Published: 7.30 CET
Karl Guha, Chairman, said: “It would be fair to say that we have had a good first half of the year. The numbers speak for themselves. The performance was strong across the board. The growth in assets under management in our high yielding Private Clients segment is particularly gratifying – notwithstanding some of the headwinds we have had in our institutional business. We believe that our approach of combining “personal touch”, professional expertise and technology is beginning to bear fruit. There is every reason to believe that we are well positioned for further growth in all our businesses.
“Furthermore, our inorganic growth in assets under management was further strengthened, through our successful acquisitions in the Netherlands and in Belgium. As such, it is an important step towards realising our goal of being the most respected and successful wealth management house in the Benelux.”
Clients assets and assets under management
During the first six months of the year, client assets increased to €121.0 billion (2020: €115.0 billion). Total assets under management (AuM) increased to €104.2 billion (2020: €99.0 billion) on the back of total net inflows of €0.3 billion and market performance of €4.8 billion. We recorded exceptionally high net inflows in AuM at Private Clients to the tune of €2.4 billion and we saw an outflow of a few institutional mandates within Wholesale & Institutional Clients. This has combined with the positive market performance to significantly enhance management fees. Savings and deposits were slightly up at €10.2 billion (2020: €10.1 billion).
Sustainable investing is an important part of our strategy and we have made solid progress in this field; 17% of our own funds are classified as Article 9 (most sustainable), 62% as Article 8 and 21% as Article 6* under the European Sustainable Finance Disclosure Regulation. In addition, AuM that are classified as sustainable within Private Clients rose by 24% to €3.8 billion in the past six months.
Results in the first half of 2021
Net profit increased to €58.3 million in the first six months of 2021 (H1 2020: €9.5 million). Commission income, the very core of our revenues, was up by 18% at €175.7 million (H1 2020: €148.9 million) on the back of higher recurring commissions and solid results at Corporate Finance. The higher AuM base also provides a good starting point for the rest of the year.
Interest income stabilised and amounted to €76.1 million (H1 2020: €77.0 million). During the first half of 2021, we saw this underpinned by some growth in the mortgage loan portfolio and our ability to charge negative interest rates on savings. In order to mitigate this impact for our clients, we introduced the Wealth Management Arrangement, which is meeting a need of our Private Banking clients to retain a proportion of their wealth in savings without paying negative interest.
Operating expenses stood at €196.8 million for the first half of 2021 (H1 2020: €187.5 million). Much as expected, expenses increased mainly due to the integration of Hof Hoorneman Bankiers, while steeper charges for supervision and compliance are also weighing in. Adjusted for these factors, costs are under control. That said, the increase in income has helped to achieve an efficiency ratio of 73.1% (H1 2020: 93.2%) for the first six months of the year.
The first half of the year saw a release from loan loss provisions of €3.5 million on the back of a high-quality loan portfolio comprising mainly residential mortgages in the Netherlands.
We successfully concluded the acquisition of Hof Hoorneman Bankiers and the past six months saw us welcome our new employees who had made the transfer from Hof Hoorneman Bankiers, with the migration of clients and funds expected to be completed in the second half of the year. In July 2021, we received the approvals for our acquisition of Mercier Vanderlinden. The acquisition of the 70% stake in this wealth manager has now been completed and collaboration between Mercier Vanderlinden and Van Lanschot Belgium is well on its way. We are very pleased with this partnership, as it significantly strengthens our position in Belgium in line with our strategy to be an important player in Belgium as a specialist wealth manager.
We have made solid progress in our integrated wealth management approach. Earlier this year, we announced an adjustment of our organisational structure, enabling us to work in an even more client-centric fashion. The new structure helps us to operate across client groups even better, provide an even broader offering and further improve the efficiency of our organisation. The new set-up has also ushered in a new reporting structure and segmentation by client groups: Private Clients (including Evi), Wholesale & Institutional Clients, Merchant Banking Clients and Other. This press release also reports in keeping with this breakdown.
Performance report, presentation, webcast
For a detailed discussion of Van Lanschot Kempen’s results and balance sheet, please refer to our performance report and presentation on the 2021 half-year results. In a conference call on 26 August at 9:00 am CET, we will discuss our 2021 half-year results in greater detail. Please see Financial results.
22 September 2021 - Extraordinary general meeting
4 October 2021 - Ex-dividend date
12 October 2021 - 2019 dividend and remainder 2020 dividend payment date
29 October 2021 - Publication of 2021 third-quarter trading update
24 February 2022 - Publication full-year results 2021
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*From the end of 2022, the funds will apply Article 7 prescribing transparency on negative sustainability effects.