Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot — FY2016 Earnings Presentation
43 slides from Kempen European High Dividend Fund N.V. N's earnings presentation, March 2017
Slide 1: Investor Presentation 2016 annual results
Investor Presentation 2016 annual results March 2017
Slide 2: Van Lanschot at a glance
Van Lanschot at a glance Van Lanschot’s profile Solid performance on all key financials 2016 2015 • Clear choice for wealth management targeting institutional and private clients • Net profit €69.8m €42.8m • Underlying result €81.3m €60.1m • Strong brand names, reliable reputation, rich history • CE
Slide 3: Van Lanschot is a specialist, independent wealth manager
Van Lanschot is a specialist, independent wealth manager
Slide 4: Van Lanschot's rich history reaches back 280 years
Van Lanschot’s rich history reaches back 280 years 1737 1991 1999 2004 2007 2013 2014 2015 2016 Cornelis van Lanschot Strategy founds Van Lanschot update in ‘s-Hertogenbosch Strategic review Acquisition 2020 Foundation Van Lanschot Belgium CenE Bankiers Introduction Launch of Vermogensregie Evi van
Slide 5: As a wealth manager Van Lanschot builds on the experience of its core activities
As a wealth manager Van Lanschot builds on the experience of its core activities Private Banking Evi • Financial guidance to help clients achieve their goals • Digital savings and investment service to preserve and build wealth, with • Specialist services for entrepreneurs, family businesses, high n
Slide 6: Our strategic update of April 2016: responding to a changing world
Our strategic update of April 2016 is about how we are responding to a changing world For our clients For our sector Opportunity for Van Lanschot More demand for advice and wealth planning Low interest rate environment Interest in investment products More individual More demand for online Stricter r
Slide 7: Next phase of our wealth management strategy
Next phase of our wealth management strategy Key themes for core activities: Private Banking Evi • Improve client experience with omnichannel • Offer accessible, high-quality online services service model backed by the know-how of a private bank • Grow client assets by exploiting opportunities and •
Slide 8: 2016 annual results
2016 annual results
Slide 9: Strong increase in profit and dividend
Strong increase in profit and dividend Client assets €69.4 billion (+10%) Underlying net result +35% to €81.3 million Assets under management €57.5 billion (+14%) Capital ratios continue to improve Dividend per share up from €0.45 to €1.20 CET I ratio at 19.0% Van Lanschot Investor Presentation – Ma
Slide 10: Market developments at a glance
Market developments at a glance • Equity markets were highly volatile in 2016 • China, oil prices, Brexit and U.S. elections were key events that shaped financial markets • Political uncertainties will continue to drive market developments in 2017 AEX Index 500 +9.9% 475 4.7% +7.5% +12.8% + 19.3% 45
Slide 11: 2016 highlights
2016 highlights Underlying net result increases with 35% to €81.3 million (2015: €60.1 million) Strong increase • Net result increases to €69.8 million (2015: €42.8 million) • Commission income under pressure due to less trading activity by clients, especially in Merchant Banking underlying net • Op
Slide 12: Underlying net result rises 35% to €81.3 million
Underlying net result rises 35% to €81.3 million € million 2016 2015 2016 vs 2015 Commission income 243.7 265.6 -8% Interest income 212.9 202.8 5% Other income 25.2 52.2 -52% Income from operating activities 481.8 520.6 -7% Operating expenses -386.8 -387.4 0% Gross result 95.0 133.1 -29% Operating p
Slide 13: Underlying net result increases by 35%
Underlying net result increases by 35% € million Core activities Total Private Banking Evi Asset Management Merchant Banking (incl. Other and Corporate Banking) +147% +27% - 46% - 69% + 35% 81.3 37.4 60.1 18.6 20.1 15.1 10.0 6.2 2015 2016 -11.1 -8.2 2015 2016 2015 2016 2015 2016 2015 2016 Van Lansch
Slide 14: Management fees hold up well; transaction and other commissions hampered
Management fees hold up well; transaction and other commissions hampered by market circumstances Commission income 2016 versus 2015 Commission income by segment € million € million 265.6 1.3 243.7 -8.6 57.8 -14.6 43.2 108.5 104.0 35.3 26.7 97.1 82.7 86.2 81.4 265.6 258.3 66.7 243.7 52.1 46.7 172.5 1
Slide 15: Interest margin supported by lower cost of hedges
Interest margin supported by lower cost of hedges and active balance sheet management Interest income Interest margin (12-mth moving average) € million % 1.39% 1.32% 1.21% 1.21% 213.7 212.9 1.30% 202.8 1.24% 1.17% 1.15% 2014 2015 2016 H1 2015 H2 2015 H1 2016 H2 2016 Interest margin Clean interest ma
