's-Hertogenbosch, the Netherlands, 22 August 2018
- Net result at €39.3 million (H1 2017: €62.3 million), underlying net result at €47.2 million (H1 2017: €69.6 million)
- Strong 13% increase in commission income
- Client assets stable at €83.7 billion and AuM stable at €69.1 billion
- €0.3 billion in net AuM inflows at Private Banking
- Further strengthening of capital position: fully loaded CET1 ratio at 21.4% (year-end 2017: 20.3%)
- Special capital return proposal of €1.50 per share
Karl Guha, Chairman, said: "Over the past six months, we have continued to work on strengthening our position as a specialist wealth manager. Our results - a sharp increase in commission income, net inflows at Private Banking and a robust capital position - made for a solid start to the year. That said, our efficiency ratio has risen, and has our full attention.
We're happy that our strong capital position enables us to propose returning €1.50 per share to our shareholders. We thank our clients and shareholders for their loyalty and the trust they put in us."
At €39.3 million, the net result in the first half of 2018 came in well below the year-earlier figure, but included no significant proceeds from sales of participating interests in Van Lanschot Kempen's private equity portfolio and investment funds. The 13% advance in commission income reflects growth in assets under management (AuM) since last year and a strong performance at Merchant Banking. Private Banking continued to grow and saw net inflows of €0.3 billion. Merchant Banking recorded a 39% increase in commission income on the back of a high number of successful corporate finance and capital market transactions.
The first quarter's equity market volatility calmed down as the second quarter progressed, resulting in a net positive market performance of €0.1 billion for the first half. Enjoying a slight net increase, AuM ended up at €69.1 billion, compared with €69.0 billion at year-end 2017. Private Banking grew its AuM by a net €0.2 billion to €22.8 billion, whereas Asset Management saw AuM reduce by €0.1 billion to €45.4 billion in the wake of outflows from its investment strategies. Growth is expected in Asset Management, with the Arcadis pension fund mandate coming into effect on 1 July and several other mandates in the pipeline. Evi saw client numbers up by 20% and its AuM grew to €1 billion.
The CET1 ratio [i] recorded a strong increase to 21.4% from 20.3%, and return on equity amounted to 8.7%. The robust capital position enables Van Lanschot Kempen to propose a capital return of €1.50 per share. If approved, over €60 million will be paid to shareholders, taking the total payment to over €210 million and staying on course to realise its ambition to return at least €250 million to shareholders before the end of 2020.
Cost levels were up on last year, driven by the acquisition of UBS's wealth management activities in the Netherlands, increased staff costs and higher project and consultancy costs related to the implementation of Van Lanschot Kempen's strategy. These higher costs combined with the impact of the current low interest rates on its income to push the efficiency ratioto 81.1%. The loan portfolio benefited from the positive economic climate, enabling a net release from loan loss provisions of €3.5 million.
[i] Fully loaded, excluding retained earnings.
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