Annual Report 2010 Our view on banking has always been that a bank should act in the interests of its clients. In 2010 our bankers continued to personify this view by being there for their clients, not just during office hours or by appointment but at other times too, by actively following the financial circumstances of their clients and by offering them much more than standard advice. In other words, by showing commitment. Personal attention, a proactive approach and commitment to our clients are what distinguish a Van Lanschot banker. And that for almost 275 years. The Annual Report 2010 is available in both Dutch and English. In the event of discrepancies between the two versions, the Dutch version will prevail. The publications are available on our website www.vanlanschot.nl/annualreports. contents about van lanschot 2 Profile 4 Key data 6 The Van Lanschot share 8 Van Lanschot’s strategy 10 Message from the Chairman of the Board of Managing Directors report of the board of managing directors 12 Personal details of members of the Board of Managing Directors 14 Market trends in 2010 16 Financial performance and outlook 22 Services to our clients: Private & Business Banking, Asset Management and Corporate Finance & Securities 33 Risk & capital management 39 Corporate social responsibility governance 45 Report of the Supervisory Board 49 Corporate Governance 60 Remuneration policy for members of the Board of Managing Directors financial statements 65 Consolidated balance sheet at 31 December 2010 66 Consolidated income statement for 2010 67 Consolidated statement of comprehensive income for 2010 68 Consolidated statement of changes in equity at 31 December 2010 69 Consolidated cash flow statement for 2010 notes 71 Summary of significant accounting principles 74 Summary of significant accounting policies 84 Risk management 132 Notes to the consolidated balance sheet 165 Notes to the consolidated income statement supplementary notes 175 Acquisitions in 2010 176 Consolidated balance sheet by accounting policy 178 Remuneration of the Board of Managing Directors and Supervisory Board 183 Related parties 186 Non-current liabilities 187 Segment information 192 Events after the balance sheet date company financial statements 193 Company balance sheet at 31 December 2010 193 Company income statement for 2010 193 Accounting policies for the company financial statements 194 Notes to the company financial statements other information 196 Independent auditor’s report 197 Profit appropriation 198 Events after the balance sheet date 199 Stichting Administratiekantoor van gewone aandelen A Van Lanschot 201 Stichting Preferente aandelen C Van Lanschot 202 Personal details of members of the Supervisory Board 203 Overview of general managers, members of the Employees’ Council and Advisory Council 204 Principal subsidiaries 205 Branches in the Netherlands and Belgium 208 Ten-year record 210 Glossary 2 about van lanschot Highlights in 2010 t Return to profitability: net profit of € 65.7 million t Assets under management increase € 5.5 billion (up 18%) to € 35.4 billion t Outperformance in all investment profiles (1.3% to 3.7%) t Excellent solvency and liquidity position: Core Tier I ratio 9.6% t Reconfirmation of all credit ratings: Single A minus (A-), stable outlook t Resumption of dividend policy: dividend distribution of € 0.70 per share t The client is key; appropriate product range with transparent fee structure Private & Business Banking services Private clients Business clients t Full range of financial services t (International) payment services t Financial planning and wealth planning t Corporate loans t Asset management and investment advice t Advice on sale and transfer of businesses t International private banking solutions t Shareholdings t Trust activities target groups t High net-worth private individuals in the Netherlands and Belgium with t Entrepreneurs and their businesses (family freely investable assets in excess of € 250,000 businesses with revenues of € 5 million or more) t Directors-owners t Entrepreneurs in the healthcare sector t Business executives t Business professionals (lawyers, civil-law notaries, auditors, tax consultants) t Foundations and associations characteristics t Wealth creation and asset protection form the basis for the service offering t Focus on both the business and private interests t State of the art investment concepts of an entrepreneur t Open architecture and transparent fee structure t In-house Business Transfer training programme t Sustainable investments/management based on strategy of engagement t Much attention for customer care t Close to the client with 29 branches in the Netherlands and 8 in Belgium t International presence in Switzerland, Luxembourg, Curacao, Jersey, France