Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — Debt Investor Presentation (March 2024)
67 slides from Kempen European High Dividend Fund N.V. N's debt investor presentation, March 2024
Slide 1: Soft Bullet Covered bond investor presentation
ee March 2024 Soft Bullet Covered bond investor presentation
Slide 2: Table of Contents
Table of Contents Executive summary 3 Van Lanschot Kempen at a glance 4 2023 full-year results 13 Van Lanschot Kempen’s diversified funding profile 31 and solid capital buffers Mortgage loan portfolio 37 Soft Bullet Covered Bond Programme 41 Annexes Annex I Sustainability 50 Annex II Dutch housing m
Slide 3: Executive summary - Soft Bullet Covered Bond Programme
Executive summary - Soft Bullet Covered Bond Programme Issuer Van Lanschot Kempen N.V. Van Lanschot Kempen N.V. Programme size €5.0bn • Credit rating of BBB+/BBB+ (S&P/Fitch) Format Soft Bullet (SB) AAA rated Soft Bullet Covered Bond Programme Extension Period Maximum of 12 months • Established in M
Slide 4: Van Lanschot Kempen at a glance
Van Lanschot Kempen at a glance We are an independent, specialist wealth manager with the aim to preserve and create wealth for our clients and for society in a sustainable way We focus on private clients, wholesale and institutional clients, and investment banking clients Our core activities are pr
Slide 5: Solid performance on all key financials
Solid performance on all key financials 2023 2022 Net result €125.2m €84.3m Underlying net result €130.5m €117.8m CET1 ratio 19.6% 20.6% Cost/income ratio 71.6% 73.1% RoCET1 14.2% 12.3% Total capital ratio 25.3% 26.4% Client assets €145.0bn €124.2bn AuM €127.6bn €107.8bn Loan book €9.2bn €9.4bn (exc
Slide 6: Van Lanschot Kempen: independent, well-capitalised wealth manager
Van Lanschot Kempen: independent, well-capitalised wealth manager Who we are – We are an independent, well-capitalised, wealth manager with a banking licence – Aim to be the best wealth manager in western Europe, with leading positions in the Netherlands and Belgium – We have a strong specialist pos
Slide 7: We serve our clients with clearly defined propositions
We serve our clients with clearly defined propositions Private Clients Wholesale & Institutional Investment Banking Clients Clients • Wealth management services for • Comprehensive fiduciary wealth • Corporate finance, equity capital entrepreneurs, family businesses, management for institutional cli
Slide 8: The year in review
The year in review Our clients Our employees Society Our shareholders • Continuing growth of • Focus on the • Focus on energy and • Dividend proposal of clients and net inflows development and food transitions €2.00 per share • Renewed interest in throughflow of • Continued annual • Continued fixed
Slide 9: Achieving sustainable and profitable growth
Achieving sustainable and profitable growth Organic growth • Strong net AuM inflow (€5.3bn) AuM development Bolt-on Bolt-on acquisitions acquisitions • Complete integration of Mercier Completed integration of Mercier Vanderlinden •Vanderlinden +18% • AcquisitionofofRobeco Robeco’s online investment
Slide 10: Progress towards our sustainability goals
Progress towards our sustainability goals Lower carbon emissions Discretionary (AuM) 88% of funds on track for reduction of 7% average annual emission intensity in line with Paris Agreement Target: 80% of funds comply with 7% average annual emission intensity reduction Mortgage portfolio -6.9% total
Slide 11: Working towards our medium-term financial targets
Working towards our medium-term financial targets Cost/income CET 1 ratio RoCET 1 Dividend ratio pay-out ratio* 71.6% 19.6% 14.2% 68.6% Target: Target: Target: Target: 70 % 17.5% including 12.0% 50 – 70 % 2.5% M&A add-on * Proposed dividend payment / underlying net result attributable to shareholder
Slide 12: Shareholder return since 2016
Shareholder return since 2016 Total shareholder return (€ m) 85 74 61 29 82 59 721 61 636 562 501 390 419 331 270 270 Returns 2016- Capital Dividend Dividend Dividend Capital Dividend Capital return Total 2018 return 2019 2020 2021 return 2022 2023 return to 2019 2022 shareholders * 2016-2018 saw th
Slide 13: 2023 full-year results
ee 2023 full-year results
Slide 14: 2023: Performance
2023: Performance Net result €125.2m Commission AuM Strong capital position (2022: €84.3m) income €427.2m €127.6bn CET 1 ratio 19.6% (2022: €407.8m) (2022: €107.8bn) (2022: 20.6%) Underlying net result Interest income AuM net inflow RoCET 1 at 14.2% €130.5m €196.5m €5.3bn (2022: 12.3%) (2022: €117.8
