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European Branch Network
(retail and business banking)

Developing a European branch network is fundamental to Triodos Bank. It allows it to build and share expertise, and use it to benefit a fast-growing Triodos Bank community. It brings a credible set of services to hundreds of thousands of business and personal customers, and grows sustainable banking’s scale and impact.

While Triodos Bank’s values bind customers and co-workers, there are important differences between countries. Regulations, tax incentives and government approaches to sustainability are sometimes markedly different in diverse markets. Local culture, within and between countries, also impacts on how Triodos Bank approaches its work.

Against a backdrop of the continuing debt crisis retail activities developed further in 2013. This was in part due to increasing demands for change from society, as people made choices more consciously about who they wanted to bank with.

Funds entrusted

Statement of funds entrusted per branch

Download XLS

Amounts in millions of EUR

31.12.2013

31.12.2012

 

EUR

%

EUR

%

 

 

 

 

 

The Netherlands

2,233.3

40

1,929.5

42

Belgium

1,274.2

23

1097.4

24

United Kingdom

789.3

14

617.8

13

Spain

1,214.0

21

858.6

19

Germany

139.3

2

90.2

2

 

 

 

 

 

 

 

 

 

 

Total

5,650.1

100

4,593.5

100

 

 

 

 

 

Statement of funds entrusted per category

Download XLS

Amounts in millions of EUR

31.12.2013

31.12.2012

 

EUR

%

EUR

%

 

 

 

 

 

Saving accounts

2,757.3

49

2,261.8

49

Deposits and time accounts

1,250.0

22

1,062.5

23

Other funds entrusted

1,642.8

29

1,269.2

28

 

 

 

 

 

 

 

 

 

 

Total

5,650.1

100

4,593.5

100

 

 

 

 

 

Funds entrusted, or savings, enable Triodos Bank to finance companies and organisations that benefit people, the environment and culture. An increase of the funds entrusted is an important indicator of Triodos Bank’s ability to attract sufficient funds to finance sustainable organisations.

Despite strong competition in all savings markets, growth overall was up by 23% across the European branches. (impact statistic)

For the reasons highlighted earlier in the report the branches offer a variety of products and services as part of its key strategic objective to offer a full set of services to customers. This has been achieved in some branches and is being developed in others, leading to a marked growth in funds entrusted which increased by EUR 1,057 million, or 23%, against expected growth of between 15 to 20%.

Together, this resulted in continuing growth in all the countries where Triodos Bank operates due in part to a growing profile, more efficient and customer-friendly account opening processes, and a receptive market keen to use their money more consciously.

In 2013, 401 organisations received total donations of EUR 0.4 million. (impact statistic)

By offering our savers, in some countries, the opportunity to donate part of the interest they receive to a charity, many social organisations receive support every year. In 2013, 401 organisations (2012: 404) received total donations of EUR 0.4 million (2012: EUR 0.5 million) in this way.

Loans

Outstanding loans per sector in 2013

Outstanding loans per sector in 2013 (pie chart)

The growth of the quality and size of the loan portfolio is an important indicator of the contribution Triodos Bank makes towards a more sustainable economy. All the sectors it works in qualify as sustainable and the companies and projects it finances contribute to delivering Triodos Bank’s mission.

To make sure that Triodos Bank only finances sustainable enterprise, potential borrowers are first assessed on the added value they create in these areas. The commercial feasibility of a prospective loan is then assessed and a decision made about whether it is a responsible banking option. The criteria or guidelines Triodos Bank uses to assess companies can be viewed on Triodos Bank’s websites.

Triodos Bank’s main focus remains on the existing sectors in which it has already developed considerable expertise.

Environment (49%, 2012: 49%)

This sector consists of renewable energy projects such as wind and solar power, biomass, hydro-electric, and energy saving projects. It also includes organic agriculture, and projects across the entire agricultural chain, from farms, processors and wholesale companies to natural food shops. Environmental technology, such as recycling companies and nature conservation projects, is also represented.

Social (29%, 2012: 28%)

This sector includes loans to traditional businesses or non-profit organisations and innovative enterprises and service providers with clear social objectives, such as social housing, loans to fair trade businesses, integration for people with disabilities or at risk of social exclusion, and health care institutions.

Culture (15%, 2012: 12%)

This sector covers loans to organisations working in education, retreat centres, religious groups, cultural centres and organisations, and artists.

The remaining proportion of the loan book includes short-term loans to municipalities and private sustainable mortgages.

The lending sectors above describe the main sectors Triodos Bank is involved in. Parts of these sectors are also financed by both Triodos Bank itself and its investment funds (see investments below).

The loan portfolio as a percentage of the total amount of funds entrusted decreased to 63% in 2013 (2012: 72%). Triodos Bank’s goal is to lend between 70% and 80% of its funds entrusted.

The quality of the loan book remained satisfactory overall, notwithstanding the economic recession. This, and a continuing focus on maintaining and diversifying the loan portfolio, led to a decline in the total loan loss provision to 0.49% of the average loan book (2012: 0.67%). This is closer to Triodos Bank’s long-term internal benchmark for provisions of 0.25%. These provisions are taken in case potential losses from defaults by borrowers become a reality.

Growth of the loan portfolio amounted to EUR 259 million, or 7.9%. (impact statistic)

Growth of the loan portfolio amounted to EUR 259 million, or 7.9%. Expected growth was between 15 and 20%. The main reason for this decline is a substantial reduction in larger loans to Dutch municipalities, primarily because of liquidity management. These investments are included in the loan portfolio in accordance with regulations related to financial reporting. In the first six months of 2013, as a result of liquidity management considerations, these short-term loans were converted to other investments that are not included in the loan portfolio. Without this change the loan portfolio would have grown by approximately 14%.

Competition between banks in the lending market has diminished because of the financial crisis and higher capital requirements, although less so in the sectors where Triodos Bank is an active lender. Banks regard sustainability as an emerging market and want to be involved in it.

Prospects

Triodos Bank’s balance sheet total is expected to grow more modestly. Growth of between 5 and 15% is expected in 2014.

All branches will focus on continuing to deliver, or developing, a credible set of services. Preparations for the launch of a current account will take place in Belgium in 2015, with the UK branch preparations following a year later. The number of customers is expected to grow by between 10 and 15% across the Group.

The loan portfolio and the funds entrusted are expected to increase by 15%. Triodos Bank’s ambitions are to focus primarily on the quality and diversification of its loan portfolio. We will concentrate on loans that reflect Triodos Bank’s efforts to finance front-runners in their fields; the entrepreneurs developing the sustainable industries of the future. We expect the levels of provisions for loans in the coming years to continue to decrease.