HERTOGENBOSCH, The Netherlands, Aug. 23, 2002 (PRIMEZONE) -- Van Lanschot NV (AMS:VLAN):
-- Operating profit after taxation up 10.1% from Euro $ 46.4 million to Euro $ 51.2 million -- Earnings per ordinary share (excluding extraordinary income) rises 10.3% from Euro $ 1.55 to Euro $ 1.71 -- Interest income again up sharply; securities commission under pressure -- Efficiency ratio further improved thanks to cost savings -- Expectation for 2002: barring unforeseen circumstances, a rise in earnings per ordinary share of at least 12%
"An excellent result in view of the continuing negative climate on the stock markets and the more difficult economic conditions," commented Mr. H. Heemskerk, Chairman of Van Lanschot NV's Board of Managing Directors, in response to the rise in profit of over 10% achieved in the first half of the year. "In particular, the corporate market, the market for home loans and the insurance business developed satisfactorily. The Bank also continued to focus strongly on strict cost control. Furthermore, our pension fund has a sufficient level of funding and the costs of the Van Lanschot share option plan have for years been fully reflected in the figures. Partly because of this I am confident that, barring unforeseen circumstances, we can achieve a rise in profit (excluding extraordinary income) for the year as a whole of at least 12%, which is in line with our mediumterm objective."
Van Lanschot achieved an improvement in operating profit after taxation of 10.1% in the first half of 2002. This operating profit, which also represents the net profit for the period in question, rose by Euro $ 4.7 million to Euro $ 51.2 million (first half 2001: Euro $ 46.4 million). Net profit for the first half of 2001 totalled Euro $ 57.3 million, but this included extraordinary income of Euro $ 10.8 million. Earnings per ordinary share, excluding extraordinary income, totalled Euro $ 1.71 in the first six months of 2002 compared with Euro $ 1.55 in the corresponding period last year. The return on average shareholders' funds was 17.8%.
In spite of the difficult market circumstances, the Bank achieved a further increase in the number of target group clients. The number of private clients rose by 723 or 1.6% in the Netherlands and remained virtually unchanged on balance in other countries. The number of corporate clients also increased. At June 30, 2002, Van Lanschot's clients included 5,334 family and other businesses, a rise of 192 or 3.7%.
At the beginning of the year the Bank, in conjunction with De Baak/VNONCW, successfully introduced the Opvolgersacademie, a training course for future directors/owners of family businesses.
Income grew by Euro $ 6.2 million, or 3.3%, to Euro $ 194.3 million in the first half of 2002. The growth in interest income comfortably offset the fall in commission. Net interest climbed by 16.2% or Euro $ 15.3 million to Euro $ 110.0 million, a favourable development which is primarily due to the expansion of lending to target group clients and a wider interest margin. Commissions fell by 12.8% or Euro $ 10.5 million to Euro $ 71.9 million compared with the first six months of last year, the net effect of a Euro $ 12.4 million or 19.7% drop in securities commissions and a rise in other commission income of Euro $ 1.9 million or 9.2%. Insurance commissions in particular developed favourably, due in part to the acquisition of an insurance firm in Rotterdam, which is now called Van Lanschot Van Harskamp Assurantien. The uncertainty on the stock markets resulted in a decrease in the number of securities orders placed by private individuals. The Bank responded to this situation by focusing its advise on the limitation of investment risks. It also launched Fund Support, a new method for providing advice about investment funds.
Operating expenses rose by only Euro $ 0.5 million compared with the first six months of 2001. Staff costs were 6.9% or $ 4.5 million higher than in the first half of 2001. Other administrative expenses fell by Euro $ 5.7 million (13.8%). This fall is mainly attributable to the strict monitoring of expenditure and to efficiency improvements.
The efficiency ratio improved by 1.7 percentage points compared with the first half of 2001 to 58.8% owing to the development of income and expenses.
Total assets remained virtually unchanged at Euro $ 10.7 billion. Lending operations flourished, the loans portfolio growing by Euro $ 406 million or 5.0%. Loans and advances granted to the public sector declined by Euro $ 50 million, but lending to the private sector rose by Euro $ 456 million. The mortgage portfolio grew by Euro $ 184 million. In view of market conditions the Bank considers this growth, attributable in part to the successful launch of the Garantierente Hypotheek and the Kroon Wonen advisory concept, to be most satisfactory. The remaining growth in the loan portfolio is attributable to both the corporate and the private market.
Funds entrusted fell slightly compared with yearend 2001 by Euro $91 million or 1.2%. Savings accounts were down Euro $ 78 million, while other funds entrusted dropped by Euro $ 13 million.
Assets held in custody for clients fell by 7.9% or Euro $ 1.2 billion to Euro $14.1 billion compared with 31 December 2001 due to the sharp downturn in stock market prices and investors' preference for Index Guarantee Contracts and Index Deposits instead of shares.
Prospects
Van Lanschot expects growth in the number of clients to continue in the second half of 2002, despite the uncertainties in the financial markets. Costs and staff numbers will continue to be monitored closely and further efforts will be directed at stepping up efficiency. A rise in expenses will therefore be less marked than the rise in income. In view of the results for the first half of the year Van Lanschot expects that earnings per ordinary share (excluding extraordinary income) for 2002 as a whole barring unforeseen circumstances will rise at least 12%, which is in line with the mediumterm objective.
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