PRESS RELEASE
For additional information, please
contact:
1 March 2013
M.G.F.M.V. Janssen
Secretary to the Managing Board
T : +31 20 557 52 30
I : www.kasbank.com
Profit recovery, further increase in client satisfaction
 Total profit increased in 2012 to €15.5 million (+52%), operating profit 7%
higher
 Fees and commission income increased by 2%, Assets under Administration
increased by over 10% to €303 billion
 Interest income 11% lower as a result of the historic low interest rates in the
financial markets
 Continued cost containment, operating expenses 1% lower than in 2011
 Overall market position in Europe stronger as a result of the partnership with
dwpbank and a successful approach to the Dutch institutional market
 Continued rise in client satisfaction, supported by industry recognition through
winning various awards in 2012 (IT Innovation Award, European Custodian of
the Year 2012).
 €0.64 per share will be proposed as dividend for 2012. This is equal to 60% of
the total result for 2012
Overview of key figures
Profit
Operational profit
Income
Assets under Administration
2012
2011
Movement
€ 15.5. mln
€ 10.2 mln
52%
€ 8.6 mln
€ 8.0 mln
7%
€ 117.7 mln
€ 115.3 mln
2%
€ 303 mld
€ 276 mld
10%
Total earnings per share
€ 1.06
€ 0.70
Dividend per share
€ 0.64
€ 0.50
BIS-ratio (ultimo)
23%
26%
BIS-ratio (average)
21%
23%
51%
28%
General
Although the financial markets showed somewhat more confidence in the European project in
the second half of 2012, the situation remains far from stable. Mutual confidence between
banks is extremely limited and interest rates remain exceptionally low. This instability makes
1/8
the entire sector very cautious and thereby causing, among other things, low transaction
volumes on European stock exchanges.
KAS BANK successfully consolidated its position in 2012. Although interest income decreased
as expected, Assets under Administration increased to over €300 billion and fee and
commission income therefore increased as well. Our low risk profile combined with traditional
high levels of liquidity and solvency has lead to a reaffirmation of our A- credit rating in 2012.
Quote from the chairman
According to Albert Roell, chairman of KAS BANK’s Board, ‘2012 was very much about the
European partnership with dwpbank, in which KAS BANK has found a stable and reliable
partner. With dwpbank we will further develop both our businesses in our core markets (The
Netherlands and Germany) and Europe. Both partners, as independent and neutral specialists,
have identified considerable business opportunities. With offering safe and reliable solutions
that enable seamless integration of client requirements, one can truly say that we focus on
prioritizing our client's interests. Increasing regulatory changes require a specialist like KAS
BANK, with a specific focus on continuity, neutrality and quality of services delivered.
Increasing regulatory changes require a specialist like KAS BANK, with a specific focus on
continuity, neutrality and quality of services delivered. Our clients - pension funds, insurers,
asset managers, banks and brokers, have yet again valued our services in 2012 and awarded
KAS BANK with higher client satisfaction ratings.’
Dividend proposal
KAS BANK will propose a final dividend in cash for 2012 of € 0.31 per ordinary KAS BANK
share to the General Meeting of Shareholders. An interim dividend of € 0.33 per ordinary
share has already been paid for 2012. The proposal therefore meets the objective of paying a
dividend of 60%-80% of the total profit under normal market conditions. Given the
developments in the financial sector and the importance of a strong capital position, we will
review this objective on an annual basis.
Projected results 2013
Although a moderate recovery of confidence seems to be occurring in Europe, it is too early to
state anything with any degree of certainty regarding the development of interest rates or
growth in volumes on stock exchanges.
The postponed sale of the interests in LCH.Clearnet of circa € 3 million after taxes, which is
expected to take place in 2013, and an expected book profit from the sale of the Spuistraat
office of expected €4-6 million before taxes, will contribute to the total profit for 2013. KAS
BANK’s contribution, which is based on the deposit guarantee scheme, because of the
nationalisation of SNS REAAL, is approximately €1 million. The pension expenses for 2013,
due to IAS19R and the low interest levels, will increase with approximately €3 million.
