TlB Annual Report 2009 - Triodos Bank

Triodos Bank Private Banking
Private Banking offers a broad range of
financial and non-financial services to
wealthier people, foundations, asso cia tions
and religious and other institutions. Sustainable
asset management is the core service within
Triodos Private Banking, which includes both
Triodos investment funds and private asset
management. Triodos Research, an experienced
specialist department, selects which businesses
are eligible for investment.
Triodos Bank Private Banking is active in The
Netherlands and Belgium. We work together
with Triodos MeesPierson Investment Management
to deliver Dutch private asset management
services; Triodos MeesPierson is a joint venture,
combining MeesPierson’s broad asset management
expertise with Triodos Bank’s sustainable
banking experience. In Belgium we have a
partnership with Puilaetco Dewaay Private
Bankers.
ACHIEVEMENT OF GOALS FOR 2009
The collapse of the financial markets in 2008
inevitably had a significant impact on the
achievements of our goals in 2009. Despite a
challenging economic situation in the first half
of the year, we increased our assets under
management to more than eur 280 million.
Assets under management in Belgium amounted
to eur 38 million (up by eur 16 million in 2009),
while The Netherlands contributed eur 242
million (up by eur 108 million). As well as
these assets under management, private banking
clients in The Netherlands also entrust us with
individual holdings in Triodos investment funds
and depository receipts (up eur 42 million to
eur 80 million) and deposits and saving accounts
(down eur 37 million to eur 86 million). The
decline of deposits and saving accounts was due
to the adverse interest rates prevalent in the
market during 2009, causing clients to switch to
higher yielding investment products.
Both in Belgium and The Netherlands, the
growth of private banking was largely due to
private individuals and religious organisations.
These customers are increasingly attracted to
our sustainable business model. However, with
one notable exception, the growth of charities
and foundations, was lower than expected. This
may have been due to a reluctance to change
banks in uncertain times and very competitive
pricing in the market. In The Netherlands, ‘the
foundation Oranje Fonds’, a widely known and
well regarded charity chose Triodos Bank to
manage a substantial part of their investment
portfolio. We consider this charity to be a
pioneer, with its commitment to invest all
holdings in sustainable and/or mission related
assets, while maintaining a market-related
financial return.
After losing 37% in 2008, our sustainable equity
portfolio rallied by 34% in 2009. This meant a
7.6% excess return versus the market represented
by the msci World index, outperforming the
index for the fourth successive year. Since the
start of our joint venture with MeesPierson in
2006, our equity portfolio has yielded a
positive return of 7% against -15% for the msci.
In 2009, Triodos’ fixed interest investments
recovered most of their underperformance from
the previous year. 2008 was a turbulent year
resulting in an underperformance of our bond
portfolios versus our benchmark. In 2009, when
calm returned to the financial markets, our
performance improved markedly. Excluding
social and cultural investments, our fixed interest
investments yielded a satisfactory 9.7%; including
Triodos social and cultural investment funds
which delivered a return of 6.9%. Our benchmark
for fixed interest investments yielded only
5.0% in 2009. Since 1 January 2006, our fixed
investment portfolio has returned 15.4% against
our own benchmark of 16.0%.
2009 was exceptional because all three investment
classes that Triodos Bank Private Banking
carries (shares, bonds, alternatives) produced
positive results. Our alternative investments,
which so far have only been offered in The
Netherlands, yielded 2.6%. This reflected a
mixture of very strong performance from Triodos
Fair Share Fund and Triodos Vastgoedfonds
which performed well against its stock-market
quoted peers but which performed negatively
over the year. During the year Triodos also
introduced Triodos Microfinance Fund, a fund
modeled like Triodos Fair Share Fund but
aimed at European (semi-) institutional markets
and private investors outside The Netherlands.
TRIODOS BANK - ANNUAL REPORT 2009 39