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Van Lanschot Kempen: net profit of over €83 million and capital return proposal

Published: 07:30 AM CET

  • Net profit moved significantly ahead of H1 2018 (€83.6 million compared with €39.3 million) on the back of book profits from the sale of two holdings
  • Underlying net result amounts to €92.5 million (H1 2018: €47.2 million)
  • Client assets rise 20% to €97.3 billion while AuM adds 23% to €82.6 billion on the back of net inflows of €8.7 billion and a positive stock market performance of €6.9 billion
  • Fully loaded CET 1 ratio increases to 22.7% (2018: 21.4%)
  • Capital return proposal in the amount of €1.50 per share

Van Lanschot Kempen today released its 2019 half-year results. Karl Guha, Chairman, said: “Our net result for the first half is significantly up on the year-earlier total and reflects book profits on the sale of our holdings in AIO II (€36.0 million net) and VLC & Partners (€16.1 million net). Ignoring the results of these holdings, our net profit is in line with last year. Our capital ratio increased further to 22.7% and our ample capital position enables us to propose a capital return to our shareholders in the amount of €1.50 per share.

“Conditions in the first six months of 2019 were turbulent, bringing market uncertainties and exceptionally low market rates. Our wealth management strategy makes us less dependent on interest income, but the pressure on interest income will increase if market rates fall further. We note more client uncertainty and a greater need for advice in these conditions.”

Net inflows of assets under management (AuM) and a favourable stock market performance added an impressive €16.1 billion to client assets, to €97.3 billion. AuM was up €15.6 billion to €82.6 billion, with strong net inflows fed in particular by Asset Management (€8.8 billion) landing the Stichting Pensioenfonds PostNL fiduciary mandate. Geopolitical and economic uncertainties across the world have made our clients more cautious about investing, and some have taken profits. As a result, savings were up by €0.4 billion, whereas Private Banking faced a minor net AuM outflow of €0.1 billion.

Over the past few years, we have nurtured Evi’s growth into a mature organisation with a strong brand. It’s now time for the next stage for Evi and we see opportunities to further enhance our proposition for mass affluent(1) clients. We have determined our next steps to this end, one of which will be to step up collaboration between Evi and Private Banking.

Commission income has been lower (-5%) in the wake of such factors as a changing AuM mix and lower fee income at Merchant Banking. Meanwhile interest income came down by 6% in the wake of persistently low interest rates. We are pleased with the 9% reduction in operating expenses to €190.4 million. Our aim for 2019 is a net cost level at around €390 million and we’re on course to stay within this range. Our efficiency ratio stands at 75.5% (H1 2018: 81.1%).

Our CET1 ratio(2)has gone up to 22.7% from 21.4%. Our strong capital base enables us to propose a capital return of €1.50 per share. If carried, this will lead to a pay-out to our shareholders – expected in December – of over €60 million. We will continue to optimise our capital base going forward, while leaving room for possible acquisitions. If possible, we will also consider paying out capital to our shareholders, subject to approval by the regulator.

(1) Mass affluent clients are high net worth individuals with investable assets up to €500,000.
(2) Fully loaded, excluding retained earnings.

Read the full press release on our 2019 half-year results (pdf)

Financial report, presentation and webcast

For a detailed discussion of Van Lanschot Kempen’s results and balance sheet, please refer to our performance report and presentation on the 2019 half-year results at Financial results.

In a conference call for analysts on 27 August at 9.00 am CET, we will discuss our 2019 half-year figures in greater detail. This may be viewed live at Financial results and played back at any later date.