Financial targets
Ratio
Standard
Growth in income versus growth in
≥3%
2012
2011
3%
-2%
83%
85%
expenses*
Efficiency ratio**
70-77%
Return on equity***
10-yr interest rate+ 5-8%
9%
6%
Growth in earnings per share
>8%
51%
-45%
Dividend pay-out
60-80%
60%
71%
Solvency (av.) BIS ratio
≥13.5%
*
Excluding impairment losses
** Excluding impairment losses
*** 10-year interest rate for 2012: 2.0%, 2011: 3.0%
21%
23%
2
Results
Profit increased by 52% in 2012 to €15.5 million (2011: €10.2 million). The contribution to
the profit of non-operating items increased from €2.2 million in 2011 to €6.9 million in 2012.
Operating profit increased by 7% to €8.6 million (2011: €8.0 million).
Total income increased by 2% to €117.7 million (2011: €115.3 million) as a result of an
increase in fee and commission income by 2% to €69.7 million (2011: €68.1 million) and an
increase in the result on investments of €6.8 million to €15.9 million (2011: €9.1 million). The
decrease in interest income and other income limited the increase in total income. Interest
income decreased by 11% to €24.6 million (2011: €27.5 million) as a result of the lower
market rate of interest. Other income decreased from €10.6 million in 2011 to €7.6 million in
2012 because of lower incidental income.
Total operating expenses decreased by 3% to €96.6 million (2011: €100.0 million).
The contribution to the profit of non-operating items in 2012, as was the case in 2011,
consisted mainly of changes in values of securities in the investment portfolio, (the reversal
of) impairments and incidental contractual income.
The return on equity was 9% in 2012 (2011: 6%) and the efficiency ratio improved from 85%
in 2011 to 83% in 2012.
Solvency
KAS BANK’s low risk profile is reflected in the quality of the balance sheet and the high
solvency ratio. The average BIS ratio in 2012 was equal to 21% (2011: 23%). At the end of
2012, the BIS ratio was 23% (at the end of 2011: 26%) and the Tier 1 ratio was 22% (at the
end of 2011: 24%).
Income
Income increased by 2% in 2012 to €117.7 million (2011: €115.3 million). Higher fee and
commission income and returns on investments were to an extent offset by a lower interest
result and other income.
In millions of euros
Interest
Fee and commission
Result on investments
Other income
Total income
2012
24.6
69.7
15.9
7.6
117.7
2011
27.5
68.1
9.1
10.6
115.3
change
-2.9
1.6
6.8
-3.0
2.4
%
-11%
2%
74%
-29%
2%
Interest income decreased by 11% to €24.6 million (2011: €27.5 million) due to lower
margins as a result of the lower short euro market rate of interest.
Fees and commission income increased by 2% to €69.7 million (2011: €68.1 million).
Breakdown of fee and commission income
In millions of euros
Asset Servicing
Transaction Servicing
Other commissions
Total commission
2012
44.2
16.9
8.6
69.7
2011
41.5
20.2
6.4
68.1
change
2.7
-3.3
2.2
1.6
%
7%
-16%
34%
2%
Asset servicing fee and commission income increased partly as a result of an increase in the
Assets under Administration with 7% to €44.2 million (2011: €41.5 million). The Assets under
Administration increased by 10% to €303 billion as at the end of 2012 (at the end of 2011:
€276 billion). The 16% decrease in transaction servicing fee and commission income to €16.9
3
million (2011: €20.2 million) is the result of lower clearing and settlement income. The
increase in other fees and commission income is the result of higher income from
laboriostransactions.
The result on investments result increased from €9.1 million in 2011 to €15.9 million in 2012.
Breakdown of result on investments
In millions of euros
Trading - foreign exchange transactions
Trading - securities and derivatives
Investments - investment portfolio
Result on investments
2012
10.4
0.6
4.9
15.9
2011
10.5
-3.5
2.1
9.1
change
-0.1
4.1
2.8
6.8
%
-1%
-118%
131%
74%
Client-driven foreign currency transactions constitute the largest component of the
investments result. Amounting to €10.4 million, this component remained virtually the same
in 2012 (2011: €10.5 million).
