Annual Report 2011

1 2011 Annual Report

2 2011 Annual Report

This document is a translation of the Dutch original and is provided as a courtesy only. In the event of any disparity, the Dutch version shall prevail. No rights may be derived from the translated document. Contents

BinckBank overview 5 Report of the supervisory board 91 Profile BinckBank 5 Message by the chairman of Key figures 7 the supervisory board 92 Key events in 2011 8 Duties of the supervisory board 93 Chairman’s message 10 Composition of the supervisory board 93 BinckBank in a European context 12 Meeting of the supervisory board and Vision, mission, strategy and objectives 16 subcommittees in 2011 93 Information for shareholders 22 Broad outlines of the remuneration report 97 Financial calendar 2012 and 2013 27 Loans granted to members of the executive board 99 Report of the executive board 29 Remuneration of members of the Review of the financial results 29 supervisory board and subcommittees in 2011 100 Retail business unit 33 Consultation with the Works Council 101 Professional Services business unit 37 Financial statements and dividend 101 Subsidiaries, joint ventures and assosiates 39 Supervisory board members 102 Outlook 2012 41 Human Resources 42 Financial statements 105 Corporate social responsibility 44 Executive board members 50

Risk & capital management 53 3 Key developments in 2011 53 Overview of risk management at BinckBank 55

2011 Capital structure 59 Capital management 62 Relevant risks and control measures 63 Capital adequacy and results of stress tests for BinckBank 71 Annual Report

Risk management accountability 73

Liquidity management 75 Liquidity profile of BinckBank 76 Liquidity risk management 76 Contingency Funding Plan (CFP) 78 Capital requirement for liquidity risk 78

Statement by the executive board 79 In-control statement 79

Corporate governance 81 Introduction 81 Developments in 2011 82 The Code 83 The Banking Code 88 Article 10 of the Takeover Directive 89 Conclusion 89 BE OPEN AND CRITICAL

EXCEED EXPECTATIONS

WHAT IS DNA?THE MOST IMPORTANT CARRIER OF GENETIC INFORMATION

EXCEL AT WHAT YOU DO

WORK WITH PASSION AND PLEASURE

1 # BinckBank Overview

Profile BinckBank BinckBank N.V. (hereinafter, ‘BinckBank’), incorporated in 2000, is an online bank for investors. BinckBank’s core business is providing a comprehensive, user-friendly website that allows private investors to invest easily and quickly anywhere in the world at competitive rates. BinckBank is ranked in the top five online brokers in Europe, and has repeatedly received rewards as the best online broker in the Netherlands, Belgium and France. BinckBank is listed on NYSE Euronext Amsterdam, and has been listed on the Amsterdam Midkap Index (AMX) since 1 March 2006. At year-end 2011, BinckBank’s market capitalisation stood at € 621m and the average daily turnover in BinckBank shares in 2011 was 252,815.

BinckBank’s ambition is to be the largest online bank for investors in Europe. It is already the market leader in the Netherlands, and has strong positions in Belgium and France. BinckBank expects to commence operations in Italy in mid-2012. The Retail business unit services private investors under the brands Alex and Binck. Under the Alex brand, we focus on Dutch private investors looking to achieve more with their capital. In addition to an extensive investment website, Alex offers savings, asset management, investment funds and education courses for investors. At Binck, we focus on the active private independent investor with order execution at competitive rates in combination with extensive facilities, including a professional investment website with real-time streaming prices, news, depth of order book, research, recommendations and tools for technical and other analysis.

In addition to serving private investors, BinckBank serves approximately 100 professional parties. The Professional Services business unit serves independent investment managers, banks, insurance companies and pension administrators in the Netherlands and Belgium. Through our online product we provide a complete securities transaction service with the associated banking administration. Our Professional Services customers can opt for a service provision agreement with BinckBank, or they can make independent use of the software supplied by our daughter company Syntel, which allows customers to manage their own operations.

BinckBank’s has stakes in Syntel (software supplier, 100%-owned), ThinkCapital (issuer of ETFs, 60% holding), BeFrank (pension accumulation, 50% holding) and TOM (multilateral trading platform, 38.5% holding).

6 2011 Annual Report

Key figures

x € 1,000 FY11 FY10 FY09 FY08 Customer figures Customer accounts 531,465 433,538 373,574 272,826 Retail 468,044 406,078 348,188 264,299 Professional Services 63,421 27,460 25,386 8,527 Number of transactions 9,709,795 8,854,215 9,617,181 7,151,244 Retail 8,936,459 8,268,167 9,144,980 6,807,997 Professional Services 773,336 586,048 472,201 343,247 Assets under administration 13,724,175 14,124,667 10,942,742 6,065,852 Retail 8,646,209 9,739,332 8,031,695 5,001,484 Professional Services 5,077,966 4,385,335 2,911,047 1,064,368

Income statement Net interest income 38,907 43,587 43,825 40,640 Net fee and commission income 128,447 126,970 129,240 101,181 Other income 13,322 13,599 9,661 6,162 Result from financial instruments 3,167 620 4,353 1,230 Impairment of financial assets (268) 70 (857) (205) Total income from operating activities 183,575 184,846 186,222 149,008 Employee expenses 50,861 45,480 43,185 38,443 Depreciation and amortisation 35,463 34,798 35,939 31,789 7 Other operating expenses 43,800 44,223 43,388 37,316 Total operating expenses 130,124 124,501 122,512 107,548 Result from operating activities 53,451 60,345 63,710 41,460 2011 Share in results of associates and joint ventures (5,848) (1,386) (1,466) 520 Other non-operating income - 23 - - Result before tax 47,603 58,982 62,244 41,980 Tax (13,513) (14,837) (15,083) (8,941)

Annual Report Result after tax 34,090 44,145 47,161 33,039

Result after tax (discontinued operations) - - - 106 Net result 34,090 44,145 47,161 33,145 Result attributable to non-controlling interests 120 95 - - Net result attributable to shareholders BinckBank 34,210 44,240 47,161 33,145 IFRS amortisation 28,196 28,196 28,196 28,196 Fiscal goodwill amortisation 2,737 2,792 2,792 2,792 Adjusted net earnings 65,143 75,228 78,149 64,133 Average number of shares outstanding during the year 74,142,108 74,080,265 74,897,706 76,870,870 Adjusted earnings per share (€) 0.88 1.02 1.04 0.83

Balance sheet & capital adequacy Balance sheet total 3,351,455 3,216,768 2,930,010 2,578,394 Equity 469,523 468,913 480,359 477,641 Total available capital (Tier I) 160,695 131,257 95,569 77,295 BIS ratio 31.1% 23.9% 18.4% 17.2% Solvency ratio 23.1% 15.7% 13.0% 13.6%

Cost / income ratio Cost / income ratio 71% 67% 66% 72% Cost / income ratio excluding IFRS amortisation 56% 52% 51% 53% BINCK IS NAMED 9NOVEMBER ‘BEST BROKER’ BY BEURSBULLETIN IN KEY EVENTS THE NETHERLANDS 2011

ALEX ACADEMY, ALEX ASSET

10NOVEMBER MANAGEMENT, ALEX ZELFBELEGGEN AND THINKCAPITAL ARE AWARDED THE ‘GOUDEN STIER’

TOM MTF OBTAINS 6JUNE AN AFM LICENCE IN FRANCE, BINCK IS FRENCH FINANCIAL DAILY SEPTEMBER FOR DERIVATIVES 11 AWARDED THE ‘LABEL 1NOVEMBER 8 ‘LES ECHOS’ NAMES BINCK AS TRADING D’EXCELLENCE 2012’ ONE OF THE BEST THREE BY LES DOSSIERS DE ONLINE BROKERS IN FRANCE L’EPARGNE

ANDROID APP 10JUNE AVAILABLE FOR BINCK CUSTOMERS

BEFRANK IS AWARDED TOM COMMENCES SEPTEMBER TOM BROKER B.V. 22 THE ‘GOUDEN SCHILD’ FOR 25NOVEMBER TRADING IN OPTIONS 21FEBRUARY OBTAINS MEMBERSHIP ‘PENSION PRODUCT OF THE OF EURONEXT LIFFE THINKCAPITAL LAUNCHES BEFRANK, THE FIRST YEAR 2011’ JUNE 14APRIL FOUR GLOBAL ETFs 24 PREMIUM PENSION INSTITUTION, OBTAINS A LICENCE FROM DE NEDERLANDSCHE BANK (DNB)

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BINCK IS NAMED AS THE FRENCH BINCK LAUNCHES BINCK ADDS BINCKBANK WINS THE NYSE EURONEXT OCTOBER DECEMBER JULY MARCH 11 ONLINE BROKER WITH THE BEST 13MAY IPAD APP 21 SCANDINAVIAN 24 HENRI SIJTHOFF PRIZE 1 REDUCES OPTION PRICE/SERVICE RATIO BY MIEUX MARKETS TO ITS FOR BEST FINANCIAL FEES FROM VIVRE VOTRE ARGENT INVESTMENT UNIVERSE REPORTING IN THE AMX € 0.75 TO € 0.40 AND ASX CATEGORY PER CONTRACT

BINCK IS CHOSEN AS

25MAY ‘BEST ONLINE BROKER BINCK LAUNCHES AN IN THE NETHER- ALLIANZ BECOMES MARCH

28 IPHONE APP AND A NEW LANDS’ BY IEX JULY 22 A BPO CUSTOMER OF BINCKBANK RESUMES

MOBILE WEBSITE NETPROFILER FOR THE DECEMBER PROFESSIONAL 16 SHARE BUY-BACK 5TH CONSECUTIVE SERVICES PROGRAMME YEAR

ALEX COMES 20DECEMBER TOP IN THE BROKERTARIEVEN CUSTOMER SATISFACTION SURVEY BINCK IS NAMED 9NOVEMBER ‘BEST BROKER’ BY BEURSBULLETIN IN THE NETHERLANDS

ALEX ACADEMY, ALEX ASSET

10NOVEMBER MANAGEMENT, ALEX ZELFBELEGGEN AND THINKCAPITAL ARE AWARDED THE ‘GOUDEN STIER’

ANDROID APP 10JUNE AVAILABLE FOR BINCK CUSTOMERS

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BINCK IS CHOSEN AS

25MAY ‘BEST ONLINE BROKER BINCK LAUNCHES AN IN THE NETHER- ALLIANZ BECOMES MARCH

28 IPHONE APP AND A NEW LANDS’ BY IEX JULY 22 A BPO CUSTOMER OF BINCKBANK RESUMES

MOBILE WEBSITE NETPROFILER FOR THE DECEMBER PROFESSIONAL 16 SHARE BUY-BACK 5TH CONSECUTIVE SERVICES PROGRAMME YEAR

ALEX COMES 20DECEMBER TOP IN THE BROKERTARIEVEN CUSTOMER SATISFACTION SURVEY Chairman’s message

Dear readers,

The preparation of the annual report each year is an ideal time to look back on the past year, but also to present a clear picture of BinckBank’s business to our stakeholders. Who are we, and what do we do? We will devote special attention to these aspects in this annual report. The theme of the report for 2011 is BinckBank’s DNA. To a large extent, our values and standards determine who we are and what we do. What this means for you as a stakeholder and BinckBank’s business ethics is described in the theme pages you will find distributed throughout the annual report.

In just 10 years BinckBank’s DNA has taken us to our present position of one of the largest online brokers in Europe. In the next few years, it will support us in achieving our ambition of becoming Europe’s largest online bank for investors.

To exceed expectations, it is important that we have the trust of our customers, and accordingly the stability and security of the bank are major priorities. BinckBank has a strong capital position (BIS ratio of 31.1%), no outstanding liabilities or direct exposure to the PIIGS countries and already meets the stricter requirements of Basel III. BinckBank moreover has a controlled and transparent remuneration policy that does not provide an incentive for high-risk behaviour.

To ensure that we continue to earn the trust placed in us by our customers and other stakeholders, our focus with our existing products and new product development is continually on serving the customer’s interest. Our products are user-friendly and transparent, and come with high-quality service. We charge competitive rates with no hidden costs. 10 Various new products were introduced for private investors last year. BinckBank has launched a new website, various applications for smart phones and a mobile website. We have also made trading in Scandinavian markets available to our customers. In Belgium and France, our extensive improvements to the service provided include the making of five 2011 new markets available for trading, high-quality analysis tools, improved search functions and a new customer website. These innovations certainly contributed to Binck and Alex once again being chosen as best online broker several times this year, and to BinckBank’s succeeding in increasing its market share among online brokers in France from 10% to 16%*.

In line with its target, our Professional Services business unit signed two BPO contracts and successfully completed the Annual Report

first phase of the migration of SNS Bank clients. The new securities giro account was moreover introduced at the end of 2011. This will enable large numbers of investors to be serviced automatically at the same time. We expect several of our customers to make use of this facility in 2012.

BinckBank resumed its share buy-back programme on 16 December 2011. In principle, we will continue the programme for as long as the solvency ratio remains above 20% on a permanent basis. Over a period of 18 months, we expect to repurchase shares up to an amount of € 28m.

In 2012, we will once again launch several new products in the market and we expect to launch Binck’s service in Italy in the middle of the year. Among other things, we are currently working on finalising the development of the portfolio-based margin system in consultation with a number of customers. We expect to introduce this system in the first half of 2012. For active investors, this means that for option strategies their margin requirement will be reduced without materially impacting the risk for BinckBank. For the Professional Services business unit, we expect to expand the service with ‘banksparen’ and ‘bankbeleggen’, and independent investment managers will be given mobile access to the platform.

* Source: l’Acsel, l’association de l’economie numérique Based on our results and the developments during the year, we are confident regarding the further growth and prospects for BinckBank. We will continue to invest in the future and the quality of our business, so that BinckBank can grow into Europe’s number one online bank for investors.

In conclusion, I would like to express my appreciation to all our customers and shareholders for their confidence in BinckBank, and to all our staff for their efforts during the past year.

Amsterdam, 8 March 2012

Koen Beentjes Chairman of the BinckBank executive board

11 2011 Annual Report

BinckBank in a European context

The online brokerage market in Europe The online brokerage landscape in Europe is fragmented. There are several players operating in various European countries, but only a few operate on a European scale.

A number of the larger European online brokers are wholely or partly owned by the major banks. Generally speaking, their strategy is different from that of specialist players like BinckBank. While BinckBank has a clear focus on online brokerage and securities-related services, the subsidiaries of the major banks are increasingly developing into online banks, offering services such as current accounts, credit cards, mortgage products and insurance. These services are in many cases offered with the support of product expertise from the parent company. BinckBank has made a conscious decision to focus on online brokerage and securities-related services because it wishes to remain a specialist in this field. It could of course be the case that other banking products will become part of the service package provided by BinckBank as a result of possible future acquisitions.

There has been speculation regarding European consolidation within the sector for some time, since this could generate substantial scale benefits. However so far, European mergers and acquisitions have not occurred. In our opinion, this is because: • Most online brokers are profitable and therefore place only a limited demand on the parent company’s capital; • The valuation of most online brokers, despite their sound profitability, is currently low; • Many online brokers are wholely or partly owned by major banks that often partly fund their banking operations out of the surplus liquidity at the broker, meaning that the online broker in many cases provides an essential element of the funding requirement; and 12 • The value of the online broker is generally low in proportion to the size of the banking parent. Disposible of the online broker is therefore not considered to be a solution for restructuring the parent company’s balance sheet. 2011 BinckBank versus peers in Europa

BinckBank Bourso- ComDirect Swissquote Avanza Nordnet Keytrade* IW Bank* Fineco* x € million rama Home market Netherlands France Germany Switzerland Sweden Sweden Belgium Italy Italy Annual Report UK, Austria, UK, Spain Norway, Luxembourg Other Belgium, Germany, and NA Dubai NA Denmark and NA markets France France and and Finland Switzerland Germany Luxembourg Market 621 486 1.056 397 529 311 Associate 147 Associate capitalisation

Number of 357,764 436,257 783,616 158,516 214,800 297,400 139,310 105,842 768,508** accounts

Number of transactions 9.7 6.5 18.7 2.1 13.0 15.3 1.3 9.1 27.1 (million) Income from operating 183.6 218. 7 340.2 105.5 79.1 123.4 46.60 60.2 285.4 activities Operating 130.1 149.0 232.1 72.6 39.6 78.7 22.5 67.0 177.2 expenses (Adjusted) 65.1 43.4 111.8 25.8 33.1 30.7 16.39 -4.4 51.9 net profit P/E ratio 9 11 9 15 17 10 NA NA NA Cost/income 56% 68% 68% 69% 50% 64% 48% 94% 62% ratio

Data as at 31 December 2011 * Data as at 31 December 2010 ** Total number of online clients The Netherlands In the Netherlands, BinckBank is the market leader with its brands Alex and Binck. Our own research shows that measured by the number of transactions, BinckBank’s market share is more than 50%. BinckBank estimates that a total of between 12m and 15m private transactions are executed in the Dutch market each year. Besides BinckBank, the players in the online brokerage market include the major banks and a few relatively small discount brokers. In addition to equities, there is extensive trading in the Netherlands in options and other derivative products such as Sprinters, Turbos and Speeders. Collateralised lending is also extensively used in the Netherlands.

Belgium In Belgium, BinckBank and Keytrade are neck and neck in terms of number of transactions. The total market consists of around 5m to 7.5m private transactions per year. Besides BinckBank and Keytrade, there are some smaller players in Belgium such as Bolero and Fortuneo. Belgian investors suffered heavily in the financial crisis during the past few years, partly due to the problems at Fortis and Dexia. Enthusiasm for investing declined significantly as a result. Most investors in Belgium prefer funds, and the use of collateralised lending is limited. Contrary to investors in the Netherlands and in France, Belgian investors are less inclined to purchase mainly shares of national companies. In the Netherlands and France, 80% to 90% of private investors invest in Dutch and French companies respectively. In Belgium, this figure is approximately 70%.

France In just three years, BinckBank has grown into the fourth-largest online broker in France, after Boursorama, Fortuneo and BourseDirect. However, many private investors in France still invest through their bank. French private investors execute approximately 30m-35m transactions each year. So far, only around 12m of these transactions are executed through online brokers with the remainder going through the major banks. This offers good potential growth opportunities for BinckBank. French investors mainly invest in warrants, and make extensive use of the Service de 13 Règlement Différé (SRD).

Italy

2011 BinckBank intends to expand further into Europe in mid-2012 by offering its services to Italian investors as well as those in the Netherlands, Belgium and France. Italy is one of the largest markets for private investors in Europe, with a total of 40m to 45m transactions executed each year. This is three times the number of transactions traded in the Netherlands. Like Dutch investors, the Italians use a lot of derivatives, especially futures. Commissions in Italy are between the levels seen in France and Belgium, and the two largest online brokers in Italy are Fineco (part of Unicredito) and IW Bank (part

Annual Report of UBI Banca). As in other European countries, we see that the larger providers of online investment services are

increasingly developing into online banks, and are therefore losing their focus on active private investors. This presents opportunities for a specialist player like BinckBank. There are a few smaller online brokers operating in addition to Fineco and IW Bank. EUROPEAN MARKETS IN WHICH BINCKBANK OPERATES

THE NETHERLANDS

Population: 17 million Number of Retail transactions: 12-15 million Online brokers: Alex, Binck, Lynx,Today’s Stocks, options and other Most traded products: derivatives BinckBank’s market share: >50% THERLA E N N D BinckBank started: E

1998 S

H T BELGIUM Population: 11 million Number of Retail transactions: 5-7.5 million Binck , Keytrade, Bolero Online brokers: BE and Fortuneo L G

I Most traded products:

ANCE U Stocks and mutual funds R M F BinckBank’s market share: Shared market leader BinckBank started: 2006

ITA L Y

FRANCE Population: 65 million Number of Retail transactions: 30-35 million Binck, Boursorama, Fortuneo, Online brokers: BourseDirect Stocks (cash and SRD), turbos, Most traded products: warrants and ETFs BinckBank’s market share: 16%*

BinckBank started: 2008 ITALY Population: 61 million Number of Retail transactions: 40-45 million Online brokers: Fineco, IW Bank, Directa Most traded products: Stocks and derivatives BinckBank’s market share: -

BinckBank started: * of the online brokers Medio 2012 The market for Professional Services For BinckBank the service to professional parties such as independent investment managers, banks, insurance companies and pension administrators has until now been mainly focused on the Netherlands. We make a distinction within services provided to professional parties between services to independent investment managers, where BinckBank acts as a broker and custodian bank, and services to banks, insurance companies and pension administrators, where BinckBank acts as a BPO (Business Process Outsourcing) provider.

Broker-custodian bank for independent investment managers Professional Services has been operating as a broker and custodian bank in the Netherlands since 2003. There are approximately 140 independent investment managers in the Netherlands. BinckBank estimates the volume of assets under management with independent investment managers at between € 10 and € 15 billion. Professional Services has grown strongly in recent years, becoming a dominant player in this market. The two largest custodian banks in this segment are BinckBank and Theodoor Gilissen. Other players include SNS Securities and ABN AMRO Bank, but these are much smaller.

Professional Services has been operating as a broker-custodian bank in Belgium since 2007. Our estimate is that the volume of this market, measured in assets under management, is similar to that in the Netherlands. The big difference is that the number of independent investment managers, at around 25, is much lower. Professional Services is a small player in this market, which, unlike the Netherlands, still features many smaller banks. The market leader is KBC Securities. Other players include Bank DeGroof, SG Private Banking, Van Lanschot Bankiers and Keytrade. The landscape is still very fragmented, and we expect the number of players to decline as a result of increasing legislation and regulation.

BPO services to banks, insurance companies and pension administrators 15 With only a few exceptions, BPO services are not provided by BPO providers on a cross-border basis. There are several reasons for this. Financial institutions are reluctant to contract parts of their business to a specialist BPO provider from another country due to a lack of adequate securities expertise in that country. In addition, hardly any securities-services 2011 systems exist that can be deployed on a cross-border basis. The difference between countries as a result of legislation and regulation is such that it is difficult to cater for this in one system. BinckBank has made a start on the work needed to upgrade its infrastructure so that it will be able to offer BPO for cross border securities services.

There are large differences between countries in the willingness to outsource parts of their activities. The degree of Annual Report

outsourcing used by Dutch financial institutions for example is low, whereas in France it is very high. This obviously means there is a difference in the number of providers in these countries as well.

Professional Services is currently more or less the only provider in the Dutch market with six financial institutions as BPO customers. We expect new players to enter this market in the coming years. KAS Bank and dwpbank (from Germany) have recently announced a joint venture that will operate in this market. We expect the arrival of new players to significantly increase the likelihood that the degree of outsourcing will increase in the Netherlands, which will create opportunities for Professional Services.

In Belgium, financial institutions have always been more prepared to use outsourcing. There are currently three parties active in this area, in various ways. The Frech company Procapital and Leleux, a Belgian broker, are the leading players. Professional Services expects to welcome its first Belgian BPO customer in 2012. Vision, mission, strategy and objectives

Vision Ten years ago, it was still unusual to buy and sell anything over the internet, whereas today it is an everyday occurrence. Offering an online brokerage account at low cost is no longer a way to differentiate as an online broker. The expectations of private investors continue to grow, especially since the fees charged by the online providers have become more similar over the last ten years. Our conviction is that tomorrow’s online broker will only be able to differentiate itself by offering high quality services and products that are transparent, simple and user-friendly. BinckBank also takes the view that such a business needs to involve its customers in its new product development process. BinckBank’s DNA is an important element in achieving the customer satisfaction that we strive for. BinckBank thinks that its employees need to be service-oriented with a focus on the customer, they should work with passion and pleasure, and they should strive to be the best in everything that they do. This will lead to products and services being introduced that truly meet customer demand and maintain a high level of customer satisfaction being maintained.

Among professional parties, we see increasing demand for a reliable custodian bank with low fees. Partly as a result of the credit crisis, an increasing number of banks and insurance companies are moving towards outsourcing their securities businesses, because this is not part of their core business and the operation and administrative processing of securities transactions is expensive and labour-intensive. It is moreover becoming increasingly difficult and complicated for professional parties to continue to meet the requirements of continually changing legislation and regulation in the financial sector. Professional Services is positioned to take advantage of this by taking over these operations by means of a BPO contract at competitive rates.

Mission 16 Since its incorporation, BinckBank’s mission has been to amaze investors by outperforming customer expectations. BinckBank continues to strive to outperform expectations in terms of products, prices and service. For instance, we aim to provide the same technical investment tools to private investors in the retail market as those available to profes- 2011 sional investors. In the professional market, BinckBank offers partnerships to parties that allow them to enjoy the economies of scale of the BinckBank platform, to use its excellent infrastructure and assist them in complying with ever more complicated legislation and regulation.

BinckBank’s intention is to achieve a high level of customer satisfaction and thereby create maximum value for its Annual Report

customers, shareholders and other stakeholders. Our aim is that our customers should be so satisfied with our service that they become ambassadors for BinckBank.

Ambition BinckBank is an online bank for investors and is one of Europe’s five largest online brokers. Our ambition is to become Europe’s largest online bank for investors in terms of numbers of brokerage accounts and transactions, profit and geographical scope.

BinckBank started as an online broker in the Netherlands. After just over ten years, the business has grown into a large European player with offices in the Netherlands, Belgium, France, Italy and a sales office in Spain for Dutch pensioners. BinckBank takes the view that serving the largest possible number of investing customers will reduce costs per transaction and thus enable BinckBank to continue to offer competitive rates to its customers.

Strengths, weaknesses, opportunities and threats BinckBank uses a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) to identify the main features of the organisation and the environment in which it operates. This analysis forms the basis of BinckBank’s strategy. Strengths and weaknesses refer to internal factors, while opportunities and threats concern developments, events and external influences to which BinckBank is exposed. The main internal and external factors are summarised in the following table. Strengths, weaknesses, opportunities and threats

Strengths Weaknesses • Market leader in the Netherlands and strong • Reliance on a relatively small customer base positions in Belgium and France • Reliance on volatile transaction income • Sound financial position and low risk appetite • High fixed cost base • Centralised back office and infrastructure • Extensive expertise and experience in securities processing

Opportunities Threats • Private investors are making better-informed • Macroeconomic developments decisions regarding their financial situation • Negative investor sentiment • Geographical expansion in Europe • Increasing competition • Trend among professional parties to outsource • Changing legislation and regulation (financial non-core activities transaction tax and abolition of distribution • Changing legislation and regulation (PPI, MiFID) fees) 17 • Negative reputation of the banking sector 2011

BinckBank strategy Annual Report

Strategic objectives BinckBank has the following strategic objectives.

Retaining reputation & trust BinckBank relies on the trust of its private and professional customers. Its relatively brief existence, the absolute size of its equity, the fact that the internet is its only distribution channel, its market listing and large number of customers and assets under administration makes BinckBank is sensative to trust issues. Maintaining trust and a good reputation are therefore essential. Since its incorporation, BinckBank has placed the customer’s interest first and has achieved a high level of customer satisfaction.

Situation at the end of 2011 BinckBank has a low risk appetite with regard to the retaining its reputation as a reliable and transparent service provider. Over the whole of 2011, our customers gave us a score of 7.6 in the customer satisfaction surveys that we conduct on a quarterly basis. The score in 2010 was 7.8 (on a scale from 1 to 10). The slight decline was mostly due to the not entirely trouble-free migration of the Dutch Binck customers to the European Retail base platform in March 2011 and the system outages at Alex and Binck in July and August. The system outages were dealt with as quickly as possible within 24 hours and BinckBank largely compensated its customers for losses incurred. In 2012 BinckBank will continue to focus on raising the level of customer satisfaction, with our target being to achieve a score of 8 from our customers in the satisfaction surveys. Extension of online brokerage (Retail) BinckBank’s net fee and commission income is mainly driven by its online brokerage operations (income from transactions) of the Retail business unit. In order to generate further growth in commission income, BinckBank intends to extend its online brokerage business by means of: • Further growth in the Netherlands, Belgium and France through the introduction of new products and services; and • Further European expansion, starting with Italy.

BinckBank wants to expand in geographical terms because economies of scale will be necessary to remain competitive in the long term. Our fixed costs can then be spread across more customer groups and countries, allowing us to keep the cost per transaction as low as possible.

Our preferred model for international growth is a combination of a greenfield operation (starting from scratch) and accelerated growth by means of add-on acquisitions if suitable opportunities for this arise. This clearly depends on local conditions in the market in question. If opportunities for acquisitions arise in markets in which BinckBank is not yet active, these will also be considered.

Situation at the end of 2011 BinckBank succeeded in achieving substantial growth in 2011 in the number of accounts in the Netherlands (+24,977 brokerage accounts, +10%), Belgium (+11,433 brokerage accounts, +28%) and France (+13,772 brokerage accounts, +56%). The number of transactions rose 10%, from 8.9m in 2010 to 9.7m in 2011, 7.1m of which were executed by our Dutch customers, 1.0m by our Belgian customers and 1.6m by our French customers.

Expansion outside the online brokerage chain: pension accrual and asset management services One of BinckBank’s objectives is to further expand the services it provides to include pension accrual and asset management activities, whereby the business model will focus on the management and administration of assets. This 18 should lead to a more stable income flow.

2011 Situation at the end of 2011 The assets under management at Alex Asset Management rose in 2011, despite the sharp fall in the stock markets, from € 610m to € 690m. The number of accounts increased by 31% to 19,007.

After the incorporation of BeFrank on 6 July 2010, the legislation for the Premium Pension Institution (PPI) took effect on 1 January 2011. On 24 June 2011, BeFrank was the first PPI in the Netherlands to obtain a licence from De Nederlandsche Annual Report

Bank (DNB), and it formally started to offer its service on 1 July 2011. In September, BeFrank won a ‘Gouden Schild’ award for ‘Pension product of the Year’. So far, 20 employers with a total of more than 4,000 employees have decided to place their pension schemes with BeFrank. We expect competition in this area to intensify rapidly with the arrival of a number of new PPIs. With an excellent service, innovation and product development, BeFrank expects to differentiate itself from the other PPIs and expects to be able to meet its customers’ needs. BeFrank will thus be able to maintain and further build on its advantage.

ThinkCapital introduced four new tracker funds in 2011. These four trackers will also be offered as a passive investment option by the pension discounter BeFrank. In November, one of these four new trackers, the Think Global Equity Tracker, won a ‘Gouden Stier’ award in the ‘Product of the Year’ category. This helped the assets under management at ThinkCapital to grow from € 20m to € 70m.

Continued growth at Professional Services Professional Services offers the following services: • Services to independent investment managers; • BPO services to banks, insurance companies and pension administrators; and • An independent broking desk.

BinckBank intends to expand its activities further in the Netherlands and Belgium. Professional Services has been offering business process outsourcing (BPO) services since 2006. Under a BPO contract, Professional Services takes full responsibility for the execution of securities orders, administration and securities-related payments. A BPO contract is usually concluded for a term of 5 to 7 years and carries a minimum annual fee. This generates recurring and therefore more stable income for BinckBank. Situation at the end of 2011 Professional Services concluded two new BPO contracts in 2011 and its assets under administration increased from € 4.4 billion to € 5.1 billion. Professional Services currently serves around 90 independent investment managers and, once all the current contracts have been implemented, a total of six BPO partners.

Optimising operational efficiency and continuity of services BinckBank’s strategic objective is to use its existing infrastructure efficiently by settling as many transactions as possible at a low transaction cost in order to be able to keep on offering competitive prices to its customers. Economies of scale as a result of high transaction volume are necessary in order to be able to remain competitive in the long term. It is thus important that BinckBank achieves as high a transaction volume as possible.

Transaction volume can be increased in various ways: • growth of the number of accounts in existing markets; • the introduction of new transaction-generating products and services; • giving professional parties access to BinckBank’s infrastructure (BPO services and independent investment managers); and • connecting new countries to the existing infrastructure.

Situation at the end of 2011

Centralised back office and infrastructure BinckBank has its centralised back office and infrastructure in Amsterdam where all transactions are settled, including those executed in Belgium and France. This central organisation for the settlement of securities transactions and the administration of securities positions is highly efficient, and allows us to achieve low costs per transaction. Various projects in 2011 focused on improving the quality and efficiency of the infrastructure and the back office. 19

In 2012 BinckBank will continue to develop its European Retail base platform, so that more European markets can be

2011 serviced in future, the time-to-market for the introduction of new products and services can be reduced and the costs can be spread across more countries.

Foreign branches with low fixed costs BinckBank uses local branches for its foreign operations. These branches have low fixed costs, since the activities they perform are more or less restricted to front office (sales and customer service) and compliance activities. This allows Annual Report the local branches to focus entirely on their customers. It is essential that these activities are placed close to the customer, since this makes it possible to provide the best possible customer service and to tailor the products and services offered to meet the wishes and needs of the private investors in the various markets. The other activities, which mainly concern ICT and back office, are organised centrally in the Netherlands.

Constant focus on cost control At BinckBank we are convinced that operational excellence is the key to controlling costs. Continually working on structural improvements to our business methods and processes makes it possible for us to control our costs. BinckBank strives to achieve a cost/income ratio excluding IFRS depreciation of approximately 50%. In 2011, this ratio was 56%. The increase compared to 2010 was mainly due to investment in the growth and quality of the business necessary to enable BinckBank to grow from a market leader in the Netherlands into a European player.

Expertise BinckBank employees have accumulated extensive expertise in the settlement and administration of securities transactions over the last few years, which greatly benefits the efficiency and continuity of our service.

Conservative financial policy BinckBank follows a conservative financial policy and is moreover conservative with regard to investing the customer funds entrusted. The aim of capital management at BinckBank is to maintain a sound solvency and liquidity position, seeking constantly to strike the right balance between the equity capital it holds, the return it can realise and the risks to which it is exposed. Situation at the end of 2011 As at 31 December 2011, the capital and liquidity position of BinckBank was sound. BinckBank’s total equity at the end of 2011 stood at € 469.5m. The total available Tier 1 capital increased from € 131.3m to € 160.7m in 2011. The BIS ratio rose from 23.9% to 31.1%, and the solvency ratio rose further from 15.7% to 23.1%.

Attractive return for shareholders BinckBank strives to achieve an attractive Total Shareholder Return (TSR) (price appreciation + dividend) for its shareholders.

Situation at the end of 2011 The proposed dividend per share for 2011 is € 0.44 (FY10 € 0.51), which means a dividend yield of 5.3% with a year-end share price of € 8.33 (FY10 4.4%). BinckBank shares opened 2011 at a price of € 11.70, and closed the year at € 8.33. The decline in the BinckBank share price in 2011 was partly due to the financial crisis in Europe and the uncertainty surrounding the possibility of a financial transaction tax being imposed.

Compliance with changing legislation and regulation BinckBank operates in regulated and supervised markets in which all stakeholders have to receive the correct service. BinckBank must continually comply with the rapidly changing legislation and regulation in the financial sector, which has the effect of increasing costs.

Situation at the end of 2011 BinckBank continuously has internal projects running to ensure that it can continue to comply with changing legislation and regulation. No significant compliance issues occurred in 2011.

The MiFID took effect in the European Union on 1 November 2007. MiFID stands for the Markets in Financial 20 Instruments Directive. The directive has three objectives: • The protection of investors and the integrity of the financial markets;

2011 • The promotion of fair, transparent, efficient and integrated financial markets; and • The further harmonisation of European stock markets and investment markets.

To comply with MiFID, BinckBank together with Optiver incorporated TOM (The Order Machine). Institutional parties had already had access to various alternative markets for a number of years. TOM now searches various markets to find the best prices for private investors; this means that private investors are no longer fully dependent on NYSE Euronext. TOM Annual Report started with the facilitation of trading in equities last year. This progressed satisfactorily, and led to better prices for our customers. The average benefit for transactions executed at a better price through TOM is € 4 to € 5 per order for active customers. The start of options trading was delayed, in part because NYSE Euronext refused to grant TOM Smart Execution a Liffe membership. After obtaining membership through successful legal action, TOM began offering trading in the first options series for private investors at the end of November. The offering will be expanded further in 2012. BinckBank customers are thus benefiting optimally from the advantages of Best Execution.

Corporate social responsibility By means of corporate social responsibility (CSR), BinckBank strives to retain and encourage sustainable confidence in its activities. The fundamental principle in our CSR policy is to place the customer’s interest first. The CSR policy is integrated in BinckBank’s services and is taken into consideration in the decision-making process with regard to innovations and product renewal.

Situation at the end of 2011 Consistent with its CSR policy, BinckBank devoted attention last year to promoting socially responsible investing to its customers, by offering socially responsible investment funds and giving these funds a prominent place on the website. With the Alex Academy, BinckBank offers mostly free education to support investors so that they have a better basis on which to make their decisions. BinckBank moreover increased the transparency regarding its CSR activities by issuing a detailed account thereof (see p. 44-48 of this annual report). Objectives for year-end 2013 In 2009, BinckBank formulated the following targets in order to achieve its ambition of becoming Europe’s largest online bank for investors.

Goals for Realisation Realisation year-end 2013 year-end 2011 year-end 2011 in % Dutch Retail brokerage accounts 330,000 267,187 81% Belgian Retail brokerage accounts 90,000 52,340 58% French Retail brokerage accounts 80,000 38,237 48% Number of BPO agreements 10 6 60% Total savings assets € 1.5 billion € 519 million 35% Total administrated assets € 15 billion € 14 million 91%

The growth in number of accounts in the Netherlands and France is slightly below that needed to achieve the targets by the end of 2013. We expect growth to pick up in the Netherlands once investor sentiment improves. In France, we expect growth in the number of opened brokerage accounts to accelerate in the next two years, now that BinckBank is gaining an increasingly strong position in the French market and BinckBank is more and more frequently cited as one of the best brokers in the various broker surveys. In Belgium, we are seeing a decline in enthusiasm for investing as a result of the crisis in Europe which has hit private investors in Belgium particularly hard. The number of new brokerage accounts is therefore behind the schedule for achieving the target by 2013. The extent to which this target is realised will be followed closely.

21 BinckBank needs to conclude two BPO contracts a year in order to realise its target of ten BPO contracts by year-end 2013. Demand for this service is developing positively. At the end of 2011, BinckBank had concluded six of these contracts, putting it exactly on schedule. 2011

The savings market in the Netherlands has been affected in the last few years by the troubles in Europe and the banking crisis. As a result of its low risk appetite and the fact that it has no traditional lending business, BinckBank is unable to compete with the increases in interest paid by other financial institutions on savings accounts. On the one hand, the distortions in the money and capital markets have made it difficult for many financial institutions to meet their funding Annual Report needs through the professional market, which made them offer higher interest rates on private savings. On the other hand, the current financial conditions are allowing them to still charge relatively high interest rates on loans to their customers. Information for shareholders

BinckBank shares are listed on NYSE Euronext Amsterdam and since 1 March 2006 have formed part of the Amsterdam Midkap Index (AMX), with a weight of 2.31% in this index on 31 December 2011.

ISIN code: NL0000335578 Reuters: BINCK AS Bloomberg: BINCK NA

Options on BinckBank shares have been traded since 21 March 2006. The average number of shares traded daily in 2011 was 252,815. BinckBank shares are followed by ten parties, whose recommendations to institutional and private investors regarding BinckBank shares are shown below.

Coverage of BinckBank shares

Company Analyst Recommendation Price target ABN AMRO Jan Willem Weidema Hold € 9.75 Albert Ploegh and ING Buy € 12.70 Marchen Altena KBC Dirk Peeters Accumulate € 14.00 Kempen & co Floris Oliemans Buy € 11.00 Kepler Capital management Benoit Pétrarque Hold € 9.00 22 Petercam Matthias de Wit Buy € 14.10 Rabo securities Cor Kluis Buy € 14.40

2011 RBS Thomas Nagtegaal Hold € 9.50 SNS securities Lemer Salah Buy € 14.00 Theodoor Gilissen Tom Muller Buy € 12.50

on 8 March 2012 Annual Report

Key figures for BinckBank shares

2011 2010 2009 2008 Earnings per share € 0.46 € 0.60 € 0.63 € 0.43 Adjusted earnings per share € 0.88 € 1.02 € 1.04 € 0.83

Dividend per share* € 0.44 € 0.51 € 0.52 € 0.41 Dividend yield in % (based on year-end closing quote) 5.3% 4.4% 4.1% 7.5%

Net asset value € 6.31 € 6.30 € 6.31 € 6.21 Year-end share price BinckBank N.V. € 8.33 € 11.60 € 12.54 € 5.45 AMX index 468 639 519 312

P/E ratio 9.47 11.37 12.06 6.53

* 2011 figures are subject to approval of the General Meeting of Shareholders Share capital

2011 2010 2009 2008 Authorised ordinary shares 100,000,000 100,000,000 100,000,000 100,000,000 Issued shares previous year-end 74,500,000 76,068,928 77,093,508 77,093,508 Number of shares issued during the year - - - - Number of shares cancelled during the year - 1,568,928 1,024,580 - Issued shares year-end 74,500,000 74,500,000 76,068,928 77,093,508 Buy-back shares 122,097 - 2,070,509 1,053,442 Number of priority shares 50 50 50 50 Average number of shares outstanding 74,142,108 74,080,625 74,897,706 76,870,870 during the year Market capitalisation year-end € 620,585,000 € 864,200,000 € 953,904,357 € 420,159,619

BinckBank shares in 2011 The stock markets were extremely volatile in 2011, especially in the first and third quarters, and closed ultimately with a loss. The AMX started the year at 639 points and finished at 468 points. Like the majority of other listed stocks, BinckBank shares were affected by the turmoil in the European financial markets, starting 2011 at € 11.70 and closing the year at € 8.33.

BinckBank vs AMX 23

160% 160% 2011 140% 140%

120% 120%

100% 100%

80% 80% Annual Report

60% 60%

40% 40%

20% 20%

0% 0% -11 -11 -11 -11 -11 -11 -10 -10 -10 -10 -10 -10 -08 -08 -08 -08 -08 -08 -09 -09 -09 -09 -09 -09 Jul Jul Jan Sep Mrt Jul Jan Jul Nov Sep Mrt May Jan Jan Nov Sep Mrt Sep May Mrt Nov Nov May May

BinckBank AMX Share price & volumes

2011 2010 2009 2008 Opening price € 11.70 € 12.51 € 5.54 € 10.11 Highest price € 13.16 € 13.66 € 14.00 € 10.23 Lowest price € 6.80 € 8.91 € 5.35 € 4.10 Closing price € 8.33 € 11.60 € 12.54 € 5.45

Share turnover 64,973,343 86,610,504 69,509,627 90,492,493 Turnover – high 924,395 4,844,483 1,215,751 2,287,767 Turnover – low 53,902 44,598 32,437 24,802 Average daily turnover 252,815 335,700 271,522 353,486

The BinckBank share price declined during the year, especially in May, June and July. The decline was mainly due to the debt crisis in Europe that resulted from the debt situation in Greece. Many European financial stocks were shunned by investors for this reason. The fall was made worse by the low volatility in the stock markets in the spring of 2011, which had a negative effect on BinckBank’s quarterly result. The crisis in the eurozone was an important factor throughout the year. Many investment funds experienced cash outflows and were forced to sell shares. BinckBank is a bank, and despite the fact that it has no lack of capital or liquidity, its shares were pulled down due to the problems at other financial institutions. The possibility that a financial transaction tax would be introduced also influenced the share price. BinckBank closed 2011 at € 8.33. 24 BinckBank share movements and volumes 2011

14.00 60,000 27 April 2011: CEO and CFO invest 2009: entire variable performance Record year for BinckBank fee in BinckBank shares in terms of number of 50,000 12.00 transactions and profit 26 April 2010: Spring and summer 2011: First-quarter results Start of the European crisis lower than expected with Greek debt situation by analysts 25 October 2010: and the escalation of the 40,000 Better than expected e European debt crisis. m u l Annual Report 10.00 third-quarter results and o

takeover rumours V 30 September 2008: Launch of share 30,000 buy-back programme May 2010: share price share 10 October 2008: Financial crisis 8.00 Lowest share price ever € 4.10 20,000

16 December 2011: BinckBank resumes its 6.00 share buy-back programme 10,000

4.00 0 31-Dec-07 30-Apr-08 31-Aug-08 31-Dec-08 30-Apr-09 31-Aug-09 31-Dec-09 30-Apr-10 31-Aug-10 31-Dec-10 30-Apr-11 31-Aug-11 31-Dec-11 29-Feb-08 30-Jun-08 31-Oct-08 28-Feb-09 30-Jun-09 31-Oct-09 28-Feb-10 30-Jun-10 31-Oct-10 28-Feb-11 30-Jun-11 31-Oct-11

Share buy-back programme BinckBank reinstated its share buy-back programme on 16 December 2011. BinckBank started the programme on 30 September 2008 with the intention of reducing its capital. As a result of rapid growth of the risks in the balance sheet and the prospect of stricter capital requirements (details of which were not known at the time), the previous buy-back programme was suspended indefinitely on 22 December 2009. Now that we have a clearer picture of the new capital requirements and BinckBank’s solvency ratio rose above 20% in the fourth quarter, we have decided to reinstate the share buy-back programme. Between 16 and 31 December 2011, a total of 122,097 shares were repurchased at an average price of € 7.89. BinckBank expects to repurchase shares to a total value of € 28m over a period of 18 months, subject to the actual or forecast solvency ratio remaining above 20%. Dividend policy BinckBank’s articles of association state that – if and to the extent the profit permits – a sum of six percent of the nominal value of the priority shares will be paid on these shares (50 x € 0.10 x 6%). The Stichting Prioriteit then determines the extent to which the remaining profit will be transferred to reserves. This sum will not be distributed to the shareholders, it will be added to the reserves of the company. The profit remaining after this addition to the reserves is at the disposal of the general meeting of shareholders. This means that the general meeting may decide with reference to this remaining profit between distribution or addition to the reserves, or a combination of the two. Distribution may, in accordance with the relevant provisions in the articles of association of BinckBank, be made in ordinary shares instead of in cash. In order for profit to be made available to the general meeting, the company’s solvency position must in the opinion of the Stichting Prioriteit be adequate for this purpose. If taking account of this provision a profit can be put at the disposal of the general meeting, the Stichting Prioriteit will strive to effect a distribution of 50% of the adjusted net profit.

