47 slides from Kempen European High Dividend Fund N.V. N's investor presentation, November 2016
Slide 1: Next phase of our wealth management strategy
Investor Presentation Next phase of our wealth management strategy
Slide 2: Van Lanschot at a glance
Van Lanschot at a glance Van Lanschot’s profile Clear choice for wealth management targeting institutional and private clients Strong brand names, reliable reputation, rich history Mutually reinforcing core activities with their own distinct culture and positioning as niche players Straightforward g
Slide 3: Q3 trading update
Q3 trading update Result in line * Commission income stable and interest income moving in line with the first two quarters of 2016 : 2 * Costs downin Q3, as the majority of regulatory costs are recognised in H1 with first two * Improving credit quality and run-off of Corporate Banking loan book lead
Slide 4: Van Lanschot is a specialist, independent wealth manager
Slide 5: Van Lanschot's rich history
Van Lanschot’s rich h years 1737 [| 1991 Cornelis van Lanschot founds Van Lanschot in ‘s-Hertogenbosch Foundation Van Lanschot Belgium 1999 2004 Acquisition CenE Bankiers 2007 CeE FH BANKIERS Van Lanschot listed on Amsterdam stock exchange Acquisition Kempen & Co i Mer haint Rash “L@ Strategic revie
Slide 6: 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 0 Van Lanschot Private Banking + Private Bank for entrepreneurs, family businesses and high net-worth individuals * Specialist services for business professionals and executives, healthcare professionals, and foundation
Slide 7: Core activities have individual strengths which are mutually reinforcing
Van Lanschot’s core activities have individual strengths which are mutually reinforcing Investment beliefs Asset allocation Manager selection Discretionary management Product development Asset Management Private Banking i 4x1 Van Lanschot Structured products Order execution CLIENTS EMPLOYEES Merchan
Slide 8: Our strategic update of April 2016 is about how we are 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 industry Appetite for investment products Low yield environment Increasing individual Reeulati responsibilities eguration Technological changes & Increased client needs for advice and wealth
Slide 9: Next phase of our wealth management strategy
Next phase of our wealth management strategy Key themes for core activities: Private Banking * Enhance client experience through omni- channel servicing model * Foster AuM growth by enhancing front-line effectiveness Merchant Banking * Continue capital light operating model ¢ Build on solid, sustain
Slide 10: Net profit 2015 to 2020 bridge
Reduced impairments Cost reduction Net interest Net profit 2020 income Commission income Net profit 2015
Slide 11: On balance, costs expected to decrease
On balance, costs expected to decrease (excluding €60 million investments) a > a > od a + t t t t t t Regionalisation of Private Banking branch network Optimising mortgages and payments; shut down mainframe IT run & change costs Combination support staff / integration Van Lanschot/Kempen Corporate B
Slide 12: One-off investment programme of €60 mn to finalise transformation
One-off investment programme of €60 mn to finalise transformation and develop omnichannel platform €60 million additional IT expenditure * Period: mid 2016 - 2019 * Rationale: finalise IT transformation of the Private Bank Comprising: * Digital transformation to omnichannel servicing model * Acceler
Slide 13: CET I ratio at 17.3% (16.9% fully loaded)
CET | ratio at 17.3 % (16.9% fully loaded) per 30 June 2016 Corporate bank run-off offers further upside potential (RWA H1 2016 = €1.6 bn) Impact Basel Ill tightening not known yet but RWA increase expected to be lower than decrease due to CB run-off Net profit (after one-off investment program) wil
Slide 14: 2016 half-year results
Slide 15: Highlights 2016 half-year results
Highlights 2016 half-year results : . ; Stable underlying net result of Client assets €66.2 billion (+5%) €37.7 million in challenging Assets under management market €54.3 billion (+8%) Capital ratios continue to improve Good progress on Strategy 2020 Acquisition private banking CET I ratio: 17.3% (
Slide 16: Market developments at a glance
Market developments at a glance * First half of 2016 has seen major volatility for equity markets, e.g. uncertainty on China, oil and Brexit * Meanwhile, bond markets are still strongly affected by ECB monetary policy * Savings rates in the Dutch market have come down significantly, but there is sco
Slide 17: Summary of 2016 half-year results
Summary of 2016 half-year results Stable result in challenging markets Capital position further strengthened Strategy 2020 started Underlying net result stable at €37.7 million (H1 2015: €37.7 million) * Net result amounts to €31.5 million (H1 2015: €37.7 million) * Commission income under pressure