Slide 15: 2023: Key messages
2023: Key messages Net result of €125.2m (2022: €84.3m): • Commission income +5% • Interest income +21% • Operating expenses +8% Net AuM inflow: €5.3bn • Private Clients net inflow: €2.3bn • Wholesale & Institutional Clients net inflow: €3.1bn Segment operating profit before tax: • Private Clients:
Slide 16: Net result amounts to €125.2m
Net result amounts to €125.2m Key drivers of net result (€ m) 10.0 -36.7 33.8 28.5 -5.4 19.4 -8.7 137.5 125.2 125.2 103.7 110.7 102.0 102.0 84.3 84.3 2022 Commission Interest Other income Operating Impairments Expenses Other** 2023 income income* expenses related to accounting treatment Mercier Vand
Slide 17: Overview of net result
Overview of net result €m 2023 2022 % change Commission 427.2 407.8 5% - Of which securities commissions 389.8 350.4 11% - Of which other commissions 37.4 57.4 -35% Interest 196.5 162.7 21% Other income 39.1 29.2 34% Income from operating activities 662.8 599.7 11% Operating expenses -474.8 -438.2 8
Slide 18: Private Clients: High net inflows
Private Clients: High net inflows AuM (€ bn) 5.0 4.7 2.3 52.4 47.5 40.5 40.5 42.8 31/12/2022 Net AuM inflows Market Acquisition 31/12/2023 performance • Net inflows: 71% non-discretionary, 29% discretionary • Q1: strong inflow in non-discretionary AuM from excess savings, increased client holdings i
Slide 19: Private Clients: Strong net AuM inflow in Belgium of €0.8bn
Private Clients: Strong net AuM inflow in Belgium of €0.8bn • After a successful integration we continued as Mercier Van Lanschot from 1 January 2024 • Private Clients Belgium will be reported as a separate segment from 2024 • Intended acquisition of Belgian investment adviser Accuro, expected to be
Slide 20: Private Clients: Positioning Evi van Lanschot for further growth
Private Clients: Positioning Evi van Lanschot for further growth • Good progress on integration of Robeco’s online investment platform • Acquisition created a leading online investment platform for mass- affluent clients, with AuM of €6.4bn • Well on track with the integration with one-off transitio
Slide 21: Wholesale & Institutional Clients: €3.1bn net inflow
Wholesale & Institutional Clients: €3.1bn net inflow AuM (€ bn) 4.7 2.8 0.5 -0.2 69.9 70.4 75.1 67.3 67.2 67.2 31/12/2022 Net Investment Net Fiduciary Net Alternative Market 31/12/2023 Strategies Management Investment performance inflows inflows Solutions inflows • Investment strategies: net outflow
Slide 22: Stable margins at both Private Clients and Wholesale & Institutional Clients
Stable margins at both Private Clients and Wholesale & Institutional Clients Annualised recurring fees* (€ m) AuM breakdown (~%) 11% 25% Private Clients 64% 379.8 414.7 359.5 329.6 339.8 306.9 22% 26% Wholesale & Institutional Clients HY2021 YE2021 HY2022 YE2022 HY2023 YE2023 53% Equities Bonds Othe
Slide 23: Investment Banking Clients: Challenging markets due to increasing interest rates
Investment Banking Clients: Challenging markets due to increasing interest rates Commission income (€ m) 55.3 56.0 36.5 2021 2022 2023 • Operating result before tax of -€4.4m (2022: €9.7m) • Rising interest rates put pressure on deal activity in real estate sector • We adapted our organisation to ma
Slide 24: Net interest income: client behaviour main driver
Net interest income: client behaviour main driver • In the first half of the year, clients converted on-demand savings into AuM, mainly fixed income • In the second half, client demand for term deposits accelerated • Clients switched back to savings rather than reinvesting the proceeds from maturing
Slide 25: Interest margins improved in 2023
Interest margins improved in 2023 Interest income (€ m) Interest margin (12-month moving average, %) 1.24% 1.18% 107.9 0.92% 93.0 88.6 0.88% 76.1 77.5 69.7 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023* H2 2023* H1 2022 H2 2022 H1 2023 H2 2023 Interest margin* • Interest income stabilised in the second ha
Slide 26: Higher result on other income mainly driven by the sale of a participating interest
Higher result on other income mainly driven by the sale of a participating interest €m Income Income Book Book value value 2023 2022 YE2023 YE2022 Van Lanschot Kempen Participaties 28.4 10.1 35.0 47.8 Bolster Investments Coöperatief UA 3.9 6.3 76.3 63.1 Co-investments in own investment funds (incl.
