Annual report 2010 - BinckBank

Annual report 2010

Jaarverslag 2010BinckBank N

.V.

This document is a translation of the Dutch original and is provided as a courtesy only. In the event of any disparity, the Dutch version shall prevail. No rights may be derived from the translated document.

1Annual Report 2010

Contents

BinckBank overview 2Profile BinckBank 2Key figures 3Key events in 2010 5Chairman’s message 6Vision, mission, strategy and objectives 8Information for shareholders 15Financial calendar 2011 19

Report of the executive board 22Review of 2010 22Review of the financial results 23Retail business unit 26Professional Services business unit 29Subsidiaries, joint ventures and participations 31Outlook 2011 33Human resources 34Corporate social responsibility 36Executive board members 38

Risk & capital management 42Key developments in 2010 42Risk appetite 43Risks for BinckBank 44Risk management accountability 50

In control statement 51

Corporate governance 54 Introduction 54The Code 54The Banking Code 57Article 10 of the Takeover Directive 58Conclusion 58

Report of the supervisory board 62Statement by the chairman of the supervisory board 62Composition of the executive and supervisory board 63Meetings of the supervisory board in 2010 63Meetings of the audit committee in 2010 64Meetings of the risk and product development committee in 2010 64Remuneration of the executive board 65Broad outlines of the remuneration report 65Remuneration policy in 2010 65Loans granted to members of the executive board 66Consultation with the Works Council 68Financial statements and dividend 68Supervisory board members 72

Financial statements 76

433,538Number of accounts in 2010

8.9 millionNumber of transactions in 2010

€ 75.2 millionAdjusten net profit in 2010

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BinckBank overview

Profile BinckBank

We offer the private investor order execution at highly competitive fees in combination with a number of facilities such as a professional brokerage website including real-time streaming of prices and news, order book depth, research, advice and (technical) analysis. In the Netherlands, Alex and Binck have repeatedly been named ‘Best Online Broker’ by various independent research agencies over the past years. In Belgium we were elected ‘Best Educational Investment Institute’ and in 2010 Binck was for the first time awarded the title ‘Best Broker’ by French investors.

In addition to private investors BinckBank also serves more than a hundred professional parties. The Professional Services business unit offers services to investment managers, banks, insurers and pension institutions in the Netherlands and Belgium, handling the entire securities transaction and its associated banking administration process on their behalf with the use of our online product. Our Professional Services customers can opt for a service provision agreement with BinckBank, or they can make independent use of the software supplied by our daughter company Syntel, which allows customers to manage their own operations.

BinckBank has branches in the Netherlands, Belgium, France and Spain, and had 565 FTEs in employment as of 31 December 2010. BinckBank also holds interests in Syntel (software provider), ThinkCapital (producer of trackers), BeFrank (pension accrual) and TOM (multilateral trading platform).

Founded in 2000, BinckBank N.V. (BinckBank) is an independent online bank for investors. BinckBank is ranked in the top 5 in Europe, and is listed on the NYSE Euronext stock exchange in Amsterdam. Since 1 March 2006 the bank has been listed on the Amsterdam Midkap Index (AMX). Its market capitalisation at the end of 2010 amounted to € 864 million, and the average daily turnover in BinckBank shares in 2010 was 335,700 shares (2009: 271,522).

BinckBank has the ambition of becoming the largest online bank for investors in Europe. As the market leader in the Netherlands, with a number 2 ranking in Belgium and a 10% market share in the French online brokerage market, BinckBank is well positioned to fulfil this ambition. At the end of 2010 BinckBank had 433,538 accounts, of which 358,469 in the Netherlands, 41,584 in Belgium and 33,485 in France. The total income from operational activities amounted to € 185 million and the adjusted net profit in 2010 was € 75 million. BinckBank aims to distribute 50% of the adjusted net profit as dividend to its shareholders each year.

BinckBank has two business units; Retail and Professional Services. Retail provides services for private investors under the labels Binck and Alex. Under the Alex label BinckBank serves the Dutch private investor who wants to get more out of his assets. In addition to an extensive brokerage website, Alex offers online saving, asset management, a mutual funds supermarket and investment training. Under the Binck label we offer services to the active independent private investor in the Netherlands, Belgium and France.

3Annual Report 2010

Key figuresx € 1,000 FY10 FY09 Δ FY09Customer figuresCustomer accounts 433,538 373,574 16%

Retail 406,078 348,188 17%Professional Services 27,460 25,386 8%

Number of transactions 8,854,215 9,617,181 -8%Retail 8,268,167 9,144,980 -10%Professional Services 586,048 472,201 24%

Assets under administration 14,124,667 10,942,742 29%Retail 9,739,332 8,031,695 21%Professional Services 4,385,335 2,911,047 51%

Income statementNet interest income 43,587 43,825 -1%Net fee and commission income 126,970 129,240 -2%Other income 13,599 9,661 41%Result from financial instruments 620 4,353 -86%Impairment of financial assets 70 (857) -108%Total income from operating activities 184,846 186,222 -1%Employee expenses 45,480 43,185 5%Depreciation and amortisation 34,798 35,939 -3%Other operating expenses 44,223 43,388 2%Total operating expenses 124,501 122,512 2%Result from operating activities 60,345 63,710 -5%Share in results of associates and joint ventures (1,386) (1,466) -5%Other non-operating income 23 - 100%Result before tax 58,982 62,244 -5%Tax (14,837) (15,083) -2%Net result 44,145 47,161 -6%Result attributable to non-controlling interests 95 - 100%Net result attributable to shareholders BinckBank 44,240 47,161 -6%IFRS amortisation 28,196 28,196 Fiscal goodwill amortisation 2,792 2,792 Adjusted net earnings 75,228 78,149 -4%Average number of shares outstanding during the year 74,080,265 74,897,706 Adjusted earnings per share 1.02 1.04 -2%

Balance sheet & capital adequacyBalance sheet total 3,216,768 2,930,010 10%Equity 468,913 480,359 -2%Total available capital 131,257 95,569 37%BIS ratio 23.9% 18.4%Solvency ratio 15.7% 13.0%

Cost / income ratioCost / income ratio 67% 66%Cost / income ratio excluding IFRS amortisation 52% 51%

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7578

64

40

50

60

70

80

2008 2009 2010

in €

mill

ion

101.1129.2 126.9

40.6

43.8 43.5

0

50

100

150

200

2008 2009 2010

Commision income Interest income

in €

mill

ion

15.7%13.0%13.6%

23.9%

17.2%18.4%

4%

8%

12%

16%

20%

24%

28%

2008 2009 2010

Solvency ratio BIS ratio

8.99.6

7.2 434

374

273

0

2

4

6

8

10

2008 2009 20100

100

200

300

400

500

in th

ousa

nds

Number of transactions Number of brokerage accounts

in m

illio

n

5.0

8.09.7

1.1

2.9

4.4

0

4

8

12

16

2008 2009 2010

Retail Professional Services

in €

bill

ion

€ 1.02

€ 0.83

€ 1.04

€ 0.51*€ 0.52

€ 0.41

€ 0.3

€ 0.5

€ 0.7

€ 0.9

€ 1.1

2008 2009 2010

Adjusted earnings per share Dividend per share

* 2010 figures are subject to approval of the General Meeting of Shareholders

Adjusted net profit Interest & commission income

Number of transactions & accounts Assets under administration

Solvency Information per BinckBank share

5Annual Report 2010

Key events 2010

September

OctoberFebruary

March

April

May

July

12 FebruarySNS Bank and BinckBank sign letter of intent for BPO outsourcing

22 MarchBinck named ‘Best Broker’ in the Netherlands by IEX Netprofiler

6 AprilBinck lowers rates in the Netherlands

11 MayBinck launches ProTrader: the trading platform for the highly active investor

21 MayPetercam selects BinckBank as custodian bank

30 SeptemberSNS Bank and BinckBank sign BPO contract

30 SeptemberBinck introduces SRD in France

17 OctoberBinck launches Fund Investments in Belgium

18 OctoberiPhone app launched for Alex

6 JulyBinckBank and Delta Lloyd join forces with BeFrank on the pension market

9 JulyBinckBank cancels 1,568,928 shares

13 JulyABN AMRO Clearing Bank N.V. new shareholder for TOM

December

November

1 DecemberLaunching of iPhone app for Binck ProTrader

14 DecemberBinck named ‘Best Broker in the Netherlands’ by Brokertarieven

4 NovemberAlex Academy and Alex Asset Management granted Golden Bull award

10 NovemberBinckBank acquires 60% interest in ThinkCapital

15 NovemberIntroduction Squawkbox for Binck ProTrader

18 NovemberBinck named best broker in France by the readers of MoneyWeek

26 NovemberThinkCapital wins the VEB Silver Investment Fund Award 2010 for the AMX tracker

26 NovemberBinck named ‘Best Broker’ in the Netherlands by Beursbulletin

30 NovemberLaunching of Fund Investments in the Netherlands

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Dear readers,

With an adjusted net profit of € 75 million, BinckBank can once again look back on a good year. Despite transaction volume falling by 8% due to decreased market sentiments, the adjusted net profit only fell by four percent in comparison to record year 2009. The fall in commission income from transactions was partly offset by an increase in other fee and commission income, including fees from asset management operations and BPO-services. This is a next step in the implementation of our strategy to develop supplementary activities in addition to brokerage, as a result of which our results will become increasingly less dependent on market volatility and investor sentiment. The adjusted net profit for 2010 amounted to € 1.02 per share. In accordance with its dividend policy, BinckBank will ask its shareholders to approve a 50% distribution of the adjusted net profit in dividend, which amounts to a final dividend of € 0.27 per share and a total dividend of € 0.51 per share.

In the course of 2010 BinckBank has strengthened its positions in the countries in which it operates. The number of Retail accounts in the Netherlands grew by 12% to 331,686. In Belgium 8,150 new Retail accounts were opened; a 25% increase. Binck in France was also successful, achieving an 86% growth (11,328 new brokerage accounts) and expanding its scope of services and products on offer. Following the introduction of the highly successful ‘Service de Règlement Différé’ (SRD) product, the number of transactions in the fourth quarter of 2010 grew substantially, as a result of which our French online brokerage market share rose to more than 10%. Moreover, the readers of MoneyWeek investment magazine named Binck ‘Best Broker’ in France. In the Netherlands many innovations were introduced, among which Binck ProTrader, Mutual funds supermarket, the iPhone app and the Squawkbox. The Squawkbox provides an online platform for our customers in which they can monitor and discuss market events and trading strategies with professional moderators. Alex Asset Management once again proved highly successful in 2010; achieving good results for our clients as well as an increase in assets under management of 82% to € 610 millions.

Various new business development initiatives were taken in the course of the year, such as the joint venture with Delta Lloyd. BeFrank is a new pension administrator who, much like BinckBank, provides high-quality, transparent services at a low cost. With the acquisition of ThinkCapital in November 2010, BinckBank has secured a means of responding to the fast growing Exchange Traded Funds (ETFs or trackers) market. ThinkCapital and BinckBank have joined forces for the purpose of permanently charting trackers in the Netherlands. BinckBank disposes of a distribution network and ThinkCapital will be responsible for product development. Our Professional Services business unit showed good results for 2010. Total assets under administration during the past year increased by 51% to € 4.4 billion, while the result from operating activities increased by 53% to € 6.8 million. Independent investment managers in 2010 transferred a larger portion of the assets managed by them to BinckBank, while new investment managers also chose to transfer their brokerage-related transactions to BinckBank. In September, SNS Bank and BinckBank ratified their agreement to outsource both execution and administration of securities orders for SNS Bank customers to BinckBank.

Chairman’s message

7Annual Report 2010

We plan to continue with the introduction of new products and innovation of our services in 2010. January already saw the introduction of Shares, our online community, which is supported by the Dutch Investors’ Association (VEB) and the Flemish Federation of Investment Clubs and Investors (VFB). This platform enables investors, both customers and non-customers, to interact and share experiences. BinckBank also made its choice of the next country in which it plans to start. We have decided to expand our activities into Italy as from mid 2012. Italy is one of the key European brokerage markets and in more fields than one can be compared to the Dutch market. Our research indicates that there is room for a specialised player like BinckBank. Based on BinckBank’s results and developments, we are optimistic about our prospects and continued expansion. However, the results will depend strongly on the stock market activities by our customers. The volatility and direction of the market are important in this respect, so it is not possible for us to provide concrete expectations regarding our results for 2011. BinckBank will continue to focus on further growth of its customer base, both in the Netherlands and abroad, in order to achieve its ambition.

I would like to thank all customers and shareholders for their trust in BinckBank and our employees for their commitment during the past year.

Amsterdam, 10 March 2011

Koen BeentjesChairman of the BinckBank executive board

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Vision, mission, strategy and objectives

VisionAn increasing number of consumers is turning to Internet search engines, communities and comparison sites to discuss and compare products and services. Consumer influence is on the rise; the Internet and social media such as Twitter provide them with the means to voice their opinions and directly influence organisations worldwide. The image of companies nowadays is increasingly determined by consumers whose experiences are published on the Internet. As online brokerage is rapidly becoming a commodity product, we believe that tomorrow’s online broker will only be able to distinguish himself by developing products and services that offer an added value. In addition, transparency and openness are steadily becoming key consumer factors in the provision of financial services. Only an approach such as ours will result in the envisaged levels of customer satisfaction.

In addition to private investors, BinckBank also provides services for professional parties. Within this group we have seen a growing need for fast and cheap order execution and a reliable custodian bank. We also see that more and more banks and insurers are outsourcing their securities operations. For them the process of executing securities transactions and subsequent administrative processes is a costly and labour-intensive affair. Moreover, a growing number of professionals find it difficult and complicated to keep up and comply with the financial sector’s ever changing legislation and regulations. Illustrative in this context is the fact that in 2010 the financial sector had to cope with several amendments of the (Dutch) Securities Book-Entry Transfer Act, MiFID II, Consumer Credit Act, commission transparency regulations and the new Banking Directives.

MissionEver since its incorporation, BinckBank’s mission has been to amaze investors by offering them more than they expect. One of BinckBank’s objectives is to continuously exceed customer expectations in the fields of product, pricing and service. For this reason we aim to provide private investors in the retail industry with the same technical investment tools as professional investors. In the B2B market BinckBank offers partner-ships with professional parties to enable them to profit from the economies of scale of the BinckBank platform, to use its excellent infrastructure and to help them at all times in meeting ever more complicated legislation and regulations.

By doing so BinckBank aims to achieve high levels of customer satisfaction and so create maximum customer and shareholder value. Our ambition is to continuously amaze our customers by providing high-quality products and a customer-focused approach at competitive prices. We strive to have customers whose satisfaction about our services will make them ambassadors for BinckBank.

AmbitionBinckBank is an online bank for investors and ranks among the 5 largest online brokers in Europe. It is our ambition to become Europe s largest online bank for investors in terms of number of brokerage accounts, transaction volume, profit and geographical scope.

Strategic objectivesBinckBank’s strategic targets can be defined as follows:

Retaining reputation & trust BinckBank relies on the trust of its (private) customers. Due to its relatively short track record, the absolute extent of its equity capital, its stock market listing and the large number of customers and assets under administration, BinckBank is sensitive to matters involving confidentiality. That is why it is of vital importance for us to safeguard our good reputation and gain the trust of our customers. Ever since being incorporated, BinckBank has been able to achieve high levels of customer satisfaction by putting its customers first.