Dividend proposal 2011 It will be proposed to the shareholders that a total dividend of € 0.44 per share (50% of the adjusted net profit for 2011) should be paid in cash for the year 2011, after deduction of 15% dividend tax. An interim cash dividend of € 0.20 per share was already distributed on 1 August 2011, so the final cash dividend proposed will be € 0.24 per share. Subject to approval by the shareholders on 23 April 2012, the share will be quoted ex-dividend on 25 April 2012. Payment of the final dividend will be made on 2 May 2012.

Shareholdings Pursuant to the Dutch Financial Supervision Act (Wft), the company is aware of five shareholders with an interest of more than 5% as at 31 December 2011. These are: 25 • Delta Lloyd N.V. (> 10%) • Boron Investments N.V. (> 5%) • Navitas B.V. (> 5%) 2011 • Delta Deelnemingenfonds N.V. (> 5%) • OppenheimerFunds Inc. (>5%)

The shareholdings of the members of the executive board of BinckBank at the end of 2011 were as follows: • Koen Beentjes: 30,901 aandelen Annual Report

• Evert Kooistra: 30,039 aandelen • Pieter Aartsen: 42,885 aandelen • Nick Bortot: 57,547 aandelen

After the general meeting of shareholders on 26 April 2011, the executive directors Beentjes and Kooistra decided to invest their entire short-term variable remuneration in BinckBank shares at a price of € 12.74 instead of in cash. The long-term variable remuneration payable to executive directors was already invested in BinckBank shares.

Investor Relations BinckBank maintains an open information policy for investors and others with a financial or other interest in the company, in order to keep all its stakeholders as fully and promptly informed as possible regarding policy and developments at the company.

BinckBank actively seeks a dialogue with its investors. This annual report is one of the means whereby it does this. All other relevant information, such as half-yearly reports, quarterly statements, risk reports and background information is available at www.binck.com. BinckBank was therefore highly gratified to receive the prestigious Henri Sijthoff prize for 2010 for best financial reporting in the AMX and ASx stocks category. Members of the executive board and Investor Relations held around 150 meetings during 2011 with (potential) investors from Europe and the United States. Following the publication of the first and third quarter results and the annual results, BinckBank organises a conference call for analysts and shareholders in which the CEO and the CFO give an explanation of BinckBank’s results. Other interested parties can follow the conference call via the website. The material presented will be published together with the press release on www.binck.com. Since the end of the first quarter of 2011, all the results and key figures have been available in a spreadsheet and a transcript of the conference call is produced. BinckBank invites analysts to attend an analysts’ meeting after publication of its half-yearly report. BinckBank moreover gives journalists the opportunity each quarter to receive an explanation of the results by telephone.

For the second time, BinckBank organised an Investor Day for institutional parties on 8 September 2011. The presentations made on this occasion are also published on the website. To also give private investors the opportunity to talk to the chairman of the BinckBank executive board, we organised a webinar for private investors in which they could ask questions regarding BinckBank’s results. Just under 200 private investors, most of whom were BinckBank shareholders, registered for this webinar.

For corporate information and questions about BinckBank, please contact the Investor Relations department.

Investor Relations Anneke Hoijtink Telephone: +31 20 522 0372 Mobile: +31 6 201 98 337 E-mail: [email protected] Twitter: twitter.com/BinckBank

26 2011 Annual Report

Financial calendar 2012 and 2013

2012* 1

Q Annual report 2011 12 March 2012

Annual general meeting of shareholders 23 April 2012

First quarter results 2012 23 April 2012 2

Q Ex-date dividend 25 April 2012

Record date dividend 27 April 2012

Payment date dividend 2 May 2012

Half-year results 2012 23 July 2012

Ex-date interim dividend 24 July 2012 3 Q

27 Record date interim dividend 26 July 2012

Payment date interim dividend 30 July 2012 2011

Third quarter results 2012 22 October 2012 4 Q Capital adequacy and risk report 29 October 2012 Annual Report

2013*

Annual results 2012 4 February 2013 1 Q Annual report 2012 11 March 2013

Annual general meeting of shareholders 22 April 2013 2 Q First quarter results 2013 22 April 2013

* Subject to amendment KEEP IT SIMPLE

GO BEYOND WHERE OTHERS STOP

EXCEED EXPECTATIONS AMAZE THE CUSTOMER

TURN OUR CUSTOMERS INTO FANS

GAIN CUSTOMER TRUST

2 # Report of the executive board

Review of the financial results

Adjusted net profit for 2011 The adjusted net profit in 2011 came to € 65.1m. This corresponds to an adjusted net profit per share of € 0.88. Compared to the previous year, the adjusted net profit was down 13% (FY10: € 75.2m). The decline was mainly the result of unchanged income accompanied by significant investment by BinckBank in 2011 in the growth of the business and in TOM and BeFrank. The result from associates and joint ventures was lower, while operating expenses rose 5%. (x € 1,000) FY11 FY10 Δ FY10 Customer figures Customer accounts 531,465 433,538 23% Retail 468,044 406,078 15% Professional Services 63,421 27,460 131% Number of transactions 9,709,795 8,854,215 10% Retail 8,936,459 8,268,167 8% Professional Services 773,336 586,048 32% Assets under administration 13,724,175 14,124,667 -3% Retail 8,646,209 9,739,332 -11% Professional Services 5,077,966 4,385,335 16%

Income statement Net interest income 38,907 43,587 -11% Net fee and commission income 128,447 126,970 1% Other income 13,322 13,599 -2% Result from financial instruments 3,167 620 Impairment of financial assets (268) 70 Total income from operating activities 183,575 184,846 -1% Employee expenses 50,861 45,480 12% Depreciation and amortisation 35,463 34,798 2% Other operating expenses 43,800 44,223 -1% Total operating expenses 130,124 124,501 5% 30 Result from operating activities 53,451 60,345 -11% Share in results of associates and joint ventures (5,848) (1,386) 322%

2011 Other non-operating income - 23 -100% Result before tax 47,603 58,982 -19% Tax (13,513) (14,837) -9% Net result 34,090 44,145 -23% Result attributable to non-controlling interests 120 95 26% Annual Report

Net result attributable to shareholders BinckBank 34,210 44,240 -23% IFRS amortisation 28,196 28,196 Fiscal goodwill amortisation 2,737 2,792 -2% Adjusted net result 65,143 75,228 -13% Average number of shares outstanding during the year 74,142,108 74,080,265 Adjusted net earnings per share (€) 0.88 1.02

Balance sheet & capital adequacy Balance sheet total 3,351,455 3,216,768 4% Equity 469,523 468,913 0% Total available capital 160,695 131,257 22% BIS ratio 31.1% 23.9% Solvency ratio 23.1% 15.7%

Cost / income ratio Cost / income ratio 71% 67% Cost / income ratio excl. IFRS amortisation 56% 52% Net interest income Net interest income fell by 11% from € 43.6m in 2010 to € 38.9m in 2011. For a large part of 2011 money and capital market interest rates were at historical lows, meaning that BinckBank had to be satisfied with substantially lower returns on its investments. In addition, partly because Alex Asset Management liquidated securities positions for its clients in the second half of 2011, BinckBank held a larger proportion of its funds entrusted in cash than would normally be the case. This negatively affected net interest income, because the interest BinckBank receives on its cash position is lower than the 1.5% interest that Alex Asset Management pays to its clients.

Net interest income Collateralised lending (at year-end)

476 50 500 43.8 43.7 45 450 410 40.6 38.9 40 400

35 350 290 illion 30 300 illion 228

in € m 25 250 in € m 20 200

15 150

10 100

5 50

0 0 FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11

31 Net fee and commission income The number of transactions increased 10% from 8.9m in 2010 to 9.7m in 2011, mainly due to the growth of BinckBank in

2011 France. Net fee and commission income rose 1% from € 127.0m in 2010 to € 128.4m in 2011 as a result of higher transaction volume combined with the growth at Professional Services. Net fee and commission income did not rise in proportion to transaction volume, because our French clients accounted for a relatively larger share of the transactions. The average income per transaction in France is lower than it is in the Netherlands and in Belgium. Furthermore, contrary to 2010, BinckBank received virtually no performance fee for Alex Asset Management in 2011. In the fourth quarter of 2010 Alex Asset Management received additional income of € 2.8m in the form of a performance fee after Annual Report deduction of a non-recurring payment for the settlement of liabilities. Without the performance fee for Alex Asset Management, the increase in net fee and commission income was 3%.

Net fee and commission income Number of transactions

10 9.6 9.7 140 129.2 127.0 128.4 8.9

120 101.2 8 7.2 100

6 80 in € million 60 in million 4

40 2 20

0 0 FY08 FY09 FY10 FY11 FY08 FY09 FY10 FY11

Other income Other income amounted to € 13.3m in 2011. In addition to the revenue of our subsidiary Syntel, other income consists of income from subscriptions and seminars, and results on currency positions. Result from financial instruments The developments in the financial markets in 2011 led to adjustments to the investment portfolio, resulting in a profit of € 3.2m.

Total operating expenses In early 2011, BinckBank expected expenses to rise by 5 to 6% in 2011 compared to 2010 in order to fund additional investments in future growth and the quality of the business. This is part of the process of transforming BinckBank from a market leader in the Netherlands into a European player. Additional employee expenses were incurred, mainly for the development of the European Retail base platform, preparations for the launch of BinckBank in Italy, and for growth in France and at Professional Services. Total operating expenses rose 5% in 2011, bringing the total operating expenses for the year to € 130.1m (FY10: € 124.5m).

Total operating expenses

140 130.1 122.5 124.5 120 107.5 43.8 100 43.4 44.2 37.3 80 35.5

in € million 60 35.9 34.8 31.8 40

45.5 50.8 32 20 38.4 43.2

0 FY08 FY09 FY10 FY11 2011 Employee expenses Other operating expenses Depreciation & amortisation Annual Report

Business unit Retail

The Retail business unit focuses on private investors in the Netherlands, Belgium and France, and from mid-2012 in Italy as well. In the Netherlands with the brands Alex and Binck. In Belgium, France and Italy, under the Binck brand only.

Retail services The Retail business unit offers private investors various different services in the areas of online brokerage and asset accumulation. Our largest customer group consists of independent investors who use BinckBank to execute securities transactions. In addition, we offer an online savings product, asset management and fund investments under our Alex brand.

BinckBank’s success lies in providing a combination of a practical, user-friendly, fast and extensive website, competitive prices and outstanding service. We also offer services that add value, such as mobile trading applications and the Squawkbox, a chat box where customers can share experiences and ideas with professional moderators and each other, as part of our effort to achieve a high level of customer satisfaction. We ask our customers to give their opinion of our service four times a year. In 2011, BinckBank received a score of 7.6 in our customer satisfaction surveys (on a scale from 1 to 10). The opinions of our customers are extremely important to us, and we use this information to improve our services and to outperform their expectations in terms of quality. We also involve our customers in the development of new products in order to match them as closely as possible to our customers’ wishes. This will mean we can retain our customers for longer, that they will place a larger proportion of their assets with BinckBank and that they will recommend us to other investors.

Developments in 2011 33 Development of the European Retail base platform The construction of the European Retail base platform continued in 2011. This platform will enable BinckBank to enter new

2011 markets more quickly and easily in future, and that new products can be launched in several countries simultaneously in a quicker way. This will benefit our ability to innovate and reduce our development costs. The customers of Binck Netherlands were migrated to the new platform in 2011, which took place in combination with the launch of the new website and the mobile website. Besides compliments, the launch of the new website led to a large number of suggestions for improvement. We also noticed that a number of customers had some difficulty in becoming familiar with the new site. BinckBank responded to this as quickly as possible by organising special webinars and seminars. In addition Annual Report

to the migration of the Binck customers, the platform was made multilingual in 2011 and the adjustments necessary for BinckBank’s launch in Italy were made. In 2012, the platform will be ready to service the first Italian customers. BinckBank’s customers in Belgium and France will be migrated to the European Retail base platform at a later stage.

Product innovation in the Netherlands In the Netherlands, we introduced various innovations at Alex and Binck. Both Binck and Alex customers can now trade using their mobile phones. The iPhone, iPad and Android apps were launched, together with a general mobile website for other smart phones. Several customers used this facility in 2011, and more

than 4% of the transactions were effected through our mobile platforms. In V the first week after the iPhone app was launched, this was one of the most E R

downloaded free financial apps. The Binck customer site has been renewed, M

increasing the user-friendliness of the site and giving it a fresh contemporary O look. Binck customers also now have access to the markets in Scandinavia. G E N Alex won the ‘Gouden Stier’ award for Best Internet Broker this year. Besides S BE noting the quality of the service, the professional jury praised the initiative to HE expand the product offering with a fund supermarket for our customers. ERDER

We also launched the Alex YouTube education channel and Alex won a further ‘Gouden Stier’ award for best educational institution. Alex Academy organised a total of more than 240 courses which attracted over 25,000 investors to participate in its class room training courses and online seminars. Just under 100,000 other investors participated through the Alex YouTube channel. Partly as a result of the financial crisis, we noted that private investors are becoming increasingly demanding with respect to their banks or investment managers. There is a clear need for reliability, transparency and lower costs. Private investors also want to have more control over their financial affairs. Alex Asset Management, which won a ‘Gouden Stier’ award in both 2010 and 2011, meets these needs by offering a very convenient and straightforward asset management product at low cost.

BinckBank Belgium increases product offering In early 2011, BinckBank increased its offering in Belgium by giving its customers access to five additional stock exchanges in Switzerland, Norway, Finland, Sweden and Denmark. In addition, new technical and fundamental analysis applications were introduced. In July, search functions were implemented to allow certificates (Sprinters, Turbos and Speeders) and warrants to be found quickly and easily. BinckBank moreover abolished its minimum rate for options at the beginning of November.

BinckBank increased its educational facilities for Belgian customers. Besides the existing courses and webinars, the information on the website was supplemented with a ‘Leren Beleggen’ (Learning how to invest) section containing a help centre, a stock market library and informative brochures. Demonstration videos have been developed that show customers, for example, how one can place various kinds of securities orders.

BinckBank wins market share in France Last year, BinckBank increased its market share in France to 16% among the online brokers. It was a year in which BinckBank significantly strengthened its market position through the introduction of various products and innovations. A new lead site was launched, and other significant innovations involved the launch of a restyled customer site and advanced search engines for fundamental data and warrants, certificates and Turbos. We also provide a market update three times a day and the Binck Academy was established in France, which organised 165 webinars attended by a total of 8,000 customers. 34

These innovations have borne fruit. Binck’s market share among the French online brokers is growing strongly, and

2011 BinckBank is getting an increasing amount of media recognition. Les Echos, France’s most important financial newspaper, cited Binck as one of the three best brokers in France. Moreover, BinckBank won the top spot on all the largest broker comparison sites, including Les Dossiers de l’Épargne, Classements des banques, Bourse en ligne, Argent mag and L’Internaute.

Preparations for BinckBank Italy on schedule Annual Report During 2010 BinckBank conducted extensive research to assess the potential offered by new countries for its European expansion. The conclusion was that Italy would be the best choice. Since then, we have been preparing for the launch of BinckBank in Italy. In 2011, the focus was on obtaining the necessary licences, planning the organisation, setting up the processes and systems and making the commercial preparations. BinckBank expects to commence operations in Italy in mid-2012. Results business unit Retail in 2011

x € 1,000 FY11 FY10 Δ Customer figures Customer accounts 468,044 406,078 15% The Netherlands 367,039 331,686 11% Brokerage accounts 267,187 242,210 10% Savings accounts 80,845 74,933 8% Asset management accounts 19,007 14,543 31% Belgium 52,340 40,907 28% Brokerage accounts 52,340 40,907 28% France 48,665 33,485 45% Brokerage accounts 38,237 24,465 56% Savings accounts 10,428 9,020 16%

Number of transactions 8,936,459 8,268,167 8% The Netherlands 6,328,926 6,196,580 2% Belgium 996,804 966,152 3% France 1,610,729 1,105,435 46%

Assets under administration 8,646,209 9,739,332 -11% The Netherlands 7,005,528 8,132,624 -14% 35 Brokerage accounts 5,828,143 6,853,448 -15% Savings accounts 487,398 669,142 -27%

2011 Asset management accounts 689,987 610,034 13% Belgium 1,173,039 1,199,657 -2% Brokerage accounts 1,173,039 1,199,657 -2% France 467,642 407,051 15% Brokerage accounts 436,109 357,996 22% Annual Report

Savings accounts 31,533 49,055 -36%

Income statement Net interest income 33,856 38,706 -13% Net fee and commission income 113,526 112,437 1% Other income 2,566 964 166% Result from financial instruments - - Impairment of financial assets (268) 70 -483% Total income from operating activities 149,680 152,177 -2%

Employee expenses 34,283 33,416 3% Depreciation and amortisation 34,172 33,413 2% Other operating expenses 37,064 38,294 -3% Total operating expenses 105,519 105,123 0%

Result from operating activities 44,161 47,054 -6% The number of accounts at the Retail business unit increased by more than 15% to 468,044, and the number of transactions rose by 8% from 8.3m in 2010 to 8.9m in 2011.

The Netherlands The total number of accounts in the Netherlands rose by 35,353. This consisted of 24,977 new brokerage accounts, 5,912 new savings accounts and 4,464 new asset management accounts. The total assets under administration at year-end 2011 were € 7.0 billion, and the number of transactions executed by our customers in the Netherlands last year was 2% higher than in 2010, amounting to 6.3m.

At the beginning of 2011, Alex Asset Management had assets under management of € 610m. The net inflow in 2011 amounted to € 165m. As a result of the worldwide decline in equity prices Alex Asset Management, like most other asset managers, was only able to realise a small positive return for a few of its customers. Contrary to other asset managers, Alex Asset Management decided in the second half of 2011 to hold a large proportion of its assets under management in cash. This limited the losses for many of our customers, as they were paid interest of 1.5% on their cash holdings. Alex Asset Management therefore charged only a small performance fee in 2011, in addition to its management fee of 0.9%. Assets under management at year-end 2011 stood at € 690m.

Belgium Binck opened its 50,000th account in Belgium this year. The number of accounts increased by 11,433 to 52,340. Transaction volume was up 3% to 1.0m, and assets under administration at year-end 2011 stood at € 1.2 billion.

France As in Belgium, we reached an important milestone in France this year as BinckBank France broke even for the first time, and will start to contribute to profits from 2012. All local expenses can now be paid out of local income. The total number of accounts in France rose 45% to 48,665, comprising 38,237 brokerage accounts and 10,428 savings accounts. 36 Transaction volume was also up from 1.1m in 2010 to 1.6m in 2011. Assets under administration rose € 61m to € 468m. 2011 Annual Report

Professional Services business unit

BinckBank started providing services to professional parties, alongside its service to private investors, in 2003. BinckBank acts as a partner providing solutions in relation to order execution and securities administration. BinckBank serves a total of around 100 professional customers consisting of independent investment managers, banks, insurance companies and pension administrators. The service is offered in both the Netherlands and Belgium.

The services of the Professional Services business unit can be divided into three categories:

Services for independent investment managers Customers of independent investment managers open a tripartite account with BinckBank and authorise the investment manager to invest for their account. The investment manager manages the portfolio according to the mandate and risk profile agreed with the customer. The investment manager’s customers always have full access to their portfolios.

BPO services for banks, insurance companies and pension administrators Banks, insurance companies and pension administrators can use the BinckBank platform on a white label basis. This service enables professional parties to offer execution-only, investment advisory and asset management services to their customers. The service is provided on either an off-balance or an on-balance basis. BinckBank takes over all the tasks related to order execution, securities administration, (securities-related) payments and the associated credit assessment. Everything is presented in the ‘look & feel’ of the bank or insurance company (log-in to the website, statements, etc.). After Friesland Bank became our first BPO customer in 2008, Robein Leven was the first insurance company to join the BinckBank platform in the summer of 2009. SNS Bank and pension administrator BeFrank joined in 2010. Demand for BPO securities services is currently strong. Financial institutions are looking for ways to reduce costs, 37 partly as a result of the credit crisis.

Independent broker desk 2011 A specialist team on the broker desk supports our professional customers in the field of order execution. Customers can trade in securities around the world, as BinckBank uses global brokers. Professional Services also has its own bond desk, with a specialist team that executes orders in bonds. Our bond desk is fully independent and does not take proprietary positions. BinckBank therefore does not have any market risk, and best execution for the customer is our only priority. BinckBank moreover offers a huge range of unlisted investment funds (more than 30,000) and for trading in derivatives, Annual Report

it works with market makers and specialist brokers.

Developments in 2011 The number of professional parties serviced by BPO contracts at year-end 2011 BinckBank continues to grow, as do the assets under Friesland Bank (2008) administration. Both the growth in the service to investment managers and the migration of the SNS Robein Leven (2009) Bank clients led to an increase in the number of SNS Bank (2010) accounts and the assets under administration. The BeFrank (2010) number of accounts rose 131% to 63,421, the assets under administration rose 16% to € 5.1 billion and the Allianz (2011) number of transactions came to 0.8m, up 32% on Non-disclosed Dutch financial institute (2011) 2010. Costs were significantly higher in 2011 compared to the previous year, mainly due to investment in the BPO projects, which have to be made before income can be generated.

Professional Services signed two BPO contracts in 2011, one of which was with Allianz Nederland, which will outsource its account administration and the execution of orders in investment funds to BinckBank for both funds entrusted and ‘banksparen’ and ‘bankbeleggen’. Implementation for both parties is expected to take place in mid-2012. The customers of SNS Beursbeleggen were migrated to the Binck platform during the third quarter. This completes the first phase of migration of the SNS Bank customers. The customers of SNS Fundcoach and the other SNS Fondsbeleggen labels will be migrated in 2012. Full revenue recognition from this contract is expected from the end of 2012. Our new securities giro account was successfully taken into production at the end of 2011. This enables large numbers of investors to be serviced automatically at the same time. We expect several of our BPO partners to make use of this facility in 2012.

Further information on the Professional Services business unit is available at www.binckprof.nl and www.binckprof.be.

Results business unit Professional Service in 2011

x € 1,000 FY11 FY10 Δ Customer figures Customer accounts 63,421 27,460 131% The Netherlands 62,588 26,783 134% Belgium 833 677 23% Number of transactions 773,336 586,048 32% The Netherlands 734,157 555,983 32% Belgium 39,179 30,065 30% Assets under administration 5,077,966 4,385,335 16% The Netherlands 4,796,356 4,141,843 16% Belgium 281,610 243,492 16%

Income statement Net interest income 4,498 4,844 -7% 38 Net fee and commission income 14,891 14,557 2% Other income 56 8 Result from financial instruments - - 2011 Impairment of financial assets - - Total income from operating activities 19,445 19,409

Employee expenses 9,227 8,019 15% Annual Report

Depreciation and amortisation 915 908 1% Other operating expenses 4,316 3,689 17% Total operating expenses 14,458 12,616 15% Result from operating activities 4,987 6,793 -27% Subsidiaries, joint ventures and participations

Syntel B.V. (Syntel) has been a 100%-owned subsidiary of BinckBank since 2006. Syntel develops and supplies innovative software enabling financial institutions to process and administer every imaginable type of securities transaction. Two out of every three securities transactions by private clients in the Netherlands are processed using Syntel software, which makes Syntel the market leader in the Netherlands. In addition to providing the software for Alex and Binck, Syntel also supplies software to third parties. Since BinckBank is the 100% owner of Syntel, BinckBank does not rely on software from other parties for its core services, namely the settlement and administration of securities transactions.

Syntel moreover develops and sells components for the transmission of financial information. Syntel’s products are fast, scalable and can deliver efficiency benefits and significant cost savings to customers. Syntel’s customers include ING Bank, Nationale Nederlanden and WestlandUtrecht Bank.

Further information on Syntel is available at www.syntel.nl.

Since 9 November 2010, BinckBank has a 60% interest in ThinkCapital, a Dutch issuer of Exchange Traded Funds (or ETFs, also known as trackers). The interest in ThinkCapital is part of BinckBank’s strategy to generate more of its income from asset accumulation and 39 thereby become less dependent on transaction-related income.

Interest in passive investing among private investors, and also among the market

2011 regulators, is growing rapidly. They see the benefits for the customer of a more balanced relationship between actively and passively managed investment products. ThinkCapital and BinckBank have joined forces with the intention of putting tracker funds on the map in the Netherlands.

ThinkCapital also focuses on index investing for the institutional market for passive investment management.

Annual Report ThinkCapital’s current offering consists of nine tracker funds designed to suit the Dutch market.

One advantage ThinkCapital has over other, foreign providers of trackers is that ThinkCapital has a Dutch legal structure and qualifies for FBI (Fiscal Investment Institution) status. This allows ThinkCapital, unlike foreign providers, to efficiently pass dividend income on to investors. Under the various tax treaties, this tax-efficiency can be applied to equities in the various treaty countries and investors from a number of treaty countries can possibly benefit.

ThinkCapital constructs its ETFs using physical replication, whereby an index is replicated by purchasing the stocks that make up the index. Some competitors use synthetic replication, which uses swap agreements to replicate the index return. This however involves additional risk in the form of counterparty risk. ThinkCapital takes the view that this does not serve the investor’s best interest, as the structure of the tracker becomes vague and complex.

Further information on ThinkCapital is available at www.thinkcapital.nl. BeFrank is a 50/50 joint venture between BinckBank and Delta Lloyd in the field of collective pensions. BeFrank was the first premium pension institution (PPI) to receive a licence from De Nederlandsche Bank (DNB) on 24 June 2011.

A PPI is a new type of pension administrator (in addition to insurance companies and pension funds) that administers pension schemes and accrues pension capital, but does not bear the insurance risk. The incorporation of a PPI became possible after the Dutch Senate passed the bill for the introduction of PPIs. The Act came into force on 1 January 2011.

The PPI is designed for the administration of collective defined contribution schemes as the second pillar alongside the AOW (state retirement pension). The feature of defined contribution schemes with individual freedom of choice regarding investment is that the pension benefit partly depends on the result of the investment choices. The PPI specifically offers the possibility of administering pensions on a cross-border basis in the near future. For companies with a presence in several countries, this offers the option of centralising and optimising their pension administration and thus reducing costs.

BeFrank is the first PPI in the Netherlands and combines the online strength of BinckBank with the pension expertise of Delta Lloyd. The result is a fresh, new pension administrator in the Dutch market. BeFrank offers an easy-to-understand pension accrual at low cost. The incorporation of BeFrank is part of BinckBank’s strategy to generate more of its income from asset accumulation and thereby become less dependent on transaction-related income.

Further information on BeFrank is available at www.befrank.nl.

TOM is a cooperation between Optiver, ABN AMRO Clearing Bank and BinckBank, that came into being on 23 June 2009 after the obtaining of a licence from the Netherlands Authority for the Financial Markets 40 (AFM). TOM Holding B.V. has two subsidiary companies, TOM Broker B.V. that provides a best-execution service to affiliated parties, and TOM B.V., which has a licence to operate as

2011 a multilateral trading facility (MTF, or market), on which equities and options are traded that are listed and traded on other markets.

Further information on TOM is available at www.tomgroup.eu. Annual Report

Outlook 2012

Since 16 February 2012, BinckBank offers its customers in the Netherlands the possibility to trade in US options. The development of the portfolio-based margin system is expected to be completed in the first half of 2012. Innovations will again be introduced in Belgium and France in various areas in order to further strengthen our market position. The launch of Binck in Italy is expected to take place half way through 2012.

Professional Services will expand its services with the addition of ‘banksparen’ and ‘bankbeleggen’. Bank investing is a new kind of bank savings with an investment component. BinckBank expects demand for this product to grow in the near future. Professional Services also once again expects to be able to conclude two new BPO contracts. We expect the migration of the SNS customers to be completed in 2012 and we will start on the implementation of our BPO services to new customers, including Allianz.

Based on our results and the developments in the period, we are confident regarding the further growth and prospects for BinckBank. Our result however remains heavily dependent on the activity of our customers in the market, which is determined to some extent by macroeconomic and other economic developments. Market volatility and direction are important factors. For this reason, we cannot issue detailed forecasts of the results we expect to achieve in 2012. BinckBank will continue to focus on further increasing its client base, through introducing new products and services both in the Netherlands and abroad, in order to achieve its targets.

41 2011 Annual Report

Human resources

Employee key figures Despite the crisis in Europe, BinckBank did not reduce its investment in the growth of its business last year. In line with our ambition to become the largest in Europe, we invested heavily in international growth. With this growth, BinckBank intends to export its successful formula to other European countries. Partly for this reason, we prefer to start a greenfield operation in new markets. This allows us to transplant our BinckBank DNA, so that our business approach can link up with the culture in the country in question. This means we can ensure that our Belgian, French and soon Italian customers experience us as a Belgian, French or Italian provider that retains the BinckBank culture. This BinckBank culture is best described using our formulated core values. Our employees are guided by the following four core values: • Exceed expectations • Work with passion and pleasure • Excel at what you do • Be open and critical

BinckBank considers it essential that these core values are reflected by all its employees. Our core values are included in the annual employee evaluation and when hiring new colleagues we look for people who have these values and who will fit into the culture of BinckBank.

One of our areas of attention in 2011 was the preparation for our expansion into Italy. An office has been opened in Milan, under the leadership of an Italian director. A total of six people are now employed there. The staff in Italy consists of a mix of employees from the Netherlands and from Italy. As we explained above, our intention is to retain our BinckBank DNA and soon to provide the best possible service to Italian private investors. To support our growth in France and provide the best possible service to our customers, the number of FTE was increased by seven last year. The signing of 42 BPO contracts and the associated implementation thereof at Professional Services and the construction of the European Retail base platform has led to an increase of staff in the ICT department of 15 FTE. The number of employees at Syntel

2011 also increased by 11 FTE. In total, the number of FTE has risen from 565 at year-end 2010 to 611 at year-end 2011.

Number of FTE per country Number of FTE per age group

700 611 4 Annual Report 565 600 6 300 281 526 4 34 267 27 475 3 30 32 250 237 500 2 27 224 18 30 26 400 200 176 163 154 300 150 128

number of FTEs 502 537 466 95 200 429 number of FTEs 100 66 73 60 55 44 50 100 50 40 13 14 18 19 0 0 2008 2009 2010 2011 < 24 25-34 35-44 45-54 55 >

The Netherlands Belgium France Italy Spain 2008 2009 2010 2011

Number of FTE per department Male/female ratio

250 700 611 565 600 526 195 106 200 475 174 94 500 156 96 148 143 100 150 132 400 113 111 93 100 300 100 82 79 number of FTEs 505 number of FTEs 76 72 78 471 6664 65 65 66 430 200 375 50 28 28 19 24 100

0 0 ICT Operations Prof. Services Retail Other support Syntel FY08 FY09 FY10 FY11

2008 2009 2010 2011 Male Female Trainees and the ‘BinckBank ICT class’ A total of 49 employees in the Netherlands moved on to a new position at BinckBank. The benefit of this for BinckBank is that we retain talented employees for longer, and that knowledge and experience remains within the company. Employees can further develop and grow in various areas. BinckBank offers traineeships to college graduates. Two new trainees are taken on each year, and follow a 2-year programme tailored to their qualifications. After completing the traineeship, they can move on to another (possibly management) position at BinckBank.

The ‘BinckBank ICT class’ is an initiative whereby people who want to work in ICT can take a 4-month course, which enables them to obtain a qualification. After qualification, we offer them an employment contract with the possibility of further training in various areas of ICT. Twelve participants started in the ‘BinckBank ICT class’ last year, of which eleven successfully completed the course and were taken on in the follow-up stage. We started a second intake of seven students in December 2011 that can move on to the follow-up stage at BinckBank in 2012 once they complete the initial course.

Development of management and employees The specially developed management development programme initiated for team leaders and managers in 2010 was continued in 2011. In addition, we organise workshops every two months for the management team in which the implications of a current management topic at BinckBank is discussed. Opportunities for increasing knowledge and/or skills are available to all employees. More than half of our employees attended an external training in 2011 in addition to the internal courses available to support them in their development. Centralised procurement is used to ensure that the content of the training courses is as far as possible appropriate to the knowledge needed at BinckBank and to its culture. Alex Academy also provides courses for our employees in the field of investing and our Compliance department on compliance issues.

43 Absenteeism Absenteeism was relatively low at BinckBank in 2011, at 2.9%. This represents a slight decline compared to 2010 (3.1%). 2011 Pensions The administration of the BinckBank pension scheme was tranfered to BeFrank in October 2011. The BeFrank online pension account enables our employees to view their pension accrual on a 24/7 basis. They see exactly how much is paid in by the employer each month, what the charges are and how the capital is invested. They can follow their investment return, and to a certain extent make investment decisions. This transparent and online facility reflects Annual Report BinckBank’s business approach.

Relations with the works council The executive board had constructive meetings with the BinckBank works council during 2011. Issues discussed at the meeting with the works council included the processing of the pension value transfer, the conduct of the employee satisfaction survey and the risk identification and evaluation process. Various requests for approval in relation to changes to the BinckBank conditions of employment were also submitted to the works council. Corporate social responsibility

Definition of CSR Corporate social responsibility (CSR) and sustainable business activity are frequently mentioned subjects that are often interpreted differently. At BinckBank, we use the term corporate social responsibility. This reflects our objective of putting our customers’ interests first in the conduct of our business. For a financial services provider, sustainable and environmental themes are of secondary importance. Our CSR policy and business policy are therefore two sides of the same coin. Creating trust by offering the maximum added value for our customers is our primary objective. BinckBank nevertheless still takes account of all possibilities for limiting its ecological footprint, even though the impact of this for a company like BinckBank is limited.

Ambition and priorities BinckBank’s success is largely due to our always putting the customer first. This ambition is and remains the cornerstone of our policy and is the central consideration in all our innovations, product renewals and customer contacts. Drawing attention to socially responsible investing (SRI) has been a priority since 2010. BinckBank promotes this theme and actively strives to reduce the present scepticism among investors with respect to SRI.

Reporting and the GRI The GRI guidelines stand for the Global Reporting Initiative guidelines. The United Nations has issued these guidelines to assist businesses in their reporting in the area of sustainability. Contrary to its Sustainability Report in 2010, in its 2011 annual report BinckBank is deviating from the GRI guidelines in a few respects. This is mainly due to the extensive overlap between the annual report and the GRI guidelines relevant to BinckBank, such as the description of strategy, the section on risk and the HR policy. Furthermore, a large number of GRI indicators defined specifically for financial 44 services providers have little or no relevance in BinckBank’s case. For instance, our geographical area of operation concerns countries within the European Union, where human rights, skewed income distribution and other social issues

2011 do not arise. In accordance with our conservative investment policy, we invest our cash mostly in German Öffentliche Pfandbriefe and government paper, as is appropriate to our low risk appetite. BinckBank provides credit to private investors for the purpose of purchasing securities, and thus does not have to deal with ethical or social considerations involved in lending to companies.

Important events in 2011 in terms of CSR: Annual Report

• The introduction of best execution for equity orders for all AEX stocks; • BinckBank is the first broker in Europe to offer a best-execution service for options from 25 November 2011; • The addition of new SRI funds to Alex Fund Investments. Alex Fund Investments thus offers the widest range in this field in the Netherlands; • The availability of the financial driving licence to all Dutch Binck customers from 28 March 2011. This was already available to Alex customers. This puts customers in an even better position to assess the extent to which their investment decisions are appropriate to their chosen profile; and • BinckBank won a large number of awards for best broker, including the award from IEX Netprofiler and the ‘Gouden Stier’.

Integrated approach The figure below illustrates the integrated approach to CSR policy taken by BinckBank. The dimensions of the CSR policy are formed by: • Management & policy, including the formulation of CSR objectives and the organisation of CSR; • Financial services, including the integration of CSR objectives in the products and services and the development of products and services specifically focused on SRI; • Social involvement, including involvement in social activities and an orientation towards stakeholders; and • Business conduct, including HR policy and environmental policy. Areas of CSR policy

F CY IN LI A O N P C & IA T L N S E E M R E V G C. IC A E N INTEGRATION IN S A PRODUCTS & M B. ORGANISATION SERVICES OF CSR

A. D. CSR AMBITIONS PRODUCTS & SERVICES R POLIC FOCUSED ON SRI S Y C

E. H. CSR ACTIVITIES HR POLICY

O P T E N R E A T F. M I G. E O V N MARKET ORIENTATION L A ENVIROMENTAL POLICY O AND DIALOGUE WITH V L M STAKEHOLDERS IN A L N IA A C G O EM S E NT

2011 Management & policy Corporate social responsibility in the sense that the interests of the customer and of the company should coincide to the fullest extent has always been a primary objective at BinckBank, and will always remain so. This objective is in our genes. The BinckBank executive board also recognises the importance of products and services specifically focusing on sustainability. The board appointed a CSR committee for this purpose in 2011 with responsibility for overseeing

Annual Report initiatives in this area and encouraging such initiatives. Sustainability as a consideration and item of attention is thus

embedded in the decision-making process. The chairman of the CSR committee is executive board member, Nick Bortot. The committee meets once a quarter. Its other members consist of representatives of Retail and Product Development, Public Relations, HR, Facilities and Risk Management. Implementation of the action items in the CSR policy is thus embedded in the existing organisation.

Financial services Since its incorporation, BinckBank has striven to offer the same facilities to private investors as those available to professional investors. BinckBank moreover strives to offer as many facilities as possible to enable its customers to invest successfully. Customers must be aware of, understand and be able to manage the risks of investing. There is a wide range of tools available to support them in this respect. Moreover, as a bank we take the necessary measures to enable our customers to manage their investment risks more effectively.

Developments in 2011 1. Best Execution for equities for private investors The incorporation of TOM has given form to our ambitions with regard to best execution. All markets orders in equities for the exchanges in Amsterdam, Brussels and Paris are now routed through TOM. TOM’s Smart Order Router searches for the market quoting the best price, either Euronext or TOM MTF. We intend to extend TOM’s operations to include a wider range of markets, order types, instruments and liquidity providers in the coming years. In addition to trading in equities, TOM MTF obtained a licence for fasilitating derivative transactions in 2011. From September, TOM reports on a monthly basis the results as regards better price formation of AEX stocks for private investors that can be executed directly in the market and for which TOM offers a better price than that quoted on Euronext. The following table shows the average price improvement achieved by TOM for orders in AEX stocks to be executed at the market price. Number of orders at % AEX orders at % orders with a Average saving per Total saving market in AEX stocks market via TOM MTF better price order in € in € September 22,872 70% 28% 5.39 23,347 October 23,878 73% 32% 4.81 25,971 November 24,999 71% 35% 4.22 26,027 December 19,920 76% 33% 5.52 27,811

2. Promotion of SRI and the offering of SRI investment funds The promotion of SRI is one of the priorities in our CSR policy. Initiatives taken during 2011 include: • Alex Fund Investments added a further six SRI funds to its product range in 2011. The fund supermarket therefore now has the widest range of SRI funds in the Netherlands. At the end of 2011, the total offering consisted of 38 funds. • For fundamental analysis, BinckBank has chosen the service package of Financiële Diensten Amsterdam (FDA) in the Netherlands for both the Binck and the Alex brands. Investors taking the premium package can conduct a detailed sustainability analysis for every company listed on the AEX or the AMX. • BinckBank drew attention to the topic of SRI by organising two online seminars, through its promotion of the new website www.duurzaamaandeel.nl, its support for the Dutch SRI Week and its providing a workshop at the Dutch SRI Day. Customers are regularly informed with regard to the possibilities and opportunities presented by SRI, including how investment instruments contribute to sustainability, risks and returns, and the tax implications. With these initiatives, SRI is actively promoted to private investors.

3. Permanent and usually free education at the Alex Academy The Alex Academy offers customers and others permanent and usually free education through courses, seminars, 46 webinars, blogs, columns and coaching programmes. Alex added a video channel on YouTube in September. Investors, either customers or non-customers can use this video portal to watch instructional videos on investing at all levels,

2011 and thus increase their knowledge in their particular area of interest and at their own level.

Number in 2011 Participants in 2011 Class room training 75 2,600 Online seminars 106 26,594 Annual Report

Youtube channel 60 96,000

Both the class room training courses and the online seminars were given a score of 8.3 by the participants, and the trainers were given a score of 8.5.

Alex Academy also organised a number of investment training courses for our own employees in 2011, which also included a test. The courses were held partly during working hours and partly outside working hours. BinckBank highly values these courses, as they contribute to generating the passion for investing that we want to embed in our genes. Further investment training on a different subject each month was also organised for our staff in 2011. Around 50 employees attended on each occasion.

4. Current activities to support investors BinckBank strives to offer as many facilities as possible to enable its customers to invest successfully. Customers must be aware of, understand and be able to manage the risks of investing. We have taken numerous measures to this effect, including a detailed intake process as well as support for customers. In addition to extensive access to fundamental, technical and risk analysis for a wide range of investment instruments, this also includes real-time information on the risks of the portfolio on a value-at-risk basis and testing of the actual risk against these personal value-at-risk limits. Other facilities provided by BinckBank include: • A manual with a detailed section on risk; and • Availability of a financial driving licence, whereby customers can assess the extent of the knowledge and understanding of investment-related matters. The financial driving licence for simple and complex investment products has been available at both Alex and Binck since 28 March 2011.

5. From its position as an internet bank, BinckBank devotes extensive attention as a matter of active policy to the security of the PC environment of its customers. Measures in this area include: • Actively informing customers regarding the threats posed by the internet, including a video explaining the importance of a secure PC environment and the elements needed for such an environment in simple and understandable terms; • BinckBank refers investors to the site www.veiligbankieren.nl, which is part of the widespread campaign by the Dutch Banking Association in this field; • Actively offering information regarding solutions, such as the best free and paid for firewalls and spam filters, and other measures the customer can take to identify and prevent threats.

Social involvement As a bank, we are aware that we have a role in society, and as part of this role we also make room for a number of social initiatives. BinckBank formulated criteria for this in 2011. The guiding principle for these activities can be described as contributing to the financial literacy of the population of the Netherlands. In 2011, this theme was only addressed by the Alex Academy. Next year, this theme of financial literacy must be given further practical content and put into a wider context. In addition to providing financial resources, BinckBank will strive to contribute to this theme by using its expertise and deploying its employees as well.

Market orientation and dialogue with stakeholders 47 BinckBank stays in touch with various stakeholders through continuous consultation. Clearly, the regulators are extremely important in this respect. The dialogue with investors, customers and shareholders receives particular

2011 attention and is facilitated in as many ways as possible. Internet is taking an increasingly important role in this process. Last year BinckBank took the initiative in meeting with investors, customers and shareholders, through conferences and symposiums and occasions such as the Investor Day, as well as through internet via our online seminars. We can once again look back on a number of successful events for our customers in 2011.

BinckBank moreover remains up to date with the view of private investors, for instance by following internet forums. Annual Report BinckBank’s employees communicate with customers on a daily basis by telephone, e-mail or Twitter. BinckBank thereby actively reflects, follows up and responds to suggestions made by customers. Customers’ wishes are then carefully recorded and assessed for feasibility.

The availability of the Squawkbox is an innovative application for our most active investors. This is a form of social media in which customers can discuss market developments or specific investment constructions or strategies either mutually or with experts in a protected environment.

The BinckBank executive board consults regularly with shareholders and institutional investors. In addition, we introduced the possibility for private shareholders to enter into an online dialogue with the executive board in 2011. This allows private investors to put questions directly to the board chairman both during the AGM and after publication of the third-quarter figures. At the end of 2011 12% of the shares of BinckBank were held by our customers.

BinckBank meets with other stakeholders at regular discussions with representatives of relevant interest groups. These include the Dutch Stockholders’ Association [Vereniging van Effecten Bezitters], the Dutch Association of Investors for Sustainable Development [Vereniging van Beleggers voor Duurzame Ontwikkeling] and the Consumers’ Association [Consumentenbond]. In addition to our customers and shareholders, we should not omit a description of the dialogue with our employees, who are very important stakeholders. In addition to the regular meetings with the works council, the board organises strategy sessions for employees on a regular basis at which employees can put questions directly to the executive board. The board gives an account of its strategy, the progress made and explains its decisions. Informative meetings are also held for employees each quarter on the occasion of the publication of the quarterly figures. Operational management The following indicators relate to the operational management of BinckBank in the Netherlands. Due to the limited amount of material used, the offices in Belgium and France have been left out of consideration.

2011 2010 Comments Paper 10,778 kg 30,000 kg Double-sided printing, office move in 2010 Toner 91 kg 70 kg Cause insourcing office printing Energy 1,339 MWH NA 60% green and 1% solar energy Water 4451 M3 NA

Paper The percentage of recycled paper in 2011 was 100%, compared to 70% in 2010. The figures do not include commercial printing (statements, quarterly reports, correspondence, customer files and other marketing material). The paper used for commercial printing was 100% FSC paper. Using double-sided printing as standard has led to a significant decline in paper usage at BinckBank.

Toner 91 kg of toner was used in 2011 (including office printing and excluding commercial printing), compared to 70 kg in 2010. The increase was largely due to the fact that printing that was previously outsourced was once again done in-house in 2011. This concerns the printing and mailing of all the operational print work.

Energy 48 Energy usage at Barbara Strozzilaan in the period from November 2010 to the end of October 2011 was 1,339 MWh. 60% of this was certified green energy; 1% originated from our own solar panels.

