased by 3% to EUR million in 2013 (2012: EUR million). Lower interest income and fee and commission income were to an extent offset by higher returns on investments.

5 Breakdown of income In millions of euros change % Interest % Fee and commission % Result on investments % Share of result of associates and joint ventures % Other income % Total income % Interest income decreased by 14% to EUR 21.2 million (2012: EUR 24.6 million) due to lower margins as a result of the lower short euromarket rate of interest. Fee and commission income decreased by 3% to EUR 67.3 million (2012: EUR 69.7 million). Breakdown of fee and commission income In millions of euros change % Asset Servicing % Transaction Servicing % Treasury % Total commission % Asset Servicing fee and commission income (mainly Custody and Investment Management Services) decreased by 3% to EUR 29.1 million (2012: EUR 30.0 million). The reduction of the KAG activities in Germany caused the decrease of this income. The increase of Assets under Administration and client wins compensated the impact of pressure on the fees for our services. The Assets under Administration increased by 7% to EUR 325 billion (2012: EUR 303 billion), mainly due to client wins. The 3% increase in Transaction Servicing fee and commission income to EUR 23.9 million (2012: EUR 23.3 million) is the result of client wins and higher volumes mainly in clearing and settlement of (non-)listed financial instruments. Treasury income decreased by 13% to EUR 14.3 million (2012: EUR 16.4 million), primarily due to a liquidity surplus which places pressure on prices in the securities lending market. Breakdown of result on investments In millions of euros change % Trading - foreign exchange transactions % Trading - securities and derivatives % Investments - investment portfolio % Result on investments % The main component of the result on investments consists of client-driven foreign exchange transactions. This component diminished by EUR 9.7 million in 2013 in comparison with 2012 (2012: EUR 10.4 million).

6 The increase in the result on investments was due to price increases for a number of bonds for which impairments were applied in 2008 and a higher trading result for equities and derivatives. Operating expenses In millions of euros * change % Personnel expenses % Housing % Information technology % General and administrative expenses % Depreciation/amortisation % Total operating expenses - excluding impairments % Impairment losses % Total operating expenses % Operating expenses (excluding impairments, but including one-off additional costs for the partnership with dwpbank) increased by 3% to EUR million in 2013 (2012: EUR 99.2 million). The increase in accommodation costs results mainly from the move from two office buildings to one. The personnel expenses increased by 6% to EUR 68.0 million (2012: EUR 64.3 million). Without exceptional items personnel expenses decreased by 4%. Exceptional items in the non-operational personnel expenses primarily involve expenses related to the restructuring of the organisation (EUR 7.7 million). The positive effect on the 2013-cost level of the new pension scheme for employees in the Netherlands was 5.3 million. Impairments Impairments mainly relate to (the reversal of) credit facilities and impairments on assets related to the closing of KAS BANK s KAG activities in Germany in On balance, the positive effect of impairments on the 2013 result amounted to EUR 0.2 million (in 2012: positive EUR 0.7 million). Tax expenses The effective tax rate of 0% (2012: 26%) is caused by tax facilities with respect to the sale of our office and the sale of our interest in LCH.Clearnet and the liquidation of our German subsidiaries.

7 Quality of the investment portfolio The table below shows the securities of the investment portfolio that are investments available for sale, investments at fair value through profit or loss and investments held to maturity according to credit rating (Moody s Investor Services). In millions of euros Risk-weighted value of the assets 31 December 2013 Percentage of portfolio 31 December 2012 Percentage of portfolio Aaa - Aa % % A1 - A3 59 5% 60 6% Baa1 - Baa % 92 8% Ba1 - Ba3 59 5% 13 1% Shares 2 0% 6 1% Total 1, % 1, % 31 December December 2012* Riskweighted Riskweighted In millions of euros Carrying amount value Carrying amount value Due from banks , Loans , Reverse repurchase agreements 1, Derivative financial instruments Financial assets designated at fair value Financial investments available-for-sale , Financial investments held-to-maturity Other assets , , Off-balance sheet exposure Total of the risk-weighted items Capital and ratios based on Basel II 31 December December 2012* In milllions of euros Capital Ratio Capital Ratio Tier % % Tier Total BIS % % KAS BANK s low risk profile is reflected by the high solvency ratio, which remained the same in The average BIS ratio in 2013 was equal to 23% (2012: 21%). The increase in the BIS ratio as at the end of 2013 (29%) relative to the end of 2012 (23%) was mainly caused by an increase in the Tier 1 Capital.

