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Triodos Bank half year results 2016

Lending growth and strengthened CET1 for Europe’s leading sustainable bank in first half of 2016

26-08-2016 till 30-09-2017 |

  • 4.1% growth in lending to sustainable businesses
  • Common Equity Tier 1 ratio (CET1) 19.8%
  • 7% increase in equity to EUR 835 million
  • 5% growth in balance sheet
  • 3% growth in total assets under management to EUR 12.6 billion
  • Net profit EUR 18.6 million
  • 23,000 new customers (4% growth)
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Lending to sustainable businesses continue to grow at Triodos Bank in the first half of 2016. A healthy 4.1% growth of the loan book was achieved while Common Equity Tier 1 ratio (CET1) increased to 19.8%, equity increased by 7%, helping the bank maintain its strong resilient position.

Despite the uncertain economic outlook prompted by the EU referendum result, Europe’s leading sustainable bank, Triodos, which only supports businesses and organisations which create environmental, social or cultural value expects lending growth to continue throughout 2016.

The new Managing Director of Triodos Bank UK Bevis Watts said: "A continued growth in our lending means we’re supporting organisations that have a positive impact on society and the environment. We continue to trade profitably and grow and against a backdrop of a fast moving world and an uncertain economic outlook. With most of the UK banking sector operating with Common Equity Tier 1 ratios of around 13-14% and Triodos increasing this to 19.8%, helped by the growing number of people and organisations choosing to invest in us, we continue to grow and demonstrate our model for sustainable banking that uses the intermediary power of finance to benefit people and the planet."

Triodos Bank has a history of responsible growth even in times of market fluctuations. Watts, recently appointed as the new leader of the bank in the UK has said how he wants Triodos to change the way banking is done.

Bevis_270

"There continue to be fundamental flaws in our financial system’s stability and in the way in which the banking sector serves society. We believe our values based banking model and our transparency about what we do and what we stand for provides a way for people to make money a force for good at a time when the financial sector is struggling to address some fundamental shortcomings."

Bevis Watts, Managing Director, Triodos Bank UK

Results

During the first six months of 2016, Triodos Bank’s balance sheet rose by 5% to EUR 8.6 billion. Growth during the same period last year was 8%.

Total assets under management, comprised of Triodos Bank, Triodos Investment Funds and Triodos Private Banking grew by 3% to EUR 12.6 billion in the first half of the year, compared to an increase of 8.3% to EUR 11.5 billion in the first half of 2015. Triodos Bank has branches in the UK, Netherlands, Belgium, Spain, Germany and an agency in France.

Sustainable banking with Triodos Bank remains attractive for many people. In the first six months of 2016 the number of customers grew by 23,000 to a total of 630,000, an increase of 4%.

At the end of the first half of 2016, Triodos Bank’s net profit reached EUR 18.6 million. This is 15% below the same period in 2015 (EUR 21.9 million). The main reasons for the lower net profit are lower interest margins and contributions that were required to be made into the Dutch Deposit Guarantee Scheme (DGS) due to a new funding mechanism that came into effect. The additional cost of the DGS contribution explains also the significant increase of the cost/income ratio (77% versus 71% for the same period last year. New regulatory levies and government taxes amount to a total of EUR 4.4 million.

Banking activities

Stable and healthy growth of the loan book is important for Triodos Bank as this directly contributes to its mission. 100% of our loans are made to sustainable enterprises in the real economy. In the first half of the year our impact lending increased by 4.1%.

The provision for bad debts decreased markedly to EUR 0.2 million compared with EUR 1.6 million in the same period of 2015, reflecting a robust loan portfolio quality.

Funds entrusted, which are composed of savings, fixed-term deposits, and current account balances, increased by 5% compared with 8% during the same period in 2015.

Capital position

During the first six months of 2016 the bank's equity increased by 7% to EUR 835 million compared to 4% during the same period in 2015.

Triodos Bank has a Common Equity Tier 1 ratio (CET1), which is an important indicator of a bank’s solvency, of 19.8%. The leverage ratio is 8.8%. This is far higher than the 3% considered an appropriate minimum for European banks.

Funds under management

Funds under management consist of two parts: funds managed by Triodos Private Banking and the total amount of money invested in funds managed by Triodos Investment Management.

Despite challenging market conditions, the assets under management by Triodos Investment Management have remained stable at EUR 3.1 billion

In the first half of 2016, funds managed by Triodos Private Banking grew by 5% to EUR 0.96 billion (2015: 9%)

Triodos Bank UK

In the first half of 2016 key events have impacted figures reported by the UK branch. Since the EU referendum result a dramatic decrease in the value of sterling against the euro has negatively impacted GBP reported performance when converted to EUR.

In the UK, Triodos Bank saw its lending grow by 4% to GBP 649 million in the first half of 2016. However because of the exchange rate in euro terms lending has fallen by 8% to EUR 777m. The UK balance sheet increased by 8% (GBP 81m) to GBP 1.1 billion. But similarly, in terms of euros this has fallen by 5% to EUR 1.3m.

UK customer numbers were impacted by the removal of Thrive Renewables

customers from UK branch figures. For the first half of 2016 UK branch customer numbers, excluding Thrive Renewables, increased by 3% to 44,000.

Triodos Bank UK expects to continue its growth in the second half of 2016, in line with its mission to create lasting sustainable benefits for people, the environment and culture. To support its growth the UK branch will continue to focus on its core areas of lending while researching new areas of need that are becoming apparent.

About Triodos Bank

Triodos Bank is a global pioneer in sustainable banking using the power of finance to invest in projects that are good for people and the planet. Triodos uses its € 12 billion in assets to create social, environmental and cultural value in a transparent and sustainable way.

With UK operations based in Bristol, Triodos Bank has branches in the Netherlands, Belgium, Spain, Germany and an agency in France. Globally, Triodos Bank has microfinance projects in Central Asia and Eastern Europe, and is a founding member of the Global Alliance for Banking on Values (GABV), a worldwide network of 36 banks seeking to transform finance into a vehicle of positive influence.

Triodos Bank N.V. has a full banking license and is registered with The Nederlandsche Bank N.V. (the Dutch central bank) and The Netherlands Authority for the Financial Markets.-End-

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For more information, please contact:

Zoe Sear , Head of Communications & Marketing

zoe.sear@triodos.co.uk
+44 (0)117 311 0259
+44 (0)7786 856069

Chris Yong, Communications Officer

christopher.yong@triodos.co.uk
+44 (0 )117 980 9721

Downloads

Our vision – Dr. Bevis Watts

New MD of Triodos Bank, Bevis Watts - 'I’m leading a bank that wants to change the world for good'.

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