Slide 27: Operating expenses: Focus on scalable growth
Operating expenses: Focus on scalable growth Operating expenses (€ m) Internal FTEs 19.0 17.7 55 5 457.1 474.8 1,780 1,844 1,844 1,899 1,904 438.2 438.2 2022 H1 2023 Robeco's Other H2 2023 2022 Staff costs Other 2023 online investment platform • Increase in staff costs, mainly driven by a higher num
Slide 28: Strong CET 1 ratio at 19.6%
Strong CET 1 ratio at 19.6% Dividend proposal of €2.00 per share (total €85.0m) Common Equity Tier 1 ratio (%) 0.8 0.8 -1.9 -0.5 -0.2 20.6 18.7 18.7 19.5 19.8 19.4 19.6 31/12/2022 Capital return Shares issued Retained Operational Other 31/12/2023 regarding profit risk Mercier Vanderlinden • CET 1 ra
Slide 29: Solid capital position
Solid capital position Continued commitment to return excess capital • Our intention remains to return excess capital above 17.5% CET 1 ratio target to our shareholders going forward Total shareholder return (€ m) Total capital return €146m 85 85 74 61 Capital return Dividend 2022 Capital return Pro
Slide 30: Committed to our financial targets
Committed to our financial targets Common Equity Tier 1 ratio Dividend pay-out ratio* 15% + 2.5% 50%-70% medium-term medium-term 23.8% 24.3% 23.7% 20.6% 19.6% 65% 67% 69% 57% 53% 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Cost/income ratio Return on Common Equity Tier 1* 70% 12% medium-term m
Slide 31: Van Lanschot Kempen's diversified funding profile and solid capital buffers
Van Lanschot Kempen’s diversified funding profile and solid capital buffers
Slide 32: Van Lanschot Kempen's solid profile is reflected in its creditworthiness
Van Lanschot Kempen’s solid profile is reflected in its creditworthiness Standard & Poor’s Fitch • Long-term credit rating of issuer: BBB+ • Long-term credit rating of issuer: BBB+ • Outlook long-term credit rating: Stable • Outlook long-term credit rating: Positive • Short-term credit rating of iss
Slide 33: Balance sheet shows strong capital and funding position
Balance sheet shows strong capital and funding position Balance sheet 31 December 2023 Significant capital buffer € bn, balance sheet total = €16.8bn • Total equity and AT1 of €1.3bn 0.3 Due to banks • CET 1 ratio 19.6% Cash and cash equivalents 3.0 and balances at banks • Leverage ratio 5.8% Low-ri
Slide 34: Van Lanschot Kempen has various funding programmes
Van Lanschot Kempen has various funding programmes Secured programmes Unsecured programmes • Public covered bond programme used for wholesale Debt Issuance Programme / MTN funding purposes • €5.0 billion programme • Residential mortgage loan portfolio, fully originated • Used for wholesale funding (
Slide 35: Funding mix and redemption profile
Funding mix and redemption profile Funding mix 31 December 2023 Redemption profile* (100% = €16.8 billion) €m 800 1% 3% 8% 600 Client savings and deposits 13% Debt securities 400 Equity Other funding 200 Interbank funding 75% 0 2024 2025 2026 2027 ≥2028 Senior unsecured Covered bond Additional Tier
Slide 36: Track record of issuing secured and unsecured debt instruments
Track record of issuing secured and unsecured debt instruments • Funding position based on a stable level of bond issuance, our presence in wholesale markets and accordingly experienced with secured funding related (reporting) tasks • Experienced player in setting up new funding programmes (for exam
Slide 37: Mortgage loan portfolio
Mortgage loan portfolio
Slide 38: Offering mortgages to private banking clients
Offering mortgages to private banking clients • We are a specialist wealth manager offering multiple services to our clients: investment allocation, estate planning and financing – and we also offer mortgages to our private banking clients • Our private bankers can offer personalised service thanks
Slide 39: Loan portfolio
Loan portfolio €m Loan Loan % change Impaired Provision Impaired Coverage portfolio portfolio loans ratio ratio 31/12/2023 31/12/2022 Mortgages 6,368 6,341 0% 27 2 0.4% 8% Other loans 2,182 2,371 -8% 98 25 4.5% 26% Loan portfolio 8,550 8,712 -2% 125 28 1.5% 22% Mortgages distributed by third parties
