Moving forward: NIBC’s net profit H1 2016

• Continued momentum and growth of the client base fuels 6% increase in operating income;
• 7% growth in net interest income, as net interest margin further increased;
• Operating expenses slightly decreased 2% compared to H1 2015 due to stringent cost control; total cost up 8% due to inclusion regulatory cost;
• Expanded product offering with acquisition of SNS Securities (renamed to NIBC Markets), start-up of BEEQUIP equipment leasing and Buy-to-let continued strong growth;
• Special items of EUR 4 million (net of tax) include both the initial gain from badwill following the acquisition of NIBC Markets and losses following the bankruptcy of a client in the retail sector; and
• Fitch revised its rating outlook for NIBC to positive in June.

Statement of the CEO, Paulus de Wilt:

“Looking back on the first half of 2016, we see some signs of a recovering economy, albeit fragile and surrounded by uncertainty. Developments in the energy and shipping markets, the sustained low interest rate climate and the Brexit have significantly impacted economic activity in our markets.

 

Nevertheless, we have provided 3% more drawn credit to our clients. The total corporate loan book remained relatively stable with a loan exposure (drawn and undrawn) of EUR 9.1 billion, as new loan production of EUR 1.2 billion offset both repayments and negative currency effects of EUR 0.2 billion. Still, I believe this is the effect of the professionalism and entrepreneurial spirit of our employees that ultimately lead to inventive solutions for our corporate clients. New transactions contributed positively to the quality of the corporate loan book, with an improved risk-reward balance. New origination also includes the growth of our new leasing activities of BEEQUIP. NIBC Markets adds complementary product offering which will increase our possibilities to support our clients, and consequently support further growth.

Origination of retail mortgages amounted to EUR 0.5 billion. As the market demands more and more longer maturities, which do not match NIBC’s natural funding position, we have had limited appetite for 20 year mortgages and have focused us more on 10 year non-NHG mortgages and our Buy-to-let-product. Our clients appreciate the Buy-to-let product offering resulting in a strong new origination volume of more than EUR 100 million in the first half year.

 

On the funding side, we have been active in various parts of the market. We have successfully issued our first 10 year pass-through covered bond, returned to the senior unsecured market with a EUR and a CHF issue and our clients, both consumer and institutional, entrusted more deposits to us again. Actively managing our funding mix has helped us to lower the effective funding rate of the portfolio, supporting a further increase of our net interest margin.

 

These achievements have contributed to a solid financial performance, with net profit up 33% to EUR 44 million based on growth of our net interest income and controlled operating expenses. With this basis, we continue to move forward with our expanded product offering to be even better positioned to support our clients with financial solutions at their decisive moments.”