Van Lanschot today publishes its trading update for the first quarter of 2014. Constant Korthout, Chief Financial & Risk Officer: "We are pleased with the progress we have made in the first three months of the year. Van Lanschot reports a positive result for this quarter that is comparable to the same period last year and the implementation of our wealth management strategy is progressing according to plan. We continue to build on the positive momentum initiated last year.
Our two brand names - Van Lanschot and Kempen & Co - continue to reap the benefits of their good standing and strong reputation among our private and institutional clients. The three core activities, Private Banking, Asset Management and Merchant Banking, all contributed to the positive result in the first quarter. The strategic priorities formulated last year for the Corporate Bank are starting to yield results. For example, the corporate and real estate loan books were further reduced as planned in the first quarter of the year.
Both income and costs were comparable to the same period last year. Client assets showed strong growth of 2.4 billion to reach 55.9 billion. This increase came from the inflow of customer savings and deposits and new institutional discretionary mandates, the inflow in Evi van Lanschot (the online wealth management proposition), and market performance. The inflow of assets under management contributed to the higher management fees compared with last year. This was offset by lower transaction volumes and a shift to management fees as a result of the introduction of investment advisory fees. The diversification of our funding profile last year and the ongoing low interest rate environment put pressure on the interest margin. As disclosed in the annual results in March, income in the first quarter was impacted by a material gain on the sale of an equity stake in the investments portfolio.
The headcount was further reduced and staff costs were down as part of the cost reduction programme. The bank continues to invest in its services and, consequently, costs on balance remained more or less at the same level as a year ago. The addition to loan loss provisions was comparable to the same period last year.
The bank's capital and funding position remains strong. Van Lanschot has a healthy funding mix of customer savings and deposits and capital market funding. The bank raised 200 million in additional long-term funding in the first quarter of the year.
The pro forma common equity Tier I ratio under the phase-in Basel III rules was 13.3% at 31 March 2014**. The fully-loaded Basel III leverage ratio remained at an extremely good level of 4.8% at the end of March 2014."
Financial calendar 2014
Publication of 2014 half-year results - 26 August 2014
Publication of Q3 2014 trading update - 7 November 2014
*The pro forma Core Tier I ratio under Basel II amounted to 13.7% at the end of March 2014 (31 December 2013: 13.1%).
**Including net result for the current financial year and applying the prevailing Basel III rules
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