“The European economy recovers more slowly than expected,” says Albert Röell, chairman of KAS BANK's Managing Board. “Market conditions remain difficult and the possible recovery is fragile."
19 Feb 2015
- Strong improvement in operating profit (+ 29%); increase of total profit to EUR 24.3 million (2013: EUR 12.3 million) largely due to compensation dwpbank
- Assets under Administration up by 37% to EUR 451 billion (2013: EUR 329 billion); Alternative Investment Fund Managers Directive (AIFMD) results in additional growth in custody business of over EUR 30 billion
- Total income up 6%; operating income 8% lower due to less sales in the investment portfolio, pressure on margins and the ECB's liquidity policies
- Costs down by 14%, mainly because of decrease in personnel expenses
- Solvency, also under new Basel standards, remains strong at an average of 24% (2013: 23%)
- Dividend maintained at EUR 0.64 (2013: EUR 0.64)
|In EUR||H1 2014||H1 2013||Movement|
|Profi||24.3 million||12.3 million||97%|
|Result from operations||11.5 million||8.9 million||29%|
|Income||120.7 million||114.2 million||6%|
|Assets under Administration||451 billion||329 billion||37%|
|Total earnings per share||1.65||0.84||94%|
|Dividend per share||0.64||0.64|
|Capital ratio (average)||24%||23%|
“The European economy recovers more slowly than expected,” says Albert Röell, chairman of KAS BANK's Managing Board. “Market conditions remain difficult and the possible recovery is fragile. The European Central Bank's measures for expansion of liquidity is a move towards structural negative interest rates, both in the Eurozone and beyond. We are therefore positive that the operating result increased considerably in 2014. Although it was not our decision to scale down our European cooperation with dwpbank, the received compensation means we can make structural investments in our operating processes and in further product development. The ongoing improvement process enables us to strengthen our unique supporting role in the areas of administration, custody and independent reports for our clients. In particular, our share of the pension fund segment has grown in terms of asset under custody as well as income.”
The further focussing of our strategy on four core segments on four core segments - pension funds, insurers, funds and wealth managers - is recognised. There has been net growth in the number of clients across the board, with a particular increase in the number of Dutch pension funds. Assets under Administration now amount to around EUR 451 billion, which means KAS BANK is pension custodian for around 3 million people.
Our tighter strategy has been recognised internationally. In November 2014 we received the Pension Fund Custodian of the Year Award and the Custodian of the Year-Benelux Award from an independent panel of financial specialists. Our recent campaign on The Custodian Principles will enable us to further raise our public profile and especially our unique positioning in our three core markets.
The growth in our services comes largely from products that help our clients to comply with the sharply increased and tighter European and national legislation and regulations. Our EMIR and AIFMD reports and liquidity and risk management instruments are attracting particularly interest.
The reorganisation translates into cost reductions, as well as a higher operating result.
KAS BANK will propose to the General Meeting of Shareholders a final cash dividend for 2014 of EUR 0.31 for each ordinary KAS BANK share. EUR 0.33 for each ordinary share has already been distributed as interim dividend for 2014.
In August 2014 we announced that 80% of the amount of EUR 20 million received from dwpbank will be invested in improving the operational management and strengthening the strategic approach. The regular dividend policy of 60-80% will be applied to the remaining part of the result.
We are continuing its policy of distributing as dividend 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 will consider this objective on an annual basis.
Expected result for 2015
We do not expect any change in the interest rate and liquidity policy in 2015 which means that the market conditions will remain difficult. As a result of the continued focus on sustainable growth and efficiency improvements we expect the operational result to further improve in the long term. In 2015, investments of EUR 5-7 million of the compensation received from dwpbank will impact the result.
Considering the continued uncertainty in the market we cannot make any statements about the total result. We repeat the bank's aim to meet in the long term the external objectives we set ourselves.