Slide 16: Steady income from securities and associates
Steady income from securities and associates Income from securities and associates € million 51.1 29.9 28.1 29.2 2.9 9.4 5.7 10.5 Capital gains 3.6 Dividend 15.5 14.8 16.1 Valuation gains and losses 2014 2015 2016 • Income from securities and associates relates to investments of our equity investmen
Slide 17: Result on financial transactions impacted by market circumstances
Result on financial transactions impacted by market circumstances and reduced client activity Results on investment portfolio Other results Total profit on financial transactions € million € million € million 47.2 + = 41.9 24.1 15.6 7.8 8.5 -11.7 -3.9 -5.3 2014 2015 2016 2014 2015 2016 2014 2015 201
Slide 18: Operating expenses stable, with underlying structural reduction achieved
Operating expenses stable, with underlying structural reduction achieved Operating expenses € million 10.2 -16.9 7.5 -1.4 394.9 387.4 387.4 388.2 386.8 386.8 2015 Regulatory KCM London IT costs Other costs 2016 costs • Approximately €5 million of the costs of KCM London are non-recurring • In 2017 w
Slide 19: Cost reduction remains a keypoint of attention
Cost reduction remains a keypoint of attention Indicative timing 2016 2017 2018 2019 Regionalisation of Private Banking branch network Outsourcing mortgages Outsourcing payments Shut down mainframe IT run costs Housing costs Integration support functions Van Lanschot/Kempen Further streamlining mid
Slide 20: Private Banking's client assets add 7% to €28.2 billion
Private Banking’s client assets add 7% to €28.2 billion, mainly driven by acquisition Net inflow assets under management Client assets € billion € billion 0.8 1.9 28.2 26.4 0.1 26.4 26.2 26.0 26.0 26.3 8.4 8.2 -0.3 -0.1 -0.5 0.3 0.9 1.4 -0.7 -0.2 -1.3 -2.0 16.7 18.9 2012 2013 2014 2015 2016 31-12-15
Slide 21: Client assets Evi stable in a volatile market, at €1.5 billion
Client assets Evi stable in a volatile market, at €1.5 billion Client Assets by product Assets under management 100% = €1.5 billion € million Assets under 830 management 37 39 9 32 45% 745 55% Savings 23 172.7 183.0 797 722 157.2 Client Assets by country 100% = €1.5 billion 31-12-15 Net Net Market 3
Slide 22: New mandates generate net inflow at Asset Management
New mandates generate net inflow at Asset Management Net inflow assets under management Assets under management € billion € billion 2.1 37.8 32.8 2.8 6.0 5.8 9.3 7.2 35.6 2.8 32.8 2.3 19.8 22.5 1.6 -0.3 -0.2 31-12-15 Net inflow Market performance 31-12-16 2012 2013 2014 2015 2016 Solutions - fiducia
Slide 23: Loan book decreases by 8%; run-off of Corporate Banking continues
Loan book decreases by 8%; run-off of Corporate Banking continues € million Loan book % Change Impaired Provision Impaired Coverage '16-'15 loans ratio ratio Mortgages 5,718 -4% 80 46 1.4% 58% Other loans 2,200 -7% 172 62 7.8% 36% Private Banking 7,917 -5% 252 108 3.2% 43% SME loans 679 -27% 178 35
Slide 24: Better credit quality leads to net release of loan loss provisions
Better credit quality and further run-off of Corporate Banking loans lead to net release of loan loss provisions Additions to loan loss provision € million 65 bps LLP/credit portfolio* 76.0 8.9 47 bps 51.0 Private Banking 22.1 Corporate Banking 69.3 Other 23.9 -7 bps 5.0 1.2 -2.2 -8.1 -6.9 2014 2015
Slide 25: Strong increase of capital position
Strong increase of capital position Common Equity Tier I ratio (phase-in) % 0.7% 0.6% 0.6% 1.2% -0.4% 19.0% 18.3% 17.7% 17.1% 16.3% 15.9% 15.9% 31-12-2015 CRR Corporate Change RWA Shortfall Other 31-12-2016 phase-in Bank Private reduction run-off Banking We reiterate our commitment to return at leas
Slide 26: Good progress on Strategy 2020 investment programme
Good progress on Strategy 2020 investment programme Project Realised 1 ▪ Digitisation of core customer journeys in Online client portal ‘Mijn Omni- Private Banking Van Lanschot’ channel ▪ Integration into existing IT landscape Wealth management app ▪ Build-up of/training in digital capabilities
Slide 27: Progress also visible in non-financial KPIs
Progress also visible in non-financial KPIs NPS Private Banking NPS Evi NPS Asset Management 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 n/a -3 n/a n/a 32 -11 -11 22 -17 -19 n/a n/a Assets under screening 78% 82% 72% 66% 48% Further increase 2012 2013 2014 2015 2016 Target Van Lansch
Slide 28: Overview of group targets
Overview of group targets Common Equity Tier I ratio (phase-in) Dividend pay-out ratio* % % 15-17% 50-70% 19.0% 16.3% 64% 14.6% 13.1% 37% 36% 11.0% 28% 0% 2012 2013 2014 2015 2016 2020 2012 2013 2014 2015 2016 as from 2016 Efficiency ratio Return on Common Equity Tier I* % % 10-12% 60-65% 80.3% 4.9%
