Triodos Bank’s Executive Board provides a perspective on the wider world it operates in, its impact and activity in 2017 and its prospects for the future.
How the World Looked in 2017
Sustainability has become an integral part of many people and business’ lives. In many countries dialogue about the role of business and finance in society, continued to be prominent throughout the year demonstrating an appetite for change from the public. In 2017 the impact of this debate – from continuing divestment initiatives to the widespread adoption of the United Nations Sustainable Development Goals - included efforts to shift business, government and civil society to act as part of a transition to a low carbon economy.
This continuing trend has also led more banks to promote themselves as more ethical and transparent and to compete more actively for sustainable loans and investments in 2017, creating more competition for Triodos Bank in all the countries where it operates.
Large numbers of people continue to choose Triodos Bank as their first bank because it meets their financial needs and is aligned with their values. Savings, lending and investments again grew during the year on the strength of this continuing interest in using money more consciously.
Higher costs, lower margins and greater impact: the challenge for the banking sector.
Historically low central bank interest rates continued throughout 2017, in part because of the oversupply of money from quantitative easing – the authority’s monetary answer to a lack of economic growth during the year. While low interest rates are good for borrowers they are generally bad news for ordinary depositors.
The higher costs of meeting regulation and lower margins because of low interest rates and competition for personal and business customers (either solely on price or from banks eager to lend to attractive ‘sustainable’ loans) increased during the year. Collectively, these issues put pressure on Triodos Bank’s profitability. For many banks, including on occasion Triodos Bank, this has meant increasing fees for products and services.
Despite a challenging environment for lending the branches grew the loan book, which is critical to increasing Triodos Bank’s impact. Ensuring a healthy balance between the growth of the loan portfolio and a relatively strong inflow of deposits continues to be an important point of attention.
How we did
Triodos Bank continued to extend its impact during the year across all its sustainable sectors.
Offering a full set of services and high-quality customer service to personal and business customers, and increasing the volume of our transactions with them, is crucial for Triodos Bank to increase its impact and fulfil its mission.
In some countries, such as The Netherlands and Spain, Triodos Bank already provides a full set of services. The UK branch launched a current account offering creating widespread interest in the national press. In Belgium the bank expanded its services to professional clients with a service that allows clients to automatically download their Triodos Bank account statements into their accounting package
Triodos Bank expanded its presence and impact during the year.
Triodos Bank wants to grow its capital so it can continue to develop and expand its activities, particularly lending. In 2017 a total of EUR 109 million in new capital was raised across Triodos Bank’s European network, attracting over 1.939 net new depository receipt holders.
Triodos Banks’ activities in Triodos Finance in France continued to develop successfully during 2017, as did preparations to establish a French branch subject to business priorities, regulatory and other approvals.
Customer satisfaction research, conducted during the year, showed Triodos Bank continues to grow in popularity because of strong relationships and customer’s willingness to recommend it. The organisation’s Net Promoter Score, based on asking retail customers in all the countries where Triodos Bank operates whether they would recommend Triodos Bank to a friend or colleague, is 27. The figure, which calculates the difference between Triodos Bank ‘promoters’ – 45%’ and ‘detractors’ – 17%, is much better than the average for large banks, although not as good as some direct banks. Triodos Bank’s principles as a sustainable bank are the main reason to recommend the bank according to the research.
According to the same research undertaken by Triodos Bank during 2017, over 20% of its retail customers have no other bank, and on average more than half of their finance is with Triodos Bank.
On the eve of his 25th anniversary in 2018, the Belgian branch passed a significant milestone. Its balance sheet is now more than EUR 2 billion.
In Germany Triodos Bank was recognised as the ‘best business customer bank’ by a national newspaper and both ‘best sustainable bank’ and ‘best direct bank’ by a leading voluntary organisation monitoring banking performance. All awards resulted from customer feedback.
In Spain, at the start of 2017, Triodos was ranked as the bank providing the best global customer satisfaction by OCU, a leading independent consumer organisation. While, in Belgium, Triodos Bank was ranked third in an overall quality assessment for the country’s best bank, including the highest rating for customer service.
Being a learning organisation
Triodos Bank fosters a co-creative culture rooted in its values based mission. Process improvement training took place across the organisation to underpin Triodos Bank’s work during the year.
In The Netherlands ‘Participate with Passion’ took place during the year, connecting sustainable start-ups with private banking customers to exchange ideas and inspire. The Belgian branch introduced monthly lunch sessions for co-workers where external speakers share their project and the inspiration behind it.