Published: 7.30 AM CET
Van Lanschot Kempen today released its 2020 full-year results. Karl Guha, Chairman, said: “Covid-19 has been a defining feature of the year. In more ways than one, it has forced us all to confront the fragility and realities of life.
“We have had a reasonably good year financially, notwithstanding the market dislocations and limitations placed upon us by the pandemic. Our investments over the last several years in technology – in particular in our omni-channel service model and other forms of digitalisation – have allowed us to serve our clients well and be there for them in their times of need. We believe that dedication to clients and catering to their needs is a defining feature for us. And we were well rewarded by our clients, as evidenced by the growth in assets under management. We are very grateful to our clients for the trust they have placed in us.
“Our resilience as a house in these challenging times is a testimony to our business model and to our people. As a management team, we have done all we could – individually and collectively – to encourage and be there for our colleagues as they grappled with the challenges placed on them by Covid-19. I must admit that I am extremely proud of who we are as a house and of my colleagues. It would be patently unfair not to mention the following two achievements in particular – the transition of IT infrastructure in Belgium to our common platform and the closure of the acquisition of Hof Hoorneman Bankiers. Both have taken Herculean efforts to bring to successful completion.
“We do not know what 2021 will bring but I assure our clients that we will be there for them – regardless of the circumstances. On behalf of the house and my colleagues, I would like to say this to you – we have your backs. And thank you.”
Client assets increased to €115.0 billion in the year (2019: €102.0 billion) and assets under management (AuM) advanced to €99.0 billion (2019: €87.7 billion). The robust €6.9 billion net AuM inflow continues the upward trend of the past years, and the year ended on favourable market performance of €3.4 billion despite volatile markets in the first half of 2020. Savings and deposits increased to €10.1 billion (2019: €9.5 billion).
As noted previously, exceptional market circumstances related to Covid-19 in the first quarter triggered losses in structured products activities, which worked out at €35.1 million for 2020. This did not affect the positions of our clients. The loss was partly offset by increased commission income and lower operating expenses, taking the overall net result to €49.8 million (2019: €80.2 million[i]
Commission income increased by €6.0 million to €296.4 million on the back of higher average AuM volumes. Interest income was still weak, declining to €152.1 million (2019: €175.3 million). Like other players in the market, we started charging negative interest to our clients for savings in excess of a specific amount in the past year. However, we recognise the desire of our Private Banking clients to keep a proportion of their assets in savings, and have designed a wealth management arrangement through which we offer our clients the possibility to keep a certain percentage of their assets invested with us in cash, without paying the negative interest rate.
Operating costs declined to €371.8 million in 2020 (2019: €384.1 million), driven by the disciplined implementation of cost-saving measures announced at the beginning of the year. Due to the partly non-structural character of the cost savings and the acquisition of Hof Hoorneman Bankiers, we expect operating costs to be at a higher level in 2021 than they were in 2020.
The loan portfolio stood at €8.4 billion at year-end, with the vast majority in residential mortgages in the Netherlands. The run-off of the corporate banking portfolio also proceeded successfully in 2020, reducing the portfolio to €195 million (2019: €318 million). Reflecting our wealth management strategy, overall credit risk is very limited, as demonstrated by the low volume of loans passed on to the Recovery department and the modest €1.9 million addition to the loan loss provision in 2020. This also includes a management overlay of €4.9 million, as we believe the IFRS 9 models are too optimistic for certain clients and industries, given the current circumstances.
The acquisition of Hof Hoorneman Bankiers was completed and was consolidated in the balance sheet and client assets as at year-end 2020. Van Lanschot Kempen expects to complete the integration of Hof Hoorneman Bankiers clients, employees and investment funds by the end of 2021. The client assets amount to €2.0 billion and we are very pleased to welcome the former Hof Hoorneman Bankiers clients.
[i] Adjusted for the sales of our stakes in AIO II and VLC & Partners, and goodwill impairments.
For a detailed discussion of Van Lanschot Kempen’s results and balance sheet, please refer to our annual report and presentation on the 2020 full-year results on Financial results.
In a conference call on 25 February at 9:00 am CET, we will discuss our 2020 full-year results in greater detail. This may be viewed live on Financial results and played back at a later date.
30 April 2021 - Publication of 2021 first-quarter trading update
27 May 2021 - General meeting
1 June 2021 - Ex-dividend date
9 June 2021 - 2020 dividend payment date – first tranche
26 August - 2021 Publication half-year results 2021