The increase in the investments result was caused by price rises of a number of bonds to
which impairments were applied in 2008 and a higher trading result on securities and
derivatives.
Other income decreased by €3 million to €7.6 million (2011: €10.6 million) as a result of
lower incidental contractual income.
Operating expenses
In millions of euros
Personnel expenses
Housing
Information technology
General and administrative expenses
Depreciation/amortization
Total operating expenses - normal
2012
62.4
3.5
16.1
8.8
6.5
97.3
2011
62.6
3.6
14.1
10.4
7.2
97.9
change
-0.2
-0.1
2.0
-1.6
-0.7
-0.6
%
0%
-2%
14%
-15%
-10%
-1%
Operating expenses (excluding impairments, but including once-only additional costs for the
partnership with dwpbank) decreased by 1% in 2012 to €97.3 million (2011: €97.9 million).
The increase in IT costs and decrease in general costs are partly the result of a shift of costs
based on a changed classification.
Impairment losses
Impairments mainly relates to (the reversal of) credit facilities or other impairments and
depreciation of goodwill. On balance, the positive effect of impairments on the 2012 result
amounted to €0.7 million (in 2012: negative €2.1 million).
Quality of the investment portfolio
The table below shows the securities of the investment portfolio that are available for sale, the
investments at fair value through profit or loss and the investments held to maturity according
to credit rating (Moody’s Investor Services).
4
In millions of euros
Aaa - Aa3
A1 - A3
Baa1 - Baa3
P1 - P2
Shares
Total
31 Dec. 2012
902
60
104
6
1,073
Percentage
of portfolio
31 Dec. 2011
84%
1,288
6%
17
9%
39
0%
1%
6
100%
1,350
Percentage
of portfolio
96%
1%
3%
0%
0%
100%
At the end of 2012, 90% of the investments had a credit rating of A3 or higher (at the end of
2011: 97%).
Risk-weighted value of the assets
KAS BANK’s low risk profile is reflected by the high solvency ratio, which remained the same
in 2012. The average BIS ratio in 2012 was equal to 21% (2011: 23%). The decrease in the
BIS ratio as at the end of 2012 (23%) relative to the end of 2011 (26%) was mainly caused
by an increase in the weighted assets of interbank investments in combination with a minor
decrease in regulatory capital.
Carrying
amount as at
In millions of euros
31 Dec. 2012
Due from banks
Loans
Reverse repurchase agreements
Derivative financial instruments
Financial assets designated at fair value
Financial investments available-for-sale
Financial investments held-to-maturity
Other assets
Carrying
amount as at
31 Dec. 2011
Riskweighted
value
2011
1,458.7
1,357.8
582.1
258.1
50.4
1,011.6
10.6
472.0
5,201.5
221.5
39.0
0.1
29.3
148.0
68.9
506.9
517.6
1,435.2
656.1
154.2
181.9
1,168.3
1,232.0
5,345.3
84.8
36.9
0.7
65.0
117.6
77.3
382.4
37.5
260.3
767.2
52.6
313.5
695.9
Off-balance sheet exposure
Total of the risk-weighted items
2012
165.2
11.4
176.6
Tier 1
Tier 2
Total BIS
Riskweighted
value
2012
BIS 2012
22%
23%
2011
164.3
14.1
178.4
BIS 2011
24%
26%
Liquidity
The table below shows the cash flows (not discounted) for the financial assets based on the
contractual maturity date (excluding shares).