Where does BinckBank stand at the end of 2010?Of all the new accounts in 2010, 20% was generated by our customers through member-gets-member programmes, while our services achieved a score of 8 (on a scale from 1 to 10) for customer satisfaction.

Expanding online brokerage (Retail)The increase in BinckBank’s operating income was largely driven by the online brokerage activities of our Retail business unit (transaction income). In order to increase this income, BinckBank plans to expand its online brokerage activities as follows:• Expansion in the Netherlands, Belgium and France by

introducing new products and services, and • Geographical expansion in Europe

9Annual Report 2010

Our preferred model for international expansion is a combination of a “greenfield operation” (independent start-up) and accelerated growth through ‘add-on’ acquisitions, all depending on relevant local market circumstances.

Where does BinckBank stand at the end of 2010?During the past year BinckBank has realised a substantial increase in the number of brokerage accounts in the Netherlands (24,320 accounts, +11%), Belgium (8,150 accounts, +25%) and France (11,328 accounts, +86%). BinckBank is market leader in the Netherlands. In Belgium we rank second and in France we have succeeded in securing a market share of more than 10% of the online brokerage market within a period of two years. This positions us in the French top 5.

In 2010, BinckBank made the decision on the fourth country in which it wants to offer its services. BinckBank plans to start in Italy by mid-2012, for which the necessary preparations will be made in 2011.

Expanding outside online brokerage: pension accrual & asset management activities BinckBank’s long term target is to expand its services to include pension accrual and asset management activities, in which the income model is based on asset management and administration. This will result in a more stable income stream of BinckBank as a whole.

Where does BinckBank stand at the end of 2010? In 2010 Alex Asset Management realised an 82% increase in assets under management to a total of € 610 million. Further steps were made during the year in the field of pension accrual and asset management activities. In July 2010, BinckBank announced its plans to cooperate with Delta Lloyd in the field of pensions by establishing the ´BeFrank´ joint venture. In November 2010, BinckBank acquired a 60% interest in ThinkCapital, a Dutch ETFs producer.

Continued growth with Professional ServicesThe Professional Services business unit provides the following services:• Services for independent investment managers• Business Processing Outsourcing (BPO) services for

banks, insurance companies and pension institutions• Independent broker desk

BinckBank’s objective is to expand its activities in all three fields in the Netherlands and Belgium and to provide these services in France in due course.

Where does BinckBank stand at the end of 2010? The Professional Services business unit developed well in 2010. By the end of the year Professional Services served more than one hundred independent investment managers, with a combined value of assets under management amounting to more than € 3.0 billion. Our BPO services also developed successfully, and BPO contracts were signed with SNS Bank and BeFrank.

Operational efficiency & safeguarding continuity of servicesBinckBank’s strategic target is to use the existing infrastructure (back office & IT platform) as efficiently as possible by processing as many transactions at a low cost per transaction, thus optimising BinckBank’s profitability. Exploiting the economies of scale and maintaining large transaction volumes are essential to our long-term competitiveness. It is therefore imperative that BinckBank succeeds in attracting the highest possible volume to its platform. There are several different ways in which to enlarge the transaction volume: • by increasing the number of account holders in

existing markets• by introducing new, transaction-generating products

and services• by granting professional customers access to

BinckBank’s infrastructure (BPO services)• by adding new countries to the existing platform

Where does BinckBank stand at the end of 2010?

Central back office and IT platformBinckBank has a central back office and IT platform in Amsterdam that are used for processing all transactions, including those from Belgium and France. This centralised organisation for securities transactions and security position administration is highly efficient and enables us to process transactions at a low cost price. In 2010, BinckBank introduced new data centres, which safeguard the continuity of the services provided. In addition, they facilitate the continued expansion of the company and its profitability. During the year various projects aimed at improving the quality and efficiency of our IT platform were initiated. The process of developing our European IT platform will continue throughout 2011, enabling us to serve even more European markets in the future and reducing the time to market for new products and services.

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Foreign branches with a low fixed cost structureBinckBank’s operations abroad are run through branches. Since BinckBank only engages in front office activities (sales and customer services) in its foreign branches, the fixed costs of these offices are kept low. All other activities are centralised in the Netherlands.

Continued focus on cost controlAt BinckBank we believe that operational excellence is the key to cost control. By continuously introducing structural improvements for our methods of operation we are able to keep our costs manageable. BinckBank’s objective in this context is to maintain a cost/income ratio excluding IFRS amortisation of approximately 50%. For 2010 this ratio amounted to 52%.

ExpertiseThe employees of BinckBank have acquired high levels of expert knowledge in processing and administering securities transactions over the years. This knowledge contributes towards higher levels of efficiency and the continuity of our services.

BinckBank, the true specialist in online brokerage services

Maintaining a conservative financial policyBinckBank maintains a conservative financial policy and is prudent when it comes to investing the funds with which it has been entrusted by customers. BinckBank’s approach to capital management is aimed at maintaining solid solvency and liquidity positions while continuously searching for the right balance between the amount of capital, return and risk. BinckBank’s objective in this respect is to maintain a solvency ratio between 12% and 20%.

Where does BinckBank stand at the end of 2010?During the whole year BinckBank’s capital position has been adequate. BinckBank has sufficient Tier I capital at its disposal for the continued expansion of activities. The solvency ratio as at 31 December 2010 amounted to 15.7%, well within the target range of 12% - 20%.

Attractive returns for shareholdersBinckBank aims to give its shareholders an attractive Total Shareholder Return (TSR) (share price gain + dividend).

Where does BinckBank stand at the end of 2010?The dividend per share for 2010 amounted to € 0.51 (FY09 € 0.52) per share, while the dividend yield amounted to 4.4% (FY09 4.1%). At the beginning of 2010, BinckBank shares were valued at € 12.51. Their value at 31 December 2010 amounted to € 11.60.

Complying with changing legislation and regulationsBinckBank operates in regulated and supervised markets in which all stakeholders need to be served correctly. BinckBank is under the obligation to permanently comply with the continuously changing legislation and regulations of the financial sector (compliance).

Where does BinckBank stand at the end of 2010?BinckBank has implemented various internal projects that aim to keep BinckBank up to date and compliant with these changing legislation and regulations.

Corporate social responsibility By corporate social responsibility (CSR), BinckBank aims to maintain and increase confidence in its sustainable activities. The corner stone of our CSR policy is to put our customers first in everything we do.

Where does BinckBank stand at the end of 2010?In 2010, BinckBank drafted its CSR policy, in which the following spear points were included:• Sustainable investment• Educating investors• Secure Internet brokerage services

Our CSR policy is an integral part of BinckBank’s services and is taken into consideration when decisions are made concerning innovation and product development.

11Annual Report 2010

Quantitative targets All medium-term quantitative targets revised upwards in 2009 remain unchanged. For the next three years, that is up to 31 December 2013, BinckBank has set the following targets:

Medium-term goals Goals for year-end 2013

Realisation at year-end 2010

Realisation in % at year-end 2010

Dutch Retail brokerage accounts 330,000 242,210 73%

Belgian Retail brokerage accounts 90,000 40,907 45%

French Retail brokerage accounts 80,000 24,465 31%

Number of BPO agreements 10 4* 40%Total savings assets € 1.5 billion € 1.5 billion € 718 million 48%Total administered assets € 15 billion € 15 billion € 14 billion 93%

* of which 2 BPO contracts are not yet operational

Strengths, weaknesses, opportunities and threats

Strengths Opportunities

• Market leader in the Netherlands and strong positions in Belgium and France

• High levels of customer satisfaction and fast product development/innovation

• Strong financial position/solvency and low risk profile• Efficient central back office & IT platform (economies of

scale)• Expert knowledge of securities transactions

• Widening the scope of services for Retail investors and financial consumers in existing markets

• Geographical expansion in Europe• Trend among professional parties to outsource

transaction processing and securities administration• MiFID and the best execution requirements via TOM

Weaknesses Threats

• Reliance on a relatively small group of Retail customers• High fixed cost basis

• Declining investors’ sentiment• Saturation of the Dutch market• Increasing competition/price pressure• Changing legislation and regulations• Lack of specialised personnel

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ScandinaviaPopulation: 24.6 millionRetail Investors: 1.8 million% using online banking: 39%Internet access: 90%Online brokers: Nordea, Nordnet, Saxo,

AvanzaAverage price level: Very lowMost traded products: Shares, funds, ETFs and

bonds

United KingdomPopulation: 62.3 millionRetail Investors: 2.5 million% using online banking: 46%Internet access: 82%Online brokers: Barclays, HSBC, E*Trade,

LloydsAverage price level: Flat fee / averageMost traded products: Spread betting, CFDs ,

FX

Germany Population: 82.3 millionRetail Investors: 2.6 million% using online banking: 38%Internet access: 79%Online brokers: DAB, Comdirect, Cortal

Consors, FlatExAverage price level: Low / averageMost traded products: Shares, bonds, OTC and

warrants

SpainPopulation: 40.4 millionRetail Investors: 1.6 million% using online banking: 35%Internet access: 60%Online brokers: Renta4, Selftrade,

BankinterAverage price level: Low / averageMost traded products: Funds, CFDs, warrants

Home Markets NL/BE/FRPopulation: 91.8 millionRetail Investors: 3.3 million% using online banking: 52%Internet access: 74%Online brokers: Keytrade, Fortuneo,

Boursorama, ComdirectAverage price level: AverageMost traded products: Shares, options, warrants

and funds

PolandPopulation: 38.5 millionRetail Investors: 0.5 million% using online banking: 6%Internet access: 58%Online brokers: Supermakler, BPH,

mBank, IDMSAAverage price level: Very lowMost traded products: Local funds and shares

ItalyPopulation: 58.1 millionRetail Investors: 2.3 million% using online banking: 27%Internet access: 50%Online brokers: Fineco, IW Bank, DirectaAverage price level: Low / averageMost traded products: Shares and derivates

Switzerland Population: 7.6 millionRetail Investors: 0.5 million% using online banking: 16%Internet access: 80%Online brokers: Swissquote, PostfinanceAverage price level: HighMost traded products: Shares and funds

Source: CIA World Factbook, comScore data, company data


BinckBank in a European contextThe European online brokerage landscape is fractured. Various (Western) European countries have a number of players, only a few of which operate on a European scale.

Some European brokers (partly) belong to large banks. Their strategy as a rule differs from specialised players such as BinckBank. Whereas BinckBank clearly focuses on online brokerage and security-related services, the big players are developing ever more towards being online banks, focused on expanding their product range to include, for example, current accounts, credit cards, mortgage-related products and insurances. These services are often offered with the support of product knowledge provided by their parent companies. We believe that such diversification is introduced at the expense of their focus on actively investing customers, which opens up opportunities for specialised players like BinckBank.

Competitors going from brokerage to online banking create opportunities for a specialist like BinckBank

Market parties have already for a long time speculated on European consolidation within the sector in order to guarantee long term growth. We have not witnessed any start of the consolidation process in 2010. Many brokers belong to (large) banks that often partially finance their own activities from liquidity surpluses generated by the brokers in question. Brokers usually claim a limited amount of the resources held by a bank, and as a rule the value of a broker is limited in comparison to the total value of the bank in question. Disposing of a broker is not considered to be a solution for the possible restructuring of the parent company’s balance sheets (please refer to page 12 and 14 for an overview of peers and the European online brokerage landscape).

European expansion into ItalyBinckBank expects to expand its European operations halfway through 2012. Next to Dutch, Belgian, and French investors BinckBank will offer Italian investors its services. The Italian market is one of Europe’s largest brokerage markets, generating on average about 45 million transactions annually. This number is three times more than in the Netherlands. Italians, much like the Dutch, trade heavily in derivatives. Italian rates lie somewhere between the French and Belgian rates. The two largest Italian players are Fineco (part of Unicredito) and IW Bank (part of UBI Banca). The trend here is much the same as in other European countries, in that large companies tend to go from being online broker to being online bank, thereby losing their focus on private investors. Four small online brokers play the field in addition to the two major players.

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BinckBank versus other European online brokers

BinckBank IW Bank Fineco Boursorama Keytrade Comdirect Swissquote Avanza Nordnet

Home market Netherlands (#1) Italy Italy France Belgium (#1) Germany (#1) Switzerland Sweden Sweden

Market capitalisation (as per 31-12-10)

€ 864 million € 147 million Associate € 691 million Associate € 1,017 million € 785 million € 726 million € 395 million

Shareholders

• Delta Lloyd N.V. (>10%)

• Boron Investments (>5%)

• Navitas B.V. (>5%)

• Delta Deel-nemingenfonds NV (>5%)

• Oppenheimer Funds (>5%)

• UBI Banca (80.5%)

• UniCredit Group (100%)

• Société General (55.5%)

• La Caixa (20.9%)

• Crédit Agricole (100%)

• Commerz- bank (80.5%)

• M. Burki (14.5%)• P. Buzzi (14.5%)• Alken Fund

European Opportunities RACC (5.8%)

• J. Pfau (5.6%)• M. Fontana

(5.5%)• PEC Global

Equity Fund (5.8%)

As per 31-12-2008

• Investment AB Öresund (21.4%)

• Sven Hagströmer (incl. fam.) (7.3%)

• Lannebo fonder (6.1%)

• Swedbank Robur Fonder AB (6.1%)

• E. Öhman J. (30.2%)

• Premiefinans AB (10.3%)

Number of accounts (2009)

373,574 98,600 878,502 682,518 118,790 1,419,037 142,702 279,000 308,600

Net income (2009) € 186 million € 68 million € 265 million € 240 million € 42 million € 258 million € 66 million € 50 million € 89 million

Operating expenses (2009)

€ 123 million € 59 million € 175 million € 132 million € 14 million € 198 million € 38 million € 23 million € 64 million

Profit before taxes(2009)

€ 62 million € 9 million € 74 million € 70 million € 20 million € 76 million € 28 million € 27 million € 24 million

Other countries

• Belgium• France

• United Kingdom

• Austria• Germany• France• Luxembourg

• n/a • United Kingdom

• Spain• Germany

• Luxembourg• Switzerland

• Austria • n/a • n/a • Norway• Denmark• Finland • Germany• Luxembourg

Source: in-house research and company data


Information for shareholders

BinckBank shares are traded continuously on NYSE Euronext Amsterdam and since 1 March 2006 have been included in the Amsterdam Midkap Index (AMX), with a weighting as at 31 December 2010 of 2.32% of the index. The share’s ISIN code reads NL0000335578 (Reuters: BINCK AS, Bloomberg: BINCK NA). In 2010 the share was covered by analysts ABN AMRO, ING, KBC, Kempen & Co, Kepler Capital Management, Petercam, Rabo Securities, RBS, SNS Securities and Theodoor Gilissen. The total number of shares outstanding as at the end of 31 December 2010 amounted to 74,500,000, with a market capitalisation of € 864 million (2009: € 954 million). Options on BinckBank ordinary shares have been traded since 21 March 2006.