Slide 18: 2016 half-year results by segment
2016 half-year results by segment Private Banking Asset Management Merchant Banking Saag profit improvement, assets under management stable Underlying net result increases to €16.8 million (H1 2015: €4.5 million) on the back of substantially lower loan loss provisioning and cost reduction + Assets u
Slide 19: Key figures 2016 half-year results
Key figures 2016 half-year results € million Commission income Interest income Other income Income from operating activities Operating expenses Gross result Loan loss provisioning Other impairments Operating profit before tax of non-strategic investments Operating profit before one-off gains / losse
Slide 20: All activities contribute to underlying net result
All activities contribute to underlying net result Underlying net result amounts to €37.7 million (H1 2015: €37.7 million) * Core activities Private Banking, Asset Management and Merchant Banking generate 83% of combined income from operating activities (2015: 82%) * Strong increase in underlying ne
Slide 21: Total commission income down 17%
Total commission income down 17% as transaction fees and other commissions are under pressure in uncertain markets Less trading activity by clients at Private Banking the main reason for the decrease in commission income compared with H1 2015 Commission income at Asset Management benefits from highe
Slide 22: Interest margin improves on the back of lower cost of hedges
Interest margin improves on the back of lower cost of hedges and active balance sheet management Interest income € million . - H1 2015 H2 2015 H12016 Interest margin (12m moving average) % Increase in net interest income and net interest margin due to: * Lower amortisation costs on discontinued inte
Slide 23: Other income decreases to €12.5 million
Other income decreases to €12.5 million Profit on financial transactions Profit on financial transactions in H1 2016 decreases compared with H1 2015 as a result of lower profit on the investment portfolio Income from securities and associates Valuation gains and losses decrease to €5,.3 million (H1
Slide 24: Operating expenses stable, with underlying structural reduction achieved
Operating expenses stable, with underlying structural reduction achieved Operating expenses * Operating expenses fairly stable at € million €194.8 million 374.9 381.7 S874 * Recurring costs down by €8.7 million; primarily driven by lower IT costs fas 1877 186.7 193.5 * Regulatory costs increase as e
Slide 25: Client assets grow 5% to €66.2 billion
Client assets grow 5% to €66.2 billion Client assets” * Assets under management rose 8% in €billion H12016 due to inflow from new mandates and positive market performance at Asset Management 86.2 59.6 9.7 2L2L * Savings and deposits declined by €0.2 billion, mainly at deposits 54.3 @ Savings & depos
Slide 26: Assets under management at Private Banking are stable
Assets under management at Private Banking are stable Net inflow assets under management* Private Banking AuM Private Banking at €17.2 billion € billion i * Inflow of discretionary mandates 207 balances outflow of non-discretionary : mandates -13 A * Share of discretionary assets under management in
Slide 27: New mandates generate net inflow at Asset Management
New mandates generate net inflow at Asset Management AuM at Asset Management up to €37.1 billion * New mandates won in H1 2016 add €2.7 billion * Largest new mandates area fiduciary mandate for Univé Group (€1 billion) and a mandate for corporate bonds of Fund de Réserve pour les Retraites (€1 billi
Slide 28: Private Banking loan book stable; run-off of Corporate Banking continues
Private Banking loan book stable; run-off of Corporate Banking continues Private Banking Stable mortgage book. New mortgage business almost compensates for repayments and prepayments Average loan to value 70% (2015: 71%) Other loans includes loans to wealthy private individuals to pay for second hom
Slide 29: 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 Net release of €1.7 million versus net Emillion 766 addition of €31.9 million in H1 2015 Private Banking * Provisioning level down to €2.4 million, compar
Slide 30: Strengthening of capital position continues
Strengthening of capital position continues CET 1 ratio phase-in grows from 16.3% to 17.3% * Risk-weighted assets reduced to €6.1 billion (H1 2015: €6.4 billion ) supported by Corporate Banking run-off * Improved credit quality leads to smaller shortfall as gap between expected loss and level of pro
Slide 31: Overview of group targets
Overview of group targets Common Equity Tier | ratio (phase-in)* % 15-17% 16.3% fg 27.3% % 13,008 14.6% 11.0% 2012 2013 2014 2015 H12016 2020 Efficiency ratio 60-65% % i 81.1% 7 2012) 2013) 2014 =. 2015__~-H12016 2020 * H12016 excluding retained profit; other years including retained profit *“* Base