2011 BinckBank selected Equinix as its data centre in 2010. For us, Equinix’s leading energy management programme was an important consideration in the selection. Equinix is the first data centre in Europe and the first company in the Netherlands with ISO 50001 certification, the new global standard for energy management. Equinix also obtained the ISO 14001 certification (for environmental management) in 2011. The ISO 14001 certification establishes the elements companies need for an effective environmentally-friendly management system. Annual Report

49 2011 Annual Report

Executive board members

50 2011 Annual Report

Koen N. Beentjes, Chairman of the executive board (1961 – Dutch nationality)

Koen was appointed as an executive director under the articles of association of BinckBank at the general meeting of shareholders of 28 April 2009 for a term of four years, with responsibility for Human resources, Information technology, Legal & compliance, Internal audit, Investor relations and Syntel.

Koen is a certified public accountant and had an international career of over 20 years at the ING Group and its predecessors. In the early days of his career he was mainly active in the field of Finance & control at subsidiary companies of the ING Group. In 1994, he took on responsibility for the acquisition of foreign retail banks by ING. He became a member of the executive board of Allgemeine Deutsche Direktbank AG in Frankfurt am Main, Germany, in 1998. Following his return to the Netherlands, Koen was appointed as general manager of ING Card at the end of 2002.

Number of BinckBank shares held at year-end 2011: 30,901

Evert-Jan M. Kooistra, executive director and CFO (1968 – Dutch nationality)

Evert-Jan was appointed as an executive director under the articles of association of BinckBank at the general meeting of shareholders of 6 May 2008 for a term of four years. He has been an executive director and CFO of BinckBank since 2008. Evert-Jan is responsible for Finance & control, Operations, Risk management and Internal control.

Evert-Jan studied business economics at the Erasmus University in Rotterdam, and is a certified public accountant. He has more than 18 years’ experience in the financial field, including periods of employment at PriceWaterhouseCoopers and Shell. Most recently he was financial director at the US company International Game Technology. 51

Number of BinckBank shares held at year-end 2011: 30,039 2011 Pieter Aartsen, executive director (1964 – Dutch nationality)

Pieter was reappointed as an executive director under the articles of association of BinckBank at the general meeting of shareholders of 26 April 2010 for a term of four years. He has been an executive director of BinckBank since 2006, with Annual Report responsibility for the Professional Services business unit, ThinkCapital, BeFrank and TOM.

Pieter studied general economics at the VU University in Amsterdam. From 1990 to 2004 he was employed at KAS Bank, where he held various positions in the Institutional Banking division. He was appointed head of Sales and business relations management for the Benelux countries in 1996, and then became head of Sales and business relations management for the UK in 2001. He moved to Deutsche Bank AG in London as head of European securities clearing and vice president in 2004, with responsibility for product development and sales of the clearing product.

Number of BinckBank shares held at year-end 2011: 42,885

Nick Bortot, executive director (1973 – Dutch nationality)

Nick was appointed as an executive director under the articles of association of BinckBank at the general meeting of shareholders of 6 May 2008 for a term of four years. He has been an executive director of BinckBank since 2008, with responsibility for the Retail business unit.

Nick studied business administration at Nyenrode Business University and international affairs at the University of Amsterdam. He has been involved with BinckBank since its incorporation in 2000, and has held positions as head of Customer relations, Marketing & sales director and managing director of the successful BinckBank Belgium.

Number of BinckBank shares held at year-end 2011: 57,547 WORK HARD, PLAY HARD

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3 # Risk & capital management

Introduction As at 31 December 2011, the capital and liquidity position of BinckBank was sound. BinckBank’s total equity at the end of 2011 stood at € 469.5m. The total available Tier I capital as at 31 December 2011 was € 160.7m. BinckBank thus has adequate financial buffers to withstand financial stress. Key developments in 2011

Capital adequacy BinckBank’s capital position was adequate throughout the year. The BIS ratio and solvency ratio rose from 23.9% and 15.7% at year-end 2010 to 31.1% and 23.1% respectively as at 31 December 2011. With its current Tier I capital of € 160.7m, BinckBank amply meets the more stringent capital requirements proposed by the Basel Committee on Banking Supervision (BCBS) which have to be fully implemented by 2019.

Capital requirement for operational risk In the first quarter of 2011 BinckBank obtained approval from De Nederlandsche Bank (DNB) to apply the ‘standardised approach’ for operational risk. In the standardised approach, the operating income is divided into different business lines. A capital requirement is imposed for each business line of between 12% and 18% of the average operating income over the three preceding financial years. As a result of the application of the standardised approach, the mandatory capital requirement for operational risk under Pillar I as at 31 December 2011 has declined from € 26.0m to € 22.5m.

System outages in the trading platform for Alex and Binck NL Between mid-July and the beginning of August, the trading platform for Alex and Binck NL suffered system outages on some trading days. The entire platform was thoroughly investigated by a multidisciplinary team to establish the cause of the outages. The cause turned out to be a problem in the mechanism that (among other things) operates the authentication process for logging in and updates the duration of client sessions on the website. We tested and subsequently implemented the necessary adjustments in early August. BinckBank works continually on the stability and speed of its websites and associated trading applications. To reduce the occurrence of similar outages in the future, we are also investigating how the platform can be made more scalable and improve back-up facilities. 54 2011 Annual Report

Overview of risk management at BinckBank

Risk appetite BinckBank BinckBank conducts its business on the basis of an appropriate balance between risk, return and capital and strives to accept risks in a conscious and responsible way. We strive to achieve a moderate risk profile. Our primary focus on online brokerage and the offering of a savings product limits our risk profile. BinckBank has a Governance Risk Compliance Framework, whereby the risk profile is managed on the basis of previously established risk criteria.

Risk appetite is the degree to which BinckBank is prepared to accept risk during the normal conduct of its business in order to achieve its objectives. Risk appetite involves a balance between risk and reward, and is a core element of BinckBank’s business. Commercial interests and returns are weighed against the risks involved. For BinckBank, risk appetite is a dynamic process rather than a static measure that continually evolves to meet changing internal and external circumstances. The company’s risk culture and ‘tone at the top’ are determining factors. The executive board also considers external perceptions when determining its level of risk appetite: how does BinckBank wish to be seen by key stakeholders such as clients, shareholders, employees and regulators? What are their expectations with regard to risk profile, risk appetite and return? An impression is formed regarding these issues through discussions with stakeholders. Risk appetite is the most important parameter in the BinckBank Enterprise Risk Management System and forms the basic principle for the company’s risk management. The executive board determines the level of risk appetite at least once a year, and adjusts this in the interim in the light of significant changes if necessary.

Like other banking institutions, BinckBank depends on the confidence and trust of private customers. Its relatively brief existence, the absolute size of its equity, its market listing and large number of customers makes BinckBank open to questions relating to issues of confidence. BinckBank is aware of this, and therefore its risk appetite with regard to its reputation, capital adequacy (or solvency), liquidity position and the integrity and rights and obligations of customers is 55 low.

2011 BinckBank’s risk profile BinckBank has a clearly different risk profile compared to traditional Dutch banks. The typical banking operations of BinckBank are relatively simple, and concern providing collateralised loans by highly liquid securities portfolios (collateralised lending), providing payment services to fixed contra-accounts at other banking institutions, automated asset management and the interest-rate business relating to the funds entrusted by our customers. These activities are Annual Report

in general classified as relatively low-risk. BinckBank’s core business, the settlement of securities transactions, is however a complex process. Each year, BinckBank processes transactions for more than 500,000 accounts in a very large number of financial products on several trading platforms through brokers and stock exchange memberships. Together with the high level of dependence on ICT, this forms a relatively high operational risk. BinckBank therefore devotes extensive attention to risk management. Adequate control measures, reporting and information systems form part of the risk management process. The annual establishment of the level of risk appetite, the identification of risks and the introduction and adjustment of relevant control measures are part of a continuous process at BinckBank. Risk management is moreover affected by changing market conditions and the increasing complexity of legislation and regulation. BinckBank must continually comply with the rapidly changing legislation and regulation in the financial sector.

Risk management organisation In the current organisation, risk management is concentrated around the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), who collectively manage the various departments involved in the management of risk. The CEO is responsible for ICT, Information security, Legal & compliance and IAD. The CFO is responsible for Operations, Treasury, Risk management and Finance & control. Each of these departments has its own by-laws which define its duties and responsibilities in relation to risk management. These by-laws have been coordinated to avoid both duplications and gaps in the risk management mechanisms. The independence of the various areas and departments is also safeguarded by this separation. Governance Risk Compliance Framework BinckBank uses the ‘three lines of defence’ principle, in which the business units have primary responsibility for the management of risk. The first-line departments are supported and monitored by second-line specialised departments, such as Risk management, Finance & Control, Compliance and Information Security. The Internal Audit Department (IAD) forms the third line of defence. The audit committee, the risk and product development committee and the supervisory board, together with the external regulators and the external auditor, form the last link in the Governance Risk Compliance Framework.

Supervisory Board

Risk & product development Audit Committee (AC) committee (RPC)

A) Operational Treasury- Credit risk BF Executive Board committee committee committee t /C an MF nt /A Risk Management (escalation to RPC)

FM Professional Retail

Services Accou /A

56 (D IAD Marketing & Sales Finance & Control ternal

rs (escalation

to AC) Ex

2011 Operations gulato Legal & Compliance Re (escalation to AC) ICT

Treasury Annual Report

Information Security (escalation to CEO)

1st line ‘of defence’ 2nd line ‘of defence’ 3rd line ‘of defence’

Risk management departments and committees BinckBank has an organisational structure in which segregation of duties is safeguarded. There are also several consultative bodies and departments that are closely involved in the management of certain types of risk, the most important of which are explained further below.

Treasury committee The treasury committee is mainly responsible for the management of liquidity risk, the credit risk in the investment portfolio and market risk (interest-rate and currency risk). This committee also sets the investment policy for the interest-rate business. This relates to matters such as strategic allocation of freely available funds to the investment portfolio and determination of the funds to be held in cash. Regarding the funds to be held in cash, the items dealt with include the placement of call monies, the risk measures (ratings) to be observed in this respect and the maximum exposure per counterparty and per sector.

Operational risk committee Operational risk management is the responsibility of the operational risk committee, which consists of representatives of line management and specialist support departments. This body focuses on the management of risks associated with human behaviour and the design of business processes. This includes information security risk, legal risks and compliance-related matters. Its principal tasks include decision-making on sound and controlled operation, coordination and promotion of operational risk control and design of the main business processes. The framework of standards and guidelines within which these decisions are made has been configured by the specialist support departments which support decision-making and policy implementation by line management. This committee also has responsibility for giving the final approval of the introduction of new products as described in the Banking Code.

Credit committee BinckBank has a credit committee. This committee focuses mainly on the management of credit risk in customer portfolios. This concerns issues such as concentration risk, margin risk and counterparty risk. The credit committee consists of the chairman of the executive board, the CFO, the risk manager and the group controller. Representatives of the business units may be invited to attend. The subjects dealt with by the credit committee at its meetings include: policy with regard to collateralised lending, margin requirements, bank guarantees and pledged accounts.

Risk management department The risk management department is responsible for the daily conduct of policy in relation to the management of credit and market risk and monitoring the existence and operation of the risk control measures as established by the credit committee. In the context of the management of operational risk, the risk management department carries out regular internal audits of the operational processes and reports its findings to the operational risk committee. It also monitors the interest-rate risk arising from the investment portfolio and reports on this to the treasury committee. The department falls under the responsibility of the CFO and also reports to the credit committee. The policy with regard to credit risk is established on the basis of statutory norms and focuses on concentrations in outstanding loans, deficit management, the adequacy of margin requirements, policy regarding collateralised lending and the monitoring of counterparty risk. The risk management department uses risk models such as Value-at-Risk, duration, the hair-cut method and separate stress tests in order to estimate the degree of risk. The risk manager has the option of escalating issues to the Risk and product development committee.

57 Finance & control department The finance & control department is responsible for the timely, accurate and complete administration and reporting of

2011 financial data to internal and external stakeholders. This includes all mandatory reporting to Dutch and foreign regulators. The finance & control department reports directly to the executive board (CFO).

Legal & compliance department The legal and compliance department reports to the CEO and in the context of risk management is responsible for the monitoring of compliance with the relevant codes of conduct and the observance of relevant legislation and regulation. Annual Report The legal & compliance department is chiefly concerned with the management of integrity risk. BinckBank places a high priority on integrity and reliability, and stresses this by means of its Code of Conduct, its Insider Trading Regulations and its Whistleblower’s Policy. The compliance manager has the option of escalating issues to the audit committee and to the manager of legal & compliance. In his role as the company secretary, the manager of legal & compliance has the option of escalating issues to the chairman of the supervisory board.

Information security department BinckBank has an information security department, which is responsible for formulating and implementating of the information security policy that has been approved by the BinckBank executive board. The information security department has the option of escalating issues to the chairman of the executive board.

Internal audit department (IAD) In line with the definition of Internal Auditing by the Institute of Internal Auditors, the mission of IAD is to provide independent and objective assurance. The purpose of the IAD is to perform assurance tasks in order to add value to and improve the functioning of the internal organisation. The IAD thus contributes to the realisation of the organisational targets by means of a systematic and disciplined approach to the evaluation and improvement of the effectiveness of risk management, control and governance processes. The IAD provides additional assurance with respect to: • the effectiveness and efficiency of the business activities; • the reliability and integrity of the financial and operational information and reporting; • the safeguarding of assets; and • compliance with relevant legislation and regulation.

The audits conducted by the IAD focus on the design, existence and operation of: • the quality and effectiveness of the operation of governance; • the risk management and control within the organisation and processes; and • the automated systems and the control measures surrounding and embedded in these systems.

In addition to scheduled audits, specific audits may be conducted on the request of management or the audit committee. The scope or operating area of the IAD includes all activities carried out under the responsibility of BinckBank. Joint ventures and associate investments are independent entities with their own licence and fall outside the (direct) area of operation of the IAD. The IAD reports to the BinckBank executive board. Within the board, the duties of the IAD are the responsibility of the chairman. In addition, the IAD has direct access to the chairman of the audit committee of BinckBank. The IAD’s independence is safeguarded by this double reporting line and the fact that it is separate from line management and the daily internal control reporting line.

Supervisory board The supervisory board discusses the strategy and the risks associated with the business each year, and, on the basis of reports, assesses the structure and operation of the internal risk management and control systems. Supervision of the financial information provided by the company is the responsibility of the supervisory board. The risk appetite of the executive board is assessed and must be approved by the supervisory board each year.

58 Audit committee The audit committee is responsible for overseeing the design and operation of the system of internal control and risk

2011 management measures, and for monitoring the implementation of the external auditor’s recommendations and the functioning of the Internal audit department.

Risk and product development committee The risk and product development committee advises the supervisory board on matters including the risk profile and the risk appetite of BinckBank. It also monitors the adequacy of the liquidity and the capital, as well as establishing, Annual Report testing and analysing new products or changes to existing products and services with regard to the duty of care towards the customer. The risk and product development committee is moreover responsible for identifying, analysing and advising on all the other material risks to BinckBank. Capital structure

BinckBank reserves capital as a provision against risk. The amount and quality of the capital reserves are determined on the basis of IFRS and the provisions of the European CRD Directives that are included in the Financial Supervision Act (Wft).

Calculation of equity capital and actual Tier I capital BinckBank’s equity capital consists of paid-in and issued share capital, share premium reserve, other reserves, the result in the current financial year, together with the value of the non-controlling interests. Treasury shares are deducted from capital equity. For the calculation of the core capital, the items goodwill, intangible assets, fair value reserve and the proposed dividend are deducted from the equity capital. For the calculation of the total available Tier I capital, the item equity investments in financial institutions of larger than 10% is deducted from the core capital. The analysis of the composition of equity capital and core capital as at 31 December 2011 is shown in the table below.

(x € 1,000) 31 December 2011 31 December 2010 Issued share capital 7,450 7,450 Share premium reserve 373,422 373,422 Treasury shares (3,954) (3,335) Other reserves 58,388 47,209 Unappropriated profit 34,210 44,240 Non-controlling interests 7 (73) Total equity 469,523 468,913

59 Less: goodwill (152,929) (152,929) Less: other intangible assets (135,773) (164,155) Less: fair value reserve 973 2,610 2011 Less: proposed dividend (17,880) (20,115)

Core capital 163,914 134,324 Annual Report

Less: equity investments in financial subsidiaries (3,219) (3,067)

Total available capital - Tier I 160,695 131,257

BinckBank’s capital position as at 31 December 2011 was sound. BinckBank’s total equity at the end of December 2011 stood at € 469.5m (2010: € 468.9m). The total available Tier I capital amounted to € 160.7m (2010: € 131.3m). The Tier I capital is not affected by movements in the fair value reserve, since this is deducted in the calculation of the total available capital (see item: ‘Less: fair value reserve’). The Tier I capital rose by € 29.4m, € 28.4m of which consisted of amortisation of intangible assets and € 1.0m from other movements in capital (such as reserved profit). Calculation of capital requirement under Pillar I and Pillar II The Basel II framework set down in the Financial Supervision Act (Wft) provides guidelines for the calculation of the minimum Pillar I capital that according to the regulators a bank must hold for credit risk, market risk and operational risk. Basel II permits various approaches for the implementation of the requirements under Pillar I with regard to credit risk, market risk and operational risk. BinckBank uses the standardised approach for credit risk and market risk, in which risk weighting and credit risk mitigation techniques are used as indicated by the regulator. BinckBank also uses the standardised approach for operational risk, whereby it forms a capital reserve based on the average operational income per business line over the preceding three financial years.

The second Pillar of the Basel II agreement concerns the process banks used to assess the adequacy of their equity capital, the ICAAP and the evaluation of that process by the regulator, known as the Supervisory Review and Evaluation Process (SREP). For the determination of its Internal Capital Adequacy Assessment Process (or ICAAP) capital BinckBank uses the complementary method, whereby capital in addition to the prescribed minimum capital requirement under Pillar I must be retained for complementary risks acknowledged by BinckBank (Pillar II). The ICAAP is used by BinckBank to determine its internal regulatory capital (or ICAAP capital). ICAAP capital is expressed in the solvency ratio. During 2011, BinckBank used a minimum capital requirement for the Pillar II solvency ratio of 12%. The SREP capital is the result of the dialogue between De Nederlandsche Bank (DNB) and BinckBank, and reflects the level of capital considered desirable from an external regulatory perspective. In certain cases the regulator may add a prudential surcharge to the ICAAP capital. No prudential surcharge was applied to BinckBank in 2011, and there was no difference between the ICAAP capital and the SREP capital.

Capital ratios Pillars I & II

(x € 1,000) 31 December 2011 31 December 2010 60 Total available capital 160,695 131,257

Total required capital Pillar I+II 2011 55,586 66,933

Pillar I required capital 41,360 43,983 Credit risk 18,718 17,884 Market risk 120 96 Annual Report Operational risk 22,522 26,003

Pillar II required capital 14,226 22,950 Interest-rate risk 4,294 8,349 Liquidity risk 477 954 Total credit risk Pillar II 9,455 13,647 Concentration risk 7,054 9,062 Margin risk 401 3,585 Counterparty risk 2,000 1,000

Excess / insufficient capital (Pillar I) 119,335 87,274 Excess / insufficient capital (Pillar II) 105,109 64,324

BIS ratio 31.1% 23.9% Solvency ratio 23.1% 15.7% Pillar I capital requirement BinckBank has reassessed its capital adequacy as at 31 December 2011. This revealed that the total Pillar I capital requirement declined by 6% to € 41.4m during 2011. The decline can largely be explained by the application of the standardised approach for the determination of the capital requirement for operational risk.

Pillar II capital requirement The total capital required under Pillar II fell by 38% in 2011 to € 14.2m. The capital requirement declined for all risks, with the exception of counterparty risk. The capital requirement for interest-rate risk fell by € 4.1m because the duration of the investment portfolio shortened from 1.33 years to 0.82 years, while the size of the investment portfolio remained more or less unchanged. The capital requirement for liquidity risk fell by € 0.5m in comparison to the level at 31 December 2010 because BinckBank’s cash holding in relation to its funds entrusted was higher at the end of 2011. Concentration risk measures the risks of losses from customers with skewed portfolios that are concentrated in specific stocks (or their associated derivatives). The highest concentration in customer portfolios at the end of 2011 was found in the stocks ING Group and Royal Dutch Shell. The capital requirement for concentration risks as at 31 December 2011 stood at € 7.1m, which is € 2.0m lower than as at 31 December 2010. The capital requirement for margin risk arises from the size of the claims on customers that would ensue after a 12.5% decline in the stock markets. BinckBank considered it necessary to increase the margin requirement on written options positions as a result of the higher volatility in securities prices during 2011. Partly as a result of this decision, the margin risk declined by € 3.2m to € 0.4m at year-end 2011. The capital requirement for counterparty risk rose by € 1.0m because the growth at the Professional Services business unit led to an increase in OTC transactions, which are settled with individual counterparties. The capital requirement for counterparty risk thus came to € 2.0m as at 31 December 2011.

In total, the capital required under Pillars I and II fell by 17% to € 55.6m. The Tier I capital rose by 22% to € 160.7m. This caused the solvency ratio to rise from 15.7% (year-end 2010) to 23.1% (year-end 2011), and the BIS ratio to rise from 23.9% (year-end 2010) to 31.1% (year-end 2011). 61 Overview of BinckBank’s capital structure 2011

x € 1,000

160,000

140,000 Annual Report

120,000

100,000 Minimum capital 2011 (12% solvency ratio)

80,000 Tier I Tier I capital capital 60,000 Liquidity risk Interest-rate risk Liquidity risk Credit Risk Interest-rate risk Credit Risk 40,000 Operational Operational Maximum Maximum risk risk Pillar I Pillar I Stress Stress 20,000 capital capital scenario scenario Credit Credit Risk Risk 0 2010 2011 2010 2011 2010 2011 2010 2011

Pillar I ICAAP capital Stresstest Available capital

The above figure illustrates the capital adequacy. Since the necessary ICAAP capital as at 31 December 2011 was lower than the capital available, one can conclude that BinckBank held sufficient capital and its capital adequacy was in excess of the desired minimum solvency ratio of 12%. The maximum stress scenario reveals that BinckBank has sufficient capital to withstand a stress scenario should this occur. Capital management

The aim of capital management at BinckBank is to maintain a sound solvency position, seeking constantly to strike the right balance between the equity capital it holds and the risks to which it is exposed. Capital management makes an increasingly important contribution to a systematic analysis of and improvement to the risk and return of BinckBank’s activities. In the design of its capital structure, BinckBank takes account of the thresholds set by De Nederlandsche Bank (DNB), the Financial Supervision Act (Wft), the Basel II regulations and its own internal requirements with respect to capital adequacy.

Capital strategy BinckBank strives to achieve an internal solvency ratio (Pillar II solvency ratio) of between 12% and 20% and has determined in its capital policy that if the solvency ratio rises towards the 20% level that surplus capital will be distributed to shareholders in the form of dividend and/or through the buy-back of own shares. BinckBank’s solvency ratio exceeded the 20% level in the fourth quarter of 2011, which led to the reinstatement of the share buy-back programme.

Internal capital targets BinckBank’s internal capital target is to achieve a solvency ratio of at least 12%.

62 2011 Annual Report

Relevant risks and control measures

The risks which are relevant to BinckBank are discussed briefly below. The identification, analysis and assessment of risks, the design and implementation of related control measures and stress testing form a continuous process at BinckBank.

Strategic risk, business risk and reputational risk International economic, cyclical factors, and the aftermath of the credit crisis influenced financial markets around the world, and consequently also affect the operating result of BinckBank. Other factors are also involved, including loss of customers, falling trading volume, lower order values and price pressure due to competition, that could result in a fall in income. BinckBank operates in a highly competitive environment in which its competitors, often large financial institutions, have well-established brands and greater financial resources. BinckBank is also seeing increasing competition from smaller online brokers which are competing aggressively on price. BinckBank makes great efforts and makes substantial investments in order to retain its existing customers and to attract new customers. Its financial position and result can also be adversely affected by unfortunate business decisions, poor execution of business decisions or inadequate response to changes in the business climate in general or in the markets relevant to the company in particular. For BinckBank, the confidence of its customers is essential and BinckBank therefore minimises risks to reputational damage as far as possible.

A description of each type of risk is given below:

Credit risk Credit risk is the risk of a counterparty and/or issuing institution involved in trading in or issuing a financial instrument 63 defaulting on an obligation and thus harming BinckBank financially. Credit risk relates to items included in the balance sheet under cash and balances with central banks, banks, financial assets and loans and receivables. With these balance sheet items, the most important consideration is the creditworthiness of the counterparty (except collateralised 2011 lending, because this is fully covered by securities as collateral). BinckBank’s credit risk can be subdivided into credit risk on cash and investments, credit risk on outstanding collateralised loans/margin obligations/SRD obligations and counterparty risk. How BinckBank manages these risks is described below.

Credit risk on cash and investments Annual Report

BinckBank deals with the funds entrusted to it by its customers prudently. Funds entrusted, or customer deposits that are not used for collateralised lending, are partially held in cash. The largest part is placed in the market in a responsible and risk-averse manner (through the investment portfolio). BinckBank’s objective with the investment portfolio is to place surplus liquidity in the market in such a way as to optimise the interest margin between the costs of raising the funds and the proceeds of placing them, consistent with the company’s risk appetite. Credit risk on cash and investments is monitored closely by the treasury department, which reports daily to the CFO and the risk management department and gives account of its activities to the treasury committee on a regular basis. Investments are made within a system of counterparty limits set in advance by the treasury committee. Cash balances surplus to requirements are placed in money and capital markets with central governments, lower-tier public authorities if guaranteed by central government, central banks and other credit institutions with a credit rating equal to or better than AA- (Fitch or equivalent). The money market loans by BinckBank have maturities varying from one day to one month. The capital market loans have maturities of up to three years. The agreements and limits with regard to placing funds in the money and capital markets are established in a limits system established by the treasury committee. Lending to counterparties by the treasury department is governed by strict rules, in accordance with treasury policy, and subject to internally set limits on both the amount and maturities of loans to approved counterparties. The resultant credit risk is monitored via regular credit reviews. Our relatively low risk appetite is demonstrated by our policy to invest only in relatively safe and liquid instruments that are eligible for collateral at the European Central Bank (ECB). Credit risk on outstanding collateralised loans/margin obligations Via customer agreements, BinckBank offers customers securities-backed credit facilities. Advances can be used to cover the margin requirement, purchase securities or furnish bank guarantees against the brokerage account. In all these cases, BinckBank is exposed to (potential) credit risk with respect to the customer. Given the nature of the loans and the collateral provided, however, credit risk is limited. In the case of lending against the collateral of financial instruments, the amount of credit advanced depends partly on the liquidity and price of the security in question. The credit facility for all products that qualify for collateralised lending is determined in accordance with the guidelines set by the credit committee, taking account of the limits set in section 152 of the Market Conduct Supervision (Financial Institutions) Decree [Besluit gedragstoezicht financiële ondernemingen, or ‘Bgfo’]. BinckBank applies a lower limit haircut of 30% on equities and 20% on bonds. In comparison with the standard approach taken by the regulator to determine the credit risk under Basel II, this is very prudent. BinckBank has retained the right towards its customers to adjust the advance against securities at any time without prior notice. Authorised limits can be translated into a maximum spending limit. This spending limit is expressed as a cover ratio whereby the minimum requirement reflects a cover ratio of 1. The degree to which the customer exceeds 1 expresses the relative surplus cover in relation to the minimum requirement. Additional cover can be obtained by providing bank guarantees, collateral in the form of securities or by increasing the cash balance. If the cover ratio falls below 1, the customer enters the deficit procedure. If the cover ratio falls to nil, the customer enters the collection procedure.

Monitoring of credit risk is conducted by the risk management department, which uses automated systems to monitor the loans provided on the basis of real-time prices. The credit risk therefore resides in movements in value of the collateral received. The risk management department watches in particular for undesirable concentration within client portfolios, known as concentration risk.

Concentration risk is a form of credit risk, and occurs in relation to customers with collateralised loans and customers with margin requirements on derivatives positions. Concentration risk arises for example in the case of concentrations 64 in specific stocks by customers with insufficiently diversified investment portfolios. The credit collateralised by securities is in this case too dependent on one or a few issues. If an issuer were to default, the consequences would be

2011 significantly more serious than if the credit had been provided on a more diversified portfolio. The risk management department monitors for excessive concentrations in customer portfolios on a daily basis. Measures are taken in line with policy if necessary to limit excessive concentrations. If there is excessive concentration, a decision is taken to reduce the credit provided to the customer in question. In addition, the credit committee may decide to limit the concentration risk associated with a specific stock by reducing the advance provided against the stock in question. Collateralised lending has fallen by 39% since year-end 2010 from € 476m to € 290m at the end of 2011. The size of the Annual Report

collateralised lending declined as a result of the heavy fall in the financial markets in August and September 2011, which reduced the value of the portfolios. Customers were thus forced to reduce some of their outstanding credit by liquidating positions in their portfolios.

Margin is a financial sum that the writer (or seller) of an short option or future must deposit as security for the risk of his position. Margin is a form of guarantee for potential losses arising as a result of the obligations assumed by the investor. This does not mean that the financial risks are limited to the size of these obligations. There is therefore the risk that the margin maintained by the customer will not be adequate in relation to the obligation. The margin requirement may therefore entail a credit risk on the customer. The amount of the margin requirements is partly determined by the margin percentages established by the Risk management department on the basis of the historical volatility of the underlying stock or index. The Risk management department analyses market movements on a daily basis and updates the margin percentages at least once a month. The outstanding margin requirement of our customers fell 10% last year from € 270m to € 244m. Due to the increased volatility in the financial markets, the margin requirement for written options was raised by BinckBank in August and September 2011. This means that customers have to hold a higher level of collateral to cover their risk, and led to an absolute increase in customers’ margin requirements. Service de Règlement Différé (SRD) BinckBank offers SRD contracts in France. An SRD contract is a transaction in a selected number of equities listed on NYSE Euronext Paris whereby payment for shares purchased or delivery of shares sold may be delayed until the last trading day of the month. The corresponding equity transaction in the cash market is executed by BinckBank in order to cover the price risk. The effect of this is that the sum involved in the transaction is advanced by BinckBank to the client. This can be seen as a form of collateralised lending for which BinckBank charges a monthly fee. The outstanding obligations amounted to € 15.6m at year-end 2011. There is currently no increase in concentration risk in customer investment portfolios in SRD contracts, so this has no significant effect on the capital requirement for concentration risk under Pillar II.

BinckBank deficit procedure The risk management department monitors the credit risk on collateralised lending and margin requirements on a daily basis. Customers with a collateralised lending and/or margin agreement are monitored by the risk management department with respect to their Available Spending Limit (ASL). The ASL is the balance of the weighted value of the securities received from the customer less the customer’s obligations in the form of collateralised lending and margin requirements. There is a shortfall in the ASL if the securities in the customer’s portfolio no longer provide adequate cover for the customer’s obligations. As soon as a negative ASL is identified, the deficit procedure is initiated. Use of a deficit procedure is a statutory requirement.

The deficit procedure used by BinckBank is as follows: BinckBank checks for each customer whether the securities adequately cover the collateralised loans and/or margin requirements (margin and current orders) on a daily basis. In the case of a negative ASL, the customer must make up the shortfall within five business days. If there is a shortfall as a result of positions in futures or SRD derivatives, this must be made up within one day. If the customer’s ASL is still negative on the last day on which the shortfall must be made up, BinckBank will start to close the customer’s securities positions on its own initiative. Securities positions will be closed until the ASL in the customer’s account is returned to a 65 positive value. As a result of changed market circumstances, it can be the case that the collateralised loan percentage does not provide sufficient cover for possible future price movements. The risk management department monitors this

2011 on a daily basis and, if necessary, will immediately adjust the collateralised loan percentage in accordance with the collateralised lending policy.

Provisions for collateralised lending and margin requirements Provisions for non-recoverable collateralised loans are determined on an individual basis and there are no collective

Annual Report provisions. The amount of the provision depends on the repayment terms agreed with the client. The total provision as

at 31 December 2011 was € 0.4m (2010: € 0.5m). In the event that the risk management department is unable to recover the debt, the case is handed to a collection agency.

Counterparty risk Counterparty risk is an element of the risk involved in settlements. The vast majority of the transactions by BinckBank’s customers are effected on regulated markets such as NYSE Euronext and TOM, whereby use is made of a central counterparty (CCP). In this case, the counterparty risk is virtually nil. The Professional Services business unit executes a small number of transactions with a counterparty, or broker. Credit risk (as well as market risk) may arise with regard to these OTC transactions as a result of non-settlement. These transactions are effected subject to counterparty limits. The credit committee approves the counterparty limits and the risk management monitors that these limits are observed.

Capital requirement for credit risk The credit requirement for credit risk under Pillar I rose 5% in 2011, from € 17.9m to € 18.7m. The main reason for the increase is due to an increase in cash held with Dutch financial institutions, for which a risk weight of 20% applies.

Market risk BinckBank’s market risk consists of interest-rate risk and currency risk. Interest-rate risk is the risk of movements in interest rates and the effect thereof on the financial position and/or the result of BinckBank. Currency risk is the risk of fluctuations in the value of items denominated in foreign currency as a result of movements in exchange rates and the effect of this on the financial position and/or the result of BinckBank. Interest-rate risk BinckBank does not operate a trading portfolio, however it is still exposed to movements in interest rates due to the loans it places in the market. Interest-rate risk exists because of the possibility that changes in market interest rates can have a negative effect on future profitability. A gradual movement in market interest rates (the yield curve) has an effect on the future interest income from collateralised lending and the investment portfolio, and on the interest BinckBank pays on savings and brokerage accounts. BinckBank manages this risk in relation to its banking operations by actively matching the maturities of its assets and liabilities within certain limits. The effect of a gradual movement in interest rates on BinckBank’s profitability is determined using an Earnings-at-Risk model. The Earnings-at-Risk model measures the impact of interest-rate risk on net income by calculating the effect on expected interest income and expense of a gradual change in market interest rates of 1% and 2% over a period of one year, both higher and lower, and the effect of this over a period of two years. This clearly shows the potential effect of changes in interest rates on BinckBank’s result. The risk management department reports the results and any breaches of the tolerance level to the treasury committee on a regular basis. BinckBank does not reserve capital for Earnings-at-Risk.

In addition to gradual movements in the yield curve, sudden movements can also occur, known as interest-rate shocks. In BinckBank’s case, interest-rate shocks are reflected in changes in value in the investment portfolio. BinckBank has an investment portfolio made up of fixed-income securities which is diversified across various maturities. The portfolio is susceptible to unrealised gains and losses due to movements in interest rates and the creditworthiness of the institutions issuing or guaranteeing the bonds. To cover losses that could arise as a result of a sudden negative interest- rate shock in combination with a large cash outflow whereby a part of the investment portfolio has to be liquidated at a loss, BinckBank reserves capital under Pillar II. These losses are determined using the Value-at-Risk model (VaR). The investment portfolio is incorporated in the banking book and is valued as Available-for-Sale. This means that movements in value as a result of events such as interest-rate shocks are expressed in the first instance in the revaluation reserve, but have no effect on BinckBank’s core capital. Any losses (or profits) on forced or voluntary sales in the investment portfolio are expressed in BinckBank’s result. The interest-rate risk for BinckBank will only lead to losses 66 if the bank is forced to liquidate its investment portfolio as a result of substantial customer withdrawals in combination with an interest-rate shock. This risk is quantified using a VaR model, which allows one to calculate with a certain

2011 degree of reliability the maximum potential loss on the investment portfolio in a given period (BinckBank uses a period of 10 trading days). BinckBank uses a confidence interval of 99.7%, which means that in 0.3% of cases a change in the value of the portfolio can occur that will be equal to or greater than the VaR calculation. The historical data for the past year are used as the input for the model, and the variance and correlation with the term to maturity of the investment portfolio are established on this basis. The model assumes full liquidation of the investment portfolio. BinckBank reserves € 4.3m in capital under Pillar II for the risks according to the VaR approach. Annual Report

Currency risk It is BinckBank’s policy not to take active foreign-exchange trading positions. Currency positions can therefore only arise as a result of the facilitation of investment transactions by customers. The policy is to hedge currency positions arising from operating activities on the same day they occur. The treasury department hedges currency positions during the day up until 22:00 hours. Currency positions arising after 22:00 hours are hedged on the next subsequent trading day. BinckBank considers this risk on currency positions to be acceptable. The reason for this is that the vast majority of transactions in foreign currency are in USD. Since most of our customers have a USD account, these currency positions are settled in the customer’s account and therefore BinckBank has no foreign currency exposure. No materially significant profits or losses on currency positions were recognised in 2011. Results on currency positions are discussed by the treasury committee on a monthly basis.

Capital requirements for market risk The capital requirement for market risk is expressed under Pillar I (market risk) and Pillar II (interest-rate risk). BinckBank reserves capital for foreign currency risk under Pillar I. At year-end 2011, the capital requirement for currency risk was € 0.1m (2010: € 0.1m). BinckBank held capital for the interest-rate risk in the investment portfolio at the end of 2011 in an amount of € 4.3m. The capital reserve declined as a result of a reduction in the duration of the investment portfolio from 1.33 years as at 31 December 2010 to 0.82 years at year-end 2011. Operational risk Due to the nature of its business, BinckBank has a relatively high inherent operational risk. Important factors here are the large number of administrative entries that have to be processed on a daily basis, the fact that all communications with customers are conducted over the internet and that for all sorts of reasons adjustments have to be made to the platform and the software on a very regular basis. Many unexpected events may moreover occur in BinckBank’s operational processes which can result in losses or prevent achievement of targets. Processes, systems and people may fail to perform as intended, employees may commit fraud, incidents may occur and day-to-day processes may be disturbed by accidents or system faults (ICT risk). The risks arising from such events are classed as operational risks. Losses due to operational risk are unavoidable. BinckBank is insured with third parties for many forms of foreseeable losses as a result of operational risk. BinckBank has a capital reserve for operational risk as prescribed by law as a buffer for uninsured (unforeseeable) losses.

Management of operational risk Operational risk is generally the result of deficiencies in the daily processing and settlement of transactions with customers or other parties or in the procedures and actions designed to ensure prompt detection of errors, quantitative or qualitative deficiencies or limitations in human resources, deficient decision-making due to inadequate management information and failure to comply correctly with internal control procedures. The assessment and control system for operational risk at BinckBank meets the following conditions: • Establish of clearly allocated responsibilities; • Measurement, assessment and updating of current operational risk in the operational risk committee; • Maintenance and reporting of the loss database to the operational risk committee; • The assessment and control system is regularly subjected to an independent expert analysis; and • The results of the periodic checks are discussed monthly by the operational risk committee and additionally an annual risk assessment is conducted to establish the risk appetite in the presence of the executive board, the 67 directors of the business units and the heads of the support departments.

Risk can only be managed by means of an adequate management reporting process. At BinckBank, this process meets the 2011 following conditions: • Reporting of the effectiveness or otherwise of the controls to the business unit responsible on a regular basis, with an additional monitoring function reserved for the IAD. The IAD monitors that the controls are implemented by the second line of defence correctly, comprehensively and in a timely manner. The reporting by the monitor and ineffectiveness of controls are also reported to the operational risk committee. Annual Report

• The effectiveness of the controls is discussed by the operational risk committee. Appropriate measures are taken on this basis in the event of an unacceptable risk. The operational risk committee also gives its approval for new products and services to be introduced by BinckBank, whereby the emphasis is on the identification and management of the risk and the establishment of the relevant key controls for the product or service in question in the risk management system.

Operational risk management is built into the structure of the organisation, which embodies a number of the internal control measures and principles that BinckBank uses to manage operational risk. Ineffective controls are assessed on a monthly basis and adjusted where necessary by the operational risk committee. In addition, a Risk Dashboard is discussed which shows the key indicators providing signals of the development of operational risks over time. These include indicators relating to ICT performance such as system failure during the month (percentage of uptime during market hours, norm = 99.9%) versus the previous period, last successful contingency test, percentage of incidents resolved within 2 days.

Important elements for the management of operational risk include: • Locate the responsibility for managing operational risk as close as possible to the processes themselves, i.e. with the line management; • Record the operating processes, risk management processes and organisational structure and their interrelationship in writing; • Embed procedures for reporting and escalation to management; • Implement controls within each process chain to ensure accurate information, together with performance and risk indicators; • Learn from incidents and errors. Where possible, record the details of incidents that resulted (or could have resulted) in losses and compare the records against the findings of risk assessments; • Automated recording and execution of transactions with associated audit trails. Daily transaction and position reconciliation, including reporting to management; • Procedures for staff recruitment and mentoring and functional segregation and job descriptions for all employees and departments; • Clear reporting lines, recording of required management information and periodic internal consultation; internal control and internal audit studies, compulsory ‘four-eyes’ principle for representation and contractual binding of the company; • Maintain a capital buffer for losses arising from unforeseen (uninsured) events and check the adequacy of the buffer with regular stress testing; and • Maintain an insurance portfolio including directors’ liability insurance, company liability insurance, inventory insurance, buildings insurance and consequential loss insurance policies.

Management of ICT risk Since the business activities of BinckBank depend heavily on ICT, a significant proportion of the operational risk concerns ICT risk. Deficiencies in ICT can constitute a significant threat to the critical business processes and the service provided to customers. ICT risks can therefore indirectly pose a threat to BinckBank’s financial position and result. To reduce this risk, a large number of control measures have been implemented in the following areas: ICT organisation and policy, security management, incident and problem management, testing, change and configuration management and continuity.

Organisation and policy This concerns first, the risk that the ICT policy and ICT organisation inadequately reflects the organisational strategy and second, the risks that the ICT organisation and ICT policy are not (or not adequately) structured and formulated to reflect the business processes and the existing information and data processing so that the processes and the provision of information are not adequately supported. 68

BinckBank has an ICT Governance Model. The ICT governance is evaluated periodically or when necessary. BinckBank

2011 also has formulated an information security policy that is actively observed within the organisation. Policy principles have been formulated for all significant ICT risk control measures such as availability, incidents, problems and changes which are measured and reported monthly to the operational risk committee using Key Performance Indicators.

BinckBank has furthermore defined a process for managing the resources required for the delivery of ICT services. BinckBank has also formulated a plan that describes the current and future demand for ICT services and the ICT Annual Report resources required (and the necessary works and costs to take these into operation), and has a compulsory CIA classification for all its ICT systems as an element of governance. CIA stands for Confidentiality, Integrity and Availability. ICT measures are taken using the CIA classification to ensure that the desired quality requirements are met.

Security management Security management relates to preventing unauthorised users from accessing information. As an internet bank, BinckBank is by definition exposed to a significant inherent risk of external fraud by online criminals. BinckBank is fully aware of this risk. BinckBank has formulated an access policy to regulate access to the infrastructure, systems, applications and data that has been approved by the director of ICT. To further increase the security of its platform, BinckBank has further extended and operationalised its Security Incident and Event Management System (SIEM). SIEM monitors the security of the BinckBank network.

BinckBank operates a highly active security policy, which is continually evaluated. An important element of this policy is a regular penetration test, in which BinckBank invites a third party to attempt to break into its systems using the latest techniques and methods. The results of this test are discussed by the operational risk committee, and can lead to a further tightening of policy and/or controls. Incident and problem management Incident and problem management focuses on the prevention of the risk of failures as a result of which the service cannot (or cannot sufficiently) be restored, of structural errors in the ICT infrastructure and ensuring that incidents and problems are dealt with correctly, completely and in a timely manner. BinckBank mitigates this risk by means of an Incident Management procedure that ensures that every ICT incident is analysed and prioritised, and that incidents with a high level of urgency and impact are escalated appropriately. Reports are also prepared on incidents and failures on a monthly basis.

Test, change and configuration management BinckBank updates its systems and programmes in line with new technological developments and the needs of its customers. BinckBank thus is exposed to the risks of incorrectly and/or incompletely developed programmes, unauthorised changes to the ICT infrastructure, inadequate provision of information concerning the ICT infrastructure and incorrect or incomplete responses to change requests or failure to deal with change requests in good time. One of the control measures in place is that only personnel from the Infra and data management department are authorised to implement approved changes to the production processes. Changes are made only in accordance with an established change procedure. BinckBank also has various separate development, testing and acceptance environments at its disposal for the development of new software releases. Before changes to production processes can be implemented, the changes concerned must have completed the test management procedure and have been approved by the test manager. The test management procedure has been further tightened this year in order to contribute to increasing the stability of the platform. Tests are increasingly conducted on an automated basis.

BinckBank’s Retail product development department began working with Scrum as its software development method in 2011. Under this method, small multidisciplinary teams with short delivery times are used. This achieves a better time-to-market for the delivery of new products. Delivery is also more predictable in terms of both time and quality. The transparency of the process allows adjustments to be made more frequently and efficiently. 69

Continuity

2011 The availability of its website and the underlying systems is a matter of great importance to BinckBank. The risk that the continuity of the (critical) business processes or the entire institution could be threatened as a result of the unavailability of the ICT infrastructure (including applications and systems) is mitigated as follows: BinckBank has prepared a Business Continuity Plan and Disaster Recovery Plan on the basis of a Business Impact Analysis. BinckBank has a contingency facility and conducts a contingency test at least once a year. To ensure the continuity of the conduct of its business, BinckBank has placed its ICT production systems with an external data centre that has taken measures Annual Report

against the effects of overheating, fire, theft, damage, loss of electrical power and natural disasters. The data centre has a Payment Card Industry Data Security Standard (PCI DSS) certification. In addition, in order to secure its business- critical data BinckBank uses back-ups and real-time synchronisation of data to the contingency location. A daily check is carried out to establish that critical back-ups have functioned properly and in the event of failures an assessment is made to determine whether further action is necessary. A report to management on the performance and availability of the systems is produced on a quarterly basis. A daily check is made to ensure that critical systems are functioning properly before the market opens. Special monitoring software is also used to continually monitor the availability and performance of critical systems.