Key figures for BinckBank shares

2010 2009 2008

Earnings per share € 0.60 € 0.63 € 0.43

Adjusted earnings per share € 1.02 € 1.04 € 0.83

Dividend per share* € 0.51 € 0.52 € 0.41

Dividend yield in % (based on year-end closing quote) 4.4% 4.1% 7.5%

Net asset value € 6.30 € 6.31 € 6.20

Year-end share price BinckBank N.V. € 11.60 € 12.54 € 5.45

P/E ratio 11.4 12.1 6.6

AMX index 639 519 312

* 2010 figures are subject to approval of the General Meeting of Shareholders

Share price & volumes

2010 2009 2008Opening price € 12.51 € 5.54 € 10.11 Highest price € 13.66 € 14.00 € 10.23 Lowest price € 8.91 € 5.35 € 4.10 Closing price € 11.60 € 12.54 € 5.45

Share turnover 86,610,504 69,509,627 90,492,493 Turnover – high 4,844,483 1,215,751 2,287,767 Turnover – low 44,598 32,437 24,802 Average daily turnover 335,700 271,522 353,486

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Share capital

2010 2009 2008Authorised ordinary shares 100,000,000 100,000,000 100,000,000

Issued shares previous year-end 76,068,928 77,093,508 77,093,508Number of shares issued during the year - - -Number of shares cancelled during the year 1,568,928 1,024,580 -Issued shares year-end 74,500,000 76,068,928 77,093,508

Number of priority shares 50 50 50

Average number of shares outstanding during the year 74,080,625 74,897,706 76,870,870

Market capitalisation year-end € 864,200,000 € 953,904,357 € 420,159,619

BinckBank shares The BinckBank share price was relatively volatile in 2010. The crisis on financial markets in May, the price reduction at the Binck label, the first quarterly results that just missed analysts’ forecasts and the rumours of a takeover in October and December all affected the value of BinckBank shares. BinckBank shares opened at € 12.51 on 1 January 2010 and subsequently peaked at € 13.66 following news of the outstanding financial results in 2009.

Due to the financial crisis in May 2010, BinckBank shares reached their lowest point at € 8.91. The shares then recovered much of their value and at the financial year’s end reached € 11.60. Calculated over the last three years, the total annual shareholder return (TSR: dividend + share price gain) averaged 8.5% (CAGR), compared to a TSR of the AMX at 2,43% (CAGB).

BinckBank vs AMX

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AMX Index (normalised)

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BinckBank share movements and volumes

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30 September 2008:Launch of share buy-back programme

October 2008:Bottom of the credit crisis

2009:Record year for BinckBank in terms of number of transactions and profit

26 April 2010:First-quarter results lower than expected by analysts

May 2010:Financial crisis

end October 2010:Takeover rumours

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Dividend policyBinckBank’s articles of association stipulate – if and to the extent that profit so permits – that an amount equal to six times the nominal value of those shares (50 x € 0.10 x 6%) is to be distributed on priority shares. The Stichting Prioriteit (the Foundation) then determines which part of the remaining profit is held in reserve. This amount is not distributed among the shareholders but added to the reserves of the company. The profit remaining after the reservation referred to is put at the disposal of the general meeting of shareholders. This means that it is up to the general meeting of shareholders to decide whether the remaining profit is distributed, held in reserve or a combination of both. Distributions may be made payable in a value other than cash, such as ordinary shares, subject to compliance with the relevant provisions of the articles of association of BinckBank.

For profits to be put at the disposal of the general meeting of shareholders, the company must in its own opinion have obtained an adequate solvency position. If, in accordance with the above, profit can be put at the disposal of the general meeting of shareholders, the Foundation will strive towards a pay-out ratio of 50% of the adjusted net profit.

Dividend proposal 2010The shareholders will be proposed to pay out a total dividend for 2010 in cash to the amount of € 0.51 for each share (50% of the adjusted net profit in 2010) less 15% dividend tax. Since an interim dividend of € 0.24 was paid out in cash for each share in August 2010, the proposed final dividend amounts to € 0.27 in cash for each share. No stock dividend will be distributed by the company. Subject to approval by the shareholders on 26 April 2011, the shares will be listed ex-dividend on 28 April 2011. Payment of the final dividend will be effected on 4 May 2011.

ShareholdingsBased on the Dutch Financial Supervision Act, five shareholders as at 31 December 2010 possess sharehol-dings with an individual interest exceeding 5%. These shareholders are: • Delta Lloyd N.V. (> 10%) • Boron Investments N.V. (> 5%) • Navitas B.V. (> 5%) • Delta Deelnemingenfonds N.V. (> 5%)• OppenheimerFunds Inc. (>5%)

At the end of 2010 the members of the executive board of BinckBank held the following equity interests: • Koen Beentjes: 19,872 shares• Evert Kooistra: 20,876 shares• Pieter Aartsen: 37,322 shares• Nick Bortot: 51,984 shares

Shareholder’s Rights ActAs of 1 July 2010, the (Dutch) Shareholder’s Rights Act has undergone several amendments. For the shareholders of BinckBank this means, among other things, that the shares need to be registered by no later than 28 days prior to the general meeting of shareholders (AGM) and that all documentation concerning the AGM’s agenda must be made available by no later than 42 days prior to the AGM taking place.

Investor RelationsBinckBank maintains an open information policy for investors and others with a (financial) interest in the company. BinckBank wishes to keep them informed about company policy and corporate developments and actively seeks a dialogue with its investors.

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This annual report is one of the means to achieve that. All other relevant information, such as half-yearly reports, quarterly reports, risk reports and background information can be found at www.binck.com.

During the past year the members of the executive board and investor relations had approximately 160 (2009: 140) meetings with (potential) investors from Europe and the United States. Following the publication of the first and third quarterly results and the annual statements, BinckBank will provide analysts and shareholders with an explanation of the results by telephone. Other interested parties will be able to follow this telephone conference via our website. The material presented will be published together with the press release on www.binck.com. A transcript of the telephone conference will be made available a few days after it has been held. Following the publication of the half-year report, BinckBank will invite analysts to a specially convened meeting. This meeting can be followed via an audio webcast on www.binck.com. All material presented at the meeting as well as the relevant transcripts will be published on our website. In addition, BinckBank provides journalists with an opportunity to have the results explained to them each quarter.

On 30 September 2010, BinckBank organised its very first Investor Day. Owing to its success, the event will be repeated on an annual basis. For 2011, the event is scheduled to take place on 8 September.

Further inquiries about corporate issues and BinckBank in general can be made at our Investor Relations department.

Investor RelationsAnneke HoijtinkTelephone: +31 20 522 0372Mobile: +31 6 201 98 337E-mail: [email protected]: twitter.com/BinckBank


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Financial calendar 2011

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Our best performance remains the word of mouth advertisement by our customers


Our best performance remains the word of mouth advertisement by our customers

Gerjan de Lange Director Marketing & Sales

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Report of the executive board

Review 2010

During the past few years we have seen a number of changes taking place on the Dutch online brokerage market. Small, aggressive and price-cutting online brokers have accessed the (hyper) active investor segment of the market, and online brokerage is turning more and more into a commodity product. It can only be expected that our pricing will be rendered less effective in the future. For these reasons BinckBank will distinguish itself from its competitors in other ways, for example by offering services that have important added value.

The first steps in this context were made by BinckBank in 2010 with the introduction of Binck ProTrader and the Squawkbox for our highly active customers. Another good example of the added value offered by BinckBank to investors is the launching of our online community, Shares. Customers and non-customers alike are offered a platform via which they can exchange experiences and trading strategies with each other that could result in better investment decisions. Other initiatives taken by BinckBank in 2010 include the founding of BeFrank, the acquisition of ThinkCapital, the introduction of SRD in France and the launching of the Mutual funds supermarket in both the Netherlands and Belgium. All the above are part of our strategy to generate more income from assets and thus reduce our dependence on income from transactions.

Online brokerage from BinckBank is a unique experience

In 2010 BinckBank introduced a number of measures to further enhance its IT infrastructure. Improvements have been made to the internal control framework, the general measures of control for IT have been sharpened and IT security has been reinforced. Now that the data centre migration has been completed, the continuity of our service provision is guaranteed even more.

In addition, more use has been made of the virtualisation concept in which multiple software enviroments can be maintained on the same hardware, which leads to economies of scale. Within the IT division, dedicated teams have been assembled for each of the business units. These dedicated teams have been accommodated with the various departments where day-to-day management takes place. The primary objective of the teams is to introduce new products and services.

At the end of the third / beginning of the fourth quarter of 2010, BinckBank relocated to its new head office in Amsterdam (Eurocenter). Acquiring these new premises means that all BinckBank employees in Amsterdam are now assembled in one building. This hugely contributes towards internal communications and cooperation.


Review of the financial results (x € 1,000) FY10 FY09 Δ FY09Customer figuresCustomer accounts 433,538 373,574 16%

Retail 406,078 348,188 17%Professional Services 27,460 25,386 8%

Number of transactions 8,854,215 9,617,181 -8%Retail 8,268,167 9,144,980 -10%Professional Services 586,048 472,201 24%

Assets under administration 14,124,667 10,942,742 29%Retail 9,739,332 8,031,695 21%Professional Services 4,385,335 2,911,047 51%

Income statementNet interest income 43,587 43,825 -1%Net fee and commission income 126,970 129,240 -2%Other income 13,599 9,661 41%Result from financial instruments 620 4,353 -86%Impairment of financial assets 70 (857) -108%Total income from operating activities 184,846 186,222 -1%Employee expenses 45,480 43,185 5%Depreciation and amortisation 34,798 35,939 -3%Other operating expenses 44,223 43,388 2%Total operating expenses 124,501 122,512 2%Result from operating activities 60,345 63,710 -5%Share in results of associates and joint ventures (1,386) (1,466) -5%Other non-operating income 23 - 100%Result before tax 58,982 62,244 -5%Tax (14,837) (15,083) -2%Net result 44,145 47,161 -6%Result attributable to non-controlling interests 95 - 100%Net result attributable to shareholders BinckBank 44,240 47,161 -6%IFRS amortisation 28,196 28,196 Fiscal goodwill amortisation 2,792 2,792 Adjusted net result 75,228 78,149 -4%Average number of shares outstanding during the year 74,080,265 74,897,706 Adjusted net earnings per share 1.02 1.04 -2%

Balance sheet & capital adequacyBalance sheet total 3,216,768 2,930,010 10%Equity 468,913 480,359 -2%Total available capital 131,257 95,569 37%BIS ratio 23.9% 18.4%Solvency ratio 15.7% 13.0%

Cost / income ratioCost / income ratio 67% 66%Cost / income ratio excl. IFRS amortisation 52% 51%

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Adjusted net profit for 2010The adjusted net profit for 2010 amounted to € 75.2 million. This is a 4% decrease in comparison to record year 2009 (€ 78.1 million). Despite an increase in the number of accounts by 59,964, the transaction volume fell by 8% due to deteriorating investor sentiments. The adjusted net profit per share amounted to € 1.02 (FY09 € 1.04).

The adjusted net profit is the net result to be allocated to BinckBank shareholders adjusted for IFRS depreciation and amortisation and the tax saving on the difference between the fiscal and commercial amortisation of the intangible assets and goodwill acquired as a result of the acquisition of Alex.

Net interest incomeDespite the relatively unfavourable conditions in the money and capital markets, 2010 net interest income of € 43.6 million was more or less the same as in 2009 (€ 43.8 million). For a large part of 2010 money and capital market interest rates were at historical lows, meaning that BinckBank had to be satisfied with substantially lower returns on its investments. As a result of the financial crisis, BinckBank moreover decided in May 2010 to be even more conservative with its investments, which led to a further decrease in the return on its investment portfolio. The negative effect of the lower (re)investment yields was, however, offset by additional interest income from an increase in funds entrusted, a decrease in the percentage of the funds entrusted held in savings accounts, an increase in collateralised lending of 16% to € 476 million and adjustments to the interest paid on savings. The interest paid on the savings accounts was brought in line with the lower yield on investments in the first half of 2010.

Funds entrusted

€ 1 ,173€ 1 ,464

€ 874€ 718

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€ 76

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Net fee and commission incomeThe net fee and commission income for 2010 amounted to € 127.0 million, only € 2.2 million less than the net fee and commission income for 2009 (€ 129.2 million). Despite the 8% decrease in the number of transactions from 9.6 million in 2009 to 8.9 million transactions in 2010, the drop in net fee and commission income was limited to a mere 2%. The lower transaction-generated income was largely compensated by an increase in other commission income from, among others, Alex Asset Management and Professional Services’ business unit BPO contracts. This demonstrates BinckBank’s gain from its strategy to generate more income from services other than transactions in order to improve the stability of its operating income.

In 2010 market interest rates were at historical lows


Other incomeOther income rose by 41% in 2010, reaching € 13.6 million (FY09: € 9.7 million). The other income item includes the income from Syntel. Licence sales increased at Syntel, and usage of the expertise of the Syntel consultants rose by both existing and new clients.

Total operating expensesThe operating expenses increased from € 122.5 million in 2009 to € 124.5 million in 2010 (+2%). The employee expenses increased by € 2.3 million (+5%), mainly due to the increase in staff by 39 fulltime employees (FTEs) to 565 FTEs. The reason for this increase lies mainly in the expansion of operations undertaken by daughter company Syntel (+22 FTEs). Depreciation and amortisation fell by € 1.1 million (-3%) and the other operating expenses increased marginally by € 0.8 million (2%). The cost/income ratio (excluding IFRS amortisation) for 2010 amounted to 52%, which is virtually the same as in 2009 (51%).

Operating expenses

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Share in results of associates and joint venturesThe share in results in associates and joint ventures amounted to € 1.4 million negative (2009: € 1.5 million negative). This concerns BinckBank’s share of start-up losses for long-term initiatives TOM and BeFrank.

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Retail business unit

The Retail business unit focuses on private investors in the Netherlands, Belgium and France as well as Italy as from mid-2012. In the Netherlands under the Alex and Binck labels. In Belgium and France, where we have been active since 2006 and 2008 respectively, we work exclusively under the Binck label.

Retail servicesThe Retail business unit offers private investors various different services in the field of online brokerage and asset accumulation. Our largest customer group consists of independent investors who use BinckBank to effect securities transactions. In addition, we offer an online savings product, asset management and the Mutual funds supermarket under our Alex label.

Our mission is to amaze our customers with the quality of our services

BinckBank’s success lies in providing a combination of a practical, fast and extensive website, competitive prices and outstanding service. Moreover, we offer services with an added value. This enables us to pursue the highest possible level of customer satisfaction. Our target is to provide our customers with the best possible services and amaze them with the quality of our services. Maintaining this approach will bind our customers to us and stimulate them to transfer larger parts of their capital to BinckBank as well as recommend us to other investors.

Developments in 2010In order to emphasize our leadership in pricing versus the large banks, the rates under the Binck label were lowered in the second quarter of 2010. In addition, we are developing a European IT platform to be prepared for further expansion into Europe. The European IT platform enables us to link-up new countries to our centralised back office.

A dedicated IT Retail team was assembled in 2010, charged with the introduction of new products and services. The team proved its worth and already in 2010 developed a number of new services.

Expansion of servicesAt the beginning of the year we launched a new trading tool for highly active investors in the Netherlands: Binck ProTrader. In addition, improvements were made to our services in France by adding content, technical and fundamental analyses, news feeds and the BinckTrader application.

