TlB Annual Report 2009 - Triodos Bank

Triodos Bank United Kingdom
The financial crisis continued to dominate
everyone’s attention in 2009. Its impact
was felt across society with few individuals
and organisations unaffected by the broad-based
economic decline. A number of high profile
businesses failed, the housing market remained
stagnant and unemployment rates increased to
their highest levels in more than a decade.
Massive Government intervention was needed
during the uk’s deepest recession since the
1940s, including large injections of public money
to support financial institutions. Efforts to
stimulate the economy included cuts in the Bank
of England base rate to 0.5%, the lowest level in
its 315-year history, and up to gbp 200 billion of
quantitative easing which increased the money
supply in an attempt to reinvigorate growth.
Confidence in the financial sector remained
low. Chief Executives of some of the failed
banks were targeted personally, and generous
bank bonuses in particular were the subject of
widespread public discontent. While there were
some elements of change, concerns about the
scale and permanency of reforms to the uk’s
financial sector have grown, with many people
disillusioned by an apparent return to business
as usual. Against this background, Triodos
Bank continued to deliver a better balance
between people, planet and profit. Our sustainable
approach to banking contrasted starkly
with the beleaguered high-street banking sector
- much of which is now, at least in part, nationalised
- and lead to more attention from the
media, individuals and the business community
than ever before. As a result we continued to
grow across all the areas we work in.
However our interest margin and therefore the
profitability of the uk branch, as well as our
ability to attract large numbers of new savings
customers, was significantly affected by the
dramatic change in the uk interest rate environment.
This margin compression has been felt
across the whole market resulting in a large
degree of consolidation amongst some of the
smaller uk financial institutions who were most
affected by it.
ACHIEVEMENT OF GOALS 2009
During the year, the uk branch’s balance sheet
before the elimination of transactions between
Triodos companies achieved modest growth of
gbp 15 million (4%) to gbp 401 million. Lending
rose by gbp 40 million to gbp 247 million,
meeting the target. This significant growth in
lending of 19%, compared with marginal savings
growth of 1%, and meant that new lending was
funded out of existing liquidity.
LENDING
The loan portfolio grew significantly by gbp 40
million (19%) to gbp 247 million during the
year, exceeding an ambitious target. Growth in
social housing lending was particularly
marked on the back of an increasing profile in
the sector. 2009 was also a record year for
lending to renewable energy and organic
farming projects. Our expanded environment
Charles Middleton: ‘While the
banking sector suffered a crisis
of confidence during 2009, our
model was singled out as offering hope for
a genuinely sustainable financial future.’
lending team financed a number of high
profile developments, including the first of
two in-vessel composting projects to be
financed by the uk branch. This is important
because the pioneering technology helps to
address the problem of food waste disposal,
which we believe will become an increasingly
significant problem.
SAVINGS
Competition across the uk savings market
intensified during 2009, as a direct result of the
credit crunch. Financial institutions, directed to
reduce their dependency on the wholesale
money markets by the regulator, competed
aggressively for retail deposits. At the same
TRIODOS BANK - ANNUAL REPORT 2009 27