Capital requirement for operational risk The capital requirement for operational risk as at 31 December 2011 was € 22.5m (2010: € 26.0m). The internal target is for annual losses on normal activities due to operational risks not to exceed 1% of gross commission income. ‘Losses due to operational risks’ here means: • The financial result of out-trades and reimbursement of customers; and • Other direct loss due to faults in ICT systems, automated information processing and operating processes.

Total losses due to operational risks in 2010 amounted to 0.94% of total gross commission income and thus remained within Binckbank’s internal limit. Total losses due to operational risks in 2011 amounted to 1.17% of total income and thus BinckBank did not remain within its internal limit of 1%. The losses as a result of the breakdowns in BinckBank’s trading platform in July and August contributed to this. Integrity risk Integrity risk is the risk of inadequate compliance with codes of conduct imposed by BinckBank standards, social standards and legislation and regulation. Integrity risk may result in direct losses (such as claims and penalties) and consequential losses (such as reputational damage or loss due to fraud). In many cases, these are losses which are insured up to a reasonable sum. To manage this risk, BinckBank imposes clear internal standards and codes of conduct which are clearly communicated within the organisation. BinckBank has a compliance officer, for whom clear reporting lines have been defined and an escalation procedure has been established. The compliance officer is responsible for informing managers and the executive board promptly and accurately in order to ensure that BinckBank’s activities continue to comply with the applicable legislation and regulation. BinckBank has procedures in place for whistleblowers and mandatory reporting of suspicious transactions, and has a security officer and a privacy officer.

Product-specific risks Different measures are currently in place in order to mitigate the risks specific to the business and products of Alex Asset Management. These risks are explained in further detail below.

Risk management at Alex Asset Management Under its Alex brand, BinckBank offers execution-only service as well as an asset management service. Assets under management rose € 80m in 2011 from € 610m to € 690m. With Alex Asset Management, BinckBank distinguishes itself from traditional asset managers by operating an active investment policy combined with investment decisions and recommendations based on quantitative analysis. The risk profile of Alex Asset Management is different from that of the normal execution-only business of BinckBank. The potential risks identified can be divided into risks associated with the duty of care, operational risk and reputational risk. The guidelines regarding the duty of care are usually stricter for asset management than they are for execution-only services, and place an additional responsibility on the asset manager. BinckBank meets these additional requirements by establishing a customer’s investment profile prior to the provision of 70 its service by means of a digital intake procedure and obtaining the approval of the customer in digital form. BinckBank asks its asset management customers to update their investment profile once a year. BinckBank checks daily to establish

2011 that the customer’s portfolio is in line with market developments and whether it corresponds to the established investment profile and objectives. Transactions are executed automatically to expand or reduce positions if this is advisable. This process is more or less fully automated, and therefore does not depend on asset management personnel. The operational risks mainly concern heavy reliance on the ICT systems, decision models and the accuracy of data used such as prices, traded volumes and corporate actions that affect prices. The controls system is adjusted to reflect this. BinckBank conducts a large number of tests on a daily basis and regularly tests that the decision models are still Annual Report operating in accordance with the criteria. The reputation of Alex Asset Management and therefore BinckBank could be harmed if customers feel that their interests are not properly protected. This perception could arise if returns are disappointing or as a result of unclear communication and negative publicity. Capital adequacy and results of stress tests for BinckBank

BinckBank conducts regular stress tests to evaluate the scale of the risks involved in extreme events with a change in one or several parameters. Stress testing is an integral part of risk management and as such is mandatory under the Basel Accord. The purpose of a stress test is to express the risks of extreme events in terms of financial loss. The likelihood and effect of this in the context of the risk appetite will lead to an evaluation of the risks accepted, and whether measures should be taken to mitigate the risk or additional capital should be reserved. Within Pillar II, stress testing is mandatory to assess the effect on Tier I capital of all types of risk to which the bank is exposed. If the outcome of an extreme but in any way probable stress scenario exceeds the available Tier I capital, this shows that BinckBank has exceeded its risk appetite. In this case BinckBank will have to take appropriate action in the form of risk-mitigating measures such as policy changes or insurance, or by reducing the risk profile of its existing activities.

Results of recent stress tests and maximum stress scenario For the calculation of the maximum stress scenario, it is important to understand that there is a difference between stress scenarios and stress tests. A stress test is a single test for one particular event and thus a change in one single parameter. A stress scenario is a set of stress tests that together form a scenario. The maximum stress scenario is based on a set of extreme events that could lead to financial losses for BinckBank. Various stress tests have been developed for each risk category to enable management to assess the scale of the risk involved in extreme but realistic situations. The individual stress tests are not complementary, since not all events can occur simultaneously, so that a stress scenario is compiled for each risk category. The various results of the stress scenarios for each risk category are combined into a maximum stress scenario for the testing of capital adequacy. The following figure shows the size of the maximum combined scenario spread across the various risk categories.

Overview of maximum combined stress scenario 71

x € 1,000

2011 60,000 Maximum combined scenario 50,000

40,000 Annual Report

30,000

Operational risk Single combined combined 20,000 scenario scenario

Credit risk Interest-rate Business risk combined risk 10,000 scenario

Liquidity risk 0

Capital adequacy including the second-round effect The capital loss for the maximum combined stress scenario was € 50.6m as at 31 December 2011 and € 74.9m as at 31 December 2010. The amount of capital retained as at 31 December 2011 of € 160.7m would decrease to Tier I capital of € 110.1m. The second round effect shows that the effects of the stress scenario affect the capital requirement. In other words, the forced liquidation of part of the investment portfolio would lead to a lower capital charge for credit and interest-rate risk. In addition, the credit risk on client portfolios would decline due to the forced liquidation of customer positions at the time of the stress event. Taken together, these effects mean that not only the total available capital would decline, but also that the capital required under Pillars I and II would fall from € 55.6m to € 51.1m. The related BIS ratio would then be 22.3% and the solvency ratio would be 17.2%. The table below shows the development of the capital adequacy after the combined stress scenario has actually occurred, including the related second-round effects. (x € 1,000) Max. combined stress 31 December 2011 Total available capital 110,141 160,695

Total required capital Pillar I+II 51,149 55,585

Pillar I required capital 39,444 41,360 Credit risk 16,802 18,718 Market risk 120 120 Operational risk 22,522 22,522

Pillar II required capital 11,705 14,226 Interest-rate risk 3,704 4,294 Liquidity risk 409 477 Total credit risk Pillar II 7,591 9,455 Concentration risk 5,291 7,054 Margin risk 301 401 Counterparty risk 2,000 2,000

Excess / insufficient capital (Pillar I) 70,697 119,335 Excess / insufficient capital (Pillar II) 58,992 105,110

BIS ratio 22.3% 31.1% 72 Solvency ratio 17.2% 23.1%

Including second-round effect 2011

Based on the second-round effect, BinckBank has established that its capital is also adequate under the maximum stress scenario. Since the BIS ratio would not fall below the minimum requirement of 8%, the raising of additional capital or retention of profit is not necessary. Annual Report

Risk management accountability

BinckBank provides information on its capital management and risk management in various forms, and in addition to its annual report also gives account of these matters in its annual Capital Adequacy and Risk Report, which is available at www.binck.com. BinckBank has decided to publish its risk reporting arising from Pillar III of the Basel agreement once a year on its website after the end of the third quarter. The frequency of publication of the risk reporting can be increased if circumstances so require. At year-end, BinckBank gives account of its risk management in the review of the financial statements under note 41 that begins on page 154, arising from the requirements under IFRS 7. With its annual ‘in-control statement’, also included in this annual report, the BinckBank executive board gives account of the operation of its risk management over the previous financial year.

73 2011 Annual Report

THE WILL TO BE THE BEST

DON’T SETTLE FOR THE STATUS QUO

EXCEL AT WHAT YOU DO DARE TO ENTERPRISE

SHOW INITIATIVE

4 # Liquidity management

Introduction Besides solvency, liquidity is also extremely important for a bank. This section is therefore devoted to liquidity management at BinckBank. Liquidity risk is the risk that BinckBank will not be able to meet its payment obligations. BinckBank adopts a prudent policy with regard to liquidity risk that is designed to ensure that demand by its clients for their cash can be met at all times. At the end of 2011, BinckBank had an ample liquidity position of € 412.1m (excluding deposits and cash reserves at central banks). This represents 16.5% of the total funds entrusted. There have been no materially significant incidents with regard to liquidity during the 2011 financial year and there have been no reasons to adjust our liquidity policy. Liquidity profile of BinckBank

BinckBank is an online bank for investors. BinckBank’s services comprise the following: the processing of securities orders placed by customers (brokerage) and the offering of a savings product and asset management services. Due to the nature of its operations, BinckBank’s business model involves a large liquidity surplus. Customers with an account at BinckBank mostly do not invest 100% of their assets, they always hold part of their assets in cash in their brokerage account or savings account. Unlike many other retail banks, BinckBank does not have a large-scale lending or mortgage business. Moreover, BinckBank’s policy is not to raise funds in the interbank market in order to place these funds at different maturities or credit categories. Its funding policy is therefore limited to customer funds and equity. Because it has no active lending or mortgage business, BinckBank’s business model is not the same as that of most Dutch (retail) banks. BinckBank does provide loans based on securities as collateral (collateralised lending) and it places its remaining liquidity surplus in the market by means of an investment portfolio. Since historically the size of the funds entrusted (far) exceeds that of the collateralised lending, BinckBank has a natural liquidity surplus and no funding requirement. The absence of (long-term) loans in combination with the liquidity surplus arising from customer funds is the basis of BinckBank’s funding policy. BinckBank has no need to attract other long-term or short-term funding. BinckBank’s customers can withdraw the funds entrusted at any time. BinckBank does not offer its customers deposits whereby cash is deposited for longer periods. Limited predictability in the long term and short-term effects on the liquidity position are features of the securities brokerage business. Most securities transactions are settled within three days of the transaction date. This means that the main focus of liquidity policy is on managing liquidity in the short term.

BinckBank’s liquidity surplus appears in the balance sheet in three different types of asset: 1. Cash and Banks: in principle 5% to 10% of the funds entrusted is held in cash (as an internal liquidity objective, and excluding cash reserves at central banks) at other banks in order to fund BinckBank’s daily operations. BinckBank can call on these funds immediately. 76 2. Financial assets: the majority of the liquidity balance is invested in the investment portfolio. BinckBank invests mainly in liquid bonds of high credit quality with a maximum maturity of three years. Criteria have been formulated for the evaluation of the liquidity value of assets. 2011 3. Loans and Receivables: a proportion of the customer funds is used to fund the collateralised loans provided by BinckBank. BinckBank also places funds on deposit with Dutch regional govenment and local authorities.

Liquidity risk management Annual Report

To avoid a situation in which it faces a liquidity shortfall, BinckBank has taken various control measures.

The most important of these are:

Organisational • The BinckBank executive board determines the risk appetite with regard to liquidity risk on an annual basis. The risk appetite with regard to liquidity is set by the board at ‘very low’ (1 on a scale of 1 to 5). The board’s very low risk appetite with regard to liquidity risk is based on a. the liquidity characteristics of the business model, that mainly involves the settlement of securities transactions and the size of the client demand deposits in relation to the relatively small size of BinckBank, b. the fact that inability to meet its obligations to customers or third parties promptly could seriously damage confidence in BinckBank and thereby constitute a threat to BinckBank’s continuity and c. BinckBank needs to avoid a situation in which it is forced to sell its assets at unfavourable market prices and thereby suffer losses. BinckBank’s risk appetite regarding liquidity risk is demonstrated by the liquidity position in its balance sheet. BinckBank funds its assets exclusively with funds entrusted by customers, which is a stable source of funding. The risk appetite regarding liquidity is also a major factor in BinckBank’s policy with respect to its investment portfolio. The investments must be of high credit quality, liquid and eligable as collateral with the central bank and/or other banks. • The treasury department has a prominent role in BinckBank’s Governance Risk Compliance Framework (first line of defence). There is also adequate segregation of duties between the formulating policy (treasury committee), policy approval (executive board) and the conduct of day-to-day liquidity management (treasury department). • The treasury department does not operate as a commercial department, in the sense that there is no direct link between the financial results of the Treasury department and the remuneration of its employees. • The number of officers involved in liquidity management at BinckBank is relatively low, and they are all at senior level. Communication lines are short, so decisions can be taken extremely quickly. The main officers involved are: the CEO, the CFO, the manager of risk management, the treasury manager and the group controller. • The senior officers concerned have extensive knowledge of the liquidity aspects of BinckBank’s business model, the drivers of liquidity and the liquidity aspects of the available assets and liabilities. • BinckBank’s liquidity risk policy corresponds to the risk appetite with regard to liquidity risk in relation to the liquidity aspects of the business model. Clear mandates are in place with regard to the management of cash, placements in the money market and the management of the investment portfolio. The frameworks within which the treasury department may invest are established in mandates which are recorded in the Treasury Manual. The Risk management department and the treasury committee monitor that none of the mandates are exceeded. • The liquidity value of the assets is monitored on the basis of established criteria. The securities in the investment portfolio and the criteria for the liquidity value of the assets are discussed by the treasury committee on a monthly basis.

Intraday monitoring • Outgoing payments traffic is continuously monitored; for transfers in excess of € 500,000 the customer is called by the customer relations department and asked for the reason for the transfer. The treasury department is also notified regarding these transfers. The treasury department is notified of the status of incoming and outgoing payments three times a day. In stress situations, transfers can be monitored on an hourly basis. • The treasury department receives statements of the transfers effected for customers four times a day, and the 77 liquidity forecast is adjusted on this basis. • The liquidity position is determined daily and a projection is made for the next three days (T+3) which is then tested

2011 against the internal liquidity target. Liquidity reports are sent to the executive board and the members of the treasury committee. Treasury monitors the cash inflow and outflow. In case of heavy cash outflow, an escalation procedure is applied and action is taken.

Long-term monitoring • BinckBank has a policy with regard to interest and advances. Raising or lowering the interest paid on customer Annual Report accounts is an instrument for adjusting the liquidity position in the medium term. Paying a higher rate of interest on credit balances will lead to cash being raised. Charging a higher interest rate for collateralised loans will reduce cash levels. The use of credit can also be adjusted by reducing or increasing the cover values BinckBank assigns to the securities in customer portfolios. • Credit is provided on the condition that BinckBank has at all times the right to unilaterally cancel the credit agreement and call in the funds. BinckBank receives liquid financial assets as collateral for the loans it provides.

Early warning indicators and escalation procedures • There are clear escalation procedures that are applied if there is a threat that the lower limit of the internal liquidity target will be breached. Escalation is applied using what is known as the traffic-lights model. This is a system of warning signals that lead to an increased level of alert with respect to the liquidity position. When none of the escalation criteria have been triggered, this is known as code green. This can be escalated to code yellow, orange and ultimately code red. Code red would apply in a situation of negative publicity regarding BinckBank’s reputation and/ or heavy cash outflow in combination with a limited cash balance.

Stress testing and contingency funding • Stress tests are conducted to test whether BinckBank is still meeting its internal liquidity target. BinckBank has formulated a number of its own stress scenarios for this purpose. In addition, there are two scenarios formulated by the regulator. • The operation of the bank’s alternative sources of liquidity (the Contingency Funding Plan) is tested at least once a year. Contingency Funding Plan (CFP)

BinckBank has various alternative sources of liquidity at its disposal to cope with liquidity stress. These are: • Reserve requirement at the central bank; • Marginal lending facility at De Nederlandsche Bank (DNB); • Credit facility (with securities as collateral); • Repo agreements; and • Liquidation of the investment portfolio.

Capital requirement for liquidity risk

The capital requirement for liquidity risk is determined by use of a scenario in which 25% of the deposits held by customers with a cash balance of more than € 100,000 and 12.5% of the deposits held by customers with a balance of € 100,000 or less are withdrawn. Under this scenario, BinckBank would have to make money available from the investment portfolio. The liquidity surcharge involved in the immediate liquidation of the investment portfolio is estimated at 0.27%. This surcharge is based on the liquidity spread that arose during the sale of a substantial part of the investment portfolio during the crisis in 2008. The liquidity spread concerns the additional costs that would be involved in an immediate forced sale of a substantial part of the portfolio within one trading day. Based on the above scenario a sum of € 353.4m would be liquidated in the investment portfolio under this ‘liquidity crisis’ scenario. Allowing for a liquidity surcharge of 0.27%, the capital requirement for liquidity risk is estimated at € 0.5m.

78 2011 Annual Report

Statement by the executive board

In-control statement

A detailed account of our risks and our risk management framework, in addition to a description of the responsibilities of the executive board, is given in the capital adequacy and risk report 2011, as published on 31 October 2011, the section on risk and capital management in the annual report, and in note 41 to the financial statements.

In accordance with the best practice provisions as stated in the Corporate Governance Code and with due observance of the limitations stated below, we confirm that our risk management and control systems provide a reasonable level of security and that we are aware of: a. the extent to which BinckBank’s strategic and operational targets are achieved; b. that BinckBank is in compliance with the applicable legislation and regulation; and c. our financial reporting is free of material misstatements. We moreover declare that these risk management and control systems have performed satisfactorily in 2011.

Our internal risk management and control systems cannot however provide absolute certainty that our strategic, operational and financial targets will be achieved or that legislation and regulation will be complied with at all times. Furthermore, systems cannot prevent all human errors, errors of assessment and mistakes. The acceptance of risk and implementation of control measures is always subject to cost/benefit considerations, and is an inherent part of entrepreneurial activity. We continue to strive to further improve and optimise our internal risk management and control procedures.

79 Without prejudice to our statement, we would like to note the following projects in effect that are designed to achieve our ambition of operational excellence: the development of the European Retail base platform, further increasing the demonstrable effects of the control measures within our fast-growing foreign operations and safeguarding the quality 2011 of the various models, parameters and charts used at BinckBank.

Statement by the executive board In accordance with Section 5:25c of the Financial Supervision Act (Wft) we state that according to the best of our

Annual Report knowledge:

A. The financial statements present a true and fair view of the assets, the liabilities, the financial position and the result of BinckBank N.V. and the companies included in the consolidation; and B. The annual report provides a true and fair view of the position as at the balance sheet date, the state of affairs during the financial year of BinckBank N.V. and its affiliated companies, whose data have been included in its financial statements, and that the annual report describes the essential risks faced by BinckBank N.V.

Amsterdam, 8 March 2012

The Executive Board Koen Beentjes, chairman of the executive board Evert Kooistra, executive director and CFO Pieter Aartsen, executive director Nick Bortot, executive director DARE TO NEGOTIATE FOR THE COMPANY AND THE CUSTOMER

AVOID WASTAGE

BE OPEN AND CRITICAL USE YOUR COMMON SENSE

FORMULATE CLEARLY AND UNDERSTANDABLY

A N

5 # Corporate governance

Introduction The Dutch Corporate Governance Code (hereinafter, ‘the Code’) is an important code for good business conduct for Dutch listed companies. The Code is self-regulatory in nature, and is based on the principle known as ‘apply or explain’. The duty of the Corporate governance code monitoring committee (hereinafter, ‘the Monitoring committee’) is to encourage the topicality and practicality of the Code, as well as to monitor compliance with the Code by Dutch listed companies. The Monitoring committee submitted its report on compliance with the Code in 2010 to the Minister of Economic Affairs, Agriculture and Innovation on 9 December 2011. The Monitoring committee devoted particular attention to a selection of best practice provisions that were not consistently applied in the last four years at a rate of 90% or more, and the new and amended provisions in the Code.

The Banking Code is an important code for good business conduct for banks in the Netherlands. The Monitoring committee for the Banking Code (hereinafter, ‘the Burgmans committee’) submitted its first full report on compliance with the Banking Code to the Minister of Finance and the Dutch Banking Association [Nederlandse Vereniging van Banken, or ‘NVB’] on 12 December 2011. The Burgmans committee has established that initiatives have been developed to implement the Banking Code across a broad front.

BinckBank is a listed bank in the Netherlands, and thus is subject to both the Dutch Corporate Governance Code and the Banking Code. Developments in 2011

Right to institute an inquiry The amendment to the right to institute an inquiry was an important legislative initiative in the field of corporate governance in 2011. Among other things, the amendment was introduced in order to tighten the criteria for access to the right to institute an inquiry and also to give the legal entity itself the right to initiate inquiry proceedings.

Intervention Act The Ministers of Finance and of Security and Justice have submitted a bill to the House of Representatives of the Dutch Parliament to grant additional powers to De Nederlandsche Bank (DNB) and the Minister of Finance to intervene in financial enterprises that get into serious difficulties.

Regulation for a Controlled Remuneration Policy in the Wft 2011 New regulations formulated by DNB with regard to remuneration at credit institutions and investment firms have come into force, as specified in the Regulation for a Controlled Remuneration Policy in the Financial Supervision Act (Wft) 2011.

Management and Supervision Act The Management and Supervision Act [Wet bestuur en toezicht] (and the remedial Act expected to come into force on 1 July 2012), among other things provides the legal basis for a one-tier board, a limit to the number of supervisory directorships a person may hold, a new regulation on conflicts of interest, target figures for diversity (between men and women) in the executive board and the supervisory board, and a change in the legal position of directors of listed companies. 82 Extension of the notification requirement for interests in listed companies

2011 An extension to the notification requirement for substantial shareholdings (to include for example cash-settled equity swaps) came into force on 1 January 2012.

Position of shareholders of a bank In its report published on 12 December 2011 on the implementation of the Banking Code, the Burgmans committee stated Annual Report that it wished to initiate a debate with regard to the position of shareholders of a bank. The Burgmans committee’s opinion is that in view of the special position banks occupy in society and the economy, there is a greater need to safeguard the stability and continuity of a bank as a going concern.

Bank tax The Bank tax bill submitted by the government to the House of Representatives of the Dutch Parliament on 15 December 2011 includes a provision that a bank that does not observe the provision in the Banking Code that the variable remuneration of an executive director may not exceed 100% of the basic salary will have to pay 5% extra tax.

European Commission The European Commission launched a public consultation in 2011 regarding ways to improve the corporate governance of European companies. The consultation concerns various issues, such as how the diversity and operation of the executive board and the monitoring and enforcement of existing national corporate governance codes can be improved, and how the involvement of shareholders can be increased.

The European Commission also published a Green Paper for consultation on corporate governance at financial enterprises and remuneration policy in 2011. In its Green Paper, the Commission asks whether the system of management and supervision at financial enterprises needs improvement, and if so, in which respects.

The following sections address the recommendations in the Code and the Banking Code. The Code

The Code has a legal basis in the sense that a listed company has to include a statement in its annual report regarding its compliance with the principles and best practice provisions of the Code that relate to the company’s executive board or supervisory board.

BinckBank generally endorses the principles stated and broadly supported in the Code.

According to best practice provision I.1 of the Code, the broad outlines of the company’s corporate governance structure must be explained each year in a separate section of the annual report, partly by reference to the principles of the Code. This section must also expressly state the extent to which the best practice provisions in the Code are being observed, and where this is not the case, why and to what extent the provisions are not applied. The principle of ‘apply or explain’ has a legal basis.

This section will fulfil the requirements of this best practice provision I.1 of the Code, and also constitutes the corporate governance statement referred to in Article 2:391(5) of the Netherlands Civil Code.

Legal structure

General BinckBank is a public limited company listed on NYSE Euronext Amsterdam. BinckBank has a number of Dutch subsidiaries and associates. BinckBank has branches in Belgium, France and Spain and intends to begin offering its services in Italy, where it has a branch since 2011. BinckBank is regulated by both De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). The foreign subsidiary Binck België N.V. was liquidated as part of 83 a legal restructuring of the group in 2011. 2011

BinckBank N.V.

38.5% 50% 60% 100% 100% Annual Report

Bewaarbedrijf Syntel TOM BeFrank N.V. ThinkCapital BinckBank N.V. Holding B.V. Holding B.V. Belgium Branch BinckBank B.V. Beheer B.V. 100% 100% 100% 100%

TOM B.V. BeFrank ThinkCapital BinckBank N.V. Fintegration PPI N.V. Asset Mgt B.V. France Branch B.V.

100% 100%

TOM BinckBank N.V. Syntel B.V. Broker B.V. Italy Branch

BinckBank N.V. Spain Branch Shares, the issue of shares, voting rights and shareholder structure

Shares BinckBank’s authorised share capital consists of 74,500,000 ordinary listed shares and 50 priority shares, each with a nominal value of € 0.10. The priority shares represent 0.00007% of the issued capital, are unlisted register shares and are held by Stichting Prioriteit Binck (hereinafter, ‘the Foundation’).

Special control rights are attached to the priority shares as specified in the company’s articles of association, which are available on the website www.binck.com. Further details regarding the position of the Foundation are given below in this section. No depositary receipts are issued for BinckBank shares.

Issuance of shares The general meeting of shareholders decides on resolutions with regard to the issuance of shares and may grant this authority to another company body for a period of up to five years. On the issuance of ordinary shares, each shareholder has a pre-emptive right in the amount of his or her total number of shares held, subject to statutory provisions. No pre-emptive right exists on shares issued a) to employees of the company or a group company, or b) against payment other than in cash.

The pre-emptive right may be limited or excluded by resolution of the AGM. The pre-emptive right may also be limited or excluded by the above-mentioned other company bodies if these have been authorised to limit or exclude the pre-emptive right by resolution of the AGM for a period of up to five years. A resolution by the AGM to limit or exclude the pre-emptive right or to grant or withdraw the authority to take such action requires a majority of at least two- thirds of the votes cast if less than half of the issued capital is represented at the meeting. Such resolutions may only be adopted by the AGM if proposed by the Foundation. 84 Voting rights Each BinckBank share entitles its holder to cast one vote. Resolutions are passed by simple majority of the votes cast, to

2011 the extent that a larger majority is not required by law or the articles of association. BinckBank uses a registration date in accordance with the Shareholders’ Rights Act [Wet aandeelhoudersrechten].

Shareholder structure The shareholders who have reported their interest in BinckBank pursuant to Section 5.3 Wft (Financial Supervision Act) are listed on page 25 of this annual report. No shareholder agreements have been concluded between BinckBank and Annual Report

the major shareholders concerned.

Anti-takeover defences The Foundation has a role in many important resolutions pursuant to the articles of association. The Foundation holds 50 BinckBank priority shares. The authorities of the Foundation consist of the initiation of specific resolutions of the AGM and the granting of prior approval to the resolutions described below. The Foundation also has direct powers, including setting the number of executive and supervisory directors.

In short, the objective of the Foundation is to protect the management and the course of events at BinckBank from influences which might negatively affect the independence of the company and its affiliated companies, and to promote a positive course of events in management.

The executive board of the Foundation has three members. Member A is appointed by the supervisory board of BinckBank, member B is appointed by the executive board of BinckBank and member C is appointed by members A and B together. Messrs C.J.M. Scholtes (chairman of the supervisory board), K.N. Beentjes (chairman of the executive board) and J.K. Brouwer (supervisory director) currently act as members A, B and C of the board of the Foundation respectively. The supervisory board and the executive board see no reason to initiate any limitation and/or removal of the powers of the Foundation. The supervisory board and the executive board believe that maintaining the position of the Foundation is beneficial to the continuity of BinckBank and the policies pursued by the bank in the short and long term, subject to careful consideration of the interests of those involved in the company. The powers of the Foundation form an integral part of the articles of association of the company. Strictly speaking therefore, there is no question of a potential or actual anti-takeover measure as referred to in best practice provision IV.3.11 of the Code. With due observance of its above-mentioned objectives under the articles of association, the Foundation is obliged when exercising its powers to protect the interests of the company and its affiliated companies, and in doing so to consider the legitimate interests of those involved in the company. The manner in which the Foundation exercises its powers will depend on the actual facts and circumstances of the case in question.

Executive Board BinckBank has a two-tier board system, meaning that management and supervision are assigned respectively to the BinckBank executive board and supervisory board. BinckBank believes that this structure promotes a system of adequate checks and balances, in which the executive board is responsible for the day-to-day management of the company and the realisation of the company’s short-term and medium-term targets, while the supervisory board supervises the executive board and has an advisory role.

Personal union BinckBank and a number of its Dutch subsidiaries are subject to a personal union at board level in the sense that a majority of the executive directors of BinckBank also act as directors of the subsidiary companies under the articles of association. The personal union promotes uniformity in company policy and strategy.

Duty of the executive board 85 Subject to the limitations stated in the articles of association, the executive board is charged with the management of the company.

2011 Regulations for the appointment, suspension and dismissal of executive board members The executive directors of BinckBank are appointed or reappointed by the AGM on the basis of a non-binding nomination by the Foundation. An executive director is appointed or reappointed for a term commencing on the date of their (re)appointment and ending at the end of the AGM held in the fourth calendar year after the calendar year in which they were (re)appointed, or at such time as is determined at the time of their (re)appointment, if earlier. Annual Report

Executive directors may be suspended or dismissed by the AGM at any time. Executive directors may also be suspended by the supervisory board. Such suspensions can be revoked by the AGM. A suspension may be extended once or more than once, but in total may never last longer than three months.

Supervisory board The supervisory board is charged with the supervision of the policy of the executive board and the general developments at the company and its affiliated companies. The supervisory board highly values close involvement with the company’s development. Performing its duties, the supervisory board focuses on the interests of the company and its affiliated companies, taking the interests of those involved in the company into consideration and also taking into account the social aspects of business operation relevant to the company. The supervisory board advises the executive board, and is moreover charged with all duties assigned to it by law and under the articles of association.

The supervisory directors of BinckBank are appointed or reappointed by the AGM on the basis of a non-binding nomination by the Foundation. A supervisory director is appointed or reappointed for a term commencing on the date of their (re)appointment and ending at the end of the AGM held in the fourth calendar year after the calendar year in which they were (re)appointed, or at such time as is determined at the time of their (re)appointment, if earlier. Annual general meeting of shareholders The general meeting of shareholders has the powers vested in it by law and under the articles of association. Its powers include the authority to appoint and dismiss executive and supervisory directors. The Foundation has an important role with reference to the powers of the AGM in many cases. The appointment of executive and supervisory directors for instance is made on the basis of a non-binding nomination by the Foundation.

Mandatory two-tier board structure (structuurregime) An amendment to the articles of association will be put before the AGM in 2012 which is needed for the implementation of the mandatory two-tier board system that will apply to BinckBank in 2012.

The consequences of the two-tier board structure for BinckBank include the following: • Executive directors will be appointed by the supervisory board; • The articles of association must include a list of executive board resolutions that require the approval of the supervisory board (including the issuance of shares, entering into or terminating a long-term joint venture, amendments to the articles of association, dissolution, certain significant investments, etc.); • Supervisory directors will be appointed by the general meeting of shareholders after nomination by the supervisory board. The general meeting of shareholders and the works council may recommend candidates to the supervisory board for nomination as a supervisory director; and • For one-third of the number of supervisory directors, the supervisory board will nominate a person recommended by the works council, unless the supervisory board objects to the recommendation on the grounds that it does not consider the recommended candidate to be suitable to act as a supervisory director, or that the composition of the supervisory board would not be appropriate if the recommendation were to be adopted.

With the exception of the Foundation’s role in the appointment of supervisory directors, the introduction of the 86 mandatory two-tier board structure does not have to involve a change to the rights and obligations of the Foundation.

2011 Compliance with the Code In the section on corporate governance in its annual report, BinckBank has to state the extent to which it observes the best practice provisions included in the Code, listing the reasons and the extent of non-compliance if it does not (the ‘apply or explain’ principle). BinckBank complies with the best practice provisions included in the Code, including best practice provisions II.3.2 – II.3.4 and III.6.1 – III.6.4, with the exception of the best practice provisions described below. Annual Report

Remuneration of the executive board A new remuneration policy (Remuneration Policy 2010) was established at the annual general meeting of shareholders in 2010. The Regulation for a Controlled Remuneration Policy in the Financial Supervision Act (Wft) 2011 (hereinafter, ‘the Regulation’) took effect on 1 January 2011. The Regulation is a new supervisory measure that is based on the powers of De Nederlandsche Bank (DNB) to set rules with respect to executive pay.

The main provisions of the Regulation concern: • The way in which policy with respect to remuneration at financial enterprises is formulated and established or approved, implemented, evaluated and amended; • The way in which remuneration elements and structures are formulated and how the risks associated with the policy and its application are managed; and • The content and method of publication of the policy regarding remuneration and its application.

The basic principle of the Regulation is that the remuneration policy should be consistent with and contribute to proper and effective risk management, and should not encourage the taking of risks that are not acceptable to BinckBank.

Based on a review it conducted, DNB is of the opinion that the Remuneration Policy 2010 does not fully comply with the Regulation. As a result of the Regulation for a Controlled Remuneration Policy in the Financial Supervision Act (Wft) 2011 coming into effect, BinckBank has to adjust its Remuneration Policy 2010 in certain respects and implement these adjustments as of 1 January 2011. One particular aspect of the Regulation is that the general meeting of shareholders (also) has to take numerous provisions in the Regulation into consideration when adopting the remuneration policy for the directors of a financial enterprise.

An amended remuneration policy will be submitted to the annual general meeting of shareholders in 2012 for adoption. One of the important changes is that variable remunerations will largely be awarded on a conditional basis. A conditionally awarded variable remuneration will only become unconditional once a reassessment on the basis of the initial performance criteria has taken place after a certain period of time has elapsed. No (conditional) dividend will be paid on shares that have been conditionally awarded. A risk adjustment may be required in the assessment of whether the applicable performance criteria have been met.

According to best practice provision II.2.13 of the Code, the overview of the remuneration policy for the next financial year and subsequent financial years to be provided by the supervisory board has to include certain information. BinckBank applies best practice provision II.2.13 of the Code, if and to the extent that publication does not concern commercially sensitive information, in other words, financial and commercial targets. The executive board and supervisory board of BinckBank take the view that providing such information is not in the interests of the company and its stakeholders. The same applies to the main elements of the contract between an executive director and the company, which according to best practice provision II.2.14 of the Code should be published without delay after the contract is concluded, to the extent that these elements concern market-sensitive information. Indeed, specific information mentioned in the applicable remuneration policy is published afterwards. The supervisory board therefore gives account to the general meeting of shareholders with regard to its assessment of the performance of the executive board.

According to best practice provision 11.2.5 of the Code, shares granted to executive directors without ficancial consideration must be retained for a period of at least five years or at least until the end of the employment, if this is 87 shorter. BinckBank complies with best practice provision 11.2.5 of the Code to the extent that calculated from the date the shares are awarded unconditionally, BinckBank shares have to be retained for a period of two years (instead of five

2011 years) or until the end of the employment. With the shorter retention period of two years instead of five years, BinckBank complies with the regulations for the variable remuneration as specified in the Regulation for a controlled remuneration policy in the Wft 2011. In BinckBank’s opinion, the conditional allocation of a material part of a variable remuneration (as stated in the Regulation for a controlled remuneration policy in the Wft 2011) in combination with the stated retention period of two years is sufficient to meet the objective of a long-term commitment to the company and its related business. Annual Report

The Banking Code

General On 9 September 2009, the Dutch Banking Association (NVB) drafted the Banking Code in reply to the Restoring Trust (Naar herstel van vertrouwen) report issued by the advisory committee on the Future of Banks (‘the Maas committee’). The Banking Code can be seen as a measure of self-regulation and applies to all banks with a banking license granted under the Financial Supervision Act. The Banking Code aims to enhance governance within banks, improve their risk management and auditing and promote the implementation of a sound remuneration policy. The Banking Code came into force on 1 January 2010 and is enshrined in the law. In their annual reports and in the same manner as applicable to compliance with the Code, banks are obliged to disclose the extent to which they adhere to the Banking Code.

Permanent education BinckBank has a permanent education programme for its executive directors, and thereby complies with principles 3.1.3 and 3.1.4 of the Banking Code. The permanent education programme consists of the following of various training programmes and courses intended to maintain the level of expertise of executive directors and improve this where necessary. Koen Beentjes and Evert Kooistra are both certified public accountants. Since 1 January 2007, a permanent education scheme has applied for members of the Dutch Association of Registered Controllers (‘the VRC’) and accountants in business of the Netherlands Institute of Chartered Accountants or ‘NBA’. In this context, Koen Beentjes took the Lean Six Sigma course and the Level 1 Pension Training for directors during 2011. He was also a speaker at the Eye on Asset Management seminar organised by Ernst & Young. Evert Kooistra took permanent education courses on risk management, Basel III, IFRS and the Level 1 Pension Training for directors. Pieter Aartsen took the Governance University programme for supervisory directors, and Nick Bortot participated in the Baak leadership programme.

88 Deviations Article 6.3.3 of the Banking Code states that a substantial part of any variable remuneration awarded to an executive

2011 director must be awarded conditionally and paid three years later at the earliest.

According to DNB, BinckBank does not yet fully comply with similar provisions that are included in the Regulation for a Controlled Remuneration Policy in the Wft 2011. For this reason, an amended remuneration policy will be submitted to the annual General Meeting of Shareholders in 2012 for adoption. Part of the amendment to the remuneration policy will entail that regulations and recommendations regarding the award of variable remunerations such as those stated in Annual Report

Article 6.3.3 of the Banking Code will be more explicitly included in the remuneration policy.

According to Article 6.3.4 of the Banking Code, shares allocated to executive directors without financial consideration must be retained for a period of at least five years in each case or at least until the end of the employment relationship, if this is shorter. Article 6.3.4 of the Banking Code corresponds to best practice provision 11.2.5 of the Code mentioned above. As regards the deviation from Article 6.3.4. of the Banking Code and the reasons for doing so, see the statement with regard to best practice provision II.2.5 of the Code.

BinckBank complies with Article 6.3.4 to the extent that calculated from the date of unconditional allocation, BinckBank shares only have to be retained for a period of two years (instead of five years) or until the end of the employment. With this shorter retention period of two years instead of five years, BinckBank complies with the regulations for a variable remuneration as specified in the Regulation for a Controlled Remuneration Policy in the Wft 2011. In BinckBank’s opinion, the conditional allocation of a substantial part of a variable remuneration (as stated in the Regulation for a Controlled Remuneration Policy in the Wft 2011) in combination with a retention period of two years is sufficient to meet the objective of a long-term commitment to the company and its related business.

Article 3.2.3 of the Banking Code states that all executive directors must sign a moral and ethical conduct declaration, the text of which must be made generally available and published on the website of BinckBank. It should constitute a guide for the actions of BinckBank employees. The notes to the Banking Code include a model declaration that each bank can supplement as it sees fit. BinckBank has made use of this. Since its incorporation in the banking sector, BinckBank has distinguished itself by pursuing an independent and self-determined course, that features a strong customer orientation and a high degree of transparency, in combination with sound business practice. The executive directors of BinckBank have amended the model for the moral and ethical declaration so as to more closely reflect the specific nature and profile of BinckBank and the relevant legislation and regulation. The text of the declaration can be viewed at www.binck.com.

Article 10 of the Takeover Directive

Under Article 10 of the Takeover Directive, BinckBank is obliged to include the following information in its annual report: a. An overview of the company’s capital structure is included on pages 83 and 84 of this annual report. This explains the various types of shares and the rights and obligations attached thereto (including special control rights) and the percentage of the issued capital represented by each type of share; b. The company has not imposed any restrictions on the transfer of shares; c. Shareholdings in the company which have to be reported pursuant to Section 5.3 Wft are listed on page 25 of this annual report; d. Special control rights attached to shares held by the Foundation are stated on page 84 of the annual report; e. Control of the scheme whereby rights are allocated to employees to take or receive shares in the capital of the company or a subsidiary company is exercised by the IAD and the compliance department; f. No restrictions apply to the voting rights attached to the company’s shares. No depositary receipts for shares have been issued; g. The company is only aware of a restriction regarding the transfer of BinckBank shares that arises as a result of the remuneration policy in force and similar restrictions applying to other employees of BinckBank; h. The procedures for appointing and dismissing supervisory and executive directors and the regulations applying to 89 amendments to the articles of association are established in the company’s articles of association and are described in general terms on page 85 of the annual report. For the full text of the articles of association, see www.binck.com;

2011 i. The powers of the executive board with particular reference to the issuance of the company’s shares and the repurchase of shares by the company are described on page 84 of the annual report. For further information, see the company’s articles of association and the minutes of the general meeting of shareholders at www.binck.com; j. The service agreement concluded with Friesland Bank N.V. in 2006 states that the agreement can be terminated with immediate effect in the event of a specifically described change of control at BinckBank. The joint venture agreement with Delta Lloyd Levensverzekering N.V. concluded on 6 July 2010 includes a change of control clause Annual Report that among other things entitles the other party to terminate the agreement in this event. The service agreement concluded with SNS Bank N.V. on 30 September 2010 states that the agreement can be terminated with immediate effect in the event of a specifically described change of control at BinckBank; k. Information on severance arrangements with executive directors is provided in the remuneration report for 2011.

Conclusion

BinckBank complies with virtually all the provisions of the Code and the Banking Code. Any deviations have been properly explained and substantiated. From left to right: Mr. Leo Deuzeman, Mr. Hans Brouwer, Mr. Kees Scholtes and Mr. Fons van Westerloo Report of the supervisory board Message by the chairman of the supervisory board

Dear readers,

We hereby present the report of the supervisory board for 2011. The financial statements have been audited by Ernst & Young Accountants LLP and have been furnished with an unqualified audit opinion, the text of which is included on pages 187 and 188.

Despite the worsening economic conditions, BinckBank succeeded in achieving a solid result in 2011. With its preparations for opening a branch office in Italy in 2012, BinckBank has made further progress with its strategy of European expansion. There has also been intensive work on the further expansion of the activities that should provide a broader foundation for BinckBank’s future. Towards the end of 2011, the share buy-back programme was reinitiated. The main objectives for 2011 were realised, as a result of both the leadership of the executive board and the other managers and the commitment, expertise and dedication of all employees.

We wish to express our appreciation to the executive board and the employees for the commitment and involvement they have demonstrated throughout the year.

Amsterdam, 8 March 2012

C.J.M. Scholtes (Chairman of the supervisory board)

92 2011 Annual Report

Duties of the supervisory board

Supervision The supervisory board is charged with the supervision of the policy of the executive board and the general developments at the company and its affiliated companies.

In the exercise of its duties, the supervisory board focuses on the interests of the company and its affiliated companies, taking the interests of those involved in the company into consideration. The supervisory board is also involved in the social aspects of business operation relevant to the company.

Advice The supervisory board also advises the executive board.

Other The supervisory board is moreover charged with all duties assigned to it by law and under the articles of association.

Composition of the supervisory board Composition The composition of the supervisory board is currently as follows: C.J.M. Scholtes (chairman) J.K. Brouwer (vice-chairman) 93 L. Deuzeman F.M. van Westerloo

2011 The information on the supervisory directors referred to in best practice provision III.1.3 and elsewhere in the Code is provided on pages 102 and 103.

Independence The composition of the supervisory board is such that the supervisory directors can operate independently within the

Annual Report framework of the profile description of the supervisory board, both in relation to each other, the executive board or any

other particular interest. The supervisory board believes that the independence criteria stated in best practice provision III.2.1 of the Code have been met.

Meetings of the supervisory board and its subcommittees in 2011 Meetings of the supervisory board

Frequency The supervisory board held its regular combined meetings with the executive board in attendance on seven occasions in 2011. The meetings took place in February, March, April, July, October and December. In addition, the chairman, and on certain occasions an individual supervisory director, held frequent informal discussions with the executive directors. The supervisory board moreover held separate meetings on two occasions in 2011. The number of meetings reflects the supervisory board’s close involvement with the company. A similar meeting schedule will be used by the supervisory board in 2012. Attendance The supervisory directors attended all the meetings. The availability of the supervisory and executive directors for interim consultation was satisfactory.

Agenda items

General The agendas for the meetings of the supervisory board covered virtually all aspects of the company’s business. In each case, the agenda was drawn up by the chairman of the supervisory board in consultation with the chairman of the executive board. The items discussed at the meetings included the following: the strategy, the interests of the various stakeholders, the principal risks associated with the company, the results of the executive board’s evaluation of the design and operation of the internal risk management and control systems, as well as significant changes thereto. Attention was also devoted to matters such as the budget, and internal and external financial quarterly, half-yearly and annual reports. Recurring and mandatory items such as the regular progress reports and the discussion of reports by the auditor (with the external auditor in attendance) were also dealt with at the meetings of the supervisory board.