At the end of the third quarter the highly popular French product ‘SRD’ was also added to our services in France. These measures have ensured that our French product range now rivals that of our competitors, but at more competitive prices and at a superior service level. In France, BinckBank was named ‘Best Broker’ by the readers of MoneyWeek, a French investment magazine. We consider this to be an acknowledgement for the improvements introduced in France during the past year. In the fourth quarter we launched the Mutual funds supermarket in the Netherlands and Belgium. The Mutual funds supermarket enables customers to invest in a wide range of funds of regional and international fund managers, for which we offer a free and specific selection of the best-performing funds according to an objective selection procedure. We also introduced an iPhone application and the Squawkbox used by customers under supervision of experienced traders (acting as moderators) to discuss stock market developments and exchange experiences and investment strategies. Our customers have responded enthusiastically to the concept. At the beginning of 2011, with the support of VEB and VFB, we launched the online community, Shares, for both customers and non-customers. Shares aims to become the true investment community in the Netherlands and Belgium.

Relationship management In order to be of even more service to our customers, Binck’s Relationship management department was made operational in June 2010. Relationship management focuses on serving the 500 most active customers.

Alex Asset Management Partly due to the financial crisis, we can see private investors demanding more from their banks and asset managers. There is clearly a need for reliability, transparency and low costs. Private customers also wish to retain more control on their ‘financial lives’. Alex Asset Management responds to these wishes by comprehen-sively and intelligibly offering customers a low-cost asset management tool. This product was granted the ‘Golden Bull’ award in 2010.


Alex AcademyMoreover, Alex with its Alex Academy was granted the ‘Golden Bull’ award for the best educative investment institution. In all, more than 25,000 investors participated in various investment seminars and courses.

European expansion into ItalyIn the course of 2010, BinckBank elaborately investigated several countries to determine which of them would fit the plans for European expansion. From all the countries selected, Italy surfaced as the obvious choice. The main reasons for selecting this country were:• The Italian market is similar to the Dutch market.

Italian investors, like the Dutch, trade heavily in derivatives, and particularly in futures.

• Italy, measured by the number of transactions, is one of the largest online brokerage markets in Europe.

• The required infrastructure connects well to BinckBank’s European IT platform, as a result of which a link-up with our centralised back office and IT infrastructure are possible and economies of scale can be achieved.

BinckBank’s focus for 2011 in expanding into Italy will be on obtaining the necessary permits, setting up the organisation, process and systems design and commercial organisation preparations. BinckBank expects to be fully operational in Italy by the middle of 2010.

Retail business unit results

During the year, 57,890 accounts were opened within the Retail business unit. The total number of accounts at the end of 2010 amounted to 406,078, of which 331,686 in the Netherlands, 40,907 in Belgium and 33,485 in France.

The NetherlandsA total number of 35,801 accounts were opened in the Netherlands, of which 24,320 brokerage accounts, 7,829 savings accounts and 3,652 asset management accounts. The assets under administration increased by 18% to € 8.1 billion.

Alex Asset Management once again had a very successful year in 2010. The assets under administration increased by 82% to € 610 million. These results have earned Alex a place among the medium-sized asset managers in the Netherlands.

Growth Alex Asset Management

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BelgiumThe Mutual funds supermarket was introduced in Belgium in November. In total 8,150 accounts were opened in Belgium in 2010, due to which the total number of accounts at the end of the year amounted to 40,907. The assets under administration increased by 37% to € 1.2 billion. The number of transactions this year turned out fractionally lower than in 2009, amounting to 966,152.

France During the past year major progress was booked in expanding the product and service range for France. In addition, several marketing campaigns were launched, which increased the Binck brand awareness and resulting in an increase in the number of accounts. The number of accounts in 2010 increased by 71% to 33,485. Our French customers are highly active investors who, in all, did 1,105,435 transactions during the past year.

Results from operating activitiesThe result from operating activities decreased by 13% to € 47.1 million, mainly caused by a 5% decrease in net fee and commission income, which in turn was a result of a 10% decrease in the number of transactions. The transaction-based income, however, was partially compensated by an increase in income other than from transactions, due to which the loss in net fee and commission income amounted to a mere 5%. The net interest income grew by 3% to € 38.7 million, mainly as a result of an increase in collateralised loans.

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x € 1,000 FY10 FY09 Δ FY09Customer figuresCustomer accounts 406,078 348,188 17%Netherlands 331,686 295,885 12%

Brokerage accounts 242,210 217,890 11%Savings accounts 74,933 67,104 12%Asset management accounts 14,543 10,891 34%

Belgium 40,907 32,757 25%Brokerage accounts 40,907 32,757 25%

France 33,485 19,546 71%Brokerage accounts 24,465 13,137 86%Savings accounts 9,020 6,409 41%

Number of transactions 8,268,167 9,144,980 -10%Netherlands 6,196,580 7,643,551 -19%Belgium 966,152 973,059 -1%France 1,105,435 528,370 109%

Assets under administration 9,739,332 8,031,695 21%Netherlands 8,132,624 6,894,120 18%

Brokerage accounts 6,853,448 5,774,656 19%Savings accounts 669,142 783,361 -15%Asset management accounts 610,034 336,103 82%

Belgium 1,199,657 875,176 37%Brokerage accounts 1,199,657 875,176 37%

France 407,051 262,399 55%Brokerage accounts 357,996 171,578 109%Savings accounts 49,055 90,821 -46%

Income statement*Net interest income 38,706 37,689 3%Net fee and commission income 112,437 118,934 -5%Other income 964 1,124 -14%Result from financial instruments - - Impairment of financial assets 70 (207) -134%

Total income from operating activities 152,177 157,540 -3%

Employee expenses 33,416 33,656 -1%Depreciation and amortisation 33,413 34,639 -4%Other operating expenses 38,294 35,140 9%

Total operating expenses 105,123 103,435 2%Result from operations 47,054 54,105 -13%

* Due to the new segmentation as from the second quarter of 2010, the comparative figures for the profit & loss account have been adjusted.


Professional Services business unit

In 2003, BinckBank began providing services for professional parties besides private investors. BinckBank offers them numerous solutions in the fields of order execution and securities administration. In all, BinckBank serves more than a hundred professional customers consisting of independent investment managers, banks, insurance companies and pension institutions. These services are offered both in the Netherlands and in Belgium.

The services provided by the Professional Services business unit can be subdivided into three categories:

Services for independent investment managersCustomers of independent investment managers open a so-called ´tripartite´ account with BinckBank and authorise the investment manager to make investments on his or her behalf. The investment manager subsequently manages the portfolio in accordance with the mandate and risk profile agreed on with the customer. The customers of the investment manager at all times have complete insight into their respective portfolios.

BPO services for banks, insurance companies and pension institutionsBanks and insurers can make 100% white label use of BinckBank’s platform. With this service professional parties can offer their customers execution-only services, asset advice and asset management. These services are offered both off and on balance. BinckBank takes care of the entire order processing, securities administration and (securities-related) payment transactions. Everything is presented in the ‘look & feel’ of the bank/insurer (website log-in, transcripts etc.). After Friesland Bank became our first BPO customer in 2008, Robein Leven became the first insurer on the BinckBank platform in the summer of 2009. Currently there is a big demand for BPO securities services. Partly as a consequence of the financial crisis, financial institutions are searching for solutions that will reduce their cost prices.

Independent broker deskA team of specialists from our broker desk supports our professional customers in the execution of orders. Customers can trade in securities worldwide, with BinckBank making use of global brokers. In addition, Professional Services has its own bond desk, where a team of experienced professionals execute bond orders. Our bond desk is fully independent, and does not take own positions on the markets.

This way BinckBank runs no market risk, and best execution for the customer is our only interest. In addition, BinckBank offers a very wide range of non-listed investment funds (more than 30,000 funds in 2010) and cooperates with market makers and specialised brokers in derivatives trading.

Developments in 2010 In the field of service provision for investment managers, Professional Services welcomed several new customers, among whom Petercam Nederland. Also, a contract was signed with Financiële Diensten Amsterdam (FDA) for the supply of data on a combination of equity research and macroeconomic analysis. This independent research combined with the independent broker desk is a unique service for investment managers.

In 2010, Professional Services signed two BPO contracts. The contract with SNS Bank was signed in September, following elaborate contracting procedures. The implementation of SNS starts with SNS Beursbeleggen in the second quarter of 2011. In the second half of 2011, SNS Fundcoach and the other SNS Fondsbeleggen labels will be transferred. We expect to fully enjoy the revenues of this contract as from the end of 2011. In addition, Professional Services has signed a BPO contract with BeFrank for the provision of services for order execution and securities administration. Professional Services aims to secure ten BPO contracts by the end of 2013. BinckBank has currently signed four BPO contracts, which is in line with our target of an average of two contracts a year.

More information about Professional Services can be found at www.binckprof.nl and www.binckprof.be.

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Professional Services business unit results

x € 1.000 FY10 FY09 Δ FY09Customer figuresCustomer accounts 27,460 25,386 8%

Netherlands 26,783 24,871 8%Belgium 677 515 31%

Number of transactions 586,048 472,201 24%Netherlands 555,983 455,912 22%Belgium 30,065 16,289 85%

Assets under administration 4,385,335 2,911,047 51%Netherlands 4,141,843 2,749,176 51%Belgium 243,492 161,871 50%

Income statementNet interest income 4,844 5,512 -12%Net fee and commission income 14,557 10,306 41%Other income 8 19 -58%Result from financial instruments - - Impairment of financial assets - - Total income from operating activities 19,409 15,837 23%

Employee expenses 8,019 7,058 14%Depreciation and amortisation 908 1,047 -13%Other operating expenses 3,689 3,280 12%Total operating expenses 12,616 11,385 11%

Result from operations 6,793 4,452 53%

* Due to the new segmentation as from the second quarter of 2010, the comparative figures for the profit & loss account have been adjusted.

Professional Services once again grew significantly in 2010. The number of accounts increased by 8%, the number of transactions by 24%, the assets under administration by 51% and the operational result even by 53%. Although new customers transferred large parts of their assets to BinckBank, it were mainly existing customers that did so. The income from operating activities increased by 23% from € 15.8 million in FY09 to € 19.4 million in FY10. The net fee and commission income increased mainly as a result of the increased number of transactions and the new BPO contracts.

The operating expenses increased by 11%, mainly due to the investment in personnel as a result of expansion of the Professional Services business unit. The result from operating activities in 2010 amounted to € 6.8 million.


Subsidiaries, joint ventures and participations

Syntel B.V. (Syntel) has been a 100% BinckBank subsidiary since 2006. Syntel develops and markets innovative software with which financial institutions can process and administrate every conceivable securities transaction. One out of every two private securities transactions in the Netherlands is processed by software created by Dutch market leader Syntel, whose customers include third parties next to Alex and Binck. As BinckBank fully owns Syntel it does not rely on third party software at the core of its services, namely securities transactions processing and administration. In addition, Syntel develops and markets financial data traffic software components. Syntel software is fast, scalable and can lead to significant cost reductions and efficiency gains for users. Syntel software is used by numerous medium-sized and large financial institutions, the latter of which ING Bank was the first to buy a license in 2009. Other users include WestlandUtrecht Bank.

More information about Syntel can be found at www.syntel.nl.

On 9 November 2010, BinckBank acquired a 60% interest in ThinkCapital, a Dutch producer of ETFs (trackers). The remaining share capital is owned by Flow Traders, a liquidity provider, and ThinkCapital’s management. Trackers are index-monitoring products used in investing that enable processing at a low cost. The expectations are that the European tracker market will grow rapidly within the coming years. The acquisition of ThinkCapital is BinckBank’s response to the expanding market of passive investments. ThinkCapital and BinckBank have joined forces for the purpose of permanently charting trackers in the Netherlands. BinckBank has the distribution network and ThinkCapital will be responsible for product development. In addition, ThinkCapital focuses on index investing on the institutional market for passive asset management. ThinkCapital’s current offer includes five trackers that are geared to the Dutch market. ThinkCapital intends to expand this offer to other markets on which Binck operates.

ThinkCapital’s advantages above other foreign tracker providers are that its legal structure is governed by Dutch law and that from a fiscal point of view it has the FBI (Fiscal Investment Institution) status. This enables ThinkCapital to efficiently pass dividends received on to investors, as opposed to foreign providers. On the basis of the various tax treaties, this fiscal efficiency can be applied to shares from the various countries the Dutch state has tax agreements with, enabling investors investing in those countries to profit as well. ThinkCapital furthermore distinguishes itself from several compe-titors by applying the method of physical replication. This method involves replicating an index by making sure that the shares from that index are actually part of the fund, as opposed to the method of synthetic replication whereby the exposure on a certain index is obtained by entering into a swap agreement, a construction that entails counterparty risk.

More information about ThinkCapital can be found at www.thinkcapital.nl.

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On 6 July 2010, BinckBank and Delta Lloyd announced their plans for a joint venture - BeFrank - in the field of group pensions. The joint venture is partly made possible by the approval given to the new Pension Institution Contributions Act (PPI) of 21 December 2010 by the (Dutch) Senate. The PPI focuses on the execution of defined contribution pension schemes (‘defined contribution’) in the second Pillar, making it a new pension administrator on the Dutch market in addition to existing insurers and pension funds. A PPI executes pension schemes for its participants, but may not bear any insurance risks itself. It may not, however, bear any insurance risks. The risks must be separately covered by an insurer.

The market for defined contribution pension schemes is growing and its market share compared to defined benefit schemes is increasing. Herein lie the opportunities for BeFrank. Especially since pension schemes are unclear, difficult to understand and expensive for most private individuals. BeFrank’s response in this respect is similar to that of BinckBank in that it enhances its products by providing high-quality, transparent services at a low cost. By doing so, BeFrank makes pension accrual and the management expenses involved more transparent and understandable for both employees and employers.

BeFrank uses the strengths of its parent companies Delta Lloyd and BinckBank by purchasing securities services from BinckBank and pension administration from Delta Lloyd. The total of start-up losses during the first three years is expected to amount to € 6 million, of which € 3 million for the account of BinckBank as a 50% shareholder.

More information about BeFrank can be found at www.befrank.nl

Following the introduction of MiFID in November 2007 it has become possible to establish alternative trading platforms (MTFs). All (retail) banks have since then had to implement an order execution policy in which a best execution clause must be included. Banks are obliged to extensively check the quality of execution for cost price and performance. BinckBank has meanwhile implemented best execution, among other things by establishing TOM. In addition, TOM will eventually lead to lower stock exchange costs for BinckBank when it is used for trading in derivatives.

Major milestones in 2010 for TOM were ABN AMRO Clearing Bank becoming a 25% shareholder in July (BinckBank and Optiver both currently hold a 37.5% share) and being granted the MTF trading license for shares by the AFM on 8 October 2010.

Major spearheads for 2011 are obtaining the MTF license for derivatives and the NYSE Euronext Liffe stock exchange membership. At the beginning of 2011, TOM brought interlocutory proceedings against NYSE Euronext Liffe because it refused to grant TOM a membership. On 22 February 2011, the court ruled that NYSE Euronext Liffe, subject to certain provisions, was obliged to immediately grant the membership. TOM expects to connect several new parties such as banks, liquidity providers and platforms in 2011.

More information about TOM can be found at www.tomtrading.eu.