Slide 29: Good progress on Strategy 2020
Good progress on Strategy 2020
Slide 30: Good progress on Strategy 2020
Good progress on Strategy 2020 Next steps in Outsourcing Partner selected for Bolt-on acquisition omnichannel Private mortgages servicing payment servicing realised Banking model Product KCM London New Merchant KCM teams development successfully Banking niche strengthened continued migrated FI & Fin
Slide 31: Acquisition of Staalbankiers' private banking activities completed
Acquisition of Staalbankiers’ private banking activities completed; migration in progress • Transaction completed on 15 December 2016 • €1.7 billion of AuM, around 80% in discretionary management • c. €300 million of savings • 25 private bankers and investment experts • Initial acquisition price of
Slide 32: Partnership with Fidor for payment services
Partnership with Fidor for payment services Key improvements for Van Lanschot High level solution • Real time transactions between savings/current accounts • Real time authorization and booking of card transactions Customer-facing contact • Payment App Van Lanschot Payment Operations Benefits • Lowe
Slide 33: Innovative investment advice App launched
Innovative investment advice App launched Overview of accounts Investment portfolio snapshot Details of investment portfolio Van Lanschot Investor Presentation – March 2017 33
Slide 34: Appendix
Appendix
Slide 35: Underlying net result increases 35% to €81.3 million
Underlying net result increases 35% to €81.3 million € million 2016 2015 2016 vs 2015 Commission income 243.7 265.6 -8% Interest income 212.9 202.8 5% Other income 25.2 52.2 -52% Income from operating activities 481.8 520.6 -7% Operating expenses -386.8 -387.4 0% Gross result 95.0 133.1 -29% Loan lo
Slide 36: Key figures 2016 by segment
Key figures 2016 by segment € million Private Evi Asset Merchant Other Core Corporate Total Banking Management Banking Activities Banking Commission income 104.0 3.6 86.2 46.7 0.1 240.7 3.0 243.7 Interest income 151.0 3.9 0.0 0.0 13.1 168.1 44.8 212.9 Other income 1.3 0.0 -0.2 1.8 22.4 25.2 0.0 25.2
Slide 37: Significant reduction of IT costs continues
Significant reduction of IT costs continues Recurring out of pocket IT cost (run cost) Out of pocket IT project cost (change cost) € million € million 57.1 -44% 39.2 32.1 -42% <30 31.4 28.1 18.3 +/-20 2012 2015 2016 2020T 2012 2015 2016 Normalised IT change cost Expenses of Strategy 2020 investment
Slide 38: Balance sheet shows strong capital and funding position
Balance sheet shows strong capital and funding position Balance sheet at 31 December 2016 € billion, total assets = €14.9 billion Cash and balances 0.1 Due to 1.8 banks with banks Investment 2.5 portfolio Customer savings 9.7 and deposits Loans and 9.6 advances Issued debt securities 3.2 0.5 Other O
Slide 39: Executive Board
Executive Board Karl Guha (1964) Constant Korthout (1962) Arjan Huisman (1971) Chairman of the Board CFO/CRO COO Appointed Appointed Appointed Appointed chairman of the Statutory Board of Appointed member of the Statutory Board of Appointed member of the Statutory Board of Van Lanschot on 2 January
Slide 40: Executive Board
Executive Board Richard Bruens (1967) Paul Gerla (1966) Joof Verhees (1960) Private Banking CEO Kempen & Co Merchant Banking Asset Management Appointed Appointed Appointed Appointed member of the Statutory Board of Van Appointed member of the Management Board of Appointed Managing Director Securitie
Slide 41: Supervisory Board
Supervisory Board • Former CEO of Monuta Willy Duron • Former member Management • Former Chairman of KBC Group Board Fortis Bank Nederland (1945) Jeanine Helthuis Chairman • Member board of directors Agfa- • Supervisory Board Member at Gevaert and Tigenix (1962) Prorail • Managing Director of PC Hoo
Slide 42: Free float has increased following the secondary offering in June 2016
Van Lanschot’s free float has increased following the secondary offering in June 2016 Overview of principal shareholders Share price € 24 APG 22 13.3% Wellington Rabobank 20 39.1% 9.9% LDDM Holding 18 Reggeborgh Invest 9.8% FMR 16 Invesco 9.7% 14 Henderson 9 June: secondary offering of a 30% stake a
Slide 43: Disclaimer
Disclaimer Disclaimer and cautionary note on forward-looking statements This document contains forward-looking statements on future events and developments. These forward-looking statements are based on the current information and assumptions of Van Lanschot’s management about known and unknown risk