Specific items Specific items of attention in 2011 were as follows: • Strategic positioning The supervisory board considered the strategic positioning of BinckBank. It was considered likely that BinckBank’s online Retail brokerage business would encounter increasing competition, both nationally and internationally. It is probable that the Retail brokerage business in Europe will undergo a phase of consolidation in due course, and therefore BinckBank needs to achieve sufficient scale to prepare for this development. BinckBank will need to continually increase the number of transactions effected on its European Retail base platform. The way to achieve this is mainly through European expansion of the online Retail brokerage business, which must be accomplished by 94 means of organic growth (the opening of branch offices in Europe) and/or by acquisitions. The decision between organic growth and acquisitions will of course require careful consideration. The supervisory board discussed its

2011 views with the executive board on this issue. • Evaluation of the fee structure The board considered the effects of the reduction in fees introduced for the Binck brand in April 2010. This evaluation is also relevant to the consideration of any future fee adjustments. The reduction in fees for the Binck label in April 2010 has had a positive effect, and this has also been a factor in the executive board’s decision to abolish the minimum fee for options transactions at Alex as of 1 January 2012. The supervisory board approved this move. Annual Report

• Opening of the branch office in Italy The progress on the preparations for opening a branch office in Italy was discussed with the executive board. The supervisory board made the acquaintance of the persons directly involved in these preparations at local level. The opening of a branch office in Italy represented further implementation of the strategy of European expansion. It is important that the supervisory board is kept fully informed with regard to the implementation of this important strategic component. From various perspectives, the supervisory board has experience of internationalisation and can thus adequately fulfil its supervisory role and has advised the executive board in this respect. The supervisory board is pleased to note that the preparations for the opening of the branch office in Italy have so far progressed favourably. • Executive board targets in 2011 The supervisory board fulfilled its responsibility for determining the remuneration of the executive board. The targets for the executive board were established with care. The supervisory board considers it important that measurable targets are established as far as possible. The supervisory board has moreover held discussions with the individual executive directors regarding their ambitions for the future. • Balance sheet planning & capital policy Partly at the request of the supervisory board, the executive board has studied the possibilities for optimising the balance sheet planning and the capital policy. The items at issue in this respect are the performance of BinckBank shares, BinckBank’s balance sheet ratios and other ratios in comparison to its European peers, the perception of shareholders and analysts of BinckBank’s risk profile, the investment policy and capital management and the potential alternatives for the placement of available and surplus capital. • Migration of Retail customers in the Netherlands to the European Retail base platform The migration of Retail customers in the Netherlands to the European Retail base platform was completed on 28 March 2011, thus achieving the first step towards a European Retail base platform. With this platform, BinckBank has a unique position in Europe. Although careful preparations were made, the migration did not proceed as well as it could have. The supervisory board therefore requested the executive board to evaluate the migration. The results of this evaluation were discussed and items of attention were established for such operations in future. One important such item is that the development and testing phase should involve a more varied customer base. • Performance of the executive board and supervisory board In the absence of the executive board, the supervisory board discussed its own performance as a whole and that of its individual members and committees, the effect of permanent education as referred to in principle 2.1.8 of the Banking Code as well as all conclusions that needed to be drawn. Also in consideration of the above, the assessment took place in full session in the context of the profile, composition and competence of the supervisory board and of the individual supervisory directors. Such an assessment clearly has to be made with the necessary prudence. Also in the absence of the executive board, the supervisory board discussed both the performance of the executive board as a whole and of the individual executive directors. The supervisory board’s assessment included the consideration of whether the executive directors were able to continue to meet the expertise requirements of De Nederlandsche Bank (DNB). This assessment also took place in full session. The supervisory board concluded unanimously that the executive board and the individual executive directors performed well last year. The executive board operates as a well-attuned team in which the individual members performed extremely well, continuing to pay attention to the specific areas of expertise assigned to them and operating from a broad, communal platform of responsibility. Within this context, the exchange of specific information regarding these areas of expertise between the individual executive directors as well as between the executive board and the supervisory board, has been both timely and of high quality, enabling those involved to properly perform their duties. Since the executive directors, each operating from their own specific background, have pro-actively and intensively exchanged information and experience, they have succeeded in implementing the principles of collective management. 95 • Portfolio-based margin system The supervisory board was involved in the development and implementation of a new, more advanced margin

2011 system (portfolio-based margin). The supervisory board particularly gave critical consideration to the risks involved from the customer’s point of view. • Risk appetite The supervisory board has reviewed and approved the risk appetite of BinckBank as established by the executive board. Annual Report

Meetings of the audit committee in 2011 The supervisory board has appointed an audit committee from among its number, consisting of Messrs J.K. Brouwer (chairman), C.J.M. Scholtes and L. Deuzeman. The meetings of the committee are attended by Messrs K.N. Beentjes (chairman of the executive board), E.J.M. Kooistra (CFO), V. Casarrubios Sterkman (manager IAD) and Mrs M. van Gils (manager Compliance). The audit committee meets the applicable independence requirements and has sufficient members with the required financial expertise. The audit committee met on four occasions in 2011, in February, June, September and November.

The audit committee is responsible for overseeing the design, existence and operation of the system of internal control and risk management measures, for monitoring implementation of the external auditor’s recommendations and for the functioning of the IAD. Supervising financial information provided by the company is the responsibility of the supervisory board, based on relevant recommendations by the audit committee. All meetings were attended by the chairman of the executive board and the CFO of BinckBank.

The main items discussed by the audit committee concerned the audits conducted by the IAD and the compliance department and the associated findings and recommendations. The audit committee assessed the design, existence and operation of the internal control measures as adequate in relation to the risk areas reviewed. In 2011 further progress was made in implementing the internal risk management system in a Governance-Risk-Compliance application this year. The processes, risks and control measures have been entered in this application, thus facilitating the transparent recording of the effectiveness of the identified control measures. A new reporting tool of Bwise was implemented at the end of 2011 which will ensure more effective reporting of the control measures at BinckBank. Special items of attention in 2011 included larger projects such as the Retail NL migration, the management letter from Ernst & Young and the audit plan of Ernst & Young for 2011. The audit committee carried out preparatory work in order to facilitate the supervision by the supervisory board. Meetings of the risk and product development committee in 2011 The risk and product development committee (RPC), as referred to in the Banking Code, consists of the supervisory directors L. Deuzeman (chairman of the RPC), J.K. Brouwer and A.M. van Westerloo. Three executive directors, namely Messrs K.N. Beentjes, E.J.M. Kooistra and N. Bortot also sit on the risk committee, along with the managers of relevant departments. The duties of the RPC include advising the supervisory board with regard the company’s risk profile and risk appetite.

The RPC met on four occasions in 2011, in March, June, September and November and devoted particular attention to the following items: risk management at Alex Asset Management; the introduction of derivatives trading on TOM and the portfolio-based margin system. The RPC has reviewed these services with reference to all the relevant risks, including the duty of care towards the customer. The RPC moreover oversees the risk appetite, risk profile and assesses the adequacy of the company’s capital and liquidity. The committee furthermore is regularly informed with respect to the current solvency and liquidity and the effects thereof in times of stress. In addition, the RPC monitors the composition of the investment portfolio and the development of BinckBank’s key risk indicators over time. This enables it to promptly identify any changes to the bank’s risk profile.

Remuneration committee BinckBank has had a remuneration committee since 25 January 2012, which is responsible for preparing for resolutions regarding remuneration, including those affecting the risks and the risk management of BinckBank that the supervisory board has to take. With respect to these resolutions, the remuneration committee takes the long-term interests of the shareholders, investors and all other stakeholders of BinckBank. The remuneration committee currently consists of Messrs C.J.M. Scholtes and A.M. van Westerloo.

96 2011 Annual Report

Broad outlines of the remuneration report

General Best practice provision II.2.12 of the Code stipulates that information must be included in the remuneration report as to the manner in which the remuneration policy of the preceding year has been implemented. In addition, it must contain a remuneration policy overview for the following and subsequent years as envisaged by the supervisory board. The remuneration report for calendar year 2011 (Remuneration Report 2011) is available at www.binck.com.

The Remuneration Policy for 2010 was established at the annual general meeting of shareholders held in 2010. The Regulation for a controlled remuneration policy in the Financial Supervision Act (Wft) 2011 (‘the Regulation’) took effect on 1 January 2011. The Regulation is a new supervisory measure that is based on the powers of De Nederlandsche Bank (DNB) to set rules with respect to remuneration.

Based on a review it conducted, De Nederlandsche Bank (DNB) is of the opinion that the Remuneration Policy 2010 does not fully comply with the Regulation. As a result of the Regulation for a Controlled Remuneration Policy in the Financial Supervision Act (Wft) 2011 coming into effect on 1 January 2011, BinckBank has to adjust its Remuneration Policy 2010 in certain respects and implement these adjustments with retroactive effect as of that date.

An amended remuneration policy (BinckBank Remuneration Policy) will be submitted to the annual general meeting of shareholders in 2012 for adoption. The important changes are that the remuneration policy will apply to the entire organisation and that a substantial part of the variable remuneration will be awarded on a conditional basis. A variable remuneration will only become unconditional once a reassessment on the basis of the applicable performance criteria has taken place after a certain period of time has elapsed. No dividend will be paid on shares that have been conditionally allocated. A risk adjustment may be required in the assessment of whether the applicable performance criteria have been 97 met.

2011 In consideration of the above, the following report describes the manner in which the remuneration of the executive board in 2011 was established by the supervisory board and gives a summary of the remuneration policy for the next and subsequent years as envisaged by the supervisory board.

BinckBank Remuneration Policy Annual Report

Introduction The BinckBank Remuneration Policy is the framework used by the supervisory board to establish the remuneration of the executive directors of BinckBank N.V. (‘the executive directors’) for the 2011 calendar year.

Remuneration elements The BinckBank Remuneration Policy comprises the following remuneration components: a. fixed gross annual salary; b. variable remuneration; c. pension scheme and supplementary disability insurance; d. car lease scheme and reimbursement of mobile telephone charges.

A description of each element in the BinckBank Remuneration Policy and the way in which it was implemented by the supervisory board during the calendar year 2011 is given below.

a. fixed gross annual salary

BinckBank Remuneration Policy The fixed gross annual salary is established by the supervisory board within a framework indicated in the BinckBank Remuneration Policy. A distinction is made between the tasks and responsibilities of the chairman and of the other executive directors. Implementation The fixed gross annual salary was unchanged from that in 2010, apart from that of Mr P. Aartsen, who received an increase as a result of his reappointment, and was established by the supervisory board for 2011 in accordance with the provisions of the BinckBank Remuneration Policy as follows:

K.N. Beentjes € 375,000 P. Aartsen € 325,000 E.J.M. Kooistra € 300,000 N. Bortot € 300,000

b. variable remuneration

BinckBank Remuneration Policy BinckBank Remuneration Policy: A variable remuneration consists of 50% in BinckBank N.V. shares and 50% of cash. A variable remuneration may not exceed the fixed gross annual salary. The period in which a variable remuneration is earned is one year; this is known as the performance period. A number of performance criteria are established for this period, in the form of a considered package of qualitative, quantitative, financial and non-financial criteria focused on both the short term and the long term. After the performance period has elapsed, an evaluation is made to determine whether, and if so to what extent, the performance criteria have been realised. This evaluation may involve an adjustment for risk.

50% of the total variable remuneration awarded is allocated unconditionally. The other 50% is allocated conditionally over a period of three years on a pro rata basis. A reassessment is made on the basis of the initial performance criteria at the end of each year (within the three-year period). Depending on the result of the reassessment, the part of the variable remuneration allocated for the year in question pro rata becomes fully or partially unconditional. 98

BinckBank shares awarded unconditionally must be held by the executive director in question for a period of at least

2011 two years.

Implementation The quantitative target for 2011 of an adjusted net annual profit of € 1.04 per share was not fully realised. The adjusted net annual profit per share came to € 0.88. This represents in total 85% of the target to be realised and exceeds the minimum threshold of 80% of the budgeted adjusted net annual profit per share. Annual Report

The quantitative targets based on the long-term development of the earnings per share (EPS), customer satisfaction and the growth of the number of brokerage accounts were realised to an extent of 56%.

The qualitative targets for 2011 were realised to an extent of 66%. These concern the further development of the new European Retail base platform, the migration of the Dutch Binck customers to this platform, the achievement of break-even operations in France, increasing the assets under management at ThinkCapital, the conclusion of new BPO agreements by Professional Services, the targets focused on the internal controls that relate to the availability of systems, contingency facilities, test management and automated testing, the establishment of the future ICT architecture and the improvement and implementation of various reporting and risk management systems.

The supervisory board has established the degree to which the executive board has achieved its targets for 2011 at 61%. There are no grounds for differentiation between the individual executive directors. This results in a total variable remuneration for each executive director of 61% of the fixed gross annual salary. c. pension scheme and supplementary disability insurance

BinckBank Remuneration Policy and its implementation Executive directors participate in a pension scheme in which 20% of the gross annual salary is paid by the company each year as pension contribution for a defined contribution scheme. BinckBank pays 50% of the premium for the supplementary disability insurance, which entitles the insured person to receive a maximum of 70% of their last-earned salary. The premium is 2.3630% of the insured sum per year. Executive directors participated in this scheme in 2011.

d. car lease scheme and mobile telephone reimbursement

BinckBank Remuneration Policy and its implementation Executive directors participate in the relevant BinckBank car lease scheme and are reimbursed for mobile telephone costs. Executive directors participated in this scheme in 2011.

Remuneration of members of the executive board

Remuneration of the Fixed basic Pension Social Performance- Total Variable as Shares of which executive board in 2011 remunera- contribution security related remuneration a % of BinckBank shares in tion 20% pay 2011* (fixed + fixed held at lock-up variable) remuneration year-end 2011 period

K.N. Beentjes € 375,000 € 75,000 € 7,892 € 229,420 € 687,312 61% 30,901 16,826 P. Aartsen € 325,000 € 65,000 € 7,892 € 198,831 € 596,723 61% 42,885 13,460 E.J.M. Kooistra € 300,000 € 60,000 € 7,892 € 183,536 € 551,428 61% 30,039 13,460 N. Bortot € 300,000 € 60,000 € 7,892 € 183,536 € 551,428 61% 57,547 13,460

99 Total € 1,300,000 € 260,000 € 31,568 € 795,323 € 2,386,891 161,372 57,206

* Payment of the performance fee will be based Remuneration policy on the still to be approved by the AGM. 2011

Remuneration of the Fixed basic Pension Social Performance- Total Variable as Shares of which executive board in 2010 remunera- contribution security related remuneration a % of BinckBank shares in tion 20% pay 2010 (fixed + fixed held at lock-up variable) remuneration year-end 2010 period

Annual Report K.N. Beentjes € 375,000 € 75,000 € 7,387 € 294,961 € 752,348 79% 19,872 9,872

P. Aartsen € 300,000 € 60,000 € 7,387 € 235,968 € 603,355 79% 37,322 7,897 E.J.M. Kooistra € 300,000 € 60,000 € 7,387 € 235,968 € 603,355 79% 20,876 7,897 N. Bortot € 300,000 € 60,000 € 7,387 € 235,968 € 603,355 79% 51,984 7,897

Total € 1,275,000 € 255,000 € 29,548 € 1,002,865 € 2,562,413 130,054 33,563

Loans granted to members of the executive board

At 31 December 2011 there were two executive directors who were making use of a collateralised lending facility, in an amount of € 255,000 for Mr N. Bortot and € 47,000 for Mr P. Aartsen. Only Mr N. Bortot had a collateralised lending facility in 2010, in an amount of € 339,000. The executive directors may make use of a collateralised lending facility on the same terms that BinckBank uses for its customers. Remuneration of members of the supervisory board and committees in 2011

At the general meeting of shareholders on 26 April 2010, it was resolved to use the following remuneration for supervisory directors with effect from 1 January 2010:

Supervisory board Annual remuneration: • Chairman of the supervisory board € 40,000 gross • Supervisory directors € 26,000 gross

Committees Annual committee compensation: • Chairman of the audit committee € 8,000 gross • Members of the audit committee € 6,000 gross • Chairman of the risk and product development committee € 8,000 gross • Members of the risk and product development committee € 6,000 gross

The remuneration awarded to supervisory directors was in accordance with the above. The following tables give an overview of the remuneration of the members of the supervisory board, the audit committee and the risk and product development committee. An overview of the remaining terms of appointment for the individual supervisory directors is also provided. 100 Remuneration overview for the members of the supervisory board

Remuneration of the Fixed remuneration Fixed Fixed Total 2011 supervisory board 2011 member of SB remuneration remuneration member of AC member of RPC C.J.M. Scholtes € 40,000 € 6,000 € 46,000 J.K. Brouwer € 26,000 € 8,000 € 6,000 € 40,000 A.M. van Westerloo € 26,000 - € 6,000 € 32,000 Annual Report L. Deuzeman € 26,000 € 6,000 € 8,000 € 40,000 Total € 118,000 € 20,000 € 20,000 € 158,000

Remuneration of the Fixed remuneration Fixed Fixed Total supervisory board 2010 member of SB remuneration remuneration member of AC member of RPC C.J.M. Scholtes € 40,000 € 6,000 - € 46,000 J.K. Brouwer € 26,000 € 8,000 € 6,000 € 40,000 A.M. van Westerloo € 26,000 - € 6,000 € 32,000 L. Deuzeman € 26,000 € 6,000 € 8,000 € 40,000 Total € 118,000 € 20,000 € 20,000 € 158,000

Overview of the terms of appointment for the members of the supervisory board

Overview of terms of appointment Date Date of SB members of (re)appointment contract expiry C.J.M. Scholtes 27-4-2011 AvA 2015 J.K. Brouwer 28-4-2009 AvA 2013 A.M. van Westerloo 26-4-2010 AvA 2014 L. Deuzeman 26-04-2011 AvA 2015 Consultation with the works council

Mr C.J.M. Scholtes represented the supervisory board at a meeting with the works council on 25 March 2011. In addition, the works council made the acquaintance of Mr A.M. van Westerloo on 7 September 2011, followed by a meeting with him on 10 November. The supervisory board highly values its relationship with the works council, and has found its contact with its members to be constructive and valuable.

Financial statements and dividend

The 2011 financial statements were discussed and adopted by the supervisory board during its meeting on 8 March 2012 with the executive board and Ernst & Young, the external auditor. Ernst & Young has issued an unqualified audit opinion. The financial statements will be submitted to the general meeting of shareholders for adoption on 23 April 2012. The proposed dividend for 2011 is € 0.44 per ordinary share. Taking account of the interim dividend of € 0.20 already paid, the final dividend proposed amounts to € 0.24 per ordinary share, subject to deduction of 15% dividend tax, to be made payable on Wednesday 2 May 2012.

101 2011 Annual Report

Supervisory board members

Kees J.M. Scholtes, chairman (1945 – Dutch nationality)

Mr Scholtes has been a member of the supervisory board for BinckBank since 2004 and was reappointed for a term of four years during the annual general meeting of shareholders of 26 April 2011. The supervisory board has appointed Mr Scholtes chairman of its board.

Mr Scholtes is a former executive director of Postbank N.V., NMB Postbank N.V. and ING Bank N.V., a former member of the executive committee of ING Asset Management B.V. and a former supervisory director of various investment funds at Postbank N.V., NMB Postbank N.V. and ING Bank N.V. In addition, Mr Scholtes was a former supervisory director for Parcom N.V., Barings Private Equity Holding, Euroclear Nederland (predecessors in title Niec and Necigef) and RBC Dexia Securities Services N.V. (former CDC Labouchere Securities Services N.V.) and a former member of the board of the Amsterdam Stock and Options Exchange (now NYSE Euronext). Mr Scholtes was also project manager during the formation of the Dutch Securities Institute and the Financial Services Foundation.

Mr Scholtes is currently also chairman of the supervisory board for IBUS Company N.V., a director of finance company Colonade B.V. and member of the investment committee of Kunst en Cultuur Pensioen en Levensverzekering Maatschappij N.V. Furthermore he was regularly involved as an investigator for the Ondernemingskamer’s investigating committees. He was e.g. involved in the investigation of Fortis and Van der Moolen.

Number of BinckBank shares held at year-end 2011: 0

102 Hans J.K. Brouwer (1944 – Dutch nationality) 2011

Mr Brouwer has been a member of the supervisory board of BinckBank since 2004 and was reappointed for the maximum term of four years during the annual general meeting of shareholders on 28 April 2009.

In 1981, following a military career as cavalry officer, Mr Brouwer took up employment with the ABN Bank, during which Annual Report

time he was involved in various activities, among which the reorganisation of senior kader recruitment and training, the reorganisation of lending operations and foreign office development in regions such as Europe, the Middle East and the Far East. In 1988, Mr Brouwer was appointed board member of the Amsterdam Stock Exchange Association (VvdE), where he was responsible for regulations, trade supervision and – as a special project – restructuring the entire Amsterdam Stock Exchange Association organisation. Following the successful restructuring of the organisation, Mr Brouwer was appointed general director of the Amsterdam Stock Exchange Association in 1991. After the successful merger between the Amsterdam Stock Exchange and EOE Options Exchange into Amsterdam Exchanges (AEX) on 1 January 1997, he was appointed director of Amsterdam Exchanges N.V. and general manager of AEXEffectenbeurs N.V.

Shortly before the merger with the Paris and Brussels stock exchanges (2002) – Euronext – Mr Brouwer withdrew from his position at Euronext and has since held a number of supervisory directorships at Van Meijel, Nobel, Ewals Cargo Care, Vital Innovators, Holland Clearing House and BinckBank. He is also a member of the supervisory board of Vita Valley. He also holds directorships at the Stichting Vereniging voor de Effectenhandel (Dutch Securities Trading Association), Amindho (economic and cultural relations between the Netherlands and Indonesia) and the Jazz Orchestra of the Concertgebouw. At the request of, among others, the World Bank, Mr Brouwer and a team of stock exchange specialists accompanied the set-up and further expansion of stock exchanges in various countries. A similar project was also completed in Baku, Azerbaijan.

Number of BinckBank shares held at year-end 2011: 0 Leo Deuzeman (1952 – Dutch nationality)

Mr Deuzeman was reappointed for a period of four years as a member of the supervisory board of BinckBank during the annual general meeting of shareholders on 26 April 2011.

Mr Deuzeman is a business economist and was employed by Deloitte as a chartered accountant from 1979 to 1986. In the period 1976-1979, he was connected to the University of Groningen as a scientific member of staff with the Financial Department of the Faculty of Economic Sciences. From 1990 to 1998 and from April 2003 to April 2007, he held the position of CFO at Kempen & Co N.V., at which bank he fulfilled the role of director of finances and administration from 1986 to 1990. In addition, Mr Deuzeman was a managing partner of Greenfield Capital Partners N.V from 1998 to 2003 and held positions as a member of the board with Publifisque B.V., Managementmij Tolsteeg B.V., Kempen Management B.V., Asmey B.V., Arceba B.V., Kempen Finance B.V., Global Property Research B.V., Kempen Deelnemingen B.V., Greenpart B.V., Greenfield Management Services B.V. and Nethave Management N.V. He was also a supervisory director for Trustus Capital Management B.V., Engage B.V., Cegeka N.V. and Kempen Custody Services N.V. Mr Deuzeman is currently a supervisory director of Blue Sky Group and chairman of the supervisory board of Intereffekt Investment Funds. He is a supervisory director and member of the advisory board of the investment fund Monolith Fund in Amsterdam and a supervisory director of Capital Guards in Rotterdam.

Number of BinckBank shares held at year-end 2011: 0

Fons M. van Westerloo (1946 – Dutch nationality)

103 Mr Van Westerloo has been a member of BinckBank’s supervisory board since 2004. He was reappointed for a term of four years during the annual general meeting of shareholders on 26 April 2010. 2011 Mr Van Westerloo formerly held positions as a member of the Operational Management Committee for RTL Group S.A., CEO of RTL Nederland B.V., CEO of SBS Broadcasting B.V., director of RTL 5 and deputy manager of broadcasting organisation AVRO.

Mr van Westerloo currently holds supervisory directorships at Inshared, a subsidiary of Eureko/Achmea, the Lotto, on Annual Report behalf of NOC/NSF, the advertising agency DDB and is a member of the advisory board of the 3stone commercial real estate agency. He is the chairman of the National Home Shopping Awards Foundation and of the Press Council Foundation. He is an executive director of the Royal Concertgebouw Orchestra, Het Nieuwe Parool Foundation and the Friends of the Concertgebouw and the Concertgebouw Orchestra Association. He is a supervisory director of Radio Netherlands Worldwide. He is also an ambassador for the Royal Dutch Opera. Mr Westerloo is an Officer in the Order of Orange-Nassau.

Number of BinckBank shares held at year-end 2011: 0

Amsterdam, 8 March 2012

The supervisory board C.J.M. Scholtes (chairman) J.K. Brouwer L. Deuzeman A.M. van Westerloo

FINANCIAL STATEMENTS 2011 Financial statements 2011 BinckBank N.V.

Consolidated financial statements Consolidated statement of financial position • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 108 Consolidated income statement• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 109 Consolidated statement of comprehensive income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 110• Consolidated statement of cash flow• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 111 Consolidated statement of changes in equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 113•

Notes to the consolidated financial statements 1 General information• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 114• 2 Accounting principles used for consolidation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 114• 3 Related party disclosures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 116• 4 Recognition and measurement of assets, equity and liabilities • • • • • • • • • • • • • • • • • • • • • • • • 116• 5 Recognition and measurement of income and expenses• • • • • • • • • • • • • • • • • • • • • • • • • • • 126 6 Acquisition of business activities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 127•

Notes to the consolidated statement of financial position 7 Cash and balances with central banks• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 128 8 Banks• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 128 9 Financial assets and liabilities at fair value through profit or loss • • • • • • • • • • • • • • • • • • • • • • 129 106 10 Available-for-sale financial assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 130 11 Loans and receivables • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 130

2011 12 Held-to-maturity investments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 130 13 Investment in associates and joint ventures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 131• 14 Intangible assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 132• 15 Property, plant and equipment • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 125• 16 Current tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 136

Annual Report • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

17 Deferred tax 137 18 Other assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 138 19 Prepayments and accrued income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 138 20 Derivative positions held on behalf of clients • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 138 21 Customer deposits • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 138 22 Provisions • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 138 23 Other liabilities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 139 24 Accruals and deferred income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 139 25 Equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 139

Notes to the consolidated income statement 26 Net interest income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 142 27 Net fee and commission income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 142 28 Other income• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 143 29 Result from financial instruments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 143 30 Impairment of financial assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 143 31 Employee expenses • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 144 32 Depreciation and amortisation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 144 33 Other operating expenses• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 145 34 Earnings per share• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 145 Other notes to the consolidated financial statements 35 Dividend distributed and proposed• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 146 36 Fair value of financial instruments �� •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• ••• •• •• •• •• 146 37 Classification of assets en liabilities by expected maturity• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• 148 38 Related parties �� •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• ••• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• 150 39 Off balance sheet commitments �� •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• ••• •• •• •• •• •• ••• 151 40 Segment information • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 152• 41 Risk management• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 154 42 Events after balance sheet date• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 172•

Company financial statements Company balance sheet • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 173• Company income statement • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 173• Company statement of changes in equity• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 174

Notes to the company financial statements a General• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 175• b Accounting principles• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 175•

Notes to the company balance sheet 107 c Cash and balances with central banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 176 d Banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 176 e Loans and receivables • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 176 2011 f Bonds and other fixed-income securities• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 177• g Equities and other non-fixed-income securities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 177• h Investment in associaties and joint ventures• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 178 i Intangible assets• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 179 j Property, plant and equipment • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 180

k Current tax 181 l Deferred tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 1• 81 m Other assets• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 1• 81 n Prepayments and accrued income• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 1• 81 o Customer deposits• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 182 p Other liabilities• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 182 q Accruals and deferred income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 182 r Provisions• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 182 s Equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 183

Other notes to the company financial statements t Note on audit expenses• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 185 u Off balance sheet commitments• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 185 v Remuneration of the executive board and the supervisory board• • • • • • • • • • • • • • • • • • • • • • • 186

Other data Independent auditor’s report • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 187 Provisions of the articles of association regarding priority shares (articles 15 and 21) • • • • • • • • • • • • • • • • • • 189 Provisions of the articles of association regarding profit appropriation (article 32) • • • • • • • • • • • • • • • • • • • 189 Proposal for profit appropriation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 189 Consolidated statement of financial position

Note 31 December 2011 31 December 2010 x € 1,000 x € 1,000 Assets Cash and balances with central banks 7 320,214 105,972 Banks 8 278,955 177,316 Financial assets held-for-trading 9 119 169 Financial assets at fair value 9 15,594 13,856 through profit or loss Available-for-sale financial assets 10 1,682,452 1,599,700 Loans and receivables 11 324,097 496,266 Held-to-maturity financial assets 12 - 4,121 Investment in associates and joint ventures 13 3,219 3,067 Intangible assets 14 292,398 320,757 Property, plant and equipment 15 46,229 43,901 Current tax 16 3,630 4,949 Other assets 18 35,137 13,050 Prepayments and accrued income 19 38,129 49,840 108 Derivative positions held on behalf of clients 20 311,282 383,804 Total assets 3,351,455 3,216,768 2011 Liabilities Banks 8 28,161 25,610 Customer deposits 21 2,492,503 2,258,290 Financial liabilities held-for-trading 9 155 50 Annual Report

Financial liabilities at fair value through profit or loss 9 1,013 1,485 Provisions 22 2,940 1,268 Current tax 16 75 468 Deferred tax 17 16,633 12,695 Other liabilities 23 13,591 48,023 Accruals and deferred income 24 15,579 16,162 Derivative positions held on behalf of clients 20 311,282 383,804 Total liabilities 2,881,932 2,747,855

Equity attributable to: Owners of the parent 25 469,516 468,986 Non-controlling interests 25 7 (73) Total equity 469,523 468,913

Total equity and liabilities 3,351,455 3,216,768 Consolidated income statement

Note 2011 2010 x € 1,000 x € 1,000 Income Interest income 54,625 60,874 Interest expense (15,718) (17,287) Net interest income 26 38,907 43,587

Fees and commission income 176,989 177,058 Fees and commission expense (48,542) (50,088) Net fee and commission income 27 128,447 126,970 Other income 28 13,322 13,599 Result from financial instruments 29 3,167 620 Impairment of financial assets 30 (268) 70 Total income from operating activities 183,575 184,846

Expenses Employee expenses 31 50,861 45,480 109 Depreciation and amortisation 32 35,463 34,798 Other operating expenses 33 43,800 44,223 Total operating expenses 130,124 124,501 2011 Result from business operations 53,451 60,345 Share in results of associates and joint ventures 13 (5,848) (1,386) Other non-operating income - 23 Result before tax 47,603 58,982 Annual Report Tax 16 (13,513) (14,837) Net result 34,090 44,145

Result attributable to: Owners of the parent 34,210 44,240 Non-controlling interests (120) (95) Net result 34,090 44,145

Basic and diluted earnings per share (EPS) 34 € 0.46 € 0.60 Consolidated statement of comprehensive income

Note 2011 2010 x € 1,000 x € 1,000 Net result from income statement 34,090 44,145

Other comprehensive income Net gain/(loss) on fair value of available-for- 25 5,625 (21,070) sale financial assets Gains and losses through profit and loss 25 (3,443) (1,467) Tax on results through equity 25 (545) 6,138 Other comprehensive income, net of tax 1,637 (16,399)

Total comprehensive income, net of tax 35,727 27,746

Result attributable: Owners of the parent 35,847 27,841 Non-controlling interests (120) (95) Total comprehensive income, net of tax 35,727 27,746 110 2011 Annual Report

Consolidated statement of cash flows

Note 2011 2010 x € 1,000 x € 1,000 Cash flow from operating activities Net result for the year 34,090 44,145

Adjustments for: Amortisation of intangible assets and 14,15 35,463 34,798 depreciation of property, plant and equipment Provisions 22 1,672 1,280 Amortisation premiums and discounts on 10 24,699 19,808 available-for-sale financial assets Impairment losses on loans and receivables 11 (62) (189) Movements in deferred tax 17 3,393 10,331 Share in undistributed results of associates and 13 5,848 1,386 joint ventures Other non-cash movements (2) 101

Movements in: 111 Banks (assets) 8 (6,350) (5,780) Financial assets and liabilities held-for-trading 9 155 (119) Financial assets at fair value through 2011 9 (2,210) 24,923 profit and loss Loans and receivables 11 172,231 (85,908) Taxes, other assets and prepayments and 16,18,19 (9,057) (2,753) accrued income Banks (liabilities) 8 2,551 25,610 Annual Report

Customer deposits 21 234,213 168,476 Tax liabilities, other liabilities, accruals and 16,23,24 (35,408) 21,553 deferred income Net cash flow from operating activities 461,226 257,662

Cash flow from investing activities Available-for-sale financial assets 10 (105,269) (130,142) Held-to-maturity financial assets 12 4,121 4,208 Investments in associates and joint ventures 13 (6,000) (2,500) Investments in intangible assets 14 (1,782) (2,081) Investments in property, plant and equipment 15 (7,650) (36,302) Net cash flow from investing activities (116,580) (166,817) Consolidated statement of cash flows (continued)

Note 2011 2010 x € 1,000 x € 1,000 Cash fow from financing activities Capital injection non-controlling interests 25 200 - Buy-back of own shares 25 (964) (4) Sale of own shares 25 502 1,454 Non-controlling interests on initial recognition 6 - 22 Dividends paid: • ••Final dividend preceding year 35 (20,022) (22,977) • ••Interim dividend current year 35 (14,831) (17,788) Net cash flow from financing activities (35,115) (39,293) Net cash flow 309,531 51,552

Opening balance of cash and cash equivalents 280,180 228,628 Closing balance of cash and cash equivalents 589,711 280,180 Movement in cash and cash equivalents 309,531 51,552

112 The cash and cash equivalents presented in the consolidated cash flow statement are included in the consolidated balance sheet under the 2011 following headings at the amounts stated below: Cash 7 320,214 105,972 Banks 8 278,955 177,316 Banks – non-cash equivalents 8 (9,458) (3,108) Annual Report

Total cash equivalents 589,711 280,180

Cash flow from operating activities includes the following items: • ••Tax paid (12,194) (17,814) • ••Interest received 61,271 58,591 • ••Interest paid (15,911) (18,359) • ••Commission received 180,801 173,205 • ••Commission paid (48,863) (52,235) Consolidated statement of changes in equity

Note Issued Share Treasury Fair Unppro- Other Non-con- Total x € 1,000 share premium shares value priated reserves trolling equity capital reserve reserve profit interests

1 January 2011 7,450 373,422 (3,335) (2,610) 44,240 49,819 (73) 468,913 Net result for the year - - - - 34,210 - (120) 34,090 Other comprehensive income - - - 1,637 - - - 1,637 Total comprehensive income - - - 1,637 34,210 - (120) 35,727 Payment of final dividend FY10 35 - - - - - (20,022) - (20,022) Payment of interim dividend 35 - - - - - (14,831) - (14,831) FY11 Sale of shares to executive 25 - - 345 - - 155 - 500 board and employees Buy-back of shares 25 - - (964) - - - - (964) Capital injection non-controlling 25 ------200 200 interests Transfer of retained earnings to 25 - - - - (44,240) 44,240 - - other reserves 31 December 2011 7,450 373,422 (3,954) (973) 34,210 59,361 7 469,523 113

Note Issued Share Treasury Fair Unppro- Other Non-con- Total x € 1,000 share premium shares value priated reserves trolling equity 2011 capital reserve reserve profit interests

1 January 2010 7,607 386,978 (18,097) 13,789 47,161 42,921 - 480,359 Net result for the year - - - - 44,240 - (95) 44,145 Other comprehensive income - - - (16,399) - - - (16,399) Annual Report

Total comprehensive income - - - (16,399) 44,240 - (95) 27,746 Payment of final dividend FY09 35 - - - - - (22,977) - (22,977) Payment of interim dividend 35 - - - - - (17,788) - (17,788) FY10 Grant of rights to shares 25 - - - - - 101 - 101 Sale of shares to executive 25 - - 1,053 - 401 1,454 board and employees Buy-back of shares 25 - - (4) - - - - (4) Cancelled shares 25 (157) (13,556) 13,713 - - - - - Non-controlling interests on 6 - - - - - 22 22 initial recognition Transfer of retained earnings to 25 - - - - (47,161) 47,161 - - other reserves 31 December 2010 7,450 373,422 (3,335) (2,610) 44,240 49,819 (73) 468,913 Notes to the consolidated financial statements

1. General information

Company information BinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law, whose shares are publicly traded. BinckBank N.V. is officially domiciled at Barbara Strozzilaan 310, 1083 HN Amsterdam. BinckBank N.V. provides conventional and internet broking services in securities and derivative transactions for private and professional investors. In this document, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and her subsidiaries.

The consolidated financial statements for BinckBank for the period ending on 31 December 2011 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 8 March 2012.

Executive board: Supervisory board: K.N. Beentjes (chairman) C.J.M. Scholtes (chairman) E.J.M. Kooistra (CFO) J.K. Brouwer P. Aartsen L. Deuzeman N. Bortot A.M. van Westerloo

Presentation of the financial statements 114 The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board and endorsed by the European Commission.

2011 Unless otherwise stated, the consolidated financial statements are in euros, with all amounts rounded to the nearest thousand.

Implications of new, amended and improved standards New and amended IFRS standards and IFRIC interpretations effective in 2011 Annual Report

New or amended standards take effect on the date as stated by IFRS and after ratification by the EU, whereby earlier application is permitted in some cases.

•• IAS 24 Related party disclosures (revised), effective as of 1 January 2011. The amendments have no material effect on the consolidated figures of BinckBank. •• IAS 32 32 Financial instruments: presentation – Classification of rights issues, effective for financial years beginning on or after 1 February 2010. BinckBank has concluded that this change has no effect on its financial position and results, since it has not issued any rights in foreign currency. ••IFRIC • 14 requirements relating to minimum funding of an asset arising from a defined benefit pension plan, effective for financial years beginning on or after 1 January 2011. BinckBank has concluded that this change has no effect on its financial position and results, since it does not operate a defined benefit pension plan. •• IFRIC 19 Extinguishing financial liabilities with equity instruments, effective for financial years beginning on or after 1 July 2010, does not apply to BinckBank.

Improvements to IFRS standards The IASB published a collection of amendments to the standards in May 2010. Different transition provisions apply for each standard.

••IAS • 34 Interim financial reporting: This amendment concerns additional disclosure requirements in relation to financial instruments for interim statements. BinckBank has amended its disclosures accordingly. •• IFRS 7 Financial instruments: disclosures. The amendments have been made to the qualitative disclosures in the risk paragraph on the treatment of collateral received and the assessment of country risk. Changes to the following standards as a result of improvements had no material effect on the accounting principles, results and financial position of BinckBank. •• IFRS 1 First-time adoption of International Financial Reporting Standards (revised) •• IFRS 3 Business combinations •• IAS 1 Presentation of financial statements •• IAS 27 Consolidated and separate financial statements •• IFRIC 13 Loyalty programmes

The following standards, amendments of standards and interpretations that have not yet taken effect or have not yet been ratified by the European Union have not yet been applied by BinckBank: •• IAS 1 Presentation of the financial statements – effective for financial years commencing on or after 1 July 2012, concerning the presentation of the overall result. This only concerns a change to the presentation of the overall result and will not be applied by BinckBank before 1 July 2012. •• IAS 12 Income taxes (revised) – effective for financial years commencing on or after 1 January 2012, concerning deferred tax on real estate investments measured at fair value. BinckBank has evaluated this standard and concluded that the change has no effect on its financial position and results. •• IAS 19 Employee benefits (revised) – effective for financial years commencing on or after 1 January 2013, intended to increase the transparency of financial reporting with regard to employee benefits, and in particular pensions. BinckBank does not expect to apply this standard before 1 January 2013 and is currently studying and evaluating its effects. •• IFRS 1 First-time adoption of International Financial Reporting Standards (revised) – effective for financial years commencing on or after 1 July 2011, concerning hyperinflation and functional currency. Since BinckBank is not a first- time adopter of IFRS, the revised standard does not apply. •• IFRS 7 Financial instruments: disclosures (revised) - effective for financial years commencing on or after 1 July 2011, concerning additional disclosures for some financial assets. BinckBank has evaluated this standard and concluded 115 that the change has no effect on its financial position and results. •• The consultation phase for IFRS 9 Financial instruments, classification and measurement, commenced in 2010

2011 and forms part of a complete revision of IAS 39 Financial instruments. BinckBank expects this standard to have consequences for the classification and measurement of its financial assets and liabilities, however the full effect will only become clear once all three phases of this IASB project are completed. In December 2011 the IASB decided to change the effective date to financial years commencing on or after 1 January 2015. •• IFRS 10 Consolidated financial statements – effective for financial years commencing on or after 1 January 2013, and concerns a new definition of control to be used to determine which entities will be consolidated, and describes Annual Report the procedures for consolidation. BinckBank does not expect to apply this standard before 1 January 2013 and is currently studying and evaluating its effects. •• IFRS 11 Joint arrangements – effective for financial years commencing on or after 1 January 2013, describes the accounting of joint arrangements involving joint control and does not permit proportional consolidation for joint ventures. BinckBank does not expect to apply this standard before 1 January 2013 and is currently studying and evaluating its effects. •• IFRS 12 Disclosure of interests in other entities – effective for financial years commencing on or after 1 January 2013, contains all the information requirements for subsidiaries, joint ventures, associates and ‘structured entities’. BinckBank does not expect to apply this standard before 1 January 2013 and is currently studying and evaluating its effects. •• IFRS 13 Fair value measurement – effective for financial years commencing on or after 1 January 2013, provides guidelines for measurement of fair value but does not change the situations in which fair value is required or permitted under IFRS. BinckBank does not expect to apply this standard before 1 January 2013 and is currently studying and evaluating its effects.

Changes in accounting principles The accounting principles with regard to valuation and result are consistent with those applied in the previous year.

Significant accounting judgements and estimates The preparation of the financial statements involves making assumptions and estimates on the recognition and measurement of assets and liabilities, contingent rights and liabilities and income and expense items. The most significant assumptions for the future and other key sources of estimation uncertainty at balance sheet date that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are: Going concern Management of BinckBank has evaluated the bank’s ability to continue to operate as a going concern and is satisfied that the bank has adequate resources to continue its activities in the forseeable future. Moreover, management is not aware of any material uncertainties that make cast doubt upon BinckBank’s ability to continue as a going concern. The financial statements therefore continue to be prepared on a going concern basis.

Fair value of financial instruments Where the fair value of financial assets and financial liabilities cannot be obtained from active markets, it is arrived at using valuation methods, including discounted cash flow models. Observable market data is used as the input to these models wherever possible but, where this is not possible, judgements are required in determining fair values. These judgements involve consideration of input factors including liquidity risk, credit risk and volatility. Changes in assumptions regarding these factors can affect the fair value of financial instruments. The valuation of financial instruments is explained in detail in Note 36.

Impairment of loans and receivables BinckBank performs periodical tests to ascertain whether the fair value of the securities portfolio serving as collateral for securities lending is sufficient to cover the loans. If the collateral provided by the securities portfolio is not sufficient to cover the collateralised lending, this is an initial indication that an impairment has occurred. BinckBank makes individual estimates of the future cash flows, proceeds from realisation of collateral net of transaction costs and the costs of collecting the receivables. BinckBank assesses periodically whether any changes have taken place which necessitate an adjustment of the provision for impairment losses.

Impairment of goodwill BinckBank performs an impairment test on the carrying amount of goodwill at least once a year. This involves estimating the value in use of the cash-generating units to which the goodwill is attributed. In order to estimate the 116 value in use, BinckBank makes an estimate of the expected future cash flows from the cash-generating unit and also determines a suitable discount rate for calculating the net present value of those cash flows. 2011 Fair value of identified intangible assets acquired with acquisitions BinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty Annual Report percentage.An impairment test is performed on each balance sheet date.

Expected useful life of intangible assets and property, plant and equipment BinckBank applies standard amortisation and depreciation periods for various groups of assets. BinckBank assesses each individual asset periodically to establish whether the standard amortisation or depreciation period still corresponds to the expected useful life of the asset concerned. Circumstances may occur during the use of the asset which may lead to a situation in which the standard period no longer corresponds to the actual useful life. As soon as a deviation is identified, the remaining carrying amount of the asset is written off over the revised remaining useful life on a straight- line basis.

Deferred tax assets Deferred tax assets are recognised if it is probable that future taxable profits will be generated to allow the tax loss carryforwards to be utilised.

2. Accounting principles for consolidation The consolidated financial statements include the assets and liabilities and the income and expense items of the company and its subsidiaries. Subsidiaries are entities over which BinckBank has control. Control is deemed to exist if BinckBank is able, either directly or indirectly, to govern the financial and operating policies of the company so as to obtain benefits from its activities.

Subsidiaries are fully consolidated as soon as BinckBank obtains control. If BinckBank ceases at any point to control a subsidiary, the subsidiary is deconsolidated immediately.

The accounting principles of the subsidiaries and their reporting periods are the same as those of BinckBank. 3. Related party disclosures Unrealised gains on transactions with associates are eliminated in proportion to BinckBank’s interests in the companies concerned.

There were transactions between BinckBank and its subsidiaries during the year. These intercompany transactions have been eliminated in the consolidated financial statements.

4. Recognition and measurement of assets, equity and liabilities

Foreign currency translation The consolidated financial statements are in euros, this being BinckBank’s functional as well as presentation currency. Items recognised in the financial statements of each entity are measured on the basis of the relevant entity’s functional currency. Transactions in foreign currencies are translated on initial recognition at the functional currency’s exchange rate on the transaction date.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on the balance sheet date. Differences relating to movements in exchange rates are recognised in the income statement. Non- monetary items in foreign currencies measured against fair value are translated at the exchange rate at the moment the fair value is determined. Currency translation differences on non-monetary items carried at fair value through profit and loss are likewise recognised in the income statement. The results of financial transactions and costs are translated into euros at the exchange rate prevailing on the transaction date in the income statement.

At the reporting date, the assets and liabilities of foreign associates are translated into BinckBank’s functional currency at the exchange rate prevailing on the balance sheet date while the income statement is translated at the weighted average exchange rate for the year. Translation differences are recognised directly in a separate component of equity. If a foreign 117 currency entity is sold, the deferred cumulative amount included in equity for the relevant entity is recognised in the income statement. 2011 Financial assets and liabilities

Initial recognition of financial assets and liabilities in the balance sheet Financial assets and liabilities bought and sold in accordance with standard market conventions are recognised at the transaction date of the relevant purchase or sale. Other financial assets and liabilities are recognised in the balance sheet Annual Report

at the time of acquisition.

On initial recognition, financial instruments may be assigned to a specific category, their accounting treatment being decided at that time. Initial recognition of financial assets and liabilities is at fair value, including directly attributable transaction costs, except for the category which is carried at fair value through profit and loss, where the transaction costs are expensed.

Derecognition of financial assets and liabilities A financial asset (or a component of a financial asset or part of a group of similar financial assets) is no longer shown in the balance sheet if: •• BinckBank ceases to have a right to the cash flows from the asset; or ••BinckBank • retains the right to receive the cash flows from the asset but has entered into an obligation to pay them to a third party in their entirety and without significant delay under the terms of a specific contract; or •• BinckBank has transferred its rights to receive the cash flows from the asset and has either (a) largely transferred all risks and rewards of ownership of the asset or (b) not largely transferred all risks and rewards of ownership of the asset or retained them fully, but has transferred control of the asset. If BinckBank has transferred its rights to receive the cash flows from an asset but has not largely transferred all risks and rewards of ownership of the asset or retained them fully and has not transferred control of the asset, that asset continues to be recognised for as long as BinckBank remains involved with the asset. Financial liabilities cease to be shown in the balance sheet as soon as the performance relating to the obligation has been completed or the obligation has been removed or has expired.