Outlook 2011

BinckBank once again has a full agenda for 2011. In January we introduced Shares, our online community with the support of the VEB and VFB, enabling us to bring investors, both customers and non-customers, in contact with each other and offer them the opportunity to exchange investment experiences. BinckBank will also actively participate in social media and online financial communities in 2011. In addition, BinckBank intends to maintain its focus on the introduction and expansion of pension accrual and asset management services. Measures to that effect have already been taken in 2010 with the introduction of the Mutual funds supermarket in the Netherlands and Belgium, the founding of BeFrank and the acquisition of ThinkCapital. With these initiatives, BinckBank aims to further distinguish itself from its competitors and become less dependent on trading volumes.BinckBank is meanwhile preparing for the introduction of a new portfolio-based margin system for its most active customers. This will enable margins to be better tuned to the wishes of customers without affecting BinckBank’s risk profile. The new system will be used simultaneously with the current strategy-based system.

Our service offering to professional customers will also be expanded. It will soon be possible to open a fully automated securities giro account within the banking environment. We also expect to be offering several foreign currency accounts to our professional customers in the near future.

The development of our European IT platform is expected to be finalised in 2011. The result will be a modular, multi-fiscal and multi-lingual platform that will enable BinckBank to connect more European countries to its central IT platform and back office. The next country to be connected to our European IT platform will be Italy. This is expected to take place halfway through 2012.

Based on BinckBank’s results and developments, we are optimistic about our prospects and continued growth. Our results, however, will depend strongly on our customers’ activities on the market. The volatility and direction of the market play an important role in this respect. As a result we cannot provide concrete expectations for our results in 2011. BinckBank will continue to focus on the expansion of its customer base, both domestic and abroad, in order to achieve its ambitions.

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Human resources

At BinckBank everything revolves around the customer and amazing the customer. Our employees play a major role in this respect. There are signs of a tight labour market next year. By professionalising our recruitment and selection policy during the past year, we have prepared ourselves to deal with that situation. In addition, we have improved our personnel policy in order to bind employees for long periods of time.

Employees - key figuresDue to BinckBank’s growth in general and that of Syntel in particular, the number of FTEs in 2010 increased by 39, going from 526 at the end of 2009 to 565 at the end of 2010. In 2010, BinckBank regrouped several of its departments. This has lead to the transfer of a number of employees from Operations and Other support to IT and Retail.

BinckBank is an online bank for investors. This implies that a large portion of our staff consists of IT professionals. One of the general characteristics of the IT sector is that it employs more men than women. This is reflected by the proportion of men versus women at BinckBank, where 84% of the FTEs are men.

Prepared for a tight labour marketWe expect the labour market for certain positions to tighten during the next few years. One of the measures taken by BinckBank in this context has been the introduction in 2010 of an auxiliary system for our recruitment and selection process. This will enable us to enter candidates into a database, monitor them, select them and automatically contact them. In 2010, approximately 3,200 people applied for a job with BinckBank.

As of mid-2010 BinckBank HR also twitters new vacancies to its followers via twitter.com/werkenbijbinck.

In addition, several measures were taken for the purpose of retaining valuable members of staff and providing in-house education and training for new employees, mainly IT professionals. One of these measures has been to provide training for beginning IT professionals. BinckBank offers them a basic training, after the successful completion of which they are ready to receive further in-house training. Twenty-three aspiring IT professionals were trained in 2010.

BinckBank, an attractive employerWe are a young, successful and dynamic company that offers a pleasant and informal working environment and ample room for initiative. BinckBank employs many young, ambitious people with the desire to advance their careers. The average age of our staff by the end of 2010 was 34. In order to prevent talented employees from seeking employment elsewhere when they are ready to make a next step in their careers, BinckBank gives them the opportunity to advance internally by offering them other positions that allow them to develop. An active programme was developed for this purpose in 2010. In all, 50 employees moved up to new positions within BinckBank in 2010. The advantage here for BinckBank is that we are able to retain employees for long periods of time, thereby keeping all the knowledge and expertise within the company. Postgraduates are offered traineeships by BinckBank. Two trainees are engaged each year. They complete a personalised two-year programme.

430471

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0

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2009 2010

men women

156

24

76

113

79 78

174

28

66

132

65

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60

80

100

120

140

160

180

200

Retail ProfessionalServices

Operations IT Other support

Syntel

2009 2010

FTEs by division Proportion of men/women


Management/employee developmentBinckBank is rapidly developing, and to enable our mostly young managers to develop accordingly, a special management development programme was launched in 2010. Workshops are held every two months for the entire management during which current subjects applicable to BinckBank in the field of leadership are discussed. We also have various courses on offer for our employees. These courses are purchased centrally, as a result of which their contents form a near perfect match for the knowledge that is required from both BinckBank and its employees. The Alex Academy in 2010 provided seven different investment courses for our staff.

BinckBank DNAOver the past years, BinckBank has evolved into a company with 565 FTEs. When we employ new staff we make sure that they fit our company profile and that our culture is preserved. BinckBank employees are characterised, among other things, by their service-mindedness, customer-friendliness and integrity. They are also cost-aware, quality-minded, hard working and passionate and happy in their work. Much consideration is given to these aspects by us when we select new employees and when our current staff is coached and assessed.

Employees - vitalityAt 3.1%, the absenteeism rate at BinckBank in 2010 has been relatively low. This percentage is virtually the same as in 2009. In 2010, management was trained in dealing with sick employees. While relocating to our new offices, extra attention was paid to providing a healthy menu in the canteen and a contract was signed with a nearby fitness centre for our employees to sport at a reduced rate.

We also regularly organise (sporting) events for the purpose of enhancing mutual ties between our employees, for whom it is also possible to buy tax-friendly bicycles.

RelocationBy purchasing the offices in Barbara Strozzilaan at the end of 2010, we have created a single location in which the entire Amsterdam-based staff can be accommodated. With the subsequent improvements in internal communication and cooperation, our choice for a centralised office has already proved its value. Much consideration was given to interior design in order to create a working environment in which our employees feel comfortable and can work efficiently.

PensionOur current pension contract expires in 2011. As a shareholder in BeFrank we also examined the possibilities for enabling our employees to take advantage of the benefits provided by BeFrank. BeFrank can provide our employees with low-cost online, real-time insight into their accrued pension entitlements. Also, external research performed by the Works Council proved BeFrank to be the best provider. We have therefore decided to place our pension contract with BeFrank in 2011.

Collaboration with the Works CouncilThroughout the year, the executive board held constructive talks with BinckBank’s Works Council. Among the issues discussed were the restructing of our IT department and the founding of BeFrank. In addition, several requests for consent were submitted to the Works Council regarding changes in BinckBank’s terms of employment, among which the new pension contract with BeFrank.

0

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5544

237

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154 163

6673

14 18

< 24 25-34 35-44 45-54 55-64

2009 2010

435 466 502

2430

32

1427

27

23

4

0

100

200

300

400

500

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2008 2009 2010

The Netherlands Belgium France Spain

FTEs by age group FTEs by country

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Corporate social responsibility

Our services mainly focus on creating trust with our customers and offering them added value. BinckBank’s service-mindedness is apparent in every last detail. Our customer service, for example, sees to it that incoming calls are answered immediately and that e-mails are answered within the hour. Such details have been a part of our approach ever since we started. In our vision, one of our core considerations is to make sure that our social impact on people and society is positive and that it reflects the responsible manner in which we operate.

By explicitly formalising our CSR activities, BinckBank provides an impulse for the execution of our CSR policy. It also serves to provide everyone involved, both internally and externally, with additional insight into our operations, which in turn contributes towards improving corporate transparency. The spear points of our CSR policy are: • Stimulating sustainable investment• Educating investors• Internet banking security

BinckBank will promote sustainable investment and has a strong ambition to change current scepticism among investors concerning sustainable investments. BinckBank believes that making a breakthrough in this area will be of significant impact.

BinckBank wishes to see its customers invest as successfully as possible. That is why BinckBank offers its customers various educational options in the form of training and courses on investing. Customers can participate in (online) seminars and training modules at various degrees of complexity. More than 25,000 participants took part in the (online) seminars. In Belgium and France we also offer such webinars. The aim is to educate our customers in sound investment. The investment courses were given 8 points (out of 10), with the investment coaches scoring even slightly better at 8.5 points.

BinckBank is an online bank for investors. The majority of its activities take place via the Internet and online. It is of vital importance that BinckBank provides a secure environment for the funds, other assets and personal details of its customers. A number of measures have been taken to ensure high continuity, stability and performance levels for the services we provide. These measures apply to various disciplines such as organisation and policy, change management, software development & performance and safeguarding the confidentiality and integrity of information.

As BinckBank is an online bank for investors, providing Internet security reaches far beyond internal measures only. A secure customer PC environment is considered by BinckBank to be a vital link in the security chain. Our customers are actively informed about and stimulated in securely accessing the Internet with their computers. In addition, our service desks intend to provide our customers with a list of computer security guidelines in the near future. These directives will be actively distributed via our website and service desk.

In the second half of 2010, BinckBank moved to its new premises. The new building has been equipped with several sustainable facilities: its cooling system uses water from the Nieuwe Meer and it features several solar panels. It also lies within easy reach of all forms of (public) transport.

The new data centres will lead to considerably less energy consumption. They were made operational in 2010. One of the key criteria in choosing between suppliers has been sustainability. Equinix, being the selected supplier, has a global reputation for being innovative in the field of energy consumption efficiency. They are currently in the process of obtaining a so-called LEED certification for all of their branch offices and their objective is to improve energy efficiency within the data centre sector. This is expected to lead to a 30% reduction in our energy consumption.


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Pieter Aartsen, executive board member(1964 – Dutch nationality)

Pieter has been an executive board member of BinckBank since 2006, and is responsible for the Professional Services business unit, ThinkCapital, TOM and the BeFrank joint venture.

Pieter studied economics at VU University Amsterdam. From 1990 to 2004 he worked at the KAS BANK, where he held various positions within the Institutional Banking division. He was appointed Head of Sales and Business Relations Management for the Benelux countries in 1996. In 2001 Pieter became Head of Sales and Business Relations Management for the UK, and in 2004 he joined Deutsche Bank AG in London as Head of European Securities Clearing and Vice President, with responsibility for product development and sales of the clearing product.

Executive board members

Evert-Jan Kooistra, executive board member and CFO(1968 – Dutch nationality)

Evert-Jan has been an executive board member and CFO of BinckBank since 2008. He is responsible for Finance & Control, Operations, Risk Management, Treasury and Internal Control.

He studied business economics at the Erasmus University in Rotterdam and is a certified public accountant. Evert-Jan has over 18 years of experience in the financial field, including time spent at PWC and Shell. In his last position he was financial director at the American company International Game Technology.

Nick Bortot, board member(1973 – Dutch nationality)

Nick has been an executive board member of BinckBank since 2008, and is responsible for the Retail business unit.

Nick studied business administration at Nyenrode Business University and international affairs at the University of Amsterdam. Nick has been involved with BinckBank since its foundation in 2000, and he has held positions as Head of Client Relations, Marketing & Sales Director and as Managing Director of the successful Binck in Belgium.

Executive board members

Koen Beentjes, chairman of the executive board (1961 – Dutch nationality)

Koen has been a member and the chairman of the executive board since 2009. He is responsible for Human Resources, Information Technology, Legal Affairs, Compliance, Internal Audit, Investor Relations and Syntel.

Koen is a certified public accountant and had an international career of over 20 years at the ING Group and its predecessors. In the early days of his career he was particularly active in the field of Finance & Control at subsidiary companies of the ING Group. In 1994 he took on responsibility for the acquisition of foreign retail banks by ING. In 1998 he became a member of the executive board of the Allgemeine Deutsche Direktbank AG in Frankfurt am Main, Germany. Following his return to the Netherlands Koen was appointed as general manager of ING Card at the end of 2002.

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Ed Lanen Director IT


The main challenge facing our IT department is to maintain stability, availability and performance of the platform while continuing to innovate

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Risk & capital management

The European debt crisis lead to much unrest about the economic and budgetary position of the Eurozone and almost throughout 2010 held stock markets in its grip. In July, 91 banks within the European Union were assessed on their ability to survive future economic shocks. BinckBank voluntarily submitted to the European stress test and came out with flying colours. With a Tier I capital of € 131.3 million and a BIS ratio of 23.9%, BinckBank possesses sufficient financial reserves to withstand financial stress.

Key developments in 2010

Capital adequacyBinckBank’s capital adequacy position was above the norm throughout the year. Its Tier I capital grew from € 95.6 million as at 31 December 2009 to € 131.3 million at the end of 2010, an increase of 37.7%. The BIS ratio and solvency ratio increased from 18.4% and 13.0% (as at the end of 2009) to respectively 23.9% and 15.7% in 2010. With these ratios BinckBank already complies with the stringent capital requirements proposed by the Basel Committee of Banking Supervision (BCBS), the full implementation of which has been set for 2019.

LiquidityBinckBank pursues a prudent liquidity risk policy by virtue of which we are obliged at all times to maintain sufficient liquidity buffers in cash to meet our customers’ demands for the liquid assets they hold. At the end of 2010 BinckBank had a sound liquidity position (€ 208.6 million ex deposits and cash reserves DNB; 9.2% of funds entrusted). There have been no material liquidity incidents in financial year 2010, nor has there been any reason for our liquidity policy to be adjusted.

Banking CodeThe year 2010 was, among other things, marked by the implementation of the product approval process in accordance with the Banking Code. BinckBank’s product approval process, besides focusing on duty of care, particularly aims to control operational risks. This implies that new products and services can only be introduced following approval by the operational risk committee. Much consideration in this context is given on the one hand to the risk and return of the product, and on the other hand to the risk appetite and BinckBank’s desired risk profile as well as the extent of compliance with our duty of care towards customers.

In addition, an independent risk and product development committee has been installed as part of the supervisory board, whose task it is to advise the supervisory board about, among other things, (substantial) changes in the bank’s risk profile regarding new products, services and changing legislation. Finally, the risk appetite for the various risk categories has both been assessed by BinckBank’s executive board and discussed with and approved by the supervisory board.

Investment policyIn the second quarter of 2010, following developments on the European capital markets, BinckBank made the decision to invest even more prudently. Consequently, its investments in Spanish (government-guaranteed) bonds were reduced from € 190 million to € 75 million, while its investments in Spanish financial institutions worth € 52 million were cut back entirely. BinckBank’s investments in Irish (government-guaranteed) bonds worth € 160 million were also reduced in their entirety. Proceeds were reinvested in German Öffentliche Pfandbriefe with lower yields, due to the restructuring of the investment portfolio. Öffentliche Pfandbriefe are covered bonds that are issued by German banks and are known to be a relatively stable and safe investment.

Operational risk capital requirementIn 2010 the capital requirement for operational risk under Pillar I was adjusted. Until the end of the first quarter, BinckBank was required to hold capital equal to 15% of the operating income of the previous financial year in conformity with the Basic Indicator Approach. This strict measure (due to rapid growth), however after consultation with DNB on the increased quality of internal management and control measures, no longer applies. As from 30 June 2010, BinckBank applies the Basic Indicator Approach using the average operating income for the previous three financial years. This change has resulted in a lower capital requirement for the operational risk under Pillar I.


Alex Asset ManagementWith Alex Asset Management BinckBank distinguishes itself from other asset managers by pursuing an active investment policy and executing automated investments on the basis of technical analyses.