Slide 32: Good progress on Strategy 2020
Slide 33: Private Banking: acquisition of Staalbankiers private banking activities
Private Banking Van Lanschot intends to acquire the private banking activities of Staalbankiers Description of announced acquisition Rationale of the transaction Implications on figures Acquisition of a maximum €1.7 billion in AuM, €280 million in savings and a limited number of securities-backed lo
Slide 34: Private Banking: moving to integrated omnichannel offering
Private Banking Moving from dedicated service offering per channel to integrated offering across channels Rationale: * Stay abreast of technological developments * Enhance client experience * Drive revenue growth/retention * Lower service costs Omnichannel offering to reflect our DNA: client-centric
Slide 35: Good progress on selecting outsourcing partners for mortgages and payments
Private Banking Good progress on selecting outsourcing partners for mortgages and payments Private Banking offering Integrated financial advice and estate planning Financial planning Discretionary management . . * Ongoing product development/evolution to Investment advisory ensure comprehensive mode
Slide 36: Evi to become the 4th pillar of our wealth management strategy
Evi van Lanschot Evi to become the 4" pillar of our wealth management strategy Evi Netherlands and Belgium will be combined and managed as a separate segment to develop its full potential, with a dedicated budget and development team Evi offers: Evi will be expanded: * Discretionary asset management
Slide 37: Asset Management: sales force strengthened
Asset Management Sales force of Asset Management strengthened to increase focus on the UK, Germany and France Asset Management activities AuM breakdown by client type H1 2016; 100% = €45.9 bn = Solutions - Van Lanschot Investment strategies clients * High quality niche investment strategies: small c
Slide 38: Merchant Banking: market leader in German real estate ECM
• Market leader in German real estate ECM • Healthy mix of (inter)national M&A and ECM deals • Leading trading market shares • Internationally recognised pan-European research products • Expanded internationally, including pan-European coverage • Full use of platform ECM, M&A and Debt Solutions (DS)
Slide 39: Appendix
Slide 40: Balance sheet shows strong capital and funding position
Balance sheet shows strong capital and funding position Significant capital buffer * Total equity of €1.3 billion * Common Equity Tier | ratio (phase-in) 17.3%* * Leverage ratio (fully loaded) 6.4% Low-risk assets * Loan book shows a decrease of €0.2 billion to €10.5 billion (compared with 31 Decemb
Slide 41: Significant reduction of recurring IT run cost realised
Significant reduction of recurring IT ‘run’ cost realised This trend is expected to continue Development ‘out of pocket’ recurring IT cost* (run cost) * — This excludes: € million * Cost increase in staff cost resulting from back sourcing 57.1 of activities ° * Decrease in ITrelated Kempen 5.8 depre
Slide 42: Investment programme against backdrop of reduced IT change costs
Investment programme against backdrop of reduced IT ‘change’ costs Development out of pocket IT project cost (change cost) * ITprojectcosthavedecreasedover € million 314 the last years : Other + Our targeted ‘normalised’ level of change costis around €20 mn ° IT investment programme on top of target
Slide 43: Executive Board
Executive Board Karl Guha (1964) Chairman of the Board Appointed Appointed chairman of the Statutory Board of Van Lanschot on 2 January 2013 Background * 1989- ABN AMRO: positions in Structured Finance, Treasury, Capital Management, Investor Relations, Risk Management and Asset & Liability Managemen
Slide 44: Executive Board
Executive Board Richard Bruens (1967) Private Banking Appointed Appointed member of the Statutory Board of Van Lanschot NV on 15 May 2014 Background 1991- ABN AMRO: managementtrainee, managerial positions in the Global Markets division, Managing Director of Investor Relations 2007 - Group Managing B
Slide 45: Supervisory Board
• Honorary Chairman of KBC • Former CEO of Monuta Group • Former member Management • Former CEO KBC Group Board Fortis Bank • Member board of directors Agfa- • Member of the supervisory board Gevaert and Tigenix at Prorail • Former CFO of Aegon and FGH • Former CEO of ABN AMRO Bank Private Banking N
Slide 46: 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 = Wellington 22 = Rabobank 20 = LDDM Holding 18 = Reggeborgh Invest — = FMR 16 4 = Invesco = Henderson 14 9 June: secondary offering of a 30% 3.3% = Free fl
Slide 47: 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