Annual Report
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Annual report Table of contents Annual Report 2 Report of the Management Board 3 1 Key figures 3 2 Foreword 4 3 Profile and brands 7 4 Strategy and Organisation 9 5 Nationalisation and its implications 13 6 Outlook 2014 21 7 Financial outlines 24 8 Developments SNS Retail Bank 28 9 Developments Property Finance 44 10 Risk and capital management 46 11 Funding, liquidity and credit ratings 52 12 Our people 55 Report of the Supervisory Board 62 13 Report of the Supervisory Board 62 Corporate governance 65 14 Corporate governance 65 Financial statements 70 15 Consolidated financial statements 70 16 Accounting principles for the consolidated financial statements 76 17 Segmentation 106 18 Acquisitions and disposals 111 19 Risk management and organisation 112 20 Financial risk management 122 21 Financial instruments and hedge accounting 144 22 Non-financial risk management 154 23 Capital management SNS Bank NV 156 24 Notes to the consolidated financial statements 160 25 Company financial statements 194 26 Notes to the company financial statements 196 27 Overview of principal subsidiaries 204 28 Other information 205 PILLAR III 208 29 Pillar III 208 SNS Bank Annual report 2013 2 Report of the Management Board 1 Key figures Key figures SNS Bank In € millions 2013 2012 2011 2010 2009 Balance Sheet Total assets 74,537 81,341 81,272 78,918 80,251 Loans and advances to customers 53,405 61,768 64,797 65,013 67,479 Of which mortgage loans 48,458 50,841 52,920 50,888 50,878 Loans and advances to banks 6,063 1,927 1,682 1,681 2,715 Amounts due to customers 43,904 42,344 40,557 37,880 34,270 Of which savings 33,276 32,815 30,342 27,398 24,435 Amounts due to credit institutions 7,457 8,686 4,716 3,096 7,119 Debt certificates 16,439 21,990 27,361 29,523 30,739 Shareholders' equity 2,582 1,337 1,723 1,580 2,165 Capital base 2,437 1,908 2,961 3,694 3,590 Income Statement Net interest income 957 705 803 871 672 Other income 86 137 239 114 426 Of which net commission and management fees 50 54 86 92 99 Net result (1,352) (719) 38 (431) (99) Net result SNS Retail Bank 184 94 281 139 120 Net result Property Finance (1,536) (813) (243) (643) (219) Ratios Return on shareholders' equity (ROE) (52.4%) (53.8%) 2.2% (27.3%) (4.6%) Efficiency ratio 50.0% 56.8% 49.9% 57.8% 57.0% Core Tier 1 ratio 16.6% 6.1% 9.2% 8.1% 8.3% Tier 1 ratio 16.6% 7.7% 12.2% 10.7% 10.7% BIS ratio 16.7% 9.3% 14.4% 16.7% 13.9% Risk weighted assets (RWA) 14,578 20,592 20,534 22,131 25,885 Number of branches SNS Bank 166 162 155 143 133 Number of agencies RegioBank 526 536 529 537 602 Number of cash dispensers 537 519 507 490 516 Number of employees (FTEs) 2,009 2,133 2,426 2,639 3,270 Core Tier 1 ratio, Tier 1 ratio and BIS ratio are calculated based on Basel II. SNS Bank Annual report 2013 3 2 Foreword ‘Facing our new future with confidence’ With the nationalisation of SNS REAAL on 1 February 2013, SNS Bank NV underwent a year of radical change. The nationalisation had far-reaching consequences for society, shareholders and subordinated creditors. At the same time, it brought clarity for both our customers and employees. We have worked hard towards a new reality. A foundation for the future. As a bank, it is therefore appropriate that we adopt a modest stance. Aid provided by the Dutch State, the taxpayer, enabled SNS Bank NV to devote its attention to regaining the confidence of its customers and society. This is something we will continue to build upon during 2014. For instance by consciously choosing to focus on our social utility function. To expand consumer choice, we aim to be the challenger in the current landscape of the Dutch banking sector. As management team, we are very much aware of the impact that the events of 2013 had on our employees. The wave of media coverage at the time of and following the nationalisation has had a significant impact. I am, therefore, proud of the positive manner in which employees of the bank rolled up their sleeves and made every effort to restore customer satisfaction. In the coming year, we will again be calling upon the flexibility and resilience of our employees. SNS Bank NV's reported net loss for 2013 was mainly caused by Property Finance, including the required write-down after the nationalisation. The segment SNS Retail Bank posted a solid profit and its capital position improved to robust levels. The core Tier 1 ratio of SNS Bank NV improved to 16.6% compared to 6.1% at year-end 2012. Following the nationalisation and separation of Property Finance, the risk profile also decreased. This