Alex Asset Management’s expansion reduces our dependence on transaction-related income but also alters BinckBank’s risk profile. The risk profile for asset management services deviates from BinckBank’s regular execution-only online brokerage activities. Possible risks have been identified in relation to duty of care aspects, operational risks and reputation damage. The duty of care directives for asset management are more strict than for execution-only services, as a result of which additional responsibility rests with the asset manager. BinckBank has covered this responsibility by establishing the customer’s investment profile by means of a digital intake prior to providing a service and having it digitally signed by the customer. Each year BinckBank requires asset management customers to update their investment profile. BinckBank then on a daily basis checks whether the customer’s investment profile is in line with market developments and whether it corresponds with the established investment profile and investment targets. If necessary, automatic transactions are executed to either expand or limit positions. This process is fully automated and therefore does not rely on managers.

Operational risk mainly concerns our strong dependence on the IT system, decision-making models and the accuracy of data used, such as prices, trade volumes and price-affecting corporate actions. The control framework has been adjusted accordingly. Extensive checks and tests are carried out by BinckBank every day as to whether the effect of the decision-making models still complies with the criteria. The reputation of Alex Asset Management and therefore that of BinckBank might be jeopardised if customers perceive their assets to be managed incorrectly.

European stress testIn 2010, BinckBank voluntarily submitted to the European stress test for banks, developed by the BCBS. The outcome of the test for BinckBank was positive. BinckBank’s Tier I ratio in all stress scenarios exceeded the BIS ratio of 18.4% as at year-end 2009. In the worst case scenario, including sovereign shock, the BIS ratio came to 23.4%.

Risk appetiteRisk appetite is the extent to which BinckBank is prepared to accept risks during regular business operations. Risk appetite defines the balance between risk and return and therefore affects the core of BinckBank’s operations. Commercial interests and yields are weighed out against the risks involved. Establishing the risk appetite for BinckBank is not a statistic certainty, but rather a dynamic process during which continuous adjustments are made according to changing internal and external circumstances. Risk culture and ‘tone at the top’ are determining factors in this respect. It was demonstrated in 2010 that defining the risk appetite had a positive impact on company culture and operations; it created a higher awareness among employees on the risk-return ratio. The executive board includes external perception in establishing the risk appetite: how does BinckBank want to be perceived by key stakeholders such as customers, shareholders, employees and supervisors? What are their expectations regarding risk profile, risk appetite and return? BinckBank’s executive board uses the various meetings it convenes with stakeholders to analyse their perceptions and expectations. The risk appetite is the single most important parameter within the BinckBank Enterprise Risk Management System and therefore the starting point for risk management. The executive board establishes the risk appetite at least once a year and adjusts it when necessary.

BinckBank, much like other financial institutions, depends on the trust of its private clients. Its relatively short track record, the absolute extent of its equity capital, its market listing and the large number of clients render BinckBank sensitive to ‘trust issues’. Such issues must at all times be avoided and resulted in BinckBank adopting a low risk appetite in relation to its reputation, the adequacy of capital (solvency), its liquidity position and the integrity and rights/obligations of customers. The classifications for risk appetite for strategic risks, business risks, credit risks and operational risks varies from low to moderate. The risk appetite established for BinckBank in general can be qualified as moderate.

BinckBank has a moderate risk appetite

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BinckBank risk profileBinckBank a moderate risk appetite in order to minimise the negative impact of unexpected occurrences on its income and Tier I capital. Our risk profile is limited by our focus on execution-only brokerage activities, dynamic and systematic asset management and our offer of an uncomplicated savings product. BinckBank pays a lot of attention to risk management. Adequate measures of control and reporting and information systems are all part of our risk management process. Defining the risk appetite, identifying risks and implementing or adjusting relevant measures of control are all continuous processes within BinckBank. Risk management is also affected by changing market conditions and the increasing complexity of legislation and regulations.

Risks for BinckBank

Strategic & business risksInternational economic (cyclical) circumstances and the effects of the credit crisis continue to affect financial markets worldwide and therefore BinckBank’s operational result. Other factors with a possible negative influence on BinckBank’s income include the loss of customers, declining trade volumes, lower average order values and price pressure due to competition. BinckBank operates in a highly competitive environment in which competitors, among whom large financial institutions, enjoy considerable name awareness and ample financial means. In addition, the number of small, aggressive and price-fighting online brokers is growing. BinckBank does everything it can and makes substantial investments to both maintain its customer portfolio and attract new investors. BinckBank’s operational result and capital can also be negatively affected by deficits due to unfavourable corporate decisions, the incorrect execution of corporate decisions and insufficient response to business climate changes in general and markets relevant to the company in particular. Customer trust remains a core element in BinckBank’s policies and everything is done to minimise the risk of reputation damage.

Required capital per risk typeBinckBank to a certain degree is prepared to accept risks that are related to the services and banking activities provided. Several risk types may relate to a specific service or banking activity. Investments, for example, are inherently sensitive to credit risk, market risk and liquidity risk. Pillar I provides guidelines for calculating the minimum capital requirement which the regulator requires a bank to maintain to cover credit, market and operational risks.

Capital per risk type

17.9

13.4

26.027.9

0.2 0.1

12.6

6.3

8.38.9

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Credit risk Market risk Operational risk Interest risk Concentration and margin risk

Counterparty risk Liquidity risk

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Required capital Pillar I

Required capital Pillar II

Under Pillar II, BinckBank identifies additional risks to which it is exposed and determines the amount of capital it requires. The figure ‘Capital per risk type’ shows the risks to which BinckBank is exposed and the amount of capital required to cover the residual risk by type. Strategic and business risk are not reflected in the capital requirement but are covered by the checks & balances in the BinckBank Enterprise Risk Management System and the capital requirement for operational risk.

A description of each risk type is given below:

Credit riskCredit risk is the risk of a counterparty and/or issuing institution involved in trading in or issuing a financial instrument defaulting on an obligation and thus harming BinckBank financially.

Credit risk relates to items included in the balance sheet under cash, banks, financial assets (including collateralised lending) and other assets. With these balance sheet items, the most important consideration is the creditworthiness of the counterparty (except collateralised lending, because these items are fully covered by securities as collateral).

BinckBank deals prudently with the funds entrusted by its customers. Funds entrusted not used for collateralised loans are invested in the market in a responsible and risk-averse manner (investment portfolio). The credit risk on liquid assets and investments is carefully monitored by the treasury department, which reports to the CFO and Risk Management on a daily basis and periodically renders account within the treasury committee.


Investments are made within a set of limits for each counterparty as determined by the treasury committee. Investments in the investment portfolio are made in accordance with conditions laid down by the treasury committee, which are based on a minimum liquidity position of 5% of the funds entrusted.

In 2010, the average solvency weighting of the investment portfolio increased to 7.5% (2009: 5%). This was due to the restructuring of the investment portfolio, among which the cutting back of the exposures in Spanish and Irish bond positions. The proceeds of the sale of these bonds (with a 0% solvency weighting) were predominantly reinvested in German Öffentliche Pfandbriefe with a weighting of 10%. As a result, the solvency weighting of the investment portfolio increased. The capital requirement in 2010 under Pillar I for credit risk increased to € 17.8 million (2009: € 13.4 million).

BinckBank invests in a responsible and risk-averse manner

Customers with a collateralised loan agreement are monitored by Risk management with respect to their available spending limit (ASL). The ASL is the balance of the weighted value of the collateral received from the customer less the customer’s obligations in the form of collateralised lending and margin requirements. There is a shortfall in the ASL if the collateral in the customer’s portfolio no longer provides sufficient cover for the customer’s obligations. As soon as a negative ASL is identified, the deficits procedure is initiated. Use of a deficits procedure is a statutory requirement. The deficits procedure used by BinckBank is as follows:

BinckBank checks for each customer whether the collateral sufficiently covers the collateralised loans and/or margin requirements (margin and current orders) on a daily basis. BinckBank does this by calculating the customer’s ASL. In the case of a negative ASL, the customer must make up the deficits within five business days. If there is a deficits as a result of futures positions, this must be made up within one day. If the customer’s ASL is still negative at 15:00 hours on the last day on which the deficits must be made up, BinckBank will start to liquidate the customer’s securities positions on its own volition. Securities positions will be liquidated until the ASL in the customer’s account is returned to a positive value.

Although collaterised loans have increased by 16.1% to € 476.2 million, this did not lead to a higher credit risk capital requirement, since sufficient securities collateral is provided for future changes in value.

Concentration risk arises when there is an excessive concentration of investments in specific funds for customers with non-diversified investment portfolios. The collateral is in this case too dependent on one or more names. If an issuing institution is liquidated, the consequences are considerably greater than if the credit is extended on a more widely spread portfolio. Risk Management carries out specific daily monitoring for undesirably high concentrations in customers’ portfolios. If necessary, measures are taken in accordance with our policy to limit excessive concentrations. In the event of excessive concentration, a decision can be made to reduce the credit granted to the customer in question.

In addition, the credit committee may decide to limit the concentration level for a specific fund by increasing the haircut on the fund in question. In 2010, BinckBank saw concentration within the entire collateralised loan portfolio increase, and with it the concentration risk. The capital requirement for concentration risk consequently increased from € 3.6 million to € 9.1 million.

The margin is an amount that the writer (seller) of an uncovered option or future is required to deposit as collateral for the risk of the position. It forms a basic guarantee that the investor can meet all possible obligations arising from the position. The size of the margin depends on the financial risk of the position. As the value of an option or future may fluctuate, the margin requirement is not a constant. The risk therefore exists that the margin maintained by the customer turns out to be insufficient in respect of the assumed obligations. The margin requirement may therefore lead to a credit risk on the customer. The level of the margin requirement is partly determined by the margin percentages established by Risk Management on the basis of the historical movements of the underlying share or index.

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Risk Management carries out daily analyses of market movements and updates the margin percentages at least once a month. Due to the declining volatility in the financial markets, the margin requirement for written options was reduced by BinckBank in the course of 2010. This led to a significant increase in the open written option positions. The open margin position of our customers in 2010 increased by 24.4% to € 270 million (year-end 2009: € 217 million). The capital requirement for margin risk increased by € 2.8 million to € 3.6 million.

Neither the concentration risk nor the margin risk are reflected in the Pillar I minimum credit risk capital requirement. For this reason, BinckBank itself imposes an additional capital requirement under Pillar II. In 2010, the capital requirement rose by € 6.3 million, from € 6.3 million at the end of 2009 to € 12.6 million at the end of 2010.

Counterparty risk forms a part of the risks on settlements. For the majority of transactions executed by BinckBank’s customers, trading is done on (regulated) markets such as NYSE Euronext and TOM, for which a central counterparty (CCP) is engaged. As a result, counterparty risk is nil. Within the Professional Services business unit, only a limited part of transactions is executed directly by a counterparty (broker). These so-called ‘Over The Counter’ (OTC) transactions can be susceptible to credit risk (also market risk) due to non-settlement, and are executed with due regard for counterpart limits. Counterparty limits are approved by the credit committee, after which Risk Management sees to it that they are complied with.

The capital requirement under Pillar II for counterparty risk at the end of 2010 amounted to € 1 million (2009: € 1 million). No loss was incurred on current settlements in 2010. Therefore there has been no reason to adjust the capital requirement for counterparty risk.

Market riskBinckBank’s market risk can be divided into interest-rate risk and currency risk.

Interest-rate risk emerges from the possibility that market rates might negatively affect future profitability. A gradual adjustment of the market rates (yield curve) affects future interest income from collateralised loans and the investment portfolio as well as the interest payments made by BinckBank on savings and brokerage accounts.

BinckBank manages this risk in relation to its banking activities by actively matching the maturities of its assets and liabilities within certain limits. The effect of a gradual interest-rate movement on BinckBank’s profitability is assessed on the basis of an Earnings at Risk model and is outlined in note 42 on page 126 of the financial statements.

In addition to gradual movements, the yield curve can also demonstrate sudden movements (interest-rate shocks). Interest-rate shocks affect the value of BinckBank’s investment portfolio. In order to absorb any losses arising from a sudden negative interest shock combined with customers’ withdrawals of funds entrusted, due to which a part of the investment portfolio is liquidated, capital is retained by BinckBank under Pillar II.

Currency risk is the risk presented by movements in the value of items denominated in foreign currencies due to movements in exchange rates. It is BinckBank’s policy not to take foreign-exchange trading positions. Foreign-exchange positions arising out of operating activities must be covered by Treasury on the same day as they become known. Because of this BinckBank is hardly exposed to any market risk.

The capital requirement for market risk is expressed under Pillar I (currency risk) and Pillar II (interest-rate risk). The capital requirement for currency risk under Pillar I amounts to € 0.1 million (year-end 2009: € 0.2 million). The capital requirement for interest-rate risk under Pillar II amounts to € 8.3 million (year-end 2009: € 8.9 million) and has decreased due to a shorter investment portfolio duration.

Operational riskDue to the nature of its operational activities, BinckBank has a high inherent operational risk. Some of the major determinants of this risk are the large number of administrative transactions that have to be processed every day, the fact that all communication takes place via the Internet and the fact that frequent software adjustments have to be made due to changing circumstances. Additionally, a number of unexpected events may occur in BinckBank’s operational processes, due to which losses are incurred or the achievement of targets is hindered. Processes, systems and people can fail, employees may fraud, incidents might occur and daily processes might be interrupted by a calamity or system failure (IT risk). The risks emerging from such occurrences are all operational risks. Losses due to operational risk cannot be avoided. As a buffer for uncovered (unforeseen) losses, BinckBank maintains a required capital for operational risk.


IT riskAs BinckBank’s business operations strongly depend on IT, a significant part of its operational risks are IT risks. Shortcomings in the field of IT may result in a significant threat to critical company processes and the service offering to customers. IT risks therefore indirectly form a threat to BinckBank’s equity position and results. A large number of measures of control have been taken to reduce these risks, among which: organisation and policy, security management, incident & problem management, test, change & configuration manage-ment and continuity.

Some of the main IT risk components and relevant measures taken are:

Organisation and policyThis concerns first, the risk that the IT policy and IT organisation inadequately reflect the organisationalstrategy and second, the risk that the IT organisation and IT policy are not (or not adequately) structuredand formulated to reflect the business processes and the existing information and data processing, with theresult that the processes and the provision of information are not adequately supported. BinckBank pursues an IT Governance Model. IT Governance is evaluated periodically or whenever necessary. In addition, BinckBank has formulated an information security policy that is actively implemented within the organisation. For all significant IT risk control measures relating to issues such as availability, incidents, problems and changes, policy principles have been formulated, which are monitored using Key Performance Indicators (KPIs) and monthly reports are submitted to the operational risk committee. Moreover, BinckBank has defined a process for managing the resources required for the delivery of IT services. BinckBank has also formulated a plan that describes the current and future demand for IT services and the IT resources required (and the necessary works and costs to take these into operation).

Security managementSecurity management is designed to ensure that information is accurate and complete, and that it cannot be accessed by unauthorised users. As an internet bank, BinckBank is by definition exposed to a significant inherent risk of external fraud by online criminals.BinckBank is fully aware of this risk and has therefore formulated an access policy for its IT infrastructure, systems, applications and data, which is approved by the IT manager. BinckBank pursues a pro-active security policy that is continuously evaluated.

One of the key components of that policy is a recurring penetration scans, at which a third party is asked by BinckBank to attempt breaking in to BinckBank’s systems with the aid of the latest technologies and methods. The test results are discussed by the operational risk committee and may lead to a further tightening of policy and/or controls.

