Banking

  • Strong improvement in efficiency
  • Tier 1 ratio robust
(€ million)
 
H1 2009
H1 2008
Δ %
 
 
 
 
Net interest margin
110
95
16%
Net commission income
2
4
-50%
Other income
2
6
-67%
Total income
114
105
9%
 
 
 
 
Expenses
58
60
-3%
Additions to loan loss provisions
43
10
n.m.
 
 
 
 
Profit before tax
13
35
-63%
 
 
 
 
Key ratio
 
 
 
Cost/income ratio
51%
57%
 
 
 
 
 
Banking Credit Portfolio
30 June 2009
31 December 2008
 
Achmea Hypotheekbank
15,699
14,782
6%
Staalbankiers
2,841
2,813
1%
Achmea Retail Bank
441
458
-4%
Friends First Finance
618
721
-14%
Other
135
148
-9%
Total
19,734
18,922
4%
 
 
 
 
Tier 1 ratio
 
 
 
Achmea Hypotheekbank
10.6
9.6
  
Staalbankiers
14.6
16.1
  

GENERAL

For Eureko, banking is a complementary business in the Netherlands through Achmea Bank (Achmea Hypotheekbank and Achmea Retail bank) and private-banker Staalbankiers, and in Ireland where Friends First Finance offers consumer finance.

Profit before tax was down by 63% compared to last year; a good performance by Achmea Hypotheekbank was offset by the additions to loan loss provisions mainly in our Irish business, as was the case at the end of 2008. Driven by a good net interest margin and reduced costs due to strict cost control, the cost/income ratio further improved to 51%.

The net interest margin rose by 16% to € 110 million. This growth is mainly attributable to Achmea Hypotheekbank.
It has been able to keep its funding costs at a low level through the covered bond programme and has benefited from the low interest rates on this.

Commission income at Staalbankiers remained under pressure as transaction volumes and assets under management are still low.

NETHERLANDS

Achmea Hypotheekbank

Profit before tax over H1 2009 doubled to € 40 million (H1 2008: € 19 million), driven by a profitable net interest margin. The Dutch mortgage market for new mortgages is suffering from the financial crisis. With a significantly lower sales volume the mortgage market is hard hit. For Achmea Hypotheekbank, the focus is on selling profitable mortgages instead of creating volume; this led to a decline in market share to 0.6% (H1 2008: 1.91%).

The Tier 1 ratio improved by 1%-point to 10.6% mainly due to the addition of the profits of H1 2009 to the equity.

Staalbankiers

Profit before tax amounted to A -10 million (H1 2008: € 2 million).
As Staalbankiers is a fully specialised private bank, its main profit drivers are the benefits that arise from the individual services offered to clients. With decreasing commission income from assets under management and fewer transactions, the first half of 2009 has been difficult for Staalbankiers. Furthermore, decreased money market rates had a negative impact on the net interest margin as Staalbankiers offered a higher rate to customers on their savings accounts. Staalbankiers significantly decreased its operating costs and no additional increase was necessary for the loan loss provisions.

The downward trend in assets under management in 2008 was halted in 2009. With an increase of 6% to € 1.7 billion, Staalbankiers managed to reverse this trend (year-end 2008: € 1.6 billion). Funds entrusted increased by 9% to € 2.8 billion (year-end 2008: € 2.6 billion).

IRELAND

Friends First Finance

Profit before tax decreased to a loss of A -25 million (H1 2008 € 2 million). This is mainly due to specific bad debt write-offs and additions to loan loss provisions of € 35 million, which is somewhat offset by higher interest margins caused by lower interest expense. Reflecting the market circumstances in Ireland, the banking credit portfolio decreased by 14% to € 618 million.