Slide 40: Additions to loan loss provisions
Additions to loan loss provisions Additions to loan loss provisions (€ m) Loan loss provision per stage (€ m) -29 bps* -19 bps* 5 bps* 2.0 42.4 Stage 3 26.9 27.7 Stage 2 Stage 1 7.0 6.1 3.5 3.6 4.4 6.1 -7.7 31/12/2021 31/12/2022 31/12/2023 -11.7 • Loan loss provisions relative to average risk- 2021
Slide 41: Soft Bullet Covered Bond Programme
Soft Bullet Covered Bond Programme
Slide 42: Summary & key features
Summary & key features Summary Key features Issuer Van Lanschot Kempen NV Structure Registered programme with DNB Strong programme tests (asset cover test & Programme size €5.0 bn amortisation test) Format Soft Bullet (SB) No interest rate swap counterparties* Extension Period Maximum of 12 months E
Slide 43: Transaction structure
Transaction structure Subordinated Loan Swap provider* Provider Servicing Swap (Sub-) Servicer agreement Agreements CBC Account Bank Administrator Van Lanschot Kempen Security Trustee Administration SB Covered Bond Company B.V. Parallel Debt agreement and Pledge of Receivables Asset Monitor and Inte
Slide 44: Key parties & transaction structure
Key parties & transaction structure Key Programme Parties Key pool characteristics as of 31 January 2024 Originator Van Lanschot Kempen Net principal balance €2,085,060,626 Transferor Van Lanschot Kempen Construction deposits €1,108,738 Issuer Van Lanschot Kempen Fixed rate 97.27% Servicer Van Lansc
Slide 45: Cover pool characteristics as of January 2024
Cover pool characteristics as of January 2024 Current loan balance per borrower € thousand Geographical distribution as % of 25% outstanding amount 20% Noord-Holland 32.88% 15% Zuid-Holland 21.28% 10% 5% Utrecht 14.40% 0% Noord-Brabant 14.15% <=250 <=500 <=750 <=1,000 <=2,000 <=3,000 >3,000 Gelderla
Slide 46: Cover pool characteristics as of January 2024
Cover pool characteristics as of January 2024 Remaining interest rate fixed period (in years) Seasoning (in years) 25% 30% 20% 20% 15% 10% 10% 5% 0% 0% 0-5 5-10 10-15 15-20 20-25 25-30 >30 <1 <2 <3 <4 <5 <6 <7 <8 <9 <10 <20 Interest rate (%) Product type 50% 3% 4% 40% 21% Annuity 30% Investment 3% 2
Slide 47: Soft Bullet mechanism
Soft Bullet mechanism Going-concern Soft Bullet Mechanics • The covered bonds (CBs) are bullet securities due on the specified maturity date and the Issuer makes the coupon and principal payments to the No Issuer Event of Default Bullet Maturity investors • The Asset Cover Test (ACT) ensures that th
Slide 48: Comparison - Dutch covered bond programmes
Comparison - Dutch covered bond programmes Main highlights* Issuer Rating (S/M/F) BBB+/NR/BBB+ A/A1/A A-/NR/A A-/NR/NR A+/A1/AA- BBB/NR/BBB A-/NR/NR A+/Aa2/A+ A/A2/A- 1. AAA/Aaa/AAA 1. AAA/NR/NR 1. AAA/NR/NR Programme Rating (S/M/F) AAA/NR/NR NR/Aaa/AAA AAA/NR/NR 2. AAA/NR/AAA AAA/NR/NR NR/Aaa/NR NR
Slide 49: Van Lanschot Kempen investor reporting
Van Lanschot Kempen investor reporting • Van Lanschot Kempen is a member of the Dutch Association of Covered Bond issuers (DACB). The objective of the DACB is to continuously improve the quality of the Dutch covered bond product offering (see also www.dacb.nl) • The Soft Bullet Covered Bond Programm
Slide 50: Annex I | Sustainability
ee Annex I | Sustainability
Slide 51: Progress on our non-financial KPIs
Progress on our non-financial KPIs 51
Slide 52: High scores on external ESG ratings
High scores on external ESG ratings Governance: 2 B- rating Lower governance risk = 1 On a scale of A+ to D- Higher governance risk = 10 ISS ESG Corporate Rating 6th place in league table of AA rating 491 entrants On a scale of AAA to CCC on resilience to ESG risks 11st place in a league table 4 and
Slide 53: Annex II | Dutch Housing Market
Annex II | Dutch Housing Market
Slide 54: House price development
House price development House Prices Index After July 2022, house prices in the Netherlands fell relatively hard, but % % stabilized in June and July of 2023; that's a little sooner than was 30 8 expected earlier this year 20 6 4 10 A likely factor is that nominal wages have risen more than anticipa