BinckBank pursues a pro-active security policy

Incident and problem managementIncident and problem management focuses on the prevention of the risk of failures as a result of which theservice cannot (or cannot sufficiently) be restored as well as of structural errors in the IT infrastructure andon ensuring that incidents and problems are dealt with correctly, completely and in a timely manner.BinckBank mitigates this risk by means of an incident management procedure that ensures that every ITincident is analysed and prioritised, and that incidents with a high level of urgency and impact are escalatedappropriately. Incidents and breakdowns are moreover reported to the IT management team on a monthlybasis. BinckBank has also implemented a problem management procedure. Problems are likewise reportedto the IT management team on a monthly basis.

Test, change and configuration managementBinckBank updates its systems and software on the basis of the latest technological developments and the needs of its customers. BinckBank therefore runs risks from incorrectly and/or incompletely developed software, unauthorised changes made to the IT infrastructure, inadequate provision of information regarding IT infrastructure and the incorrect, incomplete and/or untimely processing of proposed alterations. One of the control measures in place is that only personnel from the Infra and Data Management departments are authorised to implement approved changes to the production processes. This can only be done within the constraints of the defined change process. Moreover, BinckBank uses separate development, trial and acceptance environments for testing new software releases. Before changes to production can be implemented, the changes concerned must have completed the test management procedure and have been approved by the test manager.

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ContinuityThe availability of the website and the underlying systems are vital to BinckBank. The risk of the continuity of (critical) operational processes and/or the company being endangered due to unavailability of the IT infrastructure (including applications and systems) is reduced as follows: BinckBank has drawn up a business continuity & disaster recovery plan, based on a business impact analysis. BinckBank has a contingency facility and at least once a year performs a contingency test. In order to safeguard operational continuity, IT production and contingency systems have been transferred to an external data centre where extensive preventive measures have been taken against the effects of heat, fire, theft, damage, power cuts and natural disasters. The data centre in question is Payment Card Industry Data Security Standard (PCI DSS) certified. In addition, BinckBank uses a back-up system and real-time synchronisation of data with the data centre to secure information that is crucial to the company. Daily performance checks are carried out on critical backups and further action is considered if a failure occurs. Reports on system performance and availability are submitted to management on a quarterly basis. Critical systems are tested on performance every day before the markets open, and monitoring software that has been installed on critical systems enables those systems to be permanently monitored for availability and performance.

BinckBank has a low to moderate risk appetite for operational risk. Our internal target is to prevent the annual operational losses generated by regular business exceeding 1.0% of the gross fee and commission income. Operational losses are considered to be:• The financial result on out-trades and compensation

paid to customers • Other direct losses due to faults in IT systems,

automated information processing and operating processes.

The basic measures of control taken in view of other operational losses comprise:• Formal and comprehensive documenting of all

processes, including the operational IT processes• Identifying and documenting the key controls and

KPIs for all processes• Frequent reporting on KPIs by process owners to

management• Frequent internal auditing for set-up, availability and

performance of the key controls and relevant reporting to the management

• Monitoring of the follow up on shortcomings by the operational risk committee and audit committee

The total operational loss for 2010 amounted to € 1.7 million (2009: € 1.1 million), 0.94% (2009: 0.61%) of the total gross commission income. With these figures BinckBank has achieved its internal target.

In accordance with the Basic Indicator Approach, BinckBank holds capital for operational risk under Pillar I at 15% of the average income from the preceding three financial years. The capital requirement for operational risk at the end of 2010 amounted to € 26.0 million (2009: € 27.9 million), a factor 15 of the actual total loss in 2010 (2009: factor 25).

Liquidity and solvency

Liquidity riskBinckBank gives high priority to the management of this risk, in order to ensure that it always holds enough liquid reserves and can always meet its fi nancial obligations. Liquidity risk management is designed to take account of the effects of BinckBank-specific stress factors, such as negative publicity, increased trading activity by clients (net purchases) and variation of competitors’ interest rates.

BinckBank maintains liquidity buffers between 5% and 10% of the funds entrusted. Moreover, BinckBank can temporarily replenish its liquidity reserves by using alternative sources such as external REPO facilities and the lending facility with DNB (Target 2). The REPO and lending facility are both fully available as BinckBank possesses a liquid and high-quality investment portfolio. At the end of 2010, a major part of the investment portfolio can be used for supplementary liquidity. In the most extreme case BinckBank can decide to sell (liquidate) its investment portfolio to release the required liquidity.

BinckBank retains liquidity risk capital so that it can fulfil its obligations if a part of its investment portfolio needs to be liquidated due to unforeseen circumstances and at unfavourable conditions. The capital requirement under Pillar II for this risk at the end of 2010 amounted to € 1 million (2009: € 1 million).


SolvencyBinckBank’s approach to capital management is aimed at maintaining a solid solvency position while continuously searching for the right balance between the amount of capital held and the risks to which that capital is exposed. Our capital management contributes towards the systematic analysis and improvement of BinckBank’s return on activities. In organising its capital structure, BinckBank observes the limits prescribed by DNB, Basel II legislation and its own internal requirements for capital adequacy. BinckBank’s Capital Adequacy & Risk Report 2010, among other things, contains a detailed explanation of its policy on capital management. This report has been published on www.binck.com.

BinckBank’s capital target is to keep the solvency ratio between 12% and 20%. In addition, BinckBank has a dividend policy in which 50% of the adjusted net profit is paid out in dividend annually, subject to an adequate solvency position.

In 2010, the available capital for solvency purposes (Tier I) rose from € 95.6 million to € 131.3 million. This increase comprises the amortisation on intangible assets and allocations to the retained earnings.

BinckBank’s solvency and BIS ratio

15.7%13.0%13.6%

23.9%

17.2%18.4%

4%

8%

12%

16%

20%

24%

28%

2008 2009 2010

Solvency ratio BIS ratio

Assessment of capital adequacy At the end of 2010, stress tests were used to assess BinckBank’s capital adequacy. The loss of capital under the maximum combined stress scenarios amounted to € 74.9 million at the end of 2010. The Tier I capital of € 131.3 million at the end of 2010 would under those circumstances drop to € 56.3 million. The loss from this stress test was charged to the Tier I capital in order to test its effect on the BIS and solvency ratios. This is referred to as the so-called second round effect.

A second round effect implies that the effects of the stress scenario would also affect the amount of required capital. A forced liquidation of the investment portfolio, for example, would lower the required capital for credit and interest-rate risks. Additionally, the credit risk on customers’ portfolios would decline due to the forced liquidation of positions held by customers at times of stress. Taken together, these effects would result in a fall of the available as well as of the required capital under Pillar I and II. Required capital would drop from € 66.9 million to € 56.2 million. The BIS and solvency ratios would come down to 11.3% and 8.0% respectively as a result of the second round effects. These figures are well within the requirements defined by DNB. The following table shows the development of capital adequacy after the combined stress scenario has actually occured including the related second round effects.

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Capital position under maximum stress (2nd round)

(x € 1,000)31 December 2010 stress

31 December 2010

∆

Total available capital 56,337 131,257 -57%

Total required capital Pillar I+II 56,209 66,933 -16%

Pillar I required capital 39,771 43,983 -10%Credit risk 13,672 17,884 -24%Market risk 96 96 0%Operational risk 26,003 26,003 0%

Pillar II required capital 16,438 22,950 -28%Interest-rate risk 5,362 8,349 -36%Liquidity risk 591 954 -38%Total credit risk Pillar II 10,485 13,647 -23%

* Concentration risk 6,797 9,062 -25%* Margin risk 2,689 3,585 -25%* Counterparty risk 1,000 1,000 0%

Operational risk mark-up - - 0%Business risk - - 0%

Excess / insufficient capital (Pillar I) 16,566 87,274 -81%Excess / insufficient capital (Pillar II) 128 64.324 -100%

BIS ratio 11.3% 23.9%Solvency ratio 8.0% 15.7%

Risk management accountability BinckBank provides insight into its capital and risk management policies in a number of ways. They are accounted for in BinckBank’s annual report and in its annual Capital Adequacy & Risk Report, both available at www.binck.com. BinckBank has chosen to publish its risk report, pursuant to Pillar III of the Basel Agreement, on its website once a year after the third quarter. The frequency of publishing the risk report may be increased if required due to specific circumstances. At the end of the year, BinckBank gives an insight into its risk management in the financial statements under note 42, pursuant to the requirements of IFRS 7.

BinckBank’s executive board accounts for the effects of its risk management during the year under review by means of the annual ‘In Control Statement’ included in this annual report.


In Control Statement

In Control Statement In our Capital Adequacy & Risk Report 2010, as published on 25 October 2010, chapter Risk Management & Capital Management of the annual report on pages 42 through 50 and note 42 of the financial statements, we have included a detailed description of these risks and provided a risk management framework as well as defined the executive board’s responsibilities.

In accordance with the best practice provisions referred to in the Corporate Governance Code and with due observance of the restrictions outlined below, we confirm that our risk management and control systems offer a reasonable level of security and that we are aware of: a) the degree to which the strategic and operational

objectives of BinckBank are realised, b) that BinckBank complies with the applicable laws

and legislation and c) our financial reporting does not contain any

substantive inaccuracies. We further state that our risk management and control systems performed satisfactorily in 2010.

However, our internal risk management and control systems cannot offer absolute security of achieving the strategic, operational and financial objectives outright nor that legislation is complied with at all times. Furthermore, systems cannot prevent all human (assessment) errors and mistakes. Accepting risks and taking control measures is continuously subject to making cost-benefit considerations, which in its turn is inherent to entrepreneurship. We continue to pursue further improvement and optimisation of our internal risk management and control procedures.

With no prejudice to our statement, we wish to point out the following projects that are being implemented in the context of our ambitions to achieve operational excellence; completing the European IT platform, further increasing the demonstrable effects of the measures of control taken for our rapidly expanding foreign offices and safeguarding the quality of the various models, parameters and charts that are maintained within our organisation, particularly within Alex Asset Manage-ment.

Executive board statementIn accordance with article 5:25c of the Financial Supervision Act (WFT), we state that according to the best of our knowledge:A. the financial statements faithfully represent the

assets, liabilities, financial position and result of BinckBank N.V. and its affiliated companies; and that

B. the annual report faithfully represents the state of affairs as at the balance sheet date and the running of events during the financial year for BinckBank and its affiliated companies, whose data have been included in the financial statements, and that the essential risks to which BinckBank N.V. is exposed have been described.


The Executive BoardKoen Beentjes, Chairman of the boardEvert Kooistra, board member and CFOPieter Aartsen, board member Nick Bortot, board member

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We deliver the best of Binck white-label to professional parties


We deliver the best of Binck white-label to professional parties

Joost Walgemoed Director Professional Services

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Corporate governance

Introduction The financial crisis has lead to the introduction of new regulations aimed at improving the corporate governance of banks and companies with a stock exchange listing. The Banking Code, the new Principles of DNB and AFM for a controlled remuneration policy and the tightening of expertise control by those institutions are examples in this respect.

By governmental decree of 1 June 2010 the Banking Code was given a legal basis equivalent to that of the Corporate Governance Code (Code). By virtue of this decree banks are obliged to disclose details about their compliance with the Banking Code principles in their annual reports.

On 1 July 2010, the Shareholder’s Rights Act and the Works Council Right to Speak Act came into force. The Shareholder’s Rights Act contains provisions in the field of rights to have issues placed on the agenda, terms for convening a meeting and registration, contents of notices to convene the general meeting of shareholders and information published on websites prior to the general meeting. The Works Council Right to Speak Act aims to increase the role of employees in public companies concerning, among other things, decision-making processes for specific subjects discussed at general meetings. BinckBank will, insofar as necessary, adjust its Articles of Association in accordance with these changes in legislation.

The legislative proposal on amendment and reclamation bears particular relevance to remuneration policies. Bonuses which, in retrospect, were paid out on the basis of incorrect information (‘claw back’) and bonuses of which payment cannot be justified on grounds of unreasonableness or unfairness, are supposed to be adjusted or reclaimed in the future. The following paragraphs discuss the Code and Banking Code recommendations.

The CodeThe Code has a legal basis in that a listed company is obliged to disclose information in its annual report concerning compliance with the principles and best practice stipulations of the Code, aimed at the executive or supervisory board of the company. BinckBank largely endorses the widely supported basic principles referred to in the Code.

Each year, according to best practice provision 1.1 of the Code, the main features of the corporate governance structure of the company, partly on the basis of the principles referred to in the Code, must be described in a separate section of the annual report. This section must furthermore explicitly indicate the degree to which the best practice provisions referred to in the Code are adhered to, the degree to which they are not adhered to and why. This “apply or explain” principle has a legal basis. This chapter extensively deals with the aforesaid best practice provision 1.1 of the Code. The provisions in this chapter can at the same time be considered to be the corporate governance statement referred to in article 2:391, paragraph 5, of the Dutch Civil Code.

Legal structure

GeneralBinckBank is a public limited company listed on NYSE Euronext (Amsterdam). BinckBank has a number of Dutch subsidiaries and participating interests as well as a foreign subsidiary. BinckBank further has office branches in Belgium, France and Spain.

BinckBank operates under the supervision of both DNB and the AFM. Due to a legal restructuring of the group in 2011, its foreign subsidiary Binck België N.V. will be liquidated. It’s activities have been transferred to BinckBank N.V.

Shares, the issue of shares, voting rights and shareholder structure

SharesThe authorised capital of BinckBank consists of 74,500,000 ordinary listed shares and 50 priority shares with a nominal value of € 0.10 each. The priority shares represent 0.00007% of the issued capital, are registered, not listed and held by the Prioriteit, the Priority Binck Foundation (in this annual report further referred to as ‘the Priority’).


Special (controlling) rights are attached to the priority shares, as stated in the Articles of Association of the company. These Articles of Association can be found on our website at www.binck.com. The position of the Priority will be discussed later in this chapter. No depositary receipts have been issued for BinckBank shares.

Issue of sharesThe annual general meeting of shareholders supervises the issue of shares and is entitled to transfer that power to a different company body for a maximum term of five years. When ordinary shares are issued, each shareholder has a pre-emptive right in proportion to the total value of his shares, subject to statutory provisions.

No pre-emptive rights are attached to shares issued a) to employees of the company or group company or b) for a consideration other than in cash. The pre-emptive right can be limited or excluded by resolution of the general meeting. The pre-emptive right can also be limited or excluded for a certain term by the other company body referred to above, provided that this body has the power to limit or exclude the pre-emptive right by resolution of the general meeting, subject to a maximum of five years. A resolution by the general meeting to limit or exclude the pre-emptive right or to transfer or withdraw this power requires a majority of at least two-thirds of the votes cast if less than half of the issued capital is represented at the meeting. The resolution referred to can only be adopted by the general meeting if put forward by the Priority.

Voting rights Each BinckBank share gives the right to cast one vote. Resolutions are adopted by a simple majority of the votes cast, to the extent that no larger majority is prescribed by law or the Articles of Association.

BinckBank applies a registration date in accordance with the Shareholder’s Rights Act.

Shareholder structureThe shareholders who, regarding their interest in BinckBank, have issued a statement by virtue of chapter 5.3 of the Financial Supervision Act (WFT) have been listed on page 17 of this report. No shareholders’ agreements have been entered into between BinckBank and the major shareholders involved.

Anti-takeover defencesThe Priority holds 50 priority shares in BinckBank. By virtue of the Articles of Association, the Priority fulfils a role in many important decisions.

The powers of the Priority consist of initiating specific general meeting resolutions and granting prior approval to specified resolutions. In addition, the Priority has direct powers, such as determining the number of executive and supervisory board members.