Maturity calendar as at year-end 2012
In percentages
Banks, loans and other financial assets
Financial investments available-for-sale
Total financial assets
Maturity calendar as at year-end 2011
In percentages
Banks, loans and other financial assets
Financial investments available-for-sale
Total financial assets
On
demand
<=3
months
63%
0%
50%
On
demand
35%
8%
29%
<=3
months
46%
0%
35%
50%
11%
41%
<=1
year
1%
10%
3%
<=1
year
1%
8%
3%
<=5
year
2%
68%
16%
<=5
year
0%
59%
14%
>5
year
Maturity
not
applicable
0%
13%
3%
>5
year
0%
1%
0%
Maturity
not
applicable
3%
22%
7%
The high level of liquidity is shown by the fact that, as at the end of 2012, 79% of
investments had a maximum term of three months (at the end of 2011: 76%).
5
0%
0%
0%
Total
100%
100%
100%
Total
100%
100%
100%
The average liquidity surplus based on the Financial Supervision Act was €1.5 billion in the
fourth quarter of 2012 (fourth quarter of 2011: €1.5 billion).
The figures in this press release have not been examined by external auditors.
Annexes: Consolidated Balance Sheet, Consolidated Income Statement
6
Annexes
Consolidated Balance Sheet
31 December
2012
In thousands of euros
Assets
C ash and balances with central banks
Due from banks
Loans
Reverse repurchase agreements
Derivative financial instruments
Financial assets designated at fair value
Financial investments available-for-sale
Financial investments held-to-maturity
Investments in associates and joint ventures
C urrent tax assets
Other assets
Property and equipment
Goodwill and intangible assets
Deferred tax assets
Non-current assets held-for-sale
Total assets
Equity and liabilities
Due to banks
Due to customers
Repurchase agreements
Derivative financial instruments
Financial liabilities designated at fair value
C urrent tax liabilities
Other liabilities
Deferred tax liabilities
Total liabilities
Issued capital
Treasury shares
Share premium
Revaluation reserve
Other reserves (including profit for the year)
Equity attributable to KAS BANK shareholders
Non-controlling interests
Total equity
Total equity and liabilities
C ontingent liabilities
Irrevocable facilities
7
31 December
2011
385,004
1,458,747
1,357,769
582,149
258,137
50,384
1,011,647
10,645
25
8,189
32,426
24,214
8,510
2,542
11,118
5,201,506
1,135,738
517,628
1,435,221
656,056
154,187
181,871
1,168,288
7,996
36,513
37,402
12,659
1,740
5,345,299
260,801
4,291,808
46,050
318,658
52,512
8,405
25,644
8,419
5,012,297
457,866
4,476,611
212,484
603
20,259
9,430
5,177,253
15,699
-24,974
21,569
16,134
160,727
189,155
54
189,209
15,699
-25,324
21,569
-5,332
161,422
168,034
12
168,046
5,201,506
5,345,299
23,032
14,470
26,703
25,889
Consolidated Income Statement
In thousands of euros
INCOME
2012
2011
Interest income
Interest expense
Net interest result
63,951
39,391
24,560
74,751
47,255
27,496
Fee and commission income
Fee and commission expense
Net fee and commission result
82,102
12,394
69,708
81,186
13,065
68,121
11,019
4,851
7,555
117,693
7,022
2,064
10,566
115,269
Personnel expenses
General and administrative expenses
Depreciation and amortization
Impairment losses (recovery)
Total operating expenses
62,392
28,454
6,453
-651
96,648
62,629
28,110
7,216
2,064
100,019
Operating result before tax
Tax expense
Net result for the year
21,045
5,457
15,588
15,250
4,900
10,350
Attributable to:
KAS BANK shareholders
Non-controlling interests
15,546
42
10,230
120
EARNINGS PER SHARE
- basic (in euros)
- diluted (in euros)
1.06
1.06
0.70
0.70
Net trading income
Result from financial transactions
Other income
Total operating income
OPERATING EXPENSES
Profile KAS BANK N.V.
KAS BANK is a European specialist in wholesale securities services. As an independent bank,
we connect professional financial institutions both within Europe and across the globe.
We focus on providing added-value services to national and international organisations active
in the pensions and securities industries. We view the market from the perspective of our
clients – tailor-made services and complete transparency are paramount in helping them to
meet their business objectives. We are established in Amsterdam, London and Wiesbaden.
8