year was dominated by dealing with the aftermath of the nationalisation on 1 February 2013. SNS REAAL worked constructively with the Ministry of Finance in drawing up a restructuring plan, which was submitted to the European Commission on 19 August 2013. Following submission of the plan, preparatory work was undertaken during the remainder of 2013. On 19 December 2013, the European Commission granted its final approval of the Dutch state aid and for the restructuring plan. The spin-off of Property Finance became a reality on 31 December. Over time, SNS REAAL will cease to exist in its present form and SNS Bank NV will continue as an independent bank. The restructuring plan is the basis for the future and provides clarity for our customers and employees as well as our brands (SNS Bank, ASN Bank, RegioBank and BLG Wonen). As a result of the preparations undertaken in 2013, we can achieve significant progress in creating an independent retail bank in 2014. Part of the staff of the holding company of SNS REAAL will transfer to the bank. We anticipate that this allocation process will have been completed around the summer of 2014, with the exception of the ITC department which will follow mid 2015. In parallel with dealing with the aftermath of the nationalisation and preparing the restructuring plan, we, as a bank, also continued to build upon our core activities. The common focus of all brands within SNS Bank NV has been on regaining the trust of our customers. In 2013, we made the conscious choice to return to the social roots of the savings banks from which we originate. As a real retail bank, we will once again focus on authentic values embedded in our company since its establishment. We intend to return to being a financial services provider that makes people aware of their financial situation with simple, clear and transparent products and services. We achieve this by consciously involving our customers in the development of these products, but also with the efforts of committed colleagues. The following motto defines the essence of our services: ‘The customer knows best what he wants or requires, selects the most appropriate product and understands what it costs and what it delivers’. SNS Bank Annual report 2013 4 The company’s core values are embedded in our Manifesto. Together with our mission of CARE!, this ensures that Corporate Responsibility is integrated into our business strategy. We also began offering appropriate assistance to mortgage customers facing financial difficulty and began to actively look at how we might offer support to prevent this. SNS Bank, RegioBank and BLG Wonen customers can take a mortgage test online or in one of the SNS shops to better identify potential financial risks. By offering the right steps at the right time, problems can be avoided at an earlier stage. Our principal aim is to increase people’s financial resilience and independence. In 2013, we provided financial education for adults, young people and children through our foundations: Geldinzicht, Weet wat je besteedt (Stay on top of your spending) and through our participation in the guest teaching programmes Eurowijs and Bank voor de klas. We believe that our guiding principle should always be to put our customers’ interests first. To achieve this, we strive to offer our customers insight, clarity and prospects, so they can make the right financial choices, whether they be big or small. In 2013, SNS Bank NV undertook a considerable number of initiatives to serve and ensure the interests of customers. We thus offer simple, accessible and safe products and services with limited risk and we make use of customer experiences and complaints to further improve our products. The number of customers at SNS Bank NV grew by three percent in 2013, despite the turbulent period at the time of the nationalisation. As there is no such thing as the ‘average customer’, we have consciously chosen to serve our customers in a way that best fits their needs. That is why, instead of one brand for all customers, we have different brands, each with its own way of working, mentality and products. In 2013, we continued with the previously initiated simplification of our product offerings. Products and services for our brands are carefully designed to meet the specific needs of the customer. Through the youth savings product Zilvervloot Sparen, SNS Bank and RegioBank emphasise the importance of saving money by parents, grandparents, children and grandchildren. ASN Bank organised a savings campaign in cooperation with the Dutch National Foundation for the Elderly.