8 Liquidity The table below shows the cash flows (not discounted) for the financial assets based on the contractual maturity date (excluding shares). Maturity calendar as at 31 December 2013 In percentages On demand months year year year applicable Total Banks, loans and other financial assets 34% 60% 2% 3% 1% 0% 100% Financial investments available-for-sale 0% 10% 9% 48% 33% 0% 100% Total financial assets 24% 46% 4% 16% 10% 0% 100% < = 3 < = 1 < = 5 > 5 Maturity not Maturity calendar as at 31 December 2012 In percentages On demand months year year year applicable Total Banks, loans and other financial assets 78% 19% 1% 2% 0% 0% 100% Financial investments available-for-sale 0% 8% 10% 68% 13% 1% 100% Total financial assets 62% 17% 2% 16% 3% 0% 100% < = 3 < = 1 < = 5 > 5 Maturity not The high level of liquidity is shown by the fact that, as at the end of 2013, 70% of investments had a maximum maturity of three months (at the end of 2012: 79%). The average liquidity surplus based on the Financial Supervision Act was EUR 1.1 billion in the fourth quarter of 2013 (fourth quarter of 2012: EUR 1.5 billion). The figures in this press release have not been audited by external auditors. Annexes: Consolidated Balance Sheet, Consolidated Income Statement Profile KAS BANK N.V. KAS BANK N.V. is the independent European specialist in securities services and risk control and reporting services for professional clients in the pensions and securities industry. KAS BANK pursues a pure play strategy, underlining the bank s absolute neutrality and independence. A low risk profile is integral to its services and is reflected in the quality of its balance sheet and its high solvency ratio. Standardised services and complete transparency are paramount: this is achieved by combining a proactive approach with advanced information technology and rigorous process control. Outsourcing

9 their administrative functions to KAS BANK enables our clients to focus primarily on their own core activities. KAS BANK is listed on the NYSE Euronext Amsterdam stock exchange. As a European specialist KAS BANK has an international presence with offices in Amsterdam, London and Wiesbaden. Annexes Consolidated Balance Sheet

10 In thousands of euros 31 December December 2012* 1 January 2012* Assets Cash and balances with central banks 200, ,004 1,135,738 Due from banks 278,398 1,458, ,628 Loans 545,438 1,357,769 1,435,221 Reverse repurchase agreements 1,403, , ,056 Derivative financial instruments 149, , ,187 Financial assets designated at fair value 97,822 50, ,871 Financial investments available-for-sale 990,539 1,011,647 1,168,288 Financial investments held-to-maturity 10,370 10,645 - Investments in associates and joint ventures 1, Current tax assets 1,272 8,189 7,542 Other assets 75,572 36,610 39,933 Property and equipment 24,847 24,214 37,402 Goodwill and intangible assets 4,223 8,510 12,659 Deferred tax assets 5,726 1,496 1,339 Non-current assets held-for-sale - 11,118 - Total assets 3,790,152 5,204,644 5,347,864 Equity and liabilities Due to banks 182, , ,866 Due to customers 2,934,343 4,291,808 4,476,611 Repurchase agreements 159,180 46,050 - Derivative financial instruments 186, , ,484 Financial liabilities designated at fair value 50,450 52,512 - Current tax liabilities 1,147 8, Other liabilities 48,515 25,644 20,259 Deferred tax liabilities 14,016 8,419 9,430 Total liabilities 3,576,985 5,012,297 5,177,253 Issued capital 15,699 15,699 15,699 Treasury shares -23,612-24,974-25,324 Share premium 21,569 21,569 21,569 Revaluation reserve 9,246 16,134-5,332 Other reserves (including profit for the year) 190, , ,987 Equity attributable to KAS BANK shareholders 213, , ,599 Non-controlling interests Total equity 213, , ,611 Total equity and liabilities 3,790,152 5,204,644 5,347,864 Contingent liabilities 36,420 23,032 26,703 Irrevocable facilities 17,047 14,470 25,889 Consolidated Income Statement

11 In thousands of euros * INCOME Interest income 43,820 63,951 Interest expense 22,667 39,391 Net interest result 21,153 24,560 Fee and commission income 80,959 82,102 Fee and commission expense 13,649 12,394 Net fee and commission result 67,310 69,708 Net trading income 10,413 11,019 Result from financial transactions 11,492 4,851 Share of result of associates and joint ventures Other income 2,875 7,555 Total operating income 114, ,693 OPERATING EXPENSES Personnel expenses 67,999 64,278 General and administrative expenses 29,145 28,454 Depreciation and amortisation 4,866 6,453 Impairment losses (recovery) Total operating expenses 101,844 98,534 Operating result before tax 12,350 19,159 Tax expense 50 4,986 Net result for the year 12,300 14,173 Attributable to: KAS BANK shareholders 12,273 14,131 Non-controlling interests EARNINGS PER SHARE - basic (in euros) diluted (in euros)