Loans and receivables and the related impairment losses are written off if there is no longer any real possibility of being able to recover the outstanding debt following realisation of the collateral.

Determination of fair value The fair value of a financial instrument is based on the market price if there is an active market for that instrument. Financial assets are carried at the bid price, financial liabilities are carried at the offer price and risk off-setting positions are carried at the mid-price, excluding transaction costs.

For certain financial assets and liabilities, a quoted market price is not available. Various valuation methods are used to obtain a fair value for these financial assets and liabilities, ranging from net present value calculations to valuation models taking into account relevant price factors, including market prices of the underlying instruments referred to, market parameters (volatilities, correlations, credit risks) and client behaviour. BinckBank makes exclusive use of third-party valuation models and does not make any estimates of its own with regard to the inputs used. All the valuation methods employed are internally evaluated and approved. The majority of the data used in these valuation methods is validated on a daily basis. Valuation methods are inherently subjective. Measuring the fair value of certain financial assets and liabilities is accordingly largely dependent on estimates. Valuation methods involve various assumptions with respect to price factors. The use of other valuation methods and assumptions might produce estimates of fair values that are materially different.

118 Offsetting of financial assets and liabilities Financial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when

2011 there is a legally enforceable right to set off the amounts and an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Accounting treatment after initial recognition The accounting treatment after initial recognition depends on the categories described below. Annual Report Financial assets or financial liabilities at fair value through profit and loss An instrument is classified as carried at fair value through profit and loss if it is held for trading purposes or if it was designated as such on initial recognition for one of the following reasons: •• It eliminates or substantially reduces inconsistencies in measurement and recognition which would otherwise arise on the recognition of assets or of income and expenses on a different basis. •• The performance of the financial asset concerned is assessed on the basis of its fair value in accordance with a documented risk management or investment strategy. Reporting to management is on the basis of fair value. •• The host contract of the financial instruments contains one or more embedded derivatives and the entire contract is recognised at fair value through profit and loss. This is only permissible provided: • •• the embedded derivative has a significant influence on the contractually agreed cash flows or • ••it • is evident on initial recognition of the financial instruments that separation of the embedded derivative is not permissible (e.g. option of premature settlement at amortised cost).

Derivatives not held on behalf of clients are regarded as being held for trading purposes. Derivatives are financial instruments requiring only a limited net initial investment or none at all, with future settlement dependent on the underlying notional amount of the contract and movements in certain rates or prices (e.g. an interest rate or the price of a financial instrument). Financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement under result from financial instruments. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. In BinckBank’s case, these items mainly concern current account loans collateralised by securities and short- term money-market loans. After initial recognition the items are valued at amortised cost, using the effective interest method. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired.

Held-to-maturity financial assets Financial assets with fixed or determinable payments and a fixed maturity date are designated as investments to be held to maturity if BinckBank specifically intends to hold them until maturity and is in a position to do so. Held- to-maturity investments are recognised at amortised cost, measured using the effective interest method, less any impairment losses.

Available-for-sale financial assets Available-for-sale financial assets are those financial assets that are designated as being available for sale or are not included in one of the above categories. After initial recognition, available-for-sale financial assets are measured at fair value. Any gain or loss is shown, net of tax, as an unrealised result in the fair value reserve until the investment is derecognised or determined to be impaired. At such time the cumulative gain or loss previously shown in equity is recognised in the income statement in the result from financial instruments.

Impairment of financial assets On a regular basis and at each balance sheet date, BinckBank assesses whether there is objective evidence, provided by one or more events, of impairment of financial assets individually or groups of financial assets collectively. Impairment losses are only recognised when there is an adverse effect on the future cash flows. If impairment is indicated, the amount of any impairment loss is determined as follows for available-for-sale financial assets, loans and receivables 119 and held-to-maturity financial assets.

2011 Loans and receivables BinckBank assesses whether there is objective evidence of impairment of the lending portfolio (including any related facilities and guarantees). In the case of current account loans collateralised by securities, there is an objective indication if the fair value of the collateral is lower than the carrying amount of the current account loan. Evidence that a loan or receivable is impaired is obtained via the group’s lending assessment process. This involves assessment of clients’ creditworthiness as well as assessment of the nature of clients’ investment transactions and monitoring of Annual Report client transactions and balances.

The amount of any impairment is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the asset. The loss is presented in the income statement in Impairment of financial assets. In computing the present value of the estimated future cash flows from a financial asset for which collateral security has been provided, account is taken of the cash flows which will probably arise on realisation of the collateral security less the costs incurred in obtaining and selling the collateral security.

In the event of impairment, the impairment provision is increased by the amount of the impairment. The affected assets are only written down when all the necessary procedures have been completed and the amount of the loss has been determined. If, in a subsequent period, the amount of an impairment decreases and the decrease can be objectively related to an event occurring after the initial write-down, the previously recognised impairment is reversed. Reversal of an impairment is recognised in the provision and in the income statement. Amounts subsequently collected after having been written off are credited to the income statement in Impairment of financial assets.

The methodology and the assumptions used in estimating future cash flows are regularly evaluated in order to reduce variances between estimated and actual losses. Held-to-maturity financial assets Held-to-maturity investments are individually assessed and the amount of any impairment is measured using the same method as has been explained for loans and receivables.

BinckBank does not regard possible future events as objective indicators and such forecasts are accordingly not used as evidence of impairment of a financial asset or a portfolio of financial assets. Losses based on future events are not recognised, regardless of probability.

Available-for-sale financial assets An investment in equities is considered to have been impaired if there is a significant or prolonged fall in the fair value to below cost. An increase in value in the period after an impairment is reported in equity as a revaluation.

Investments in interest-bearing securities are assessed for impairment if there are objective indications of financial problems at the issuer or borrower, there is no longer an active market, or there are other such indications. If there are such indications, the cumulative net loss previously recognised directly in equity is transferred from equity to the income statement in impairments. Reversals of impairments in subsequent years relating to interest-bearing securities are reversed through the income statement if the increase in the fair value of the instrument can be objectively related to an event occurring after the previous impairment was recognised in the income statement.

Loans and receivables under renewed contracts In the case of existing loans and receivables, it is possible for renewed contracts to be concluded with clients. These loans are no longer treated as overdue. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable. These loans and receivables are periodically tested for impairment on an individual basis, using the original effective interest rate.

120 Acquisitions and goodwill All acquisitions are accounted for using the acquisition method. The identifiable assets, equity and liabilities of the

2011 acquired company or activities are recognised at fair value.

BinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty Annual Report percentage.

Earn-out arrangements may be agreed as part of business acquisitions. BinckBank makes an estimate of the earn- out payments on the basis of the expected future results of the acquired companies. These earn-out payments form part of the price paid for the acquired company. An annual assessment is made to determine whether the earn-out obligation should be adjusted in the light of any changes to the development of the results. Adjustments to the earn-out calculations after completion of the acquisition are recognised directly in the income statement.

On initial recognition, goodwill acquired in a business combination is measured as the difference between the cost of the business combination and BinckBank’s share of the net fair value of the acquired company’s identifiable assets, liabilities and contingent liabilities, if positive. Subsequently, goodwill is carried at cost less any cumulative impairments. A negative difference between cost and fair value is expensed immediately.

The valuation of a third-party interest in the acquired company is made at either the fair value on the acquisition date or the proportional share in the identifiable assets and liabilities of the acquired company.

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. For this impairment test, goodwill acquired in a business combination is allocated to BinckBank’s cash-generating units or groups of cash-generating units that are expected to benefit from the synergy of the business combination as from the date of acquisition. An impairment is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is an asset’s fair value less cost to sell or its value in use, whichever is higher. If the recoverable amount is lower than the carrying amount, an impairment is recognised. Impairment of goodwill is not reversed.

Necessary adjustments to the fair value of acquired assets, equity and liabilities measured at the time of acquisition that are identified before the end of the first reporting period after the business combination result in an adjustment of the goodwill. Necessary adjustments identified at a later date are recognised in the income statement through profit or loss. Gains and losses on the disposal of a company or activity are measured as the difference between the proceeds from disposal and the carrying amount of the company or activity, including goodwill and currency translation reserve.

Transaction costs associated with an acquisition are recognised directly in the income statement.

Cash and cash equivalents Cash and cash equivalents consist of cash, balances with (central) banks and short term deposits (call money) with original maturities of three months or less that are readily convertible into known amounts of cash and on which there is a negligible impairment risk.

Associates and joint ventures

Associates Associates are entities in which BinckBank generally holds between 20% and 50% of the voting rights or in which BinckBank is able to exercise significant influence in some other way but over which BinckBank does not have control. Investments in associates are accounted for using the equity method. The item includes goodwill paid on acquisition, less any cumulative impairment losses. Under the equity method, BinckBank’s share in the results of the associate is reported 121 in BinckBank’s income statement as share in results of associates and joint ventures. BinckBank’s share in changes in an associate’s reserves is recognised directly in BinckBank’s equity. The carrying amount of the investment is adjusted

2011 for the reported results and changes in reserves. If the carrying amount of the investment in an associate falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate. Where necessary, the accounting principles of associates are adjusted in order to ensure consistency with those of BinckBank.

Joint ventures Annual Report Joint ventures are entities over which BinckBank exercises joint control. This control is established in an agreement, and strategic decisions regarding financial and operating policy are taken by unanimous vote. Joint ventures are reported using the equity method from the date on which BinckBank has joint control for the first time until the date on which this control ceases. Under the equity method, BinckBank’s share in the results of the joint venture is reported in BinckBank’s income statement as share in results of associates and joint ventures. BinckBank’s share of changes in a joint venture’s reserves is recognised directly in BinckBank’s equity. The carrying value of the joint venture is adjusted for these results and movements in reserves. If the carrying amount of the investment in a joint venture falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the joint venture concerned or has already made payments on behalf of the joint venture. Where necessary, the accounting principles of joint ventures are adjusted in order to ensure consistency with those of BinckBank.

Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less cumulative amortisation and any cumulative impairments.

Intangible assets are determined as having either a definite or an indefinite useful life. Intangible assets with a definite useful life are amortised over the useful life and tested for impairment if there are indications that an asset may be impaired. The useful lives of the intangible assets are assessed annually and adjusted if there has been a change. Amortisation of intangible assets with a definite useful life is presented in the income statement in depreciation and amortisation. Intangible assets with an indefinite useful life are subjected to an annual impairment test, either individually or at the level of the cash-generating unit. These intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reassessed annually, including an assessment of whether the indefinite useful life is still justifiable.

The activities relating to research and development of software are recognised and measured as follows:

Costs of research are recognised in the income statement when they occur. An intangible asset arising from development costs incurred in an individual project is only recognised if BinckBank can demonstrate that: •• completion of this intangible asset is technically feasible, so that it will be available for use or for sale; •• it is BinckBank’s intention to complete the intangible asset and use or sell it; •• BinckBank is capable of using or selling the intangible asset; •• future economic benefits are achievable; ••adequate • technical, financial and other resources are available to complete the development of the intangible asset and for its use or sale; and •• it is possible to measure the costs incurred during development reliably.

After initial recognition of the development costs, the asset is carried at cost less any cumulative amortisation and cumulative impairments. Any such capitalised costs are amortised over the period in which the expected future economic benefits from the project concerned are to be realised. The carrying amount of the development costs is tested for impairment annually if the asset is not yet in use or if there are indications of impairment during the year.

Property, plant and equipment Real estate for own use is carried at historical cost less cumulative depreciation and impairments. All other assets 122 recognised in the balance sheet as operating assets are carried at historical cost less cumulative depreciation and any impairments. 2011 Real estate and operating assets are subject to straight-line depreciation on the basis of useful life, taking account of the residual value. The expected useful life is: Real estate (own use) 50 years Computer hardware 5 years Fixtures, fittings and equipment 5-10 years Annual Report Other non-current assets 5 years

If an asset consists of various ‘components’ with different useful lives and/or different residual values, the asset is divided into these components and depreciation is applied separately. Useful life and residual value are assessed annually. If it emerges that the estimated values differ from previous estimates, the values are adjusted. If the carrying amount of an asset is higher than the estimated recoverable amount, an impairment is recognised and charged to the income statement. Results on the sale of real estate and operating assets, being the difference between the sale proceeds and the carrying amount, are recognised in the income statement in the period in which the sale occurred. Repair and maintenance costs are charged to the income statement in the period to which they relate. The costs of significant renovations are capitalised if it is likely that additional future benefits will be realised from the existing asset. Significant renovations are written off on the basis of the remaining useful life of the asset concerned. Prepayments arising from an operational lease are recognised in investments in real estate. Amortisation of the leasehold is applied on a linear basis over the remaining life to maturity. Tax

Current tax This item concerns tax assets and liabilities for current and prior years, carried at the amount expected to be claimed from or paid to the tax authorities. The tax amount is computed on the basis of enacted tax rates and applicable tax law.

Deferred tax Deferred tax liabilities are recognised, based on the temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount in these financial statements. Deferred tax liabilities are recognised for all taxable temporary differences except: ••where • the deferred tax liability arises on the initial recognition of goodwill or the initial recognition of an asset or a liability in a transaction that is not a business combination and does not affect the operating profit before tax or the taxable profit; •• in the case of taxable temporary differences connected with investments in subsidiaries and associates, where BinckBank is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, unused tax facilities and unused tax loss carryforwards when it is probable that taxable profits will be available against which the deferred tax asset can be utilised, enabling the deductible temporary differences, unused tax facilities and unused tax loss carryforwards to be used.

The carrying amount of the deferred tax assets is assessed at the balance sheet date and reduced if it is not probable that sufficient taxable profits will be available against which some or all of the deferred tax asset can be utilised. Unrecognised deferred tax assets are reassessed at the balance sheet date and recognised to the extent that it is probable that taxable profits will be available in the future against which the deferred tax asset can be utilised. Deferred tax assets 123 and liabilities are carried at amounts measured at the tax rates expected to be applicable to the period in which the asset is realised or the liability is settled, based on enacted tax rates and applicable tax law. The tax on items recognised

2011 directly in equity is accounted for directly in equity instead of in the income statement. Deferred tax assets and liabilities are presented as a net amount if there is a legally enforceable right to set off deferred tax assets against deferred tax liabilities and the deferred tax is related to the same taxable entity and the same tax authority.

Other assets This item includes other receivables. The receivables included in this item are carried at amortised cost less any Annual Report impairments.

Work in progress Work in progress relates exclusively to the external activities of the subsidiary Syntel. Work in progress is carried at the cost of the work performed, plus a proportion of the expected final results based on progress and less invoiced instalments, prepayments and provisions. For anticipated losses on work in progress, provisions are recognised as soon as such losses are identified and are deducted from the cost, any already recognised profits also being reversed. The cost comprises the direct project costs, made up of direct wage costs, materials, costs of subcontracted work, other direct costs and charges for the hire and maintenance of the equipment used. The progress of the project is measured on the basis of the cost of the work performed in relation to the expected cost of the project as a whole. Profits are not recognised on work in progress before it is possible to make a reliable estimate of the final result. For each project, the balance of the value of the work in progress less invoiced instalments and prepayments is measured. In the case of projects on which the invoiced instalments and prepayments exceed the value of the work, this balance is included in other liabilities instead of other assets. Impairments of non-financial assets The carrying amount of BinckBank’s assets is tested at each balance sheet date in order to determine whether there are indications of impairment. If so, the recoverable amount of the asset is estimated. The recoverable amount is an asset’s fair value less cost to sell or its value in use, whichever is higher. An impairment is recognised if the carrying amount of an asset or cash-generating unit exceeds the recoverable amount.

Derivatives positions held on behalf of clients BinckBank executes derivatives transactions on behalf of its clients and holds the resultant positions in its own name but for the client’s account and at the client’s risk. The positions are recognised at fair value, measured according to the quoted price at the balance sheet date. Financial settlement with the clients concerned in respect of such transactions and positions is effected immediately. The clients have lodged adequate collateral with BinckBank in the form of cash balances, bank guarantees and securities to cover the risks arising out of the derivatives positions held.

Customer deposits Savings comprise the balances on savings accounts held by clients. Savings are measured at fair value on initial recognition, including transaction costs incurred. Savings are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of the accounts concerned.

Demand deposits relate to non-subordinated liabilities to non-banks that are not embodied in debt securities. These liabilities are measured at fair value on initial recognition, including transaction costs incurred. They are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of these liabilities to clients. 124

Provisions

2011 A provision is recognised if (I) BinckBank has a present obligation (legal or constructive) as a result of a past event; (II) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and (III) a reliable estimate can be made of the amount of the obligation. If BinckBank expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted at a rate, before tax, that reflects, where appropriate, Annual Report the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

Pensions BinckBank operates a pension plan for its executive board and employees based on a defined contribution scheme. In a defined contribution scheme, a percentage of the employee’s fixed salary is paid as contribution to a pension insurer. The percentage payable is age-related. The pension contributions are recognised in the year to which they relate.

Other liabilities All loans are carried on initial recognition at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans are subsequently carried at amortised cost calculated using the effective interest method.

Equity The costs associated with the issue of new shares are charged to the share premium account. Treasury shares Equity instruments which are reacquired (treasury shares) are deducted from equity at the acquisition price including transaction costs. Gains or losses on the purchase, sale, issue or withdrawal of BinckBank’s own equity instruments are not recognised in the income statement.

Off balance sheet commitments Contingent liabilities are liabilities that are not recognised in the balance sheet because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within BinckBank’s control.

Leasing Lease contracts whereby the risks and benefits relating to the right of ownership are held to a significant extent by the lessor are designated as operating leases. Lease payments made in the capacity of lessee in relation to operating leases are applied to the result during the lease period, after deduction of any premiums received from the lessor. BinckBank is only involved in operational lease contracts as a lessee.

BinckBank has not entered into any financial lease contracts of material significance, either as lessor or as lessee.

Earnings per ordinary share The basic earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders for the period by the weighted average number of shares in issue during the period. The diluted earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of shares during the period, adjusted for possible dilution resulting for example from outstanding option rights.

Cash flow statement 125 The cash flow statement has been prepared using the indirect method, in which cash flows are analysed according to operating, investing and financing activities. In the cash flow from operating activities, the net result is adjusted for

2011 income and expenses that have not resulted in receipts and expenses in the same financial year and for changes in provisions and suspense items. Cash includes the cash in hand together with freely available balances on deposit with central banks and other financial instruments with maturities of less than three months from the date of acquisition. Cash flows in foreign currency are converted to the functional currency at the exchange rate prevailing on the date the cash flow occurs. Annual Report 5. Recognition and measurement of income and expenses

General information Income and expense items are recognised in the period to which they relate, having due regard to the above accounting principles. Revenues are recognised if it is probable that their economic benefits will flow to BinckBank and the revenue can be reliably measured.

Interest income Interest income consists of the interest on financial assets attributable to the period. Interest on financial assets is measured using the effective interest method based on the actual acquisition price. The effective interest method is based on the expected flow of cash receipts, taking account of the risk of premature redemption of the underlying financial instrument and the direct costs and revenues, such as the transaction costs charged and any discount or premium. If the risk of early redemption cannot be sufficiently reliably measured, BinckBank assumes the cash flows during the entire term to maturity of the financial instruments. Interest income on financial assets subject to impairment which have been written down to the estimated recoverable value or fair value are subsequently recognised on the basis of the interest rate used to measure the recoverable value by discounting the future cash flows. Interest expense This item includes the interest expense on all financial obligations and is measured on the basis of the effective interest method.

Net fee and commission income Commission income and expense comprises payments, excluding interest, received or receivable from third parties and paid or payable to third parties, respectively, whether on a non-recurring or more regular basis, in respect of services provided.

Other income Other income comprises amounts charged to third parties during the year in respect of goods and services supplied relating to hardware and software after deduction of sales expenses, together with all other income not classified under other income items.

Work in progress on contracts for third parties BinckBank uses the percentage of completion method to measure the revenue generated by each contract on the balance sheet date. The percentage of completion is determined by comparing the total estimated costs for a project with the actual costs up to the balance sheet date. BinckBank recognises the positive or negative balance of the revenue less invoiced instalments for each project in other assets or other liabilities, respectively.

Share in results of associates and joint ventures This concerns BinckBank’s share in the results of its associates and joint ventures. If the carrying amount of the investment in an associate or joint venture falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate or joint venture concerned or has already made payments on behalf of the associate or joint venture. 126

Tax

2011 Tax is recognised in the income statement unless the tax relates to items recognised directly in equity, in which case it is recognised in the comprehensive income and in equity respectively. Annual Report

6. Acquisition of business activities In 2010 on 9 November BinckBank acquired a 60% interest in the share capital and voting rights of ThinkCapital Holding B.V. (hereinafter ‘ThinkCapital’). The acquisition enables BinckBank to benefit from the increase in demand for index tracker. ThinkCapital and BinckBank are joining forces with the intention of putting tracker funds on the map in the Netherlands. Index trackers are investment products that follow an index and can be managed at low cost.

The fair value of the identifiable assets and liabilities and the goodwill as at the acquisition date are as follows:

ThinkCapital fair value ThinkCapital carrying amout x € 1,000 x € 1,000 Assets Banks 13 13 Property, plant and equipment - 7 Deferred tax assets - 269 Other assets 199 199 Prepayments and accrued income 12 12 Total assets 224 500

Liabilities Other liabilities 80 80 Accruals and deferred income 88 88 Total liabilities 168 168

Net capital 56 127 Non-controlling interest (40%) (22) Acquired identifiable assets and liabilities 34

2011 Purchase price 11 Purchase benefit (23)

Cash outflow on acquisition: Cash paid (11) Annual Report Net cash acquired 8 Net cash outflow (3)

The acquisition was funded out of available financial assets.

The acquisition of ThinkCapital has been recognised using the acquisition method as described in IFRS 3. The gain realised by BinckBank in the acquisition reflects the distribution capacity that BinckBank will provide. The gain from the acquisition is recognised in the consolidated income statement under other non-operating income. The non- controlling interest is recognised at the fair value as at the acquisition date.

No other acquisitions took place in 2011 or 2010. Notes to the consolidated statement of financial position

31 December 2011 31 December 2010 x € 1,000 x € 1,000 7. Cash and balances with central banks 320,214 105,972 This item includes all cash and any credit balances available on demand from the central banks in countries where BinckBank has offices.

8. Banks Due from banks 278,955 177,316 This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises: Credit balances available on demand 164,059 169,175 Call money 105,438 5,033 Receivable from DNB in relation to the Deposit Guarantee Scheme 9,458 3,108 for DSB Bank 128 278,955 177,316 The call money receivables have original maturities of less then three months. Interest is received on these balances at a variable 2011 rate based on market interest rates.

The development of the receivable from DNB in relation to DGS DSB Bank is as follows: Balance as at 1 January 3,108 - Annual Report Total contribution to DNB 7,293 5,780 Movements in provision (668) (2,672) Revaluation (275) - Balance as at 31 December 9,458 3,108

Since 19 October 2009, De Nederlandsche Bank (DNB) has been operating the deposit guarantee scheme (DGS) in relation to DSB Bank N.V. A total of approximately € 3.6 billion has been paid to the account holders at DSB Bank. The receivers of DSB Bank have apportioned the assets of DNB Bank during 2011. Both these components have been attributed by DNB across all the banks participating in the DGS. For BinckBank, the sum involved amounts to € 13,072,000. However the contribution to the DGS in a single financial year is capped at 5% of own funds, and thus BinckBank will pay its remaining obligation of € 667,000 at the beginning of 2012.

The loss expected as a result of the bankruptcy of DSB at year-end 2011 is estimated by the Dutch Banking Association (NVB) at € 750m (2010: € 600m). BinckBank’s share amounts to € 3.4m and is deducted from the account receivable, which is measured at the cash value of the estimated future cash flows.

Revaluations are recognised directly in the income statement under Result from financial instruments. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 Due to banks 28,161 25,610

BinckBank has sweeping arrangements with various banks whereby the debit and credit balances in a large number of bank accounts are regulated with a fixed treasury contra-account. This is only visible on the statement for the next business day; therefore at year-end BinckBank has an obligation t0 a single bank account for a very short period.

9. Financial assets and liabilities at fair value with changes in fair value through profit or loss Financial assets held-for-trading 119 169 This item comprises: SRD derivative receivables

Financial assets at fair value through profit and loss 15,594 13,856 This item comprises: Equity positions in relation to SRD receivables

Financial liabilities held-for-trading 155 50 129 This item comprises: SRD derivative payables 2011

Financial liabilities at fair value through profit and loss 1,013 1,485 Equity positions in relation to SRD payables

Since 2010 BinckBank offers SRD (Service de Règlement Différé) contracts in France. An SRD contract is a transaction Annual Report in a selected number of equities listed on Euronext Paris whereby payment for shares purchased or delivery of shares sold may be deferred until the last trading day of the month. The corresponding equity transaction in the cash market is executed by BinckBank in order to cover the price risk. If fact what happens is that BinckBank advances the transaction sum to the client (in case of an SRD long) or the client is anabled to take a short position (SRD short). Under IFRS, SRD receivables and payables are classified as a derivative and are recognised as Financial assets and liabilities held-for-trading purposes. Financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement under result from financial instruments. The corresponding positions in equities are classified as financial assets and liabilities at fair value through profit and loss, because otherwise the treatment would not be consistent with the associated derivatives. Both unrealised and realised gains and losses are recognised directly in the income statement under result from financial instruments. Since BinckBank takes a position in equities which exactly offsets the SRD derivatives position held by the client, there is a natural hedge of the price risk. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 10. Available-for-sale financial assets 1,682,452 1,599,700 This item comprises: Government / government-guaranteed bonds 676,838 432,322 Other bonds 1,005,614 1,167,378 1,682,452 1,599,700

Movements in available-for-sale financial assets were: Balance as at 1 January 1,603,180 1,492,846 Redemptions (395,785) (577,718) Sales (483,205) (521,597) Purchases 984,259 1,229,457 Amortisation of premiums and discounts (24,699) (19,808) Balance as at 31 December 1,683,750 1,603,180 Revaluation as at 31 December (1,298) (3,480) Balance as at 31 December 1,682,452 1,599,700

11. Loans and receivables 324,097 496,266 This item comprises receivables from private sector clients, including overnight loans and overdrafts that are collateralised by securities and bank guarantees (collateralised loans). 130

The analysis is as follows:

2011 Receivables from government institutions 34,000 20,000 Receivables collateralised by securities 287,115 470,741 Receivables collateralised by bank guarantees 2,944 5,453 Other receivables 462 558 Loans and receivables, gross 324,521 496,752 Annual Report Less: impairment provision (424) (486) 324,097 496,266

The interest rate is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after realisation of collateral (securities and bank guarantees).

The changes in impairment provisions were as follows: Balance as at 1 January 486 675 Added 271 32 Recovered (3) (102) Write-offs (330) (119) Balance as at 31 December 424 486

The impairment provision is calculated on a specific basis.

12. Held-to-maturity financial assets - 4,121 The portfolio interest-bearing securities classefied as held-to- maturity financial assets concerned a Dutch government bond and has been redeemed in 2011. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 13. Investment in associates and joint ventures 3,219 3,067 This item comprises: TOM Holding B.V. 1,510 2,174 BeFrank N.V. 1,709 893 3,219 3,067

The development of this item was as follows: Balance as at 1 January 3,067 1,953 Capital increases and acquisitions 6,000 2,500 Result on associates and joint ventures (5,848) (1,386) Balance as at 31 December 3,219 3,067

The item capital increases and acquisitions relates to investments in TOM Holding B.V. and the joint venture BeFrank N.V.

Country Interest Share in Share in Assets Liabilities equity result excl. equity Associates 2011 131 TOM Holding B.V. NL 38.5% 1,510 (3,664) 5,561 1,639 Total 1,510 (3,664) 5,561 1,639 2011 Associates 2010 TOM Holding B.V. NL 37.5% 2,174 (1,279) 6,564 767 Total 2,174 (1,279) 6,564 767

Annual Report Country Interest Share in Share Fixed Current Long- Current Total Total

equity in assets assets term liabilities revenue ex- result liabilities pense Joint ventures 2011 BeFrank N.V. NL 50% 1,709 (2,184) 538 4,321 - 1,441 49 (4,302)

Total 1,709 (2,184) 538 4,321 - 1,441 49 (4,302)

Joint ventures 2010 BeFrank N.V. NL 50% 893 (107) - 1.848 - 62 - (284) Total 893 (107) - 1.848 - 62 - (284)

The joint venture had no off balance sheet or investment commitments as at 31 December 2011 and 31 December 2011 and 31 December 2010. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 14. Intangible assets 292,398 320,757 The movements in 2011 were as follows: Brand name Core Customer Software Goodwill Total deposits base Balance as at 1 January 2011 12,562 58,866 91,927 4,473 152,929 320,757 Investments - - - 1,782 - 1,782 Disposals - cost - - - (414) - (414) Disposals - cumulative amortisation - - - 414 - 414 Amortisation (6,281) (8,409) (13,292) (2,159) - (30,141) Balance as at 31 December 2011 6,281 50,457 78,635 4,096 152,929 292,398

Cumulative cost 31,405 84,095 131,988 12,780 152,929 413,197 Cumulative amortisation and impairments (25,124) (33,638) (53,353) (8,684) - (120,799) Balance as at 31 December 2011 6,281 50,457 78,635 4,096 152,929 292,398

Amortisation period (years) 5 10 5 - 10 5

The movements in 2010 were as follows: Brand name Core Customer Software Goodwill Total deposits base Balance as at 1 January 2010 18,843 67,276 105,218 4,295 152,929 348,561 132 Investments - - - 2,081 - 2,081 Disposals - cost - - - (715) - (715) Disposals - cumulative amortisation - - - 715 - 715 2011 Amortisation (6,281) (8,410) (13,291) (1,903) - (29,885) Balance as at 31 December 2010 12,562 58,866 91,927 4,473 152,929 320,757

Cumulative cost 31,405 84,095 131,988 11,412 152,929 411,829

Annual Report Cumulative amortisation and impairments (18,843) (25,229) (40,061) (6,939) - (91,072)

Balance as at 31 December 2010 12,562 58,866 91,927 4,473 152,929 320,757

Amortisation period (years) 5 10 5 - 10 5

The items Brand and Customer deposits arise from the acquisition of Alex Beleggersbank. The item Customer base arises from the acquisition of Syntel and Alex Beleggersbank.

Software includes purchased software and proprietary software developed by Syntel, which is sold to its clients, as well as Syntel-developed software for supporting BinckBank’s operations. The hours charged to these software development projects have been capitalised by BinckBank as software at an average hourly rate reflecting only direct staff costs.

‘Goodwill’ relates to the excess of the purchase price paid to acquire the activities of Alex Beleggersbank and Syntel over the fair value of the identifiable assets and liabilities. Impairment testing of other intangible assets The various categories of intangible assets are tested annually or more frequently if events or changes in circumstances indicate that the carrying amount, less applicable annual amortisation, may be impaired. In the first instance, the test is made on the basis of the indicators mentioned in IAS 36.12, augmented by indicators identified by BinckBank compared with the assumptions on which the valuation of the identified immaterial assets was based at the time of the acquisition.

Intangible asset Indicator Brand name Reputational damage to the Alex brand Decision to limit the use of the Alex brand Core deposits Low customer deposits under the Alex brand compared to purchase date Less interest margin compared to purchase date Customer base Higher attrition rate in Alex accounts compared to purchase date Lower average revenues per acquired account than forecast at purchase date Software Decision to limit the use of the acquired software General Higher market interest rates, adverse effect on the discount rate

If the test reveals an indication of impairment, BinckBank performs a full calculation of the recoverable amount of the cash-generating units. This calculation is made in the same way as that described for the calculation of the value in use.

Goodwill impairment test Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. The annual test as of 30 September 2011 gave no indication that the goodwill had 133 been impaired. As at 31 December 2011, there were no changes in the circumstances such as to indicate impairment.

The goodwill has been allocated to the following individual cash-generating units: 2011 31 December 2011 31 December 2010 x € 1,000 x € 1,000 Goodwill Retail 142,882 142,882 Syntel 8,014 8,014 Annual Report

Business process outsourcing (BPO) 2,033 2,033 152,929 152,929

Principal assumptions used in calculating the value in use: The recoverable amount of the cash-generating units is based on the value in use. Use has been made of cash flow projections over a period of five years, based on financial estimates used by management for setting targets. The cash flows beyond the five-year horizon have been extrapolated, using growth rates of between 0% and 2%. Management has compared the principal assumptions against market estimates and market expectations.

The following assumptions have been used: 2011 Retail Syntel BPO Discount rate 10.13% 11.87% 11.87% Expected growth rate beyond five-year horizon 2% 2% 0%

2010 Retail Syntel BPO Discount rate 10.35% 11.6% 11.6% Expected growth rate beyond five-year horizon 2% 2% 0% Principal assumptions used in calculating the value in use of Alex Beleggersbank as at 30 September 2011 The principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were: ••The • natural attrition rate and inflow of new private investors based on the trends of the past five years and the budget, including a multi-year forecast, respectively. The conservatively estimated growth in the number of clients discounted in the expected numbers of transactions and in the amounts of customer deposits and funds invested. •• Interest margin based on the actual interest margin achieved over the past year, allowing for the long-term effect of low interest rates. •• Commission income and expense are based on the expected average number of transactions and the average commission income and expense per transaction. The average income, expense and number of transactions are based on the averages in the previous year.

Principal assumptions used in calculating the value in use of Syntel/BPO activities as at 30 September 2011 The principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were: ••Estimated • sales based on sales for the year immediately preceding the budget year, applying an annual growth rate of 2%. ••Costs • based on standardised costs for the year immediately preceding the budget year, applying an annual rate of increase of 3%.

134 2011 Annual Report

31 December 2011 31 December 2010 x € 1,000 x € 1,000 15. Property, plant and equipment 46,229 43,901 The movements in 2011 were as follows: Real estate Fixtures, Computer Other Total fittings and hardware equipment Balance as at 1 January 2011 24,665 7,960 11,272 4 43,901 Investments 4,829 468 2,341 12 7,650 Disposals - cost - (167) (325) (18) (510) Disposals - cumulative depreciation - 167 325 18 510 Depreciation (579) (1,046) (3,691) (6) (5,322) Balance as at 31 December 2011 28,915 7,382 9,922 10 46,229

Cumulative cost 29,827 9,595 20,538 12 59,972 Cumulative depreciation and impairments (912) (2,213) (10,616) (2) (13,743) Balance as at 31 December 2011 28,915 7,382 9,922 10 46,229

Depreciation period in years 50 5 - 10 5 5

The movements in 2010 were as follows: Real estate Fixtures, Computer Other Total 135 fittings and hardware equipment Balance as at 1 January 2010 - 459 12,046 7 12,512 2011 Investments 24,998 8,182 3,122 - 36,302 Disposals - cost - (1,120) (1,949) - (3,069) Disposals - cumulative depreciation - 1,120 1,949 - 3,069 Depreciation (333) (681) (3,896) (3) (4,913)

Annual Report Balance as at 31 December 2010 24,665 7,960 11,272 4 43,901

Cumulative cost 24,998 9,294 18,522 18 52,832 Cumulative depreciation and impairments (333) (1,334) (7,250) (14) (8,931) Balance as at 31 December 2010 24,665 7,960 11,272 4 43,901

Depreciation period in years 50 5 - 10 5 5

The investment in real estate includes prepayments in relation to a leasehold (operating lease) which expires on 15 April 2056. In 2011, an amount of € 242,000 in relation to amortisation of the leasehold is included in depreciation and amortisation (2010: € 208,000). 31 December 2011 31 December 2010 x € 1,000 x € 1,000 16. Current tax Current tax assets 3,630 4,949 The balance as at year-end relates mainly to the current year. Current tax liabilities (75) (468) These concern corporation tax payable by subsidiaries which are not part of the tax group.

The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows: 2011 2011 2010 2010 Amount Percentage Amount Percentage Standard tax rate 11,901 25.0% 15,040 25.5% Effect of different tax rates 49 0.1% 44 0.1% (in other countries) Effect of substantial-holding 1,462 3.1% 353 0.6% privileges Effect of changes in tax rates - 0.0% (271) (0.5%) Other effects on the tax rate 101 0,2% (329) (0.5%) Total tax expense/tax burden 13,513 28.4% 14,837 25.2%

136 The effect of changes in tax rates relates to the adjustment of the deferred tax liabilities as a result of a change in the tax rate in the Netherlands from 25.5% to 25% per 1 January 2011. 2011 The other effects on the tax rate include the various tax facilities used and corrections to tax in previous reporting years. Annual Report

31 December 31 December 2011 2010 17. Deferred tax Composition Deferred tax assets - - Deferred tax liabilities (16,633) (12,695) Net deferred tax asset / (liability) (16,633) (12,695)

Maturity of deferred tax liabilities: Within one year (1,426) (1,408) One to five years (3,581) (2,679) Longer than five years (11,626) (8,608) (16,633) (12,695)

1 January Movement via Movement via 31 December 2011 income statement balance sheet 2011 Origin of deferred tax assets and liabilities Available-for-sale financial assets (720) - (104) (824) Goodwill and intangible assets (8,211) - (2,737) (10,948) Depreciation period differences for (2,900) - (1,097) (3,997) non-current assets Other (864) - - (864) Net asset / (liability) (12,695) - (3,938) (16,633) 137 1 January Movement via Movement via 31 December 2010 income statement balance sheet 2010 2011 Origin of deferred tax assets and liabilities Tax loss carryforwards 5,988 (5,988) - - Available-for-sale financial assets (5,268) 32 4,516 (720) Goodwill and intangible assets (5,584) 165 (2,792) (8,211) Depreciation period differences for Annual Report - 58 (2,958) (2,900) non-current assets Other (3,638) 2,428 346 (864) Net asset / (liability) (8,502) (3,305) (888) (12,695)

The total compensating tax losses at year-end 2011 were nil (2010: nil).

The item Available-for-sale financial assets relates to the deferred tax on unrealised profits as a result of the revaluation of the investment portfolio.

The Goodwill and intangible assets in the deferred tax liabilities relate to the differences between the commercial and fiscal amortisation of the goodwill and intangible assets acquired on the acquisition of Alex.

The depreciation period differences for non-current assets relate to tax facilities with regard to accelerated depreciation on certain investments in fixed assets in the period 2009-2011. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 18. Other assets 35,137 13,050 This item comprises: Trade receivables 1,515 4,448 Receivables relating to securities sold, but not yet delivered 31,447 7,270 Other receivables 2,175 1,332 35,137 13,050 Trade receivables, receivables relating to securities sold but not yet delivered and other receivables have maturities of less than one year.

19. Prepayments and accrued income 38,129 49,840 This item comprises: Interest receivable 28,737 35,383 Commission receivable 5,960 9,772 Other prepayments and accrued income 3,432 4,685 38,129 49,840 Other prepayments and accrued income concern mainly prepaid IT maintenance contracts, which are paid up to three years in advance.

138 20. Derivatives positions held on behalf of clients 311,282 383,804 The derivative positions held on behalf of clients are held in

2011 BinckBank’s own name but for the client’s account and at the client’s risk.

21. Customer deposits 2,492,503 2,258,290 This item comprises: Annual Report Demand deposits savings accounts 518,954 717,181 Demand deposits in current accounts 1,973,549 1,541,109 2,492,503 2,258,290

22. Provisions 2,940 1,268 The movement in the other provisions were as follows: Balance as at 1 January 1,268 40 Released (667) (40) Addition 2,339 683 Other movements - 585 Balance as at 31 December 2,940 1,268

The item other provisions includes restructuring and legal disputes. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 23. Other liabilities 13,591 48,023 This item comprises: Liabilities in respect of securities transactions not yet settled 2,230 34,939 Tax and social security contributions 3,449 3,319 Trade payables 4,765 6,474 Other liabilities 3,147 3,291 13,591 48,023 An amount of € 667,000 is included in Other liabilities as a liability towards DNB in relation to the DGS-DSB, which has been paid in 2012.

24. Accruals and deferred income 15,579 16,162 This item comprises: Accrued interest 4,337 4,530 Employee expenses 6,270 6,832 Stock exchange and clearing costs payable 654 975 Other accruals and deferred income 4,318 3,825 15,579 16,162

Employee expenses under this heading mostly concern performance-related pay to board members and employees 139 of BinckBank.

25. Equity 469,523 468,913 2011 This item comprises: Issued share capital 7,450 7,450 Share premium reserve 373,422 373,422 Treasury shares (3,954) (3,335) Fair value reserve (973) (2,610) Annual Report

Unappropriated profit 34,210 44,240 Other reserves 59,361 49,819 Non-controlling interests 7 (73) 469,523 468,913 31 December 2011 31 December 2010 x € 1,000 x € 1,000

Aantal Amount Aantal Amount Issued share capital 7,450 7,450

A total of 74,500,000 ordinary shares were in issue, each with a nominal value of € 0.10. The share capital is fully paid up. 1,568,928 shares were cancelled on 9 July 2010.

Balance as at 1 January 74,500,000 7,450 76,068,928 7,607 Cancellation of treasury shares - - (1,568,928) (157) Balance as at 31 December 74,500,000 7,450 74,500,000 7,450

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium reserve 373,422 373,422 Balance as at 1 January 373,422 386,978 Cancellation of treasury shares - (13,556) Balance as at 31 December 373,422 373,422

140 The share premium reserve is exempt from tax.

Treasury shares (3,954) (3,335) 2011

Number Amount Number Amount Balance as at 1 January 381,511 (3,335) 2,070,509 (18,097) Issued to executive board and employees (39,491) 345 (120,495) 1,053

Annual Report Cancellation of treasury shares - - (1,568,928) 13,713

Buy-back of own shares 122,097 (964) 425 (4) Balance as at 31 December 464,117 (3,954) 381,511 (3,335)

As at 1 January 2011, the number of treasury shares held was 381,511, acquired at an average purchase price of € 8.74. In December 2011 122,097 shares were repurchased at an average price of € 7.89. In 2011 39,491 shares were sold to the executive board and employees in connection with the settlement of the remuneration policy with an average purchase price of € 8.74.

31 December 2011 31 December 2010 x € 1,000 x € 1,000 Fair value reserve (973) (2,610) The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets.

This item comprises: Unrealised profits 3,298 2,881 Unrealised losses (4,596) (6,361) Tax on unrealised profits and losses 325 870 (973) (2,610)

The movements in the fair value reserve were as follows: Balance as at 1 January (2,610) 13,789 Movement in fair value 5,625 (21,070) Realisation of revaluations through profit and loss (3,443) (1,467) Tax on the movement in value (545) 6,138 Balance as at 31 December (973) (2,610)

Unappropriated profit 34,210 44,240 Balance as at 1 January 44,240 47,161 Addition to other reserves (44,240) (47,161) 141 Result for the year 34,210 44,240 Balance as at 31 December 34,210 44,240 2011 Other reserves 59,361 49,819 Balance as at 1 January 49,819 42,921 Grant of rights to shares - 101 Sale of shares to executive board and employees 155 401 Payment of final dividend (20,022) (22,977) Annual Report

Payment of interim dividend (14,831) (17,788) Appropriation of profit for previous year 44,240 47,161 Balance as at 31 December 59,361 49,819

Non-controlling interests 7 (73) Balance as at 1 January (73) - Capital injection non-controlling interests 200 - Non-controlling interests on initial recognition - 22 Result attributable to non-controlling interests (120) (95) Balance as at 31 December 7 (73)

BinckBank holds a primary preference on certain retained reserves up to an amount of € 1.1m. For the the time being non-controlling interest is limited to the nominal value of the share capital issued and fully paid up. For a broader outline see note 38: Related parties. Notes to the consolidated income statement

2011 2010 x € 1,000 x € 1,000 26. Net interest income 38,907 43,587 This includes all income and expense items relating to the lending and borrowing of money, providing they are of a similar nature to interest, as well as interest income on credit balances or interest expense on overdrafts.

This item comprises: Interest income Balances with central banks 1,237 477 Financial assets at fair value through profit and loss - 1,200 Available-for-sale financial assets 29,093 38,050 Held-to-maturity financial assets 80 221 Loans and receivables 23,987 20,840 Other interest income 228 86 54,625 60,874 The interest income recognised on non-performing loans is € 13,000 (2010: € 21,000).

142 Interest expense Interest on customer deposits measured at amortised cost 15,450 17,036 Interest on accounts with credit institutions 268 251 2011 15,718 17,287

27. Net fee and commission income 128,447 126,970 Net fee and commission income comprises fees for services As atformed for and by third parties in respect of securities Annual Report

transactions and related services.

This item comprises: Fee and commission income Commission income 150,913 149,539 Other commission income 26,076 27,519 176,989 177,058 Other commission income includes distribution fees, custody fees, management fees, performance fees and fees charged for BPO services.

Fee and commission expense Stock exchange and clearing costs 31,251 33,618 Other commission expense 17,291 16,470 48,542 50,088 Other commission expense includes commission sharing agreements. 2011 2010 x € 1,000 x € 1,000 28. Other income 13,332 13,599 This item comprises: Revenue from ICT services 10,237 10,597 Other income 3,085 3,002 13,322 13,599

The item revenue from ICT services net of cost of sales is € 4,185,000 in 2011 (2010: € 3,828,000). The item other income includes fees for subscriptions and courses, currency results, and other income and expense items that cannot be accounted for under other items.

29. Result from financial instruments 3,167 620 This item comprises: Result from SRD (Service de Règlement Différé) Result on SRD derivative positions 11,361 321 Result on SRD equity positions (11,361) (321) - - The SRD receivables and payables are classified as derivatives and are recognised as financial assets and liabilities held for 143 trading. Movements in value are recognised directly in the income statement under Result from financial instruments.