Slide 55: Dutch mortgage lending standards
Dutch mortgage lending standards Evolution of Dutch mortgage lending standards 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 ▪ Limited tax ▪ Highest tax ▪ Highest tax rate ▪ Highest tax rate ▪ Highest tax rate ▪ Easing of deduction of rate reduces reduced to: 43% reduced to: 40% r
Slide 56: Economy in the Netherlands
Economy in the Netherlands Gross Domestic Product (GDP) – Y-o-Y change Looking ahead, a period of economic ‘muddling through’ is expected. It 7% is forecasted that Dutch GDP will grow by an average of 0.4% in 2023 and 0.8% in 2024. The number of bankruptcies is expected to increase 5% further, so a
Slide 57: Inflation, wage growth and house price increase
Inflation, wage growth and house price increase Q3 2022 – Q3 2023 - house price increase per region The labour market remains strong: employment has gone up further, with labour participation at 73.1% in Q2 2023. After nearly a year of declines, house prices have stabilized somewhat in recent months
Slide 58: Mortgage debt outstanding & mortgage rates
Mortgage debt outstanding & mortgage rates Residential Mortgages outstanding (in €bn) The mortgage debt outstanding for the Netherlands 875 continues to rise in recent years. Given the lower transaction volumes and house prices, this effect could see a 825 turnaround 775 725 Mortgage interest rates
Slide 59: Annex III | Product offering and underwriting
Annex III | Product offering and underwriting
Slide 60: Product offering
Product offering Private banking services to wealthy individuals and to individuals starting to build their wealth • Advice on financial planning and wealth management is provided • The focus is on delivering relevant advice and high-quality service • Mortgage loans are offered as part of full-servi
Slide 61: Underwriting (1/2)
Underwriting (1/2) Dutch Code of Conduct Governance Our mortgage underwriting criteria have been continuously updated to align with the Dutch Code of Conduct, national law and prevailing market practices. The following criteria represent our current standards: Maximum loan to value • Market values u
Slide 62: Underwriting (2/2)
Underwriting (2/2) • Various fraud checks are carried out (BKR, SFH, VIS, EVA, employer’s certificate)* Fraud & insurance • Continuous contact between banker and client requirements • Mandatory hazard insurance based on reconstruction value • Mandatory property valuation by independent appraiser • F
Slide 63: Arrears management and reducing credit risk
Arrears management and reducing credit risk Arrears management • Mortgage loans are considered in arrear if one or more payments have been missed by the client • After approximately two weeks a reminder is sent by the service provider (Stater). Every month another letter is sent, for as long as the
Slide 64: Restructuring approach
Restructuring approach • All arrears of over 45 days are monitored by the Prevention Team. They focus on analysing the situation of the client in order to find a permanent solution, rather than just acting on signals. Within 60 days it must be clear whether a problem can be easily Prevention solved,
Slide 65: Contact
Contact Ralf van Betteraij Marrit Oudeboon Head of Funding Management Funding Management T +31 20 348 97 13 T +31 20 348 97 14 r.vanbetteraij@vanlanschotkempen.com m.oudeboon@vanlanschotkempen.com
Slide 66: Important Notice (1/2)
Important Notice (1/2) FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES, ITS TERRITORIES AND POSSESSIONS TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN
Slide 67: Important Notice (2/2)
Important Notice (2/2) The financial data in the Presentation have not been audited or reviewed, unless specifically stated otherwise. Small differences in tables may be the result of rounding. Each Relevant Persons expressly disclaims any and all liability for any representations, warranties or und
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