Continued growth despite challenging market conditions
Financial market sentiment was extremely negative in 2011, spurred on by anxieties around the fate of the euro.
Potential investors hesitated to commit investment capital, preferring to save or stick to their current positions. In this challenging climate, we were pleased to record growth of 20% in entrusted funds to EUR 654 million. In Belgium, the entrusted funds increased by 31% to EUR 64 million, compared to 28% to EUR 49 million in 2010.
Triodos Bank Privat Banking 2011
Total = EUR 654 million
The composition of these entrusted funds again remained roughly the same, with the majority allocated to asset management through Triodos MeesPierson Sustainable Asset Management.
In the Netherlands, growth came predominantly from private individuals, with foundations and religious organisations more reluctant to commit capital.
We were especially pleased to see increased interest from entrepreneurs, who also contributed to the success of Triodos Bank’s capital increase in 2011.
In 2011, private banking clients invested a record EUR 11 million in new equity capital for Triodos Bank, pointing to strong confidence in our banking model.
After increasing by 16% in 2010, Private Banking’s sustainable equity portfolio decreased by 2.7%, in 2011. We consider this modest decrease to be acceptable in the light of challenging market conditions.
The return of our sustainable portfolio was 0.9 % less than the market represented by the MSCI World Index, reducing the relatively underperformance we recorded in 2010. Since 2006, our equity portfolio has yielded a positive return of 20% versus 0% for the MSCI.
Performance Triodos Equity portfolio versus MSCI
Start = 100 at inception Private Banking in September 2005
Fixed income investments
Sustainable fixed income investments performed better than equities in 2011, both in nominal and relative terms. Excluding social and cultural investments, fixed interest investments returned 2.7% in 2011, versus our benchmark of 1.8%. Since 2006, our portfolio has returned 24% versus 19.7% for our benchmark.
Including social and cultural investments, even without the benefit of associated tax credits, the return of this fixed income portfolio increased even more in 2011.
The higher return of the social and cultural fixed interest investments in both 2011 and the period from 2006 to 2011 (again excluding tax credits), is a highly satisfactory result. This performance validates a decision to continue to provide dedicated sustainable investments despite decreasing tax benefits.
Private Banking’s third investment class of alternatives – or mission related investments – which are only available in the Netherlands to date returned 1.8% in 2011, reflecting the excellent performances of the Triodos Fair Share Fund and Triodos Renewables Fund.
The Triodos sustainable Real Estate fund, in conjunction with the poor state of the Dutch real estate market, returned -3.2%
After returning a first profit in 2010 after four years of small start-up losses, Private Banking in the Netherlands increased its profitability by 49% to EUR 0.7 million in 2011.
The Belgian results of Private and Personal banking is fully consolidated in the branch figures.