2011 The corresponding positions in equities are classified as financial assets and liabilities at fair value through profit or loss. Movements in value are also recognised under result from financial instruments. Since BinckBank takes a position in equities which exactly offsets the SRD derivatives position, there is a natural hedge of the price risk. Annual Report

Result from other financial instruments Financial assets at fair value through profit and loss - (847) Available-for-sale financial assets 3,443 1,467 Other results from financial instruments (276) - 3,167 620

30. Impairment of financial assets (268) 70 This item comprises: Loans and receivables (268) 70 (268) 70 2011 2010 x € 1,000 x € 1,000 31. Employee expenses 50,861 45,480 This item comprises: Salaries 32,756 29,416 Social insurance contributions 4,742 4,020 Pension costs 2,873 2,524 Profit sharing and performance-related pay 3,917 4,502 Other employee expenses 6,573 5,018 50,861 45,480 In 2011 employees expenses for research and development and non-capitalised costs for development are included an amount of € 1,169,000 (2010: € 238,000).

Average number of employees The average number of employees in 2011, including members of the executive board, was 667 (2010: 610). The number at year-end 2011 was 681 (year-end 2010: 646).

The following expenses are included in employee expenses in relation to associated parties (executive board and supervisory board). 144 Salaries 1,300 1,275 Social insurance contributions 32 30

2011 Pension costs 260 255 Performance-related pay 795 1,003 Other employee expenses 158 158 2,545 2,721 The other employee expenses entirely relate to and Annual Report exclusively concern expenses in relation to the supervisory board. Details of the remuneration paid to the individual members of the executive board and supervisory board of BinckBank N.V. are disclosed in the remuneration section of the annual report on pages 98-100. At year-end 2011, members of the executive board had loans collateralised by securities on the general conditions applying to employees of € 302,000 (2010: € 339,000).

32. Depreciation and amortisation 35,463 34,798 This item comprises depreciation and amortisation on: Intangible assets 30,141 29,885 Property, plant and equipment 5,322 4,913 35,463 34,798 2011 2010 x € 1,000 x € 1,000 33. Other operating expenses 43,800 44,223 This item comprises: Marketing costs 15,337 16,696 ICT costs 10,223 9,965 Audit and professional services 4,057 2,320 Premises costs 2,498 4,071 Communication and information costs 6,377 5,956 Miscellaneous overheads 5,308 5,215 43,800 44,223

34. Earnings per share The basic earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders for the period by the weighted average number of shares in issue during the period.

The calculation of the earnings per share is based on the following: Net result after tax 34,090 44,145 Result attributable to minority shareholders (120) (95) 145 Result attributable to shareholders of BinckBank N.V. 34,210 44,240

Number of shares in issue on 1 January 74,500,000 76,068,928 2011 Less: repurchased shares on 1 January (381,511) (2,070,509) 74,118,489 73,998,419 Weighted average number of shares relating to (*): Issued to executive board and employees 26,598 82,095 Annual Report

Repurchased (2,979) (249) Average number of shares in issue 74,142,108 74,080,265

(*) The above numbers are based on the total numbers disclosed in note 25, taking account of the date of movement in equity.

Earnings per share (in €) 0.46 0.60 There are no rights outstanding that could lead to a dilution of earnings per share. The diluted earnings per share are therefore the same as the basic earnings per share, and consequently are no longer separately disclosed in these financial statements. No other transactions in ordinary shares or potential ordinary shares were conducted between the reporting date and the date of completion of these financial statements. 2011 2010 x € 1,000 x € 1,000 35. Dividend distributed and proposed Declared and paid during the year Dividend on ordinary shares: Final dividend for 2010: € 0.27 (2009: € 0.31) 20,022 22,977 Interim dividend for 2011: € 0.20 (2010: € 0.24) 14,831 17,788 34,853 40,765

Proposed for approval by the general meeting of shareholders (not recognised as a liability as at 31 December) Dividend on ordinary shares: 17,880 20,115 Final dividend for 2011: € 0.24 (2010: € 0.27)

36. Fair value of financial instruments A significant proportion of the financial instruments are recognised in the balance sheet at fair value. BinckBank uses the following three measurement levels for the classification and disclosure of financial instruments measured at fair value:

Level 1: Fair value based on price quotations in active markets Level 2: Fair value based on observable market data Level 3: Fair value not based on observable market data

Level 1 Level 2 Level 3 Total 31 December 2011 146 x € 1,000 x € 1,000 x € 1,000 x € 1,000 Financial assets held-for-trading - 119 - 119 Financial assets at fair value through profit and loss 15,594 - - 15,594 2011 Available-for-sale financial assets - 1,682,452 - 1,682,452 Totale assets 15,594 1,682,571 - 1,698,165

Financial liabilities held-for-trading - 155 - 155

Annual Report Financial liabilities at fair value through profit and loss 1,013 - - 1,013

Totale liabilities 1,013 155 - 1,168

Level 1 Level 2 Level 3 Total 31 December 2010 x € 1,000 x € 1,000 x € 1,000 x € 1,000 Financial assets held-for-trading - 169 - 169 Financial assets at fair value through profit and loss 13,856 - - 13,856 Available-for-sale financial assets - 1,599,700 - 1,599,700 Totale assets 13,856 1,599,869 - 1,613,725

Financial liabilities held-for-trading - 50 - 50 Financial liabilities at fair value through profit and loss 1,485 - - 1,485 Totale liabilities 1,485 50 - 1,535 Level 1: Fair value based on price quotations in active markets The fair value of all financial instruments in this category is determined on the basis of published prices originating from a stock exchange, broker or data provider providing that these prices reflect current and normally occurring market transactions. In BinckBank’s case, this concerns the equity positions relating to SRD receivables and payables.

Level 2: Fair value based on observable market data The fair value of all financial instruments in level 2 is determined using a valuation technique for which the input is derived from market prices, however there is no demonstrably active market. In this case the available prices are substantiated mainly using market information such as interest rates and current risk premiums associated with the various credit ratings.

In BinckBank’s case, this concerns the following financial instruments: •Derivatives ••• positions in relation to SRD receivables and payables This concerns OTC (Over The Counter) derivatives which are directly agreed with individual clients and not traded in a separate market. The value is directly derived from the market prices of the underlying equities. •• Investment portfolio - bonds The investment portfolio concerns current bonds that are mainly traded between professional market participants without the intermediation of a regulated market. Prices are available from brokers on request. Transactions in these bonds are not centrally registered and/or published by a stock exchange, and BinckBank is thus of the opinion that there is no demonstrably active market. No financial assets were reclassified from level 2 to level 1 in 2010 or 2011.

Level 3: Fair value not based on observable market data Any financial instruments in this category are individually assessed. Valuation is based on a management best estimate, taking account of the last known prices and analysis by external valuation agencies. BinckBank has no financial instruments in this category. 147

Fair value

2011 The following analysis compares the carrying amounts and fair values of all the financial instruments recognised in BinckBank’s financial statements.

Carrying amount Fair value 2011 2010 2011 2010 x € 1,000 x € 1,000 x € 1,000 x € 1,000 Annual Report

Financial assets Cash and balances with central banks 320,214 105,972 320,214 105,972 Banks 278,955 177,316 278,955 177,316 Financial assets held-for-trading 119 169 119 169 Financial assets at fair value through profit and loss 15,594 13,856 15,594 13,856 Available-for-sale financial assets 1,682,452 1,599,700 1,682,452 1,599,700 Loans and receivables 324,097 496,266 324,097 496,266 Held-to-maturity financial assets - 4,121 - 4,185 Total financial assets 2,621,431 2,397,400 2,621,431 2,397,464

Financial liabilities Banks 28,161 25,610 28,161 25,610 Customer deposits 2,492,503 2,258,290 2,492,503 2,258,290 Financial liabilities held-for-trading 155 50 155 50 Financial liabilities at fair value through profit and loss 1,013 1,485 1,013 1,485 Total financial liabilities 2,521,832 2,285,435 2,521,832 2,285,435 37. Classification of assets & liabilities by expected maturity The table below shows the assets and liabilities classified by expected remaining life to maturity. < 12 months > 12 months Total As at 31 December 2011 x € 1,000 x € 1,000 x € 1,000 Assets Cash and balances with central banks 320,214 - 320,214 Banks 269,497 9,458 278,955 Financial assets held-for-trading 119 - 119 Financial assets at fair value through profit and loss 15,594 - 15,594 Available-for-sale financial assets 529,160 1,153,292 1,682,452 Loans and receivables 324,097 - 324,097 Held-to-maturity financial assets - - - Investment in associates and joint ventures - 3,219 3,219 Intangible assets - 292,398 292,398 Property, plant and equipment - 46,229 46,229 Current tax 3,630 - 3,630 Deferred tax 35,137 - 35,137 Other assets 38,129 - 38,129 Prepayments and accrued income 311,282 - 311,282 Derivatives positions held on behalf of clients Total assets 1,846,859 1,504,596 3,351,455

148 Liabilities Banks 28,161 - 28,161

2011 Customer deposits 2,492,503 - 2,492,503 Financial liabilities held-for-trading 155 - 155 Financial liabilities at fair value through profit and loss 1,013 - 1,013 Provisions 2,940 - 2,940 Current tax 75 - 75 Annual Report Deferred tax 1,426 15,207 16,633 Other liabilities 13,591 - 13,591 Accruals and deferred income 15,579 - 15,579 Derivatives positions held on behalf of clients 311,282 - 311,282 Total liabilities 2,866,725 15,207 2,881,932

Net (1,019,866) 1,489,389 469,523 37. Classification of assets & liabilities by expected maturity (continued) The table below shows the assets and liabilities classified by expected remaining life to maturity. < 12 months > 12 months Total As at 31 December 2010 x € 1,000 x € 1,000 x € 1,000 Assets Cash and balanced with central banks 105,972 - 105,972 Banks 174,208 3,108 177,316 Financial assets held-for-trading 169 - 169 Financial assets at fair value through profit and loss 13,856 - 13,856 Available-for-sale financial assets 448,687 1,151,013 1,599,700 Loans and receivables 496,266 - 496,266 Held-to-maturity financial assets 4,121 - 4,121 Investment in associates and joint ventures - 3,067 3,067 Intangible assets - 320,757 320,757 Property, plant and equipment - 43,901 43,901 Current tax 4,949 - 4,949 Other assets 13,050 - 13,050 Prepayments and accrued income 49,840 - 49,840 Derivatives positions held on behalf of clients 383,804 - 383,804 Total assets 1,694,922 1,521,846 3,216,768

Liabilities 149 Banks 25,610 - 25,610 Customer deposits 2,258,290 - 2,258,290

2011 Financial liabilities held-for-trading 50 - 50 Financial liabilities at fair value through profit and loss 1,485 - 1,485 Provisions 1,268 - 1,268 Current tax 468 - 468 Deferred tax 1,408 11,287 12,695 Annual Report Other liabilities 48,023 - 48,023 Accruals and deferred income 16,162 - 16,162 Derivatives positions held on behalf of clients 383,804 - 383,804 Total liabilities 2,736,568 11,287 2,747,855

Net (1,041,646) 1,510,559 468,913 38. Related parties The consolidated financial statements include the following BinckBank related parties: Country Interest year-end 2011 Interest year-end 2010 Consolidated companies: Syntel Beheer B.V. Netherlands 100% 100% Bewaarbedrijf BinckBank B.V. Netherlands 100% 100% ThinkCapital Holding B.V. Netherlands 60% 60% Binck België N.V. Belgium 100%

Joint ventures: BeFrank N.V. Netherlands 50% 50%

Associates: TOM Holding B.V. Netherlands 38.5% 37.5%

The group of related parties consists of consolidated companies, joint ventures, associates, and the executive board and supervisory board of BinckBank. The interest presented above is equal to the voting rights held in relation to the company concerned.

Terms and conditions of transactions with related parties Transactions with related parties are conducted on commercial terms and conditions and at market prices. As at year-end 2011, BinckBank did not recognise any bad debt provisions for receivables from related parties (2010: nil). The judgement concerning the need for such provisions is made each year on the basis of an assessment of the financial 150 position of the individual related parties and the markets in which they operate. No guarantees have been issued or received with regard to related parties. 2011 Binck België N.V. The activities of Binck België N.V. were discontinued in 2010 and the company was liquidated in December 2011. Commercial activities of BinckBank in Belgium run through the Belgian branch of BinckBank and are not impacted by the liquidation. Annual Report ThinkCapital Holding B.V. The capital structure was revised in 2011 in order to support the activities of ThinkCapital Holding B.V. A total sum of € 1.6m was paid into the share premium reserve by the shareholders. BinckBank holds a primary preference on certain retained reserves up to an amount of € 1.1m, followed by a secondary preference on certain retained reserves of the other shareholders up to an amount of € 1.1m. In practice this means that BinckBank is entitled to 100% of the result until the retained reserves have reached an amount of € 1.1m, followed by a period in which BinckBank is entitled to 0% of the result until the retained reserves have reached an amount of € 2.2m. After this period, BinckBank will be entitled to a share of the result in accordance with its shareholding. The credit facility previously provided on commercial conditions in 2010 was terminated in September 2011. During 2011, interest of € 25,000 (2010: € 1,000) was charged and BinckBank provided premises, office data systems and administrative services in an amount of € 72,000. At year-end 2011, BinckBank had a receivable from ThinkCapital Holding B.V. of € 7,000 (2010: € 8,000).

BeFrank N.V. An additional capital sum of € 3.0m was invested in the joint venture BeFrank N.V. in 2011. An amount of € 86,000 was charged in relation to ICT and administrative services in 2011 (2010: € 40,000). At year-end 2011, BinckBank had a receivable from BeFrank N.V. of € 65,000.

TOM Holding B.V. BinckBank made an additional capital investment in its associate TOM Holding B.V. of € 3.0m in 2011. In the period April – September 2011 BinckBank provided a credit facility on commercial conditions for which a total of € 21,000 was charged in interest. BinckBank provided premises, office data systems and administrative services to TOM in 2011, for which a fee of € 243,000 is recognised. At year-end 2011, BinckBank had a receivable from TOM Holding B.V. of € 136,000. In 2011, € 317,000 was charged to BinckBank by subsidiary companies of TOM Holding B.V. for the provision of securities services. At year-end 2011, BinckBank had an account payable to TOM Holding B.V. of € 20,000.

No transactions involving the executive board or the supervisory board other than under contracts of employment took place during the year. See Note 31 on employee expenses and the general remuneration report on pages 98-100 in the annual report for further details.

Transactions with consolidated companies are fully eliminated in the consolidated financial statements. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 39. Off balance sheet commitments Contingent liabilities Liabilities in respect of contracts of suretyship and guarantees 3,387 2,929 Liabilities in respect of irrevocable facilities - -

To meet the requirements of its clients, BinckBank offers products such as contracts of suretyship and guarantees in relation to loans. The underlying value of these products is not presented on the face of the balance sheet. The above figure represents the maximum potential credit risk for BinckBank attached to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

Lease commitments The company has leases and service contracts for office premises in the Netherlands, Belgium, France, Spain and Italy. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined annual expense relating to office rents and operating lease payments for the vehicles at year-end 2011 was € 3.0m (2010: € 4.5m). Annual Report

31 December 2011 31 December 2010 x € 1,000 x € 1,000 The aged analysis of the outstanding liabilities is as follows: Within one year 3,093 2,780 One to five years 4,138 5,252 Longer than five years 338 -

Legal proceedings BinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or profitability.

Deposit guarantee scheme The deposit guarantee scheme is intended to guarantee certain deposits by account holders if a bank goes bankrupt. The scheme provides security for deposits of up to € 100,000 and applies per account holder per bank, regardless of the number of accounts held. In case of a joint account operated by two persons, the maximum applies per person. More or less all savings accounts, current accounts and term deposits are covered. If a credit institution finds itself in difficulties and does not have sufficient funds to pay all or part of the guaranteed amounts to its account holders, De Nederlandsche Bank (DNB) will make up the difference. The total amount paid out by DNB will then be recovered from the banks on a pro rata basis. Investor compensation scheme Despite the fact that all banks and investment firms in the Netherlands are subject to regulation by DNB and the Netherlands Authority for the Financial Markets (AFM), a bank or investment firm may encounter problems with payments. In this case, the investor compensation scheme guarantees a minimum level of protection in the event that the bank or investment firm cannot meet its obligations arising from the investment services it provides to its clients. The investor compensation scheme provides a guarantee of up to € 20,000 per person per institution.

40. Segment information As an online broker, BinckBank offers its retail clients fast and low-cost access to all the world’s major financial markets. Moreover, as an asset management bank, BinckBank provides support to its clients in the management of their assets through online asset management services and online savings accounts. In addition to fast and low-cost order execution, BinckBank also provides services to professional clients relating to the administrative processing of securities and financial transactions by means of an outsourcing system (BPO), or through the licensing of the related software. The company has offices in the Netherlands, Belgium, France, Spain and Italy.

A segment is a clearly distinct element of BinckBank that provides services with a risk or return profile that is different from the other segments (a business segment), or which provides services to a particular economic market (market segment) that has a different risk and return profile to that of other segments. In terms of organisation, the operations of BinckBank are divided into two primary business segments. The executive board determines the performance targets, and authorises and monitors the budgets prepared for these business segments. The management of the business segment is responsible for setting policy for that segment, in accordance with the strategy and performance targets formulated by the executive board. The business segments are: •• Retail •• Professional Services

152 The Retail business unit operates as an (internet) broker for the private client market. The Professional Services business unit provides brokerage services in securities and derivatives transactions on behalf of professional investors in the

2011 Netherlands and abroad, including the provision of the majority of the related administration. All directly attributable income and expenses are recognised within the Retail and Professional Services business segments, together with the attributed costs of the group activities.

Group operations includes the departments directly managed by the executive board and for which the income and expenses are not included in one of the other business segments. Annual Report This includes central Treasury results, including results on sales in the investment portfolio, external activities of the ICT department, which include the subsidiary Syntel B.V. and extraordinary expenses, for example in relation to the deposit guarantee scheme. With effect from 1 January 2011, the results of ThinkCapital Holding B.V. are reported under group operations.

The same accounting principles with regard to valuation and result are used for a business segment as those described for the consolidated balance sheet and income statement of BinckBank. The prices used for transactions between business segments are the prices that would occur under normal market conditions (‘at arm’s length’).

The results of associates and joint ventures are attributed to business segments to the extent that the business segments exercise direct influence on the associates and joint ventures. All other results of associates and joint ventures are recognised at group level.

Investments in intangible assets and property, plant and equipment are attributed to the business segments to the extent that the investments are directly acquired by the business segments. All other investments are recognised at group level.

Tax is managed at group level and is not attributed to the operating segments.

Syntel charged a sum of € 6.7m (2010: € 5.5m) for services provided to BinckBank. These costs have been eliminated in the segment information presented below and replaced by the allocation of the actual costs.

As was the case in 2010, no client or group of associated clients was responsible for more than 10% of the bank’s total income in 2011. Business segmentation

Retail Professional Services Group operations Total x € 1,000 2011 2010 2011 2010 2011 2010 2011 2010 Interest income 47,644 55,069 6,071 5,515 910 290 54,625 60,874 Interest expense (13,788) (16,363) (1,573) (671) (357) (253) (15,718) (17,287) Net interest income 33,856 38,706 4,498 4,844 553 37 38,907 43,587 Commission income 146,224 147,310 30,607 29,748 158 - 176,989 177,058 Commission expense (32,698) (34,873) (15,716) (15,191) (128) (24) (48,542) (50,088) Net fee and commission income 113,526 112,437 14,891 14,557 30 (24) 128,447 126,970 Other income 2,566 964 56 8 10,700 12,627 13,322 13,599 Result from financial instruments - - - - 3,167 620 3,167 620 Impairment of financial assets (268) 70 - - - - (268) 70 Total income from 149,680 152,177 19,445 19,409 14,450 13,260 183,575 184,846 operating activities

Employee expenses (34,283) (33,416) (9,227) (8,019) (7,351) (4,045) (50,861) (45,480) Depreciation and amortisation (34,172) (33,413) (915) (908) (376) (477) (35,463) (34,798) Other operating expenses (37,064) (38,294) (4,316) (3,689) (2,420) (2,240) (43,800) (44,223) Total operating expense (105,519) (105,123) (14,458) (12,616) (10,147) (6,762) (130,124) (124,501)

Result from operating activities 44,161 47,054 4,987 6,793 4,303 6,498 53,451 60,345 153 Share in results of associates and (5,848) (1,386) joint ventures Other non-operating income - 23 2011 Result before tax 47,603 58,982 Tax (13,513) (14,837) Net result 34,090 44,145

Total assets 2,557,181 2,396,899 379,148 318,644 415,126 501,225 3,351,455 3,216,768 Annual Report

Total liabilities 2,171,220 1,989,064 358,565 294,599 352,147 464,192 2,881,932 2,747,855 The analysis below shows the geographical distribution of income from operating activities and the property, plant and equipment and intangible assets of BinckBank. Income is allocated on the basis of the country of domicile of the branch where the account is opened, and the property, plant and equipment and intangible assets on the basis of the country in which the assets are held.

Segmentation of continued operations by region Netherlands Other countries Total x € 1,000 2011 2010 2011 2010 2011 2010 Total income from 158,901 166,947 24,674 17,899 183,575 184,846 operating activities Property, plant and equipment, and intangible 338,431 364,493 196 165 338,627 364,658 assets

41. Risk management

Introduction In the conduct of their operations, banks face a variety of risks. Risk is defined as the probability that a particular event could lead to a loss for a bank. Banks have to hold sufficient capital in order to be able to absorb potential losses in the event of an unfavourable scenario, so that they can continue to conduct their business if and when such losses would be incurred. BinckBank strives to maintain a moderate risk profile, so that the effects of unexpected events on profit and equity will be limited. BinckBank devotes considerable attention to risk management and employs risk management systems. Adequate control measures, reporting systems and information systems incorporating limits are part of the risk 154 management process. The identification of risks and the creation and updating of appropriate control measures constitute an ongoing process within BinckBank. Risk management is itself an ongoing process which is affected by both changing market conditions and the increasing complexity of legislation and regulation. 2011

The relevant risks for BinckBank and the related control measures are described in detail in the section Risk and capital management in the annual report (page 53). The note on financial risks in the financial statements is based on the requirements of IFRS 7.

Annual Report BinckBank’s risk management focuses on:

•• Pillar I • Credit risk •• Market risk • Operational risk •• Pillar II • Interest-rate risk • Liquidity risk • Credit risk • Concentration risk • Margin risk • Counterparty risk

After a general section on risk and capital management, these types of risk are described separately below.

BinckBank’s risk profile BinckBank has a fundamentally different risk profile from that of a traditional Dutch bank. The typical banking operations of BinckBank are relatively simple, and concern the offering of loans collateralised by highly liquid securities portfolios (collateralised lending), providing payment services to fixed contra-accounts at other banking institutions, automated asset management and the interest-rate business relating to customer deposits. These activities are in general classified as relatively low-risk. BinckBank’s core business, the settlement of securities transactions, is however a complex process. Each year, BinckBank processes millions of transactions for more than 500,000 accounts in a very large number of financial products on several trading platforms through brokers and stock exchange memberships. Together with the high level of dependence on ICT, this indicates a relatively high operational risk. Risk management organisation In the current organisation, risk management is concentrated around the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), who together manage the various departments involved in the management of risk. Each of these departments has its own by-laws which define its duties and responsibilities in relation to risk management. These by- laws have been coordinated to avoid both duplications and gaps in the risk management mechanisms. The independence of the various functions/departments is safeguarded by segregating the reporting lines. BinckBank uses the ‘three lines of defence’ principle, in which the business units have primary responsibility for the management of risk. The first-line departments are supported and monitored by second-line specialised departments, such as Risk Management, Finance & Control, Compliance, Internal Control and Information Security. The Internal Audit Department (IAD) forms the third line of defence. The Audit Committee, Risk and Product Development Committee and the supervisory board, together with the regulators and the external auditor, form the last link in the Governance Risk Compliance Framework.

Risk management departments and committees BinckBank has an organisational structure in which the segregation of duties is safeguarded. There are also several consultative bodies and departments that are closely involved in the management of certain types of risk, the most important of which are further explained below.

Treasury committee The treasury committee is mainly concerned with the management of liquidity risk, credit risk in the investment portfolio and market risk (interest-rate risk and currency risk), and determines the investment policy for the interest-rate business.

Operational risk committee Operational risk management is the responsibility of the Operational risk committee, which consists of representatives of line management and specialist support departments and manages risks relating to human factors and shortcomings in business processes, such as information security risk, legal risk and compliance risk. Its principal tasks include decision- 155 making on sound and controlled operation, coordination and promotion of operational risk control and design of the main business processes. 2011 Credit committee BinckBank has a credit committee, which is responsible mainly for controlling credit risk in customer portfolios, including concentration, margin and counterparty risk.

Risk management department Annual Report The Risk management department is responsible for the day-to-day implementation of the policy formulated by the credit committee for the management of credit and market risk and reports directly to the CFO, the credit committee and the operational risk committee.

Finance & control department The Finance & control department is responsible for the timely administration and reporting of financial data to internal and external stakeholders. This includes all mandatory reporting to De Nederlandsche Bank and the Netherlands Authority for the Financial Markets (AFM).

Compliance department The Compliance department is responsible for monitoring compliance with the applicable codes of conduct and the relevant securities legislation and regulation and is concerned primarily with management of integrity risk. Through its code of conduct, insider trading regulations and whistleblower’s charter, BinckBank demonstrates the importance it attaches to values such as integrity and dependability.

Information security department BinckBank has an Information security department, which is responsible for formulating and implementing information security policy. The Information security department has the option of escalating issues to the chairman of the executive board. Internal audit department (IAD) In line with the definition of Internal Auditing by the Institute of Internal Auditors, the mission of IAD is to provide independent and objective certainty. The purpose of the IAD is to perform assurance tasks in order to add value to and improve the functioning of the internal organisation. The IAD thus contributes to the realisation of the organisational targets by means of a systematic and disciplined approach to the evaluation and improvement of the effectiveness of risk management, control and governance processes. IAD does not provide consulting services.

The scope or operating area of the IAD includes all activities carried out under the responsibility of BinckBank. Joint ventures are independent entities with their own licence and fall outside the (direct) area of operation of the IAD.

Supervision of activities

Supervisory board The supervisory board discusses the strategy and the risks associated with the business each year, and, on the basis of reports, assesses the structure and operation of the internal risk management and control systems. Supervision of the provision of financial information by the company is the responsibility of the supervisory board.

Audit committee The audit committee is responsible for overseeing the implementation and operation of the system of internal control and risk management and monitoring the implementation of the external auditor’s recommendations and the functioning of the Internal audit department.

Risk and product development committee The risk and product development committee (RPC) advises the supervisory board on matters including the risk profile and the risk appetite of BinckBank. It also monitors the adequacy of the liquidity and the capital, as well as establishing, 156 testing and analysing new products or changes to existing products and services with regard to the duty of care towards the customer. The RPC is moreover responsible for identifying, analysing and advising on all the other material risks to

2011 BinckBank.

Capital management The aim of capital management at BinckBank is to maintain a sound solvency position, seeking constantly to strike the right balance between the equity capital it holds and the risks to which it is exposed. This involves holding capital for the complementary Pillar II risks identified by BinckBank, such as interest-rate risk, concentration risk, margin risk and Annual Report counterparty risk, in addition to the minimum capital requirements prescribed under Pillar I (credit risk, market risk and operational risk). The adequacy of this retained capital under Pillar II is tested on a regular basis, which may lead to higher or lower internal capital requirements. The testing process is known as the ICAAP (Internal Capital Adequacy Assessment Process). The result of the ICAAP is expressed as the internal solvency ratio. BinckBank’s internal capital target is to achieve a solvency ratio of at least 12%.

Capital adequacy BinckBank continuously assesses the adequacy of its capital. Due in part to a strong increase in its Tier I capital, BinckBank’s solvency ratio has risen from 15.7% on 31 December 2010 to 23.1% on 31 December 2011. The solvency ratio’s rise to above 20% was the reason for reactivating the share buy-back programme in December 2011. The current level of Tier I capital is sufficient to continue the growth in our activities and puts BinckBank in a sound position to cope with periods of financial stress. The capital adequacy is assessed on a monthly basis, based on the capital requirements under Pillars I and II and results of a fixed set of stress tests. The results provide information on the adequacy of the capital and the extent to which BinckBank can continue its operations in the event of a stress scenario. The capital requirement under Pillar I is expressed in the BIS ratio. The capital adequacy under Pillars I and II is expressed in the solvency ratio. Calculation of equity capital and actual Tier I capital (x € 1,000) 31 December 2011 31 December 2010 Issued and paid-up capital 7,450 7,450 Share premium reserve 373,422 373,422 Treasury shares (3,954) (3,335) Other reserves 58,388 47,209 Unappropriated profit 34,210 44,240 Non-controlling interests 7 (73) Total equity 469,523 468,913

Less: goodwill (152,929) (152,929) Less: other intangible assets (135,773) (164,155) Less: fair value reserve 973 2,610 Less: proposed dividend (17,880) (20,115) Core capital 163,914 134,324 Less: equity investments in financial subsidiaries (3,219) (3,067) Total available capital (A) - Tier I 160,695 131,257

Credit risk - Pillar I 18,718 17,884 Market risk (= currency risk) 120 96 Operational risk 22,522 26,003 157 Total required capital (B) - Pillar I 41,360 43,983

2011 Interest-rate risk 4,294 8,349 Liquidity risk 477 954 Credit risk - Pillar II 9,455 13,647 Concentration risk 7,054 9,062 Margin risk 401 3,585 Annual Report Counterparty risk 2,000 1,000 Total required capital - Pillar II 14,226 22,950 Total required capital (C) - Pillar I + II 55,586 66,933

BIS ratio (=A/B * 8%) 31.1% 23.9% Solvency ratio (= A/C * 8%) 23.1% 15.7%

Credit risk - Pillar I Credit risk is the risk of a counterparty and/or issuing institution involved in trading in or issuing a financial instrument defaulting on an obligation and thus harming BinckBank financially.

Lending BinckBank lends to central governments, lower-tier public authorities if guaranteed by central government, central banks and other banks and credit institutions with a credit rating equal to or better than F1 (Fitch or equivalent). These are short-term loans with terms ranging from one day to a maximum of one month. BinckBank is exposed to counterparty risk (the risk of default by a counterparty to which credit has been extended). BinckBank extends credit to counterparties within a system of limits for both size and maturity for each counterparty, which are set in advance by the Treasury committee.

Investment portfolio - bonds In the assessment of the creditworthiness of the investments in bonds, use is also made of the long-term credit ratings published by rating agencies. Investments in European central and lower-tier public authorities are limited to Dutch and German bonds, which under the Financial Supervision Act (Wft) have a solvency weight of 0%. New investments in other debt securities must have at least an AA- rating and be eligible for collateral at the European Central Bank. Investments whose credit rating falls below A- are subjected to review and may be liquidated.

Collateralised lending Via individual customer agreements, BinckBank offers customers credit facilities collateralised by securities. Advances can be used to cover the margin requirement on derivatives positions, purchase securities or furnish bank guarantees against the securities account. In the case of lending against the collateral of financial instruments, the amount of credit advanced depends partly on the liquidity and price of the instrument in question. The Risk management department uses automated systems to monitor the loans provided and the value of the collateral on the basis of real- time prices. The credit risk therefore resides in movements in value of the collateral received.

Credit risk - Pillar II

Concentration risk The Risk management department closely monitors for undesirable concentration within client portfolios. Concentration risk arises when there is excessive concentration in one or a few stocks due to customers holding non- diversified investment portfolios.

Margin risk The customers of BinckBank can take positions in listed derivatives (options and futures). The credit risk arising from taking short positions in options is covered by requiring customers to provide cover in the form of money and/or securities (margin requirements). Since the risk associated with written option positions is not adequately expressed in the Pillar I minimum capital requirements, BinckBank has itself imposed an additional capital requirement. This amount expresses the size of customer deficits not covered by securities in the event of a 12.5% decline in the financial markets within a period of 5 trading days. 158

Counterparty risk

2011 BinckBank is exposed to counterparty risk as a result of its institutional brokerage operations. This concerns a very limited number of customers that have orders executed via BinckBank on an occasional basis. A maximum limit is established for each counterparty in terms of the total amount still to be settled.

Maximum credit risk The following table presents the maximum credit risk associated with the various financial instruments. The maximum Annual Report credit risk is shown gross, without taking account of the effects of credit risk mitigation provided by set-off agreements and the collateral that has been furnished. The maximum credit risk in derivatives positions for the account and risk of clients is shown by the margin requirement as described above, and is not included in the table. 2011 2010 x € 1,000 x € 1,000 Credit risk Cash and balanced with central banks 320,214 105,972 Banks 278,955 177,316 Financial assets held-for-trading 119 169 Financial assets at fair value through profit and loss 15,594 13,856 Available-for-sale financial assets 1,682,452 1,599,700 Loans and receivables 324,097 496,266 Held-to-maturity financial assets - 4,121 2,621,431 2,397,400 Guarantees 3,387 2,929 2,624,818 2,400,329

The quality of the loans and advances and the provision for bad debts are shown in the tables below:

Not yet due 324,059 496,194 Past due 462 558 Total 324,521 496,752 Bad debt provision (424) (486) Net loans and receivables 324,097 496,266 159 Past due items are residual items remaining after realisation of the collateral (securities and bank guarantees). The provision is formed on a case-by-case basis. 2011

Loans and receivables by percentage covered: Money-market loans 34,000 20,000 < 25% of the value of the collateral 75,479 77,081 between 25% and 50% of the value of the collateral 113,255 189,551 Annual Report between 50% and 75% of the value of the collateral 95,779 205,122 > 75% of the value of the collateral 5,546 4,440 Past due 462 558 324,521 496,752 There are no items in arrears or for which provisions have been recognised in any of the other categories of financial assets.

Loans and receivables under renewed contracts In the case of existing loans and receivables, it is possible for renewed contracts to be concluded with clients. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable.

Loans and receivables under renewed contracts 32 61 Credit risk on outstanding collateralised loans/margin requirements Via its customer agreement, BinckBank offers clients credit facilities against securities collateral. Advances can be used to cover the margin requirement, the purchase of securities or the furnishing of bank guarantees. In all these cases, BinckBank is exposed to (potential) credit risk with respect to the customer. Given the nature of the loans and the collateral provided, however, the credit risk is limited. In the case of lending against the collateral of financial instruments, the amount of credit advanced depends partly on the liquidity and price of the financial instrument in question. The credit facility for all products that qualify for collateralised lending is determined in accordance with the guidelines set by the credit committee, taking account of the limits set in section 152 of the Market Conduct Supervision (Financial Institutions) Decree [Besluit gedragstoezicht financiële ondernemingen, or ‘Bgfo’]. BinckBank applies a lower limit of a haircut of 30% on equities and 20% on bonds. In comparison with the standard approach taken by the regulator to determine the credit risk under Basel II, this is very prudent. BinckBank has retained the right towards its customers to adjust the haircut at any time without prior notice. Authorised limits can be translated into a maximum spending limit. This spending limit can be expressed as a cover ratio whereby the minimum requirement reflects a cover ratio of 1. The degree to which the customer exceeds 1 expresses the relative surplus cover in relation to the minimum requirement. Additional cover can be obtained by providing bank guarantees, collateral in the form of securities or by increasing the cash balance. If the cover ratio falls below 1, the customer enters the deficit procedure. If there is no cover ratio (cover is nil) the client moves from the deficit procedure to the collection procedure.

Monitoring of credit risk is conducted by the Risk management department, which uses automated systems to monitor the loans provided and the value of the collateral on the basis of real-time prices. The credit risk therefore resides in movements in value of the collateral received. The Risk management department watches in particular for undesirable concentration within client portfolios. Concentration risk is a form of credit risk, and occurs in relation to customers with collateralised loans and customers with margin requirements on derivatives positions. Concentration risk arises for example in the case of concentrations in specific stocks by customers with insufficiently diversified investment portfolios. The credit collateralised by securities is in this case too dependent on one or a few issuers. If an issuer were to default, the consequences would 160 be significantly more serious than if the credit had been provided on a more diversified portfolio. The Risk management department monitors for excessive concentrations in customer portfolios on a daily basis. Measures are taken in line with

2011 policy if necessary to limit excessive concentrations. In addition, the Credit committee may decide to limit the concentration risk associated with a specific stock by increasing the haircut on the stock in question.

Margin is a financial sum that the writer (or seller) of an uncovered option or future must deposit as security for the risk of his position. Margin is a form of guarantee for potential losses arising as a result of the obligations assumed by the investor. This does not mean that the financial risks are limited to the size of these obligations. There is therefore the Annual Report risk that the margin maintained by the customer will not be adequate in relation to the obligation he has assumed. The margin requirement may therefore entail a credit risk on the customer. The amount of the margin requirements is partly determined by the margin percentages established by the Risk management department on the basis of the historical volatility of the underlying stock or index. The Risk management department analyses market movements on a daily basis and updates the margin percentages at least once a month.

Deficit procedure Customers with a loan agreement are monitored by Risk management with respect to their available spending limit (ASL). The ASL is the balance of the weighted value of the securities received from the customer less the customer’s obligations in the form of collateralised lending and margin requirements. There is a shortfall in the ASL if the securities in the customer’s portfolio no longer provide adequate cover for the customer’s obligations. As soon as a negative ASL is identified, the deficit procedure is initiated. Use of a deficit procedure is a legal requirement. The deficit procedure used by BinckBank is as follows:

BinckBank checks for each client whether the securities adequately cover the collateralised loans and/or margin requirements (margin and current orders) on a daily basis. BinckBank does this by calculating the client’s ASL. In the case of a negative ASL, the client must make up the shortfall within five business days. If there is a shortfall as a result of positions in futures or SRD derivatives, this must be made up within one business day. If the client’s ASL is still negative at 15:00 hours on the last day on which the shortfall must be made up, BinckBank will start to close the client’s securities positions on its own initiative. Securities positions will be closed until the ASL in the client’s account is returned to a positive value. Risk concentration per economic sector The following table presents the credit risk by economic sector.

Risk concentration per economic Central Financial Government/ Private Other Total sector as at 31 December 2011 banks institu- government individu- private x € 1,000 tions guaranteed als sector Cash and balanced with central banks 320,214 - - - - 320,214 Banks - 278,955 - - - 278,955 Financial assets held-for-trading - - - - 119 119 Financial assets at fair value through - - - - 15,594 15,594 profit and loss Available-for-sale financial assets - 1,016,466 665,986 - - 1,682,452 Loans and receivables - - 34,000 290,097 - 324,097 Held-to-maturity financial assets ------320,214 1,295,421 699,986 290,097 15,713 2,621,431 Guarantees - - - 3,133 254 3,387 320,214 1,295,421 699,986 293,230 15,967 2,624,818

Risk concentration per economic Central Financial Government/ Private Other Total sector as at 31 December 2010 banks institu- government individu- private x € 1,000 tions guaranteed als sector Cash and balanced with central banks 105,972 - - - - 105,972 Banks - 177,316 - - - 177,316 161 Financial assets held-for-trading - - - - 169 169 Financial assets at fair value through - - - - 13,856 13,856

2011 profit and loss Available-for-sale financial assets - 1,167,379 432,321 - - 1,599,700 Loans and receivables - - 20,000 476,266 - 496,266 Held-to-maturity financial assets - - 4,121 - - 4,121 105,972 1,344,695 456,442 476,266 14,025 2,397,400 Annual Report Guarantees - - - 2,460 469 2,929 105,972 1,344,695 456,442 478,726 14,494 2,400,329 Risk categories of financial assets Assessment of the creditworthiness of the financial assets and liabilities is based on credit ratings provided by rating agencies. Cash and loans to banks are classified on the basis of the short-term credit rating of rating agencies. For the investment portfolio, the long-term rating is used. Loans and receivables concern credit provided against securities collateral to private individuals and SME clients. These are not rated by credit rating agencies. Collateralised lending is not assessed on the basis of a rating, but on the quality of the collateral.

Risk categories of financial Short-term rating Long-term rating assets as at 31 December Between Between Unrated Total 2011 F1+ F1 AAA AA+ and A+ and A- x € 1,000 AA- Cash and balanced with 320,214 - 320,214 central banks Banks - 269,497 9,458 278,955 Financial assets held - - - 119 119 for trading Financial assets at fair value - - - 15,594 15,594 through profit and loss Available-for-sale 1,440,841 216,606 - 25,005 1,682,452 financial assets Loans and receivables 324,097 324,097 Held-to-maturity financial - - - - assets

162 Total 320,214 269,497 1,440,841 216,606 - 374,273 2,621,431

Risk categories of financial Short-term rating Long-term rating 2011 assets as at 31 December Between Between Unrated Total 2010 F1+ F1 AAA AA+ and A+ and A- x € 1,000 AA- Cash and balanced with 105,972 - 105,972 central banks Annual Report Banks - 174,208 3,108 177,316 Financial assets held - - - 169 169 for trading Financial assets at fair value - - - 13,856 13,856 through profit and loss Available-for-sale 1,367,245 232,455 - 1,599,700 financial assets Loans and receivables 496,266 496,266 Held-to-maturity financial 4,121 - - 4,121 assets Total 105,972 174,208 1,371,366 232,455 - 513,399 2,397,400 Risk concentration per country The following table presents the credit risk, analysed by country.

Geographical distribution Supra- Nether- Germany Belgium France Other EU Non-EU Total as at 31 December 2011 national lands countries countries x € 1,000 Cash and balanced with central banks 265,000 46,886 - 6.309 2.019 - - 320,214 Banks - 262,557 - 172 5,220 2,586 8,420 278,955 Financial assets held-for-trading - - - - 119 - - 119 Financial assets at fair value - - - - 15,594 - - 15,594 through profit and loss Available-for-sale financial assets - 74,414 1,608,038 - - - - 1,682,452 Loans and receivables - 293,571 894 6,206 595 2,169 20,662 324,097 Held-to-maturity financial assets ------Total 265,000 677,428 1,608,932 12,687 23,547 4,755 29,082 2,621,431 % distribution 10% 26% 62% 0% 1% 0% 1% 100%

Geographical distribution Supra- Nether- Germany Belgium France Other EU Non-EU Total as at 31 December 2010 national lands countries countries x € 1,000 Cash and balanced with central banks - 99,328 - 6.309 2.019 - - 105,972 Banks - 150,540 - 5,897 2,105 16,821 1,953 177,316 Financial assets held-for-trading - - - - 169 - - 169 Financial assets at fair value - - - - 13,856 - - 13,856 163 through profit and loss Available-for-sale financial assets - 91,410 1,418,905 - - 89,385 - 1,599,700 Loans and receivables - 470,823 569 8,250 884 2,461 13,279 496,266 2011 Held-to-maturity financial assets - 4,121 - - - - - 4,121 Total - 816,222 1,419,474 18,400 19,405 108,667 15,232 2,397,400 % distribution 0% 34% 59% 1% 1% 5% 0% 100%

The debt crisis in the PIIGS countries and the associated uncertainty led BinckBank to restructure its investment Annual Report portfolio in 2010 and to reduce its positions in Spanish and Irish bonds. The last Spanish bonds were sold in 2011.

BinckBank invests mainly in German central and lower-tier government paper, which under the Financial Supervision Act (Wft) have a solvency weight of 0%, and in German Öffentliche Pfandbriefe, which under the Wft have a solvency weight of 10%. The German Öffentliche Pfandbriefe is a particular type of bond which offers additional security to the holder under the German Pfandbriefe Act (Pfandbriefgesetz). Against the debt that the issuer of the bonds has to the holders, the issuer has a claim against one or more central or lower public authorities, known as the cover pool. The security consists in the fact that the issuer (the bank) has given the holders of the bonds a separate claim on the claim it has received from these central or lower public authorities that they can exercise if the issuer of the bonds fails to meet its obligations. This would entail a suspension of payments or a bankruptcy. A separate position is created for the holders of the covered bonds within the issuing bank (legally and also organisationally). This gives the holders of the covered bonds a separate and stronger position because they hold a preference in the conditions of the loan: they will be the first to be paid, and other creditors will have to wait their turn until this has been accomplished. In most cases, the lending conditions of the bond designate a party that will act as the representative of the bondholders in the event of a suspension of payments or bankruptcy. In the case of failure to pay interest or make repayments on the bonds in time, this representative (who is normally referred to as the ‘trustee’) requests the bank’s debtors to make their payments to them, the trustee, from then on instead of to the bank. (The payments are as it were conditionally ‘redirected’, on condition that suspension of payments or bankruptcy has occurred). The advantage of this construction for the bondholders is that they are not affected by the suspension of payments or bankruptcy of the bank (known as ‘bankruptcy remoteness’). As long as there is a positive difference between the total of the cover pool and what the bank has to pay to the bondholders, the bondholders will not suffer a loss (apart from possibly to some extent due to delays in payments). The higher quality is usually expressed in the higher rating of the covered bond. It should be noted that occasions in which the collateralisation structure actually had to be used are extremely rare. The last time this happened was in 1901. Of course, it is essential that the construction is legally ‘watertight’. The loan conditions are thus usually rather lengthy. Pfandbriefe cover pools are dynamic. Their composition can and usually does change over time, depending on the maturities of existing and newly issued Pfandbriefe.

The Pfandbriefe Act states that Pfandbriefe banks must test that the surplus value in the cover pool is at least 2% on a daily basis. German Pfandbriefe banks must report their positions in the cover pool of the issued Pfandbriefe on a quarterly basis. For German Öffentliche Pfandbriefe, the following criteria must be reported: •• The valuation of the cover pool and the associated surplus cover; •• The maturity profile of the cover pool compared to that of the outstanding Pfandbriefe; •• The percentage of derivatives used in the cover pool; •• The distribution across countries.