and Spain t Institutional investment solutions also accessible to Private Banking clients 3 QSJWBUFCBOLJOHQVSTBOH CBOLJOHXJUIDBSFBOEBUUFOUJPO Van Lanschot is the oldest independent private bank in the Van Lanschot has made a conscious choice to remain of a size Netherlands with a history dating back to 1737. Van Lanschot that strikes the right balance between offering comprehensive, offers a full range of services to high net-worth individuals in high-quality advisory services and ensuring a personal approach, the Netherlands and Belgium, as well as entrepreneurs and their with short communication lines. We are attentive and responsive businesses in the Netherlands. In the institutional market, we to our clients’ needs, while also offering a high degree of focus on asset management mandates, increasingly through professionalism and discretion. Personal relationships are full-service fiduciary investment solutions. paramount. Our people are ambitious, committed, independent and professional. That is how they make the difference for our We provide our Private Banking services in close collaboration clients. Independence forms the basis of our business model. with our subsidiary Kempen & Co. Kempen is a Dutch merchant bank which provides financial services in the fields of institutional The client is key, but Van Lanschot also serves the interests of asset management, securities brokerage and corporate finance. other stakeholders. We maintain close contacts with our own Thanks to the close collaboration between both banks, the employees, shareholders, other providers of capital and civil- high-quality investment solutions and other services for society organisations. These contacts form an essential aspect institutional clients are also available to our private clients. of our social corporate responsibility policy, with which we aim to be an honourable and reliable bank for all stakeholders. Asset Management Corporate Finance & Securities Corporate Finance Securities t Institutional asset management t Independent advice and support in mergers, t Securities research t Compilation of investment portfolios of acquisitions, capital market transactions and t Securities brokerage private clients financial restructurings t Roadshows t Management of investment funds t Advisory services in collaboration with Private t Investment products t Fiduciary asset management & Business Banking for large and medium- t Bond desk t Development of investment products sized family businesses t Retail desk for private clients and solutions t Institutional investors t Listed and unlisted companies t Professional investors t Pension funds/insurance companies t Corporate clients of Van Lanschot t Private & Business Banking clients t Financial institutions t Listed companies t Semi-public and public institutions t Foundations and associations t Niche strategy: European small caps, listed t Specialisation in five sectors: property, t Niche player with focus on Benelux property funds, high dividend shares, utilities, renewables & cleantech, financial countries, listed companies, listed investment grade (government) bonds and institutions, life sciences & healthcare and (European) life-sciences companies and absolute-return strategies construction and maritime & offshore sectors listed pan-European property companies t Client Solutions: full-scope investment solutions t Independent intermediary without conflicting for client (fiduciary management) interests t Sustainable investments based on strategy of engagement t Asset management based on long-term vision and entrepreneurship 4 key data In millions of euros, unless indicated otherwise * 2010 2009 Comments results Income from operating activities 613.3 568.5 Strong increase in interest and commission income Operating expenses 422.3 428.8 Lower costs thanks to efficiency measures Addition to loan loss provision 86.5 113.2 Declining trend in loan loss provision continues Net profit 65.7 – 14.8 Return to profitability balance sheet Loans 15,710 16,941 Deleveraging of the balance sheet Liabilities 13,546 13,380 Stable basis of savings and deposits of clients Total assets 19,590 20,569 80% of the balance sheet consists of the loan book Equity 1,785 1,552 Increase due to conversion of preference shares off balance sheet Client Assets 48,961 43,243 Continued investments in core activities: asset management in particular – Assets under management 35,415 29,863 – Funds entrusted 13,546 13,380 Assets under management 35,415 29,863 Growth in asset management – Non-discretionary 14,478 13,703 – Discretionary 20,937 16,160 – of which double counted 689 489 other financial data Earnings per share (in euros) 1.45 – 0.72 Increase in income from core operations Addition to loan loss provision as a % of average