Valuation of the cover pool Three different methods for the valuation of the assets in the cover pool are used: • ‘Nennwert’ or face value is used for reporting country and maturity distribution; • ‘Barwert’ or net present value is used to test whether the surplus cover is still at the minimum level of 2%; • ‘Risikobarwert’ or risk-adjusted net cash value is the result of stress tests of the calculated net cash value for interest- rate and currency shocks.

Net present value The net present value is calculated by discounting all future cash values against the current yield curve. For European paper, the euro swap curve must be used. This is a generic euro yield curve for the whole eurozone, which does not reflect country- specific aspects. The calculated NPV may differ from the actual market value of the assets. This will be the case if the current interest rate for an asset is not the same as the swap interest rate. Pfandbriefe banks are not obliged to report on the basis of market values or estimates thereof. This aspect is however considered by market parties, such as credit rating agencies. In order to ensure a rating of AAA, in some cases it will therefore be necessary to maintain a surplus cover of more 164 than the legal minimum of 2%.

2011 Risk-adjusted net present value The net present value is calculated in order to determine the surplus value and for the conduct of (weekly) mandatory stress tests. These involve the use of various scenarios calculated on the basis of a sudden shift in the yield curve and/or exchange rates. If the result of the stress test is a shortfall in the cover, additional assets must be paid in to cover the difference. The stress tests can be conducted using three different methods: • A static approach using a prescribed parallel shift in the yield curve and prescribed movements in exchange rates; Annual Report • A dynamic approach based on market volatility over a recent period, for which legal minimum levels are set; • On the basis of internal risk models that must be approved by the German financial markets regulator BaFin.

BinckBank’s approach In its assessment of the surplus value in the cover registers, BinckBank looks initially at the surplus value reported on the basis of net present values. At year-end 2011, according to the latest available cover pool report BinckBank’s positions in German Öffentliche Pfandbriefe had surplus values of between 9.43% and 43.27%. This is compared to the exposure in the cover register to countries that BinckBank has designated as ‘weak’. BinckBank monitors the country risk in the cover register in two ways. First, the surplus cover in the cover register is compared to the reported exposure to weaker countries. The intention here is to establish whether surplus cover still exists if the exposure to weaker countries is deducted. Pfandbriefe for which more than 20% of the cover register consists of weaker countries are no longer purchased. We also look at the credit ratings of these Pfandbriefe, which includes the opinion of the rating agencies regarding the country risk in the Pfandbriefe in question. Credit risk weighting and capital requirement This table presents the credit risk weight with the capital requirement according to the standard method of Basel II.

Credit risk standard Risk weight Credit risk mitigation Risk- Capital approach as at 31 0% 10% 20% 50% 75% 100% Substi- Collateral weighted require- December 2011 tution assets ment x € 1.000 (8%) Claims or contingent claims on central 1,002,935 ------governments or central banks Claims or contingent claims on regional 37,637 ------governments or local authorities Claims or contingent claims on financial 29,209 950,597 326,310 - - (3,921) 160,190 12,815 institutions Claims or contingent claims on corporate ------clients Retail claims or contingent retail 311,282 - - - 312,469 - (5,537) (293,389) 10,157 813 claims Past due items ------Other receivables 1,512 - - - - 63,631 - - 63,631 5,090 Total 1,382,575 950,597 326,310 - 312,469 63,631 (9,458) (293,389) 233,978 18,718 165

Credit risk standard Risk weight Credit risk mitigation Risk- Capital approach as at 31 weighted require-

2011 0% 10% 20% 50% 75% 100% Substi- Collateral December 2010 tution assets ment x € 1.000 (8%) Claims or contingent claims on central 551,755 ------governments or central banks Annual Report

Claims or contingent claims on regional 24,992 ------governments or local authorities Claims or contingent claims on financial 4,869 1,160,503 182,800 - - 2,345 153,261 12,261 institutions Claims or contingent claims on corporate ------clients Retail claims or contingent retail 383,804 - - - 497,771 - (5,453) (492,318) - - claims Past due items - - - - - 72 - - 72 6 Other receivables - - - - - 70,212 - - 70,212 5,617 Total 965,420 1,160,503 182,800 - 497,771 70,284 (3,108) (492,318) 223,545 17,884 Pillar I – market risk The only market risk to which BinckBank is exposed under Pillar I is currency risk. Currency risk is the risk presented by movements in the value of items denominated in foreign currencies due to movements in exchange rates. It is BinckBank’s policy not to take active foreign-exchange trading positions. Currency positions can therefore only arise as a result of the facilitation of investment transactions by customers. The policy is to hedge currency positions arising from operating activities on the same day they occur. The Treasury department hedges currency positions during the day up until 22:00 hours CET. Currency positions arising after 22:00 hours are hedged on the next subsequent trading day. BinckBank considers this risk on currency positions to be acceptable.

Pillar I – operational risk Operational risk is generally the result of deficiencies in the daily processing and settlement of transactions with clients or other parties or in the procedures and actions designed to ensure prompt detection of errors, quantitative or qualitative deficiencies or limitations in human resources, deficient decision-making due to inadequate management information and non-compliance with internal control procedures.

BinckBank obtained approval from DNB to migrate from use of the basic indicator approach (BIA) to use of the standardised approach (SA) for measuring the operational risk as from the first quarter of 2011. Under the BIA, the operational risk is measured using a percentage prescribed by the regulator of 15% of the average operating income in the three preceding financial years. Under the SA, the operating income in the three preceding financial years is divided into various business lines with preset capital requirements of between 12% and 18%. The mandatory capital requirement for operational risk has declined, partly as a result of migration to the SA.

Standardised Approach as at 31 December 2011

Business Line Operational income Risk Capital 166 2009 2010 2011 weighting requirement Retail brokerage 129,896 120,285 126,659 12% 15,074

2011 Retail banking 43,825 43,587 38,907 12% 5,053 Agency services 8,758 12,605 12,219 15% 1,679 Asset management 3,743 8,369 5,790 12% 716 Total 186,222 184,846 183,575 22,522 Annual Report

Standardised Approach as at 31 December 2010

Business Line Operational income Risk Capital 2008 2009 2010 weighting requirement Retail brokerage 101,639 129,896 120,285 12% 14,073 Retail banking 40,640 43,825 43,587 12% 5,122 Agency services 5,882 8,758 12,605 15% 1,362 Asset management 847 3,743 8,369 12% 518 Total 149,008 186,222 184,846 21,075

Basic Indicator Approach as at 31 December 2010

Operational income Risk Capital 2008 2009 2010 weighting requirement Total 149,008 186,222 184,846 15% 26,003

The internal target is for annual losses on normal activities due to operational risks not to exceed 1% of gross commission income. ‘Losses due to operational risks’ here means: • The financial result of out-trades and reimbursement of clients; • Other direct loss due to faults in ICT systems, automated information processing and operating processes. Losses due to operational risk in 2011 amounted to 1.17% of total gross commission income and thus BinckBank did not remain within its internal limit. Operational losses in 2010 came to 0.94%. The assessment and control system for operational risk at BinckBank meets the following conditions: • Establishment of clearly allocated responsibilities; • Measurement, assessment and updating of current operational risk in the operational risk committee. • Maintenance and reporting of the loss database to the operational risk committee; • The assessment and control system is regularly subjected to an independent expert analysis; • The results of the periodic checks are discussed monthly by the operational risk committee and additionally an annual risk assessment is conducted to establish the risk appetite in the presence of the executive board, the directors of the business units and the heads of the support departments.

Risk can only be managed by means of an adequate management reporting process. At BinckBank, this process meets the following conditions: • Reporting of the effectiveness or otherwise of the controls to the business unit responsible on a regular basis, with an additional monitoring function reserved for the IAD. The IAD monitors that the controls are implemented by the second line of defence correctly, comprehensively and in a timely manner. The reporting by the monitor and ineffectiveness of controls are also reported to the operational risk committee; • The effectiveness of the controls is discussed by the operational risk committee. Appropriate measures are taken on this basis in the event of an unacceptable risk. The operational risk committee also gives its approval for new products and services to be introduced by BinckBank, whereby the emphasis is on the identification and management of the risk and the establishment of the relevant key controls for the product or service in question in the risk management system.

167 2011 Annual Report

Pillar II – interest-rate risk Interest-rate risk refers to the exposure to movements in the yield curve affecting future profitability. Interest-rate risk affects items in the balance sheet recognised under banks, loans and receivables, interest-bearing securities, other liabilities and customer deposits. BinckBank manages this risk in relation to its banking operations by actively matching the maturities of its assets and liabilities within certain limits.

Duration schedule as at 31 December 2011 < 1 month > 1 month > 1 year > 2 year > 5 Non- Total x € 1,000 < 1 year < 2 years < 5 years years interest bearing Assets Cash and balanced with central banks 320,214 - - - - - 320,214 Banks 264,497 5,000 - - - 9,458 278,955 Financial assets held-for-trading - - - - - 119 119 Financial assets at fair value through pprofit and - - - - - 15,594 15,594 loss Available-for-sale financial assets 131,265 864,789 568,594 117,804 - - 1,682,452 Loans and receivables 324,097 - - - - - 324,097 Held-to-maturity financial assets ------1,040,073 869,789 568,594 117,804 - 25,171 2,621,431

Liabilities Banks 28,161 - - - - - 28,161 Customer deposits 2,492,503 - - - - - 2,492,503 Financial liabilities held-for-trading - - - - - 155 155 Financial liabilities at fair value through profit and 168 - - - - - 1,013 1,013 loss 2,520,664 - - - - 1,168 2,521,832 2011 Duration schedule as at 31 December 2010 < 1 month > 1 month > 1 year > 2 years > 5 Non- Total x € 1,000 < 1 year < 2 years < 5 years years interest bearing Assets Cash and balanced with central banks 105,972 - - - - - 105,972 Annual Report Banks 169,203 5,005 - - - 3,108 177,316 Financial assets held-for-trading - - - - - 169 169 Financial assets at fair value through pprofit and - - - - - 13,856 13,856 loss Available-for-sale financial assets 46,000 420,605 713,622 419,473 - - 1,599,700 Loans and receivables 496,266 - - - - - 496,266 Held-to-maturity financial assets - 4,121 - - - - 4,121 817,441 429,731 713,622 419,473 - 17,133 2,397,400

Liabilities Banks 25,610 - - - - - 25,610 Customer deposits 2,258,290 - - - - - 2,258,290 Financial liabilities held-for-trading - - - - - 50 50 Financial liabilities at fair value through profit and - - - - - 1,485 1,485 loss 2,283,900 - - - - 1,535 2,285,435 Sensitivity analysis of interest-rate risk Interest-rate risk exists because of the possibility that changes in market interest rates can have a negative effect on future profitability. The interest-rate risk of the banking operations can best be illustrated by means of a sensitivity analysis. The sensitivity of the bank’s result and equity to parallel shifts in the yield curve is reported to the treasury committee on a monthly basis.

Risk of a gradual parallel movement of the yield curve A gradual movement in market interest rates (the yield curve) has an effect on the future interest income from collateralised lending and the investment portfolio, and on the interest BinckBank pays on savings and brokerage accounts. BinckBank manages this risk in relation to its banking operations by actively matching and keeping the maturities of its assets and liabilities within certain limits.

In these simulations at total level in euros the effect on the result of gradual movements in the yield curve of +200, +100, -100 and -200 basis points is shown during a period of one year after the balance sheet date with an unchanged interest base.

The effect on the result before tax over periods of one and two years after the balance sheet date is shown in the table below.

Sensitivity analysis of interest-rate result Effect on the result Gradual parallel yield-curve movement in basis points 31 December 2011 31 December 2010 x € 1,000 x € 1,000 Over a period of 1 year +200 64 (1,416) 169 +100 32 (697) -100 (1,503) (96)

2011 -200 (1,922) 643

Over a period of 2 years +200 7,365 5,025 +100 3,683 269 Annual Report -100 (7,068) (3,987) -200 (11,250) (4,585)

Risk of a sudden parallel movement of the yield curve In addition to gradual movements in the yield curve, sudden movements can also occur, known as interest-rate shocks. In BinckBank’s case, interest-rate shocks are reflected in changes in value in the investment portfolio. BinckBank has an investment portfolio made up of fixed-income securities which is diversified across various maturities. The actual investments in the portfolio are selected by the treasury committee. The portfolio is susceptible to gains and losses due to movements in the yield curve and the creditworthiness of the institutions issuing or guaranteeing the bonds.

The effective interest rate on the portfolio of fixed-income investments classified as available for sale is 1.72% (2010: 1.56%).

The effect on equity of an interest-rate shock of 100 basis points is shown in the table below (before tax):

Effect on capital Sudden parallel yield-curve movement in basis points 31 December 2011 31 December 2010 x € 1,000 x € 1,000 100 (13,796) (24,400) -100 13,796 20,400

The above figures relate only to a movement in the unrealised result. This will only lead to losses if the bank is forced to liquidate its investment portfolio as a result of substantial client withdrawals in combination with an interest-rate shock. Pillar II – liquidity risk Liquidity risk is the risk that BinckBank will not be able to meet its financial obligations. BinckBank gives high priority to the management of this risk, to ensure that it always holds enough liquid reserves and can always meet its financial obligations. Liquidity risk management is designed to manage the effects of BinckBank-specific stress factors – such as negative publicity, increased trading activity by clients (net purchases) and variation of competitors’ interest rates.

The following table shows the value of the undiscounted liabilities classified by remaining contractual maturity.

Remaining contractual maturity of liabilities On < 3 > 3 > 1 year > 5 years Total (undiscounted) as at 31 December 2011 demand months months < 5 years x € 1,000 < 1 year Liabilities Banks 28,161 - - - - 28,161 Customer deposits 2,496,840 - - - - 2,496,840 Financial liabilities held-for-trading - 155 - - - 155 Financial liabilities at fair value through - 1,013 - - - 1,013 profit and loss Total 2,525,001 1,168 - - - 2,526,169

Remaining contractual maturity of liabilities On < 3 > 3 > 1 year > 5 years Total (undiscounted) as at 31 December 2010 demand months months < 5 years x € 1,000 < 1 year Liabilities Banks 25,610 - - - - 25,610 170 Customer deposits 2,262,820 - - - - 2,262,820 Financial liabilities held-for-trading - 50 - - - 50

2011 Financial liabilities at fair value through - 1,485 - - - 1,485 profit and loss Total 2,288,430 1,535 - - - 2,289,965

If clients withdraw their assets en masse or client assets are used collectively to invest, there is a risk that BinckBank will

Annual Report be unable to meet its obligations to creditors. BinckBank’s liquidity risk policy therefore focuses primarily on managing

this aspect of liquidity risk.

The extent to which the maturities of assets and liabilities match is of fundamental importance to BinckBank. It is unusual for banks to achieve complete maturity matching of assets and liabilities because transactions are frequently not predictable and are also extremely diverse in nature. The maturities of assets and liabilities and the scope for replacing interest-bearing liabilities as and when they mature in an economically acceptable manner are important factors in the assessment of the bank’s liquidity and the extent to which the bank is exposed to movements in interest rates and exchange rates.

At the end of December BinckBank had an ample position in immediately available liquid assets. BinckBank also has repo facilities with external banks to safeguard its liquidity position. Should these measures not be adequate, BinckBank can use its Target 2 facility at the central bank to raise additional cash secured by the investment portfolio (marginal lending facility). This avoids a situation in which due to high cash outflows, BinckBank is forced to liquidate its investment portfolio at distressed levels.

BinckBank’s liquidity policy includes checks, warning limits and additional measures in the event of high cash outflow due to client withdrawals or investments. The liquidity policy is formulated in a liquidity contingency plan.

The following table presents the fair value of the financial assets and liabilities based on expected remaining maturity. Assets maturing within two weeks are treated as being available on demand. Customer deposits are treated as available on demand in the table. In practice, a longer maturity is allocated to these products. The positions as at year end are representative of the positions during the year. In addition, the loan facilities and possibilities for liquidation of the interest-bearing securities are shown. This concerns fixed-income securities which can be traded in an active market or used as collateral for a loan from DNB. Maturity calendar as at On < 3 months > 3 months > 1 year > 5 years Total 31 December 2011 demand < 1 year < 5 years x € 1,000 Assets Cash and balanced with central 320,214 - - - - 320,214 banks Banks 278,955 - - - - 278,955 Financial assets held-for-trading - 119 - - - 119 Financial assets at fair value - 15,594 - - - 15,594 through profit and loss Available-for-sale financial - 144,611 384,549 1,153,292 - 1,682,452 assets Loans and receivables 290,097 34,000 - - - 324,097 Held-to-maturity financial assets ------889,266 194,324 384,549 1,153,292 - 2,621,431 Guarantees - 47 155 346 2,839 3,387 889,266 194,371 384,704 1,153,638 2,839 2,624,818

Liabilities Banks 28,161 - - - - 28,161 Customer deposits 2,492,503 - - - - 2,492,503 Financial liabilities held-for- - 155 - - - 155 171 trading Financial liabilities at fair value - 1,013 - - - 1,013 through profit and loss 2011 2,520,664 1,168 - - - 2,521,832

Liquidity surplus / deficit on (1,631,398) 193,203 384,704 1,153,638 2,839 102,986 basis of contractual maturities Annual Report Credit, lending facilities and 1,682,452 (144,611) (384,549) (1,153,292) - - possibilities for liquidation

Liquidity surplus / deficit taking account of credit, lending 51,054 48,592 155 346 2,839 102,986 facilities and possibilities for liquidation Maturity calendar as at On < 3 months > 3 months > 1 year > 5 years Total 31 December 2010 demand < 1 year < 5 years x € 1,000 Assets Cash and balanced with central 105,972 - - - - 105,972 banks Banks 169,174 5,034 - 3,108 - 177,316 Financial assets held-for-trading - 169 - - - 169 Financial assets at fair value - 13,856 - - - 13,856 through profit and loss Available-for-sale financial assets - 86,514 362,173 1,151,013 - 1,599,700 Loans and receivables 476,266 20,000 - - - 496,266 Held-to-maturity financial assets - - 4,121 - - 4,121 751,412 125,573 366,294 1,154,121 - 2,397,400 Guarantees - 225 55 236 2,413 2,929 751,412 125,798 366,349 1,154,357 2,413 2,400,329

Liabilities Banks 25,610 - - - - 25,610 Customer deposits 2,258,290 - - - - 2,258,290 Financial liabilities held-for- - 50 - - - 50 trading 172 Financial liabilities at fair value - 1,485 - - - 1,485 through profit and loss 2,283,900 1,535 - - - 2,285,435 2011

Liquidity surplus / deficit on (1,532,488) 124,263 366,349 1,154,357 2,413 114,894 basis of contractual maturities

Credit, lending facilities and Annual Report

1,603,821 (86,514) (366,294) (1,151,013) - - possibilities for liquidation

Liquidity surplus / deficit taking account of credit, lending 71,333 37,749 55 3,344 2,413 114,894 facilities and possibilities for liquidation

42. Events after balance sheet date An amended remuneration policy in accordance with the Regulation for a Controlled Remuneration Policy in the Financial Supervision Act (WFT) introduced by De Nederlandsche Bank in 2011 will be submitted to shareholders for approval at the shareholders’ meeting on 23 April 2012. The intention however is to apply the amended remuneration policy with retroactive effect to the 2011 financial year. If the shareholders approve the amended remuneration policy, part of the variable performance fee will be paid in BinckBank shares. The effect of the payment in shares will be reported on allocation of the shares, which will take place on the day following the shareholders’ meeting. The amended remuneration policy will not materially affect the reported equity and result for 2011. Company balance sheet (before appropriation of profit)

Note 31 December 2011 31 December 2010 x € 1,000 x € 1,000 Assets Cash and balanced with central banks c 320,211 105,970 Banks d 270,905 171,254 Loans and receivables e 324,097 496,266 Bonds and other fixed-income securities f 1,682,452 1,603,821 Equities and other non-fixed-income securities g 15,713 14,025 Investment in associates and joint ventures h 11,170 303,711 Intangible assets i 292,148 320,348 Property, plant and equipment j 45,805 43,520 Current tax k 3,374 4,949 Other assets m 33,763 9,375 Prepayments and accrued income n 37,659 49,054 Derivatives positions held on behalf of clients 20 311,282 383,804 Total assets 3,348,579 3,506,097

Liabilities Banks d 28,161 25,610 173 Customer deposits o 2,492,503 2,258,290 Current tax k 75 6 Deferred tax l 16,633 12,695 2011 Other liabilities p 14,008 341,424 Accruals and deferred income q 14,246 14,014 Derivatives positions held on behalf of clients 20 311,282 383,804 Provisions r 2,155 1,268 Annual Report

Total liabilities 2,879,063 3,037,111

Issued share capital 7,450 7,450 Share premium 373,422 373,422 Treasury shares (3,954) (3,335) Revaluation reserve (973) (2,610) Other reserves 59,361 49,819 Unappropriated profit 34,210 44,240 Equity s 469,516 468,986 Total liabilities 3,348,579 3,506,097

Company income statement

2011 2010 x € 1,000 x € 1,000 Share in results in associates and joint ventures (after tax) (2,189) 15,624 Other results (after tax) 36,399 28,616 Net result 34,210 44,240 Company statement of changes in equity

Note Issued Share Treasury Revalua- Legal Other Unappro- Total x € 1,000 share premium shares tion reserves reserves priated equity capital reserve reserve profit 1 January 2011 7,450 373,422 (3,335) (2,610) - 49,819 44,240 468,986 Unrealised gain on available-for- s - - - 5,080 - - - 5,080 sale assets (after tax) Realisation of revaluations s - - - (3,443) - - - (3,443) through profit and loss Result recognised directly in equity - - - 1,637 - - - 1,637 Result for the year ------34,210 34,210 Total income and expense - - - 1,637 - - 34,210 35,847 Payment of final dividend FY10 s - - - - - (20,022) - (20,022) Payment of interim dividend FY11 s - - - - - (14,831) - (14,831) Sale of shares to executive board s - - 345 - - 155 - 500 and employees Buy-back shares s - - (964) - - - - (964) Transfer of retained earnings to - - - - - 44,240 (44,240) - other reserves 31 December 2011 7,450 373,422 (3,954) (973) - 59,361 34,210 469,516

Note Issued Share Treasury Revalua- Legal Other Unappro- Total 174 x € 1,000 share premium shares tion reserves reserves priated equity capital reserve reserve profit 1 January 2010 7,607 386,978 (18,097) 10,616 3,173 42,921 47,161 480,359

2011 Unrealised gain on available-for- s - - - (14,478) - - - (14,478) sale assets (after tax) Realisation of revaluations s - - - 1,252 - - - 1,252 through profit and loss Reserve for revaluation of s - - - - (3,173) - - (3,173)

Annual Report associates

Result recognised directly in equity - - - (13,226) (3,173) - - (16,399) Result for the year ------44,240 44,240 Total income and expense - - - (13,226) (3,173) - 44,240 27,841 Payment of final dividend FY09 s - - - - - (22,977) - (22,977) Payment of interim dividend FY10 s - - - - - (17,788) - (17,788) Grant of rights to shares s - - - - - 101 - 101 Sale of shares to executive board s - - 1,053 - - 401 - 1,454 and employees Buy-back shares s - - (4) - - - - (4) Cancelled shares s (157) (13,556) 13,713 - - - - - Transfer of retained earnings to - - - - - 47,161 (47,161) - other reserves 31 December 2010 7,450 373,422 (3,335) (2,610) - 49,819 44,240 468,986 Notes to the company financial statements

a. General

Company information BinckBank N.V. is a company established in the Netherlands with its domicile in Amsterdam, whose shares are publicly traded. BinckBank N.V. provides conventional and internet broking services in securities and derivatives transactions for private and professional investors.

The company financial statements for BinckBank for the period ending on 31 December 2011 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 8 March 2012.

Amsterdam,

Executive board: Supervisory board: K.N. Beentjes (chairman) C.J.M. Scholtes (chairman) E.J.M. Kooistra (CFO) J.K. Brouwer P. Aartsen L. Deuzeman N. Bortot A.M. van Westerloo

Presentation of the financial statements Utilising the option provided by Part 9 of Book 2 of the Netherlands Civil Code, BinckBank has prepared its company 175 financial statements using the same accounting principles as those used for the consolidated financial statements. In accordance with the provisions of Article 2:402 of the Netherlands Civil Code, the company income statement shows only the share in results of subsidiaries and associates after tax and other profits after tax. 2011

b. Accounting principles

General Details of the accounting principles can be found in the notes to the consolidated financial statements and, unless

Annual Report otherwise stated, apply equally to the company financial statements.

The statement as referred to in Articles 2:379 and 2:414 of the Netherlands Civil Code is filed with the Trade Register of the Chamber of Commerce in Amsterdam.

Associates The investments in group companies are recognised at net asset value. The reporting dates of these companies are the same and the accounting principles applied to their financial reporting are in accordance with those applied by BinckBank for similar transactions and events in similar circumstances. Notes to the company balance sheet

31 December 2011 31 December 2010 x € 1,000 x € 1,000 c. Cash and balanced with central banks 320,211 105,970 This item includes all cash in legal tender, including bank notes and coins in foreign currency, and any credit balances available on demand from the central banks in countries where BinckBank has offices.

d. Banks Due from banks 270,905 171,254 This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises: Credit balances available on demand 156,009 163,113 Call money 105,438 5,033 Receivable from DNB in relation to the Deposit Guarantee 9,458 3,108 Scheme for DSB Bank 270,905 171,254

176 The call money receivables have original maturities of less than three months. Interest is received on these balances at

2011 a variable rate based on EONIA or EURIBOR. For the receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank, see note 8 to the consolidated statement of financial position.

Annual Report Due to banks 28,161 25,610

BinckBank has sweeping arrangements with various banks whereby the debit and credit balances in a large number of bank accounts are regulated with a fixed treasury contra- account. This is only visible on the statement for the next business day; therefore at year-end BinckBank has an obligation t0 a single bank account for a very short period.

e. Loans and receivables 324,097 496,266 This item comprises receivables from private sector clients, including overnight loans and overdrafts collateralised by securities and bank guarantees (collateralised loans). All loans and receivables have a remaining duration of less than one year.

The analysis is as follows: Receivable from government institutions 34,000 20,000 Receivables collateralised by securities 287,115 470,741 Receivables collateralised by bank guarantees 2,944 5,453 Other receivables 462 558 Loans and receivables, gross 324,521 496,752 Less: impairment provision (424) (486) 324,097 496,266 31 December 2011 31 December 2010 x € 1,000 x € 1,000 The interest rate is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after execution of collateral (securities and bank guarantees).

f. Bonds and other fixed-income securities 1,682,452 1,603,821 This concerns the investment portfolio consisting of: Available-for-sale financial assets 1,682,452 1,599,700 Held-to-maturity financial assets - 4,121 1,682,452 1,603,821

Financial assets at fair value through profit and loss This item comprises: Government bonds / government-guaranteed bonds 676,838 432,322 Other bonds 1,005,614 1,167,378 1,682,452 1,599,700 This item concerns a portfolio of interest-bearing securities with remaining maturities of between 0 and 3 years.

Held-to-maturity financial assets This item comprises: 177 Government bonds / government-guaranteed bonds - 4,121 - 4,121 2011 The portfolio interest-bearing securities classefied as held- to-maturity financial assets concerned a Dutch government bond and has been redeemed in 2011.

g. Equities and other non-fixed-income securities 15,713 14,025 Annual Report

The trading portfolio comprises: SRD derivatives payables 119 169 Equity positions in relation to SRD obligations 15,594 13,856 15,713 14,025

In 2010 BinckBank commenced its offering of SRD (Service de Règlement Différé) contracts in France. For further information regarding this financial instrument, see note 9 to the consolidated financial statements. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 h. Investment in associates and joint ventures 11,170 303,711 This item comprises: Group companies 7,951 300,644 Other associates 1,510 2,174 Joint ventures 1,709 893 11,170 303,711

Movements during the year were as follows:

Balance as at 1 January 303,711 302,997 Capital increases and acquisitions 7,400 5,513 Dividends and capital refunds (297,752) (17,250) Result in associates and joint ventures (2,189) 15,624 Movement in revaluation reserve for associates - (3,173) Balance as at 31 December 11,170 303,711

The item investment in associates and joint ventures includes among others investments in TOM Holding B.V., BeFrank N.V. and ThinkCapital Holding B.V.

178 The item dividends and capital refunds includes dividends received from Syntel Beheer B.V. and repatriation of the fully available capital of Binck België N.V.

2011 Overview of group companies The following statement lists the group companies.

Place Country Interest Interest year-end 2011 year-end 2010 Annual Report Binck België N.V. Antwerp Belgium 100% Bewaarbedrijf BinckBank B.V. Amsterdam Netherlands 100% 100% Syntel Beheer B.V. Reeuwijk Netherlands 100% 100% ThinkCapital Holding B.V. Amsterdam Netherlands 60% 60%

The activities of Binck België B.V. were discontinued in 2010 and the company was liquidated in December 2011.

For the other capital holdings, see note 13 to the consolidated statement of financial position on associates and joint ventures. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 i. Intangible assets 292,148 320,348

The movements in 2011 were as follows: Brand Core Customer Software Goodwill Total name deposits base Balance as at 1 January 2011 12,562 58,866 91,741 4,250 152,929 320,348 Investments - - - 1,713 - 1,713 Disposals - cost - - - (414) - (414) Disposals - cumulative amortisation - - - 414 - 414 Amortisation (6,281) (8,409) (13,106) (2,117) - (29,913) Balance as at 31 December 2011 6,281 50,457 78,635 3,846 152,929 292,148

Cumulative cost 31,405 84,095 131,058 11,621 152,929 411,108 Cumulative amortisation and impairments (25,124) (33,638) (52,423) (7,775) - (118,960)

Balance as at 31 December 2011 6,281 50,457 78,635 3,846 152,929 292,148

Amortisation period (years) 5 10 5 - 10 5

The movements in 2010 were as follows: 179 Brand Core Customer Software Goodwill Total name deposits base

2011 Balance as at 1 January 2010 18,843 67,276 104,846 3,975 152,929 347,869 Investments - - - 2,022 - 2,022 Disposals - cost - - - (359) - (359) Disposals - cumulative amortisation - - - 359 - 359 Amortisation (6,281) (8,410) (13,105) (1,747) - (29,543) Annual Report

Balance as at 31 December 2010 12,562 58,866 91,741 4,250 152,929 320,348

Cumulative cost 31,405 84,095 131,058 10,322 152,929 409,809 Cumulative amortisation and impairments (18,843) (25,229) (39,317) (6,072) - (89,461) Balance as at 31 December 2010 12,562 58,866 91,741 4,250 152,929 320,348

Amortisation period (years) 5 10 5 - 10 5 31 December 2011 31 December 2010 x € 1,000 x € 1,000 j. Property, plant and equipment 45,805 43,520

The movements in 2011 were as follows: Real Fixtures, Computer Other Total estate fittings and hardware equipment Balance as at 1 January 2011 24,665 7,852 10,999 4 43,520 Investments 4,829 435 2,176 12 7,452 Disposals - cost - - (322) (18) (340) Disposals - cumulative depreciation - - 322 18 340 Depreciation and amortisation (579) (948) (3,634) (6) (5,167) Balance as at 31 December 2011 28,915 7,339 9,541 10 45,805

Cumulative cost 29,827 8,666 19,318 12 57,823 Cumulative depreciation and impairments (912) (1,327) (9,777) (2) (12,018) Balance as at 31 December 2011 28,915 7,339 9,541 10 45,805

Depreciation period in years 50 5 - 10 5 5

The movements in 2010 were as follows: Real Fixtures, Computer Other Total 180 estate fittings and hardware equipment Balance as at 1 January 2010 - 345 11,874 7 12,226 2011 Investments 24,998 8,125 2,939 - 36,062 Disposals - cost - (958) (1,908) - (2,866) Disposals - cumulative depreciation - 958 1,908 - 2,866 Depreciation and amortisation (333) (618) (3,814) (3) (4,768)

Annual Report Balance as at 31 December 2010 24,665 7,852 10,999 4 43,520

Cumulative cost 24,998 8,231 17,464 18 50,711 Cumulative depreciation and impairments (333) (379) (6,465) (14) (7,191) Balance as at 31 December 2010 24,665 7,852 10,999 4 43,520

Depreciation period in years 50 5 - 10 5 5

The investment in real estate includes prepayments in relation to a leasehold (operating lease) which expires on 15 April 2056. In 2011, an amount of € 242,000 in relation to amortisation of the leasehold is included in depreciation and amortisation (2010: € 208,000). 31 December 2011 31 December 2010 x € 1,000 x € 1,000 k. Current tax Current tax assets 3,374 4,949 Current tax liabilities (75) (6) Net asset / (liability) 3,299 4,943

The balance as at year-end 2011 relates mainly to the reporting period.

l. Deferred tax Composition Deferred tax assets - - Deferred tax liabilities (16,633) (12,695) Net asset / (liability) (16,633) (12,695)

Origin of deferred tax assets and liabilities: Available-for-sale financial assets (824) (720) Goodwill and other intangible assets (10,948) (8,211) Depreciation period differences for non-current assets (3,997) (2,900) Other assets / (liabilities) (864) (864) Net asset / (liability) (16,633) (12,695) 181

m. Other assets 33,763 9,375

2011 This item comprises: Trade receivables 325 824 Receivables relating to securities sold, but not yet delivered 31,447 7,270 Other receivables 1,991 1,281 33,763 9,375 Annual Report

- of which receivables from group companies 7 141

Trade receivables, receivables relating to securities sold but not yet delivered and other receivables have maturities of less than one year.

n. Prepayments and accrued income 37,659 49,054 This item comprises: Interest receivable 28,678 35,338 Commission receivable 5,960 9,772 Other prepayments and accrued income 3,021 3,944 37,659 49,054 31 December 2011 31 December 2010 x € 1,000 x € 1,000 o. Customer deposits 2,492,503 2,258,290 This item comprises: Demand deposits savings accounts 518,954 717,181 Demand deposits current accounts 1,973,549 1,541,109 2,492,503 2,258,290

p. Other liabilities 14,008 341,424 This item comprises: SRD derivative payables 155 50 Equity positions in relation to SRD obligations 1,013 1,485 Liabilities in respect of securities transactions not yet settled 2,230 34,939 Tax and social security contributions 2,896 2,918 Amounts owed to group companies 124 294,403 Trade payables 5,833 6,455 Other liabilities 1,757 1,174 14,008 341,424 In 2010 BinckBank commenced its offering of SRD (Service de Règlement Différé) contracts in France. For further information regarding this financial instrument, see note 9 to the consolidated financial statements. 182 q. Accruals and deferred income 14,246 14,014

2011 This item comprises: Accrued interest 4,337 4,530 Employee expenses 5,520 5,738 Stock exchange and clearing costs payable 654 975 Other accruals and deferred income 3,735 2,771 Annual Report

14,246 14,014

Employee expenses under this heading mostly concern performance-related pay to board members and employees of BinckBank.

r. Provisions 2,155 1,268 The movement in the provision for obligations under the deposit guarantee scheme was as follows: Balance as at 1 January 1,268 40 Released (667) (40) Addition 1,554 683 Other movements - 585 Balance as at 31 December 2,155 1,268

The item other provisions includes restructuring and legal disputes. 31 December 2011 31 December 2010 x € 1,000 x € 1,000 s. Equity 469,516 468,986 Issued share capital 7,450 7,450 A total of 74,500,000 ordinary shares were in issue, each with a nominal value of € 0.10. The share capital is fully paid up. 1,568,928 shares were cancelled on 9 July 2010.

Number Amount Number Amount Balance as at 1 January 74,500,000 7,450 76,068,928 7,607 Cancellation of treasury shares - - (1,568,928) (157) Balance as at 31 December 74,500,000 7,450 74,500,000 7,450

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium reserve 373,422 373,422 Balance as at 1 January 373,422 386,978 Cancellation of treasury shares - (13,556) Balance as at 31 December 373,422 373,422

The share premium reserve is exempt from tax. 183 Treasury shares (3,954) (3,335) 2011 Number Amount Number Amount Situation at opening date 381,511 (3,335) 2,070,509 (18,097) Issued to executive board and employees (39,491) 345 (120,495) 1,053 Cancellation of treasury shares - - (1,568,928) 13,713 Annual Report

Buy-back of own shares 122,097 (964) 425 (4) Situation at end of financial year 464,117 (3,954) 381,511 (3,335)

The carrying amount of the treasury shares as at year-end 2011 was measured at the average purchase price of € 8.52. The change in equity in respect of treasury shares reflects the amounts bought and sold. The quoted share price as at year-end 2011 was € 8.33 (2010: € 11.60). 31 December 2011 31 December 2010 x € 1,000 x € 1,000 Revaluation reserve (973) (2,610) Balance as at 1 January (2,610) 10,616 Unrealised result on available-for-sale financial assets 5,625 (18,982) Realisation of revaluations through profit and loss (3,443) 1,252 Tax on unrealised gains and losses on available-for-sale (545) 4,504 financial assets Balance as at 31 December (973) (2,610)

The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets. In the determination of the freely available profit, any negative revaluation reserve is deducted from the reserves available for distribution.

Other reserves 59,361 49,819 Balance as at 1 January 49,819 42,921 Grant of rights to shares - 101 Sale of shares to executive board and employees 155 401 Payment of final dividend (20,022) (22,977) Payment of interim dividend (14,831) (17,788) 184 Appropriation of profit for previous year 44,240 47,161 Balance as at 31 December 59,361 49,819 2011 Unappropriated result 34,210 44,240 Balance as at 1 January 44,240 47,161 Addition to other reserves (44,240) (47,161) Result for the year 34,210 44,240

Annual Report Balance as at 31 December 34,210 44,240

Ernst & Young Ernst & Young Total Accountants Other services x € 1,000 x € 1,000 x € 1,000 t. Note on audit expenses The following fees were charged to the company, its subsidiaries and other consolidated entities by the audit firm Ernst & Young Accountants LLP and other divisions of Ernst & Young as referred to in Section 2:382a of the Netherlands Civil Code:

2011 Audit of the financial statements, including audit of statutory financial statements and other statutory audits of 440 - 440 subsidiary companies and consolidated entities Other audit services 87 - 87 Other non-audit services 39 - 39 566 - 566 2010 Audit of the financial statements, including audit of statutory financial statements and other statutory audits of 368 - 368 subsidiary companies and consolidated entities Other audit services 57 - 57 Other non-audit services - 7 7 185 425 7 432

2011 2011 2010 x € 1,000 x € 1,000 u. Off balance sheet commitments Contingent liabilities Liabilities in respect of contracts of suretyship and guarantees 3,264 2,816 Annual Report

Liabilities in respect of irrevocable facilities - -

With the acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the Dutch Shareholders’ Association (the VEB). If BinckBank terminates the VEB agreement, it will be liable to pay an amount equal to the custody fee and dividend commission paid by each client of Alex Bottom- Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each client on exceeding set limits. Lease commitments The company has leases and service contracts for office premises in the Netherlands, Belgium, France, Spain and Italy. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined annual expense relating to office rents and operating lease payments for the vehicles at year-end 2011 was € 2.0m (2010: € 3.5m).

2011 2010 x € 1,000 x € 1,000 The aged analysis of the outstanding liabilities is as follows: Within one year 2,001 1,774 One to five years 1,845 2,731 Longer than five years 47 -

2011 Investor compensation scheme Despite the fact that all banks and investment firms in the Netherlands are subject to regulation by DNB and the Netherlands Authority for the Financial Markets (AFM), a bank or investment firm may encounter problems with payments. In this case, the investor compensation scheme guarantees a minimum level of protection in the event that the bank or investment firm cannot meet its obligations arising from the investment services it provides to its clients. Annual Report

The investor compensation scheme provides a guarantee of up to € 20,000 per person per institution.

v. Remuneration of the executive board and the supervisory board The information on the remuneration of members of the executive board and members of the supervisory board is given in the consolidated financial statements (page 144). Other data Independent auditor’s report

To: the General Meeting of Shareholders of BinckBank N.V.

Report on the financial statements We have audited the accompanying financial statements 2011 of BinckBank N.V., Amsterdam. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2011, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes, comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise the company balance sheet as at 31 December 2011, company income statement and company statement of changes in equity for the year then ended and the notes, comprising a summary of the accounting principles and other explanatory information.

Management’s responsibility Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility 187 Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical

2011 requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Annual Report

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December, 2011 and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code.

Opinion with respect to the company financial statements In our opinion, the company financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December, 2011 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code. Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the management board report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code.

Amsterdam, 8 March 2012

Ernst & Young Accountants LLP

Signed by N.G.D. Warmer

188 2011 Annual Report

Provisions of the articles of association regarding priority shares (articles 15 and 21) The rights attached to the priority shares include the right to make non-binding nominations for appointment to the company’s supervisory board and executive board and to take various other actions. The priority shares are held by Stichting Prioriteit Binck, Amsterdam. This foundation’s board, which consists of three members, is appointed by the supervisory board and executive board of the company.

The board members of Stichting Prioriteit Binck are: C.J.M. Scholtes J.K. Brouwer K.N. Beentjes

Provisions of the articles of association in respect of profit appropriation (article 32) 1. The company may only make distributions to the shareholders if the company’s equity exceeds its issued and paid- up share capital plus the reserves required to be held by law or by the articles of association. 2. Firstly – and only insofar as profits allow – an amount equal to six percent (6%) of the nominal value of the priority shares will be distributed on these shares. 3. The foundation will determine the extent to which the remaining profits will be transferred to reserves. Profits remaining after application of subsection 2 and the first sentence of this subsection will be at the disposal of the general meeting of shareholders. Any amounts not distributed will be transferred to the company’s reserves. 4. Withdrawals from distributable reserves may be made pursuant to a resolution by the general meeting of shareholders, subject to the prior consent of the foundation. 5. The executive board may resolve to allow the company to make interim distributions, providing it demonstrates in the form of an interim statement of assets and liabilities as referred to in Section 105(4), Book 2 of the Netherlands Civil Code that it complies with item 1 above and subject to the prior consent of the foundation. The distributions referred to in this subsection may be made in cash, in shares in the company’s equity or in marketable rights thereto. 189 6. The general meeting of shareholders may resolve to declare that distributions on shares other than interim distributions as referred to in subsection 5 of this article (whether at the shareholders’ discretion or otherwise) may,

2011 instead of being made in cash, be made fully or partly (whether at the shareholders’ discretion or otherwise) in: a. ordinary shares (which will, if desired and possible, be charged to the share premium reserve) or marketable rights to ordinary shares, or b. equity instruments of the company or marketable rights thereto. A resolution as referred to in the previous sentence may only be passed after being proposed by the executive board and approved by the supervisory board. Annual Report A proposal to pass a resolution as referred to in b will be submitted only after consultation with Euronext Amsterdam N.V. 7. No distribution will be made to the company in respect of shares it holds in its own capital or on shares for which the company holds depositary receipts. 8. The calculation of the profit distributable on shares will disregard shares that are not eligible, pursuant to subsection 7, for such distribution. 9. Once a resolution to make a distribution has been passed, the amount will be declared payable within fourteen days. An entitlement to receive a distribution will lapse five years after the date on which the amount is declared payable, and the said amount will then revert to the company.

Proposal for profit appropriation On the proposal of the foundation, € 16,210,000 will be transferred to the reserves. An interim dividend of € 0.20 per share has already been paid in respect of 2011. The remainder is at the disposal of the general meeting of shareholders. It is proposed to distribute this in the form of a final dividend of € 0.24 per ordinary share.

The profit appropriation will then be as follows: x € 1,000 Profit in 2011 34,090 Less: Transferred to other reserves (1,379) Less: Interim dividend paid for 2011 (14,831) At shareholders’ disposal 17,880 This proposal is not reflected in the balance sheet. Principal subsidiaries Foreign offices

Bewaarbedrijf BinckBank B.V. BinckBank Belgium Barbara Strozzilaan 310 De Keyserlei 58 1083 HN Amsterdam 2018 Antwerpen Telephone (020) 522 03 30 Belgium Telephone +32 3 303 3133 Syntel Beheer B.V. www.binck.be Reeuwijkse Poort 114 2811 MX Reeuwijk BinckBank France Telephone (0182) 398 888 102-106, rue Victor Hugo www.syntel.nl 92300-Levallois-As atret CEDEX France Executive Board: Telephone +33 170 36 70 62 H. Krijgsman www.binck.fr K.N. Beentjes BinckBank Italy ThinkCapital Holding B.V. Via Ventura 5 Barbara Strozzilaan 310 20134 Milano 1083 HN Amsterdam Italy Telephone (020) 314 96 70 Telephone +39 02 217 11 380 www.thinkcapital.nl www.binck.it

Executive Board: BinckBank Spain M. Rozemuller Trading name: Alex Vermogensbank Spanje 190 G. Koning Urbanizacion Marbella Real, local 15 Carretera de Cadiz, km 178,7

2011 29602 Marbella Malaga Spain Telephone +34 952 92 4011 www.alexspanje.com Annual Report

BinckBank N.V. Barbara Strozzilaan 310 1083 HN Amsterdam The Netherlands

Correspondence address P.O. Box 75047 1070 NA Amsterdam The Netherlands

Tel: +31 (0)20 522 03 30 Fax: +31 (0)20 320 41 76

Internet: www.binck.com

BinckBank N.V., established in Amsterdam and entered in the Trade Register of the Amsterdam Chamber of Commerce under no. 33 16 22 23.

Investor Relations Tel: +31 (0)20 522 03 72 Email: [email protected]

191 2011 Annual Report

Colophon Photography Edith Paol, Amsterdam BinckBank N.V. Barbara Strozzilaan 310 1083 HN Amsterdam The Netherlands

P.O. Box 75047 1001 NA Amsterdam The Netherlands t +31 20 606 26 66 f +31 20 320 41 76 e [email protected] i www.binck.nl