In short, the objective of the Priority is to protect the management and the course of events at BinckBank from influences which might negatively affect the independence of the company and its affiliated companies, and to promote a positive course of affairs in management. The board of the Priority consists of three members. Board member A is appointed by BinckBank’s supervisory board, Board member B is appointed by BinckBank’s executive board and board member C is appointed by board members A and B together. Messrs C.J.M. Scholtes (Chairman of the supervisory board), K.N. Beentjes (Chairman of the executive board) and J.K. Brouwer (member of the supervisory board) act as board members A, B and C respectively.

The executive and supervisory board see no reason to initiate any limitation and/or removal of the powers of the Priority. The executive and supervisory board believe that maintaining the position of the Priority is beneficial to the continuity of BinckBank and the policies pursued by the bank in the short and long term, subject to careful consideration of the interests of those involved in the company.

The powers of the Priority form an integral part of the Articles of Association of the company. Therefore, strictly speaking, there is no question of a (potential) ‘deployable anti-takeover measure’ as meant by best practice provision IV.3.11 of the Code. When exercising its powers, the Priority, with due observance of its objectives under the Articles of Association, is obliged to protect the interests of the company and its affiliated companies and in doing so consider the qualifying interests of the parties involved. The manner in which the Priority uses its powers in each case depends on specific facts and circumstances.

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Executive BoardBinckBank has a two-tier board system, meaning that execution and supervision are assigned to the executive board and the supervisory board of BinckBank respectively. BinckBank believes that this structure promotes a secure system of checks and balances, within which the executive board is responsible for the day-to-day management as well as the short, medium and long-term strategies of the company, whereas the supervisory board supervises the executive board and advises it.

Personal UnionBinckBank and a number of its subsidiaries are subject to a Personal Union at the board level in the sense that, under the Articles of Association for BinckBank, (the majority of) BinckBank’s executive board members also act as executive board members for its subsidiaries. The Personal Union promotes uniformity in company policy and strategy.

Task of the executive boardThe executive board is charged with managing the company, subject to limits established by the Articles of Association.

Regulations for the appointment, suspension and dismissal of executive board membersMembers of the executive board of BinckBank are appointed or re-appointed by the general meeting on the basis of a non-binding list of nominees put forward by the Priority. A member of the executive board is appointed or re-appointment for a period that runs from the day of (re)appointment to the end of the annual general meeting held in the fourth calendar year following the calendar year of (re)appointment or such earlier date as established at the time of (re)appointment.

Members of the executive board may at all times be suspended or dismissed by the general meeting.

Members of the executive board can equally be suspended by the supervisory board. Such suspensions can be revoked by the general meeting. A suspension can be extended more than once but may never last longer than three months.

Supervisory boardThe supervisory board is charged with supervising the policies pursued by the executive board and the general course of events of the company and its affiliated companies. The supervisory board highly values close involvement with the company’s development.

In exercising its duties the supervisory board is guided by the interests of the company and its affiliated companies and for that purpose weighs the relevant interests of those involved in the company.

The supervisory board also considers the social aspects of entrepreneurship relevant to the company in executing its duties. It also advises the executive board. The supervisory board is furthermore charged with all duties assigned to it by virtue of law and the Articles of Association.

Members of the supervisory board are appointed or re-appointed by the general meeting on the basis of a non-binding list of nominees put forward by the Priority. A member of the supervisory board is appointment or re-appointment for a period that runs from the day of (re)appointment to the end of the annual general meeting held held in the fourth calendar year following the calendar year of (re)appointment or such earlier date as established at the time of (re)appointment.

Annual general meeting of shareholdersThe annual general meeting of shareholders has the duties and powers vested in it by virtue of law and the Articles of Association. Its powers extend to, among other things, appointing and dismissing executive and supervisory board members. The Priority often plays an important role in relation to the powers of the general meeting of shareholders. For instance, the appointment of executive and supervisory board members is made on the basis of a non-binding list of nominees put forward by the Priority.

Compliance with the CodeBinckBank is obliged to disclose the degree to which it adheres to the best practice provisions of the Code in the Corporate Governance chapter of its annual report, listing the reasons and the extent of non-compliance if it does not (‘apply or explain’ principle). BinckBank adheres to the best practice provisions of the Code, among which best practice provisions II.3.2 – II.3.4 and III.6.1 – III.6.4, with the exception of the best practice provisions set out below.

Remuneration of the executive boardA new remuneration policy (Remuneration Policy 2010) was established during the annual general meeting of 2010.


The Remuneration Policy 2010 is partly based on the inclusion of relevant social developments. In view of the nature of the company, the Remuneration Policy 2010 was drafted with as much consideration for the contents of the various Code, Banking Code and Principles for a controlled remuneration policy as possible.

By virtue of best practice provision II.2.13 of the Code, the remuneration policy overview, as envisaged by the supervisory board for the next and subsequent financial years, had to contain certain information.

BinckBank applies best practice provision II.2.13 of the Code only if and to the extent that publication does not relate to competition-sensitive information, such as financial and commercial targets. In the opinion of the executive board and the supervisory board disclosing such information is not in the best interest of the company and its stakeholders. The same applies to the main elements in contracts between members of the executive board and the company, as referred to in best practice provision II.2.11 of the Code, to the extent that those elements contain market-sensitive information that has to be disclosed following conclusion of those contracts. It should be noted that specific information contained within the Remuneration Policy 2010 is made available in arrears. The supervisory board is thus accountable to the general meeting for performance appraisals of the executive board.

The Banking Code

GeneralThe Netherlands Bankers’ Association (NVB) on 9 September 2009 drafted the Banking Code in reply to the Restoring Trust (Naar herstel van vertrouwen) report issued by the advisory committee on the Future of Banks (“the Maas Committee”). The Banking Code can be seen as a measure of self-regulation and applies to all banks with a banking license granted under the Financial Supervisions Act. The Banking Code aims to enhance governance within banks, improve their risk management and auditing and promote the implementation of a sound remuneration policy.

The Banking Code came into force on 1 January 2010 and is enshrined in the law. Banks, in their annual reports and in the same manner as applicable to compliance with the Code, are obliged to disclose the extent to which they adhere to the Banking Code.

Deviations Article 6.3.3 of the Banking Code stipulates that, insofar as relevant, a substantial part of any variable pay is granted conditionally and is paid out at least three years later.

BinckBank is a relatively young, fast developing company and therefore subject to (frequent) change. The usefulness and feasibility in formulating long-term remuneration targets for the executive board members are therefore limited. The Remuneration Policy 2010 for this reason proceeds for a 2/3 part from long-term targets whose realisation (and payment of the appropriate variable pay) is assessed on an annual basis by the supervisory board. If a variable long-term payment is granted, the executive board member in question is bound to a lock-up period of five calendar years, even if his employment contract expires prematurely. The supervisory board reports to the general meeting of shareholders on the manner and outcome of its assessments.

Article 3.2.3. of the Banking Code stipulates that each executive board member is obliged to sign a moral-ethical statement. The text of that statement must be made publically available and must be published on BinckBank’s Internet site. It serves as a guideline for the conduct of the employees of BinckBank. A model statement is included in the explanatory notes to the Banking Code. Each bank is entitled to supplement that statement at its own discretion. BinckBank has used this option. Ever since its incorporation, BinckBank has been able to distinguish itself by setting its own independent and self-supporting course, which is characterised by a strong customer-focus and a high degree of transparency combined with sound operational management. BinckBank’s executive board members have adjusted the moral-ethical statement to optimise its relevance to BinckBank’s profile and character as well as the appropriate legislation and regulations. The moral-ethical statement can be found at www.binck.com.

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Article 10 of the Takeover Directivea) Page 54 and 55 of this annual report contains a capital

structure overview, which shows the different types of shares, the rights attached to those shares (including special controlling rights), obligations and the percentage of the issued capital that is represented by each type of share;

b) The transfer of shares is not subject to limitations imposed by the company;

c) Participating interests in the company to which a duty to report applies in accordance with chapter 5.3 of the Financial Supervision Act (WFT), have been listed on page 17 of this annual report;

d) Special controlling rights attached to shares held by the Priority are listed on page 54 and 55 of this annual report;

e) Regulations vesting a right in employees to subscribe to or obtain shares in the capital of the company or its affiliated companies are supervised by the Internal Audit and Compliance departments;

f) Voting rights attached to shares of the company are not limited. No depository receipts for shares have been issued;

g) The company is only aware of a limitation for the transfer of shares in BinckBank arising from the Remuneration Policy 2010 and comparable limitations imposed on other employees of BinckBank.

h) The manner of appointment and dismissal of members of the executive board and supervisory board and the provisions for amendment of the Articles of Association are described in the Articles of Association of the company and explained in outline on pages 56 of this annual report. For the Articles of Association please refer to www.binck.com;

i) The powers of the executive board, in particular concerning the issue of company shares and the acquisition of shares by the company, are listed on page 54 and 55 of this annual report. For further information please refer to the Articles of Association of the company and the minutes of the general meeting of shareholders at www.binck.com;

j) The service contract entered into with Friesland Bank N.V. in 2006 stipulates that the contract may be immediately terminated if a change of control takes place within BinckBank. In the joint venture agreement entered into with Delta Lloyd Levensverzekering N.V. on 6 July 2010, a change of control clause has been included which, among other things, allows the other party to terminate the agreement. The service agreement entered into with SNS Bank N.V. on 30 September 2010 stipulates that the agreement may be immediately terminated if a change of control takes place within BinckBank;

k) Information on the redundancy arrangements for members of the executive board has been included in the 2010 Remuneration Report.

ConclusionBinckBank complies with virtually all Code and Banking Code provisions. We believe that all deviations have been soundly motivated.

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Jim TehupuringManager Academy


In 2010, more than 25,000 investors took part in the courses and seminars of the Academy

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Report of the supervisory board

Statement by the chairman of the supervisory board

Dear reader, It is with great pleasure that we present the financial statements drawn up by the executive board of BinckBank N.V. The financial statements have been duly audited by and discussed with our external auditors Ernst & Young Accountants LLP on the basis of their report of findings. The approved auditor’s report has been included on pages 164 and 165. The financial statements were approved by us on 10 March 2010 and we present them to you for adoption by the general meeting of shareholders on 26 April 2011. We endorse the proposed dividend payment of € 0.51 (2009: € 0.52) per share in cash, amounting to a gross amount of € 37.9 million (2009: € 39.3 million), to be paid out of the profit of the closed financial year, the remainder of € 6.2 million is to be added to other reserves. As per 2 August 2010 an interim dividend of € 0.24 per share was already distributed. Despite less favourable market circumstances, BinckBank has succeeded in achieving a healthy financial result in 2010. Many new products and services have been launched for the benefit of our customers, and our European ambitions for expansion are being achieved through our branches in Belgium and France. Due to good management by the executive board and other managers as well as the dedication, expert knowledge and input of all the employees, BinckBank has been able to achieve its major ambitions for 2010. We thank the executive board and staff for their dedication and involvement. In 2010, we, the members of the supervisory board, enrolled in an advanced educational programme that was specially developed by Ernst & Young in response to the Banking Code. Among the subjects discussed were IT and Corporate Governance. The executive board members also took part in a number of courses and training sessions focusing on their respective fields of expertise.


C.J.M. Scholtes (Chairman)


Composition of the executive and supervisory boardMembers of the executive board of BinckBank are appointed by the general meeting on the basis of a non-binding list of nominees put forward by the Priority. At the annual general meeting of 2010, Mr Aartsen was re-appointed as a member of the executive board for a term of four years. The executive board of BinckBank currently consists of Messrs Beentjes, Aartsen, Kooistra and Bortot. The CVs of the members of the executive board have been included on page 38 and 39 of this annual report.

At the annual general meeting of 2010, Mr Van Westerloo was re-appointed as a member of the supervisory board for a term of four years. Messrs Scholtes and Deuzeman will offer themselves for re-election as members of BinckBank’s supervisory board at the general meeting of 2011. If Messrs Scholtes and Deuzeman are re-elected, the supervisory board will consist of Messrs Scholtes, Brouwer, Deuzeman and Van Westerloo. Information on the members of the supervisory board as referred to in best practice provision III.1.3 of the Code and can be found on page 72 and 73 of this annual report.

The composition of the supervisory board is such that the members, both in relation to each other, the executive board or any other particular interest, can operate independently within the framework of the supervisory board profile. The supervisory board believes that the independence criteria referred to in best practice provision III.2.1 of the Code have been met.

The members of the supervisory board have attended virtually all meetings. Reasons for their absence must be limited to circumstances beyond their control. The availability of the members of the executive and supervisory boards for interim consultations has proved satisfactory.

Meetings of the supervisory board in 2010 In 2010, the supervisory board met six times during regular, combined meetings with the executive board. The meetings were held in the months of February, March, April, July, October and December. In addition, the chairman and, on certain occasions, an individual member of the supervisory board conducted frequent informal consultations with members of the executive board. In addition, the supervisory board met twice during separate meetings. The number of meetings reflects the supervisory board’s close involvement with the company. A similar schedule for meetings will be maintained by the supervisory board in 2011.

The agendas for the meetings covered virtually all aspects of management and were always prepared by the chairman of the supervisory board in consultation with the chairman of the executive board. Among the issues discussed were strategy, the interests of all stockholders especially those of the customers and shareholders, the primary risks facing the company, the outcome of executive board appraisals concerning the set-up and the effect of internal risk management and control systems, and significant changes. Other issues such as budget, internal and external financial quarterly, interim and annual reports were also discussed. Particular consideration was given to the division of tasks for the supervisory board members and subcommittees, risk appetite by the executive board, decision-making processes concerning the international expansion into Italy, the joint venture with Delta Lloyd (BeFrank), the progress of TOM, the acquisition of ThinkCapital, key-staff remunerations, CSR policy, volatility of the revenue model, competitive position and domestic and international price developments for online brokerage services. Recurring topics, such as regular progress reports and audit reports (discussed in the presence of the external auditor) were also discussed during the meetings of the supervisory board.

The meetings were characterised by an open, amicable atmosphere with sufficient room for constructive criticism. As a result, the supervisory board was able to excel in the performance of its supervisory and advisory duties. Those attending the meetings experienced the chairmanship conducted by the chairman of the supervisory board as satisfactory.

The quality of the documents up for discussion during the meetings of the supervisory board and the combined meetings with the executive board was good and available in a timely fashion. This enabled a valuable exchange of views regarding all relevant developments and risks within operational management, policy and strategy, due to which a sound decision-making process was safeguarded.

In the absence of the executive board the supervisory board discussed its own functioning as a whole and that of its individual members and committees, the effect of permanent education as referred to in principle 2.1.8 of the Banking Code as well as all conclusions that needed to be drawn. In accordance with the Banking Code, performance by the supervisory board was assessed under the supervision of an independent, professional third party, namely Mr P.M.L. Frentrop, who is known to be an expert in the principles of good corporate governance.

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Partly in view of the above, the assessment was conducted as part of a plenary session against the background of the profile, composition and competence of the supervisory board as well as that of its individual members. These assessments were obviously carried out with the necessary prudence.

Again in the absence of the executive board, the functioning of the executive board as a whole and that of its individual members have been discussed by the supervisory board. In making its assessments, the supervisory board had to evaluate whether all executive board members would be individually competent enough to meet the stringent professional requirements of DNB. These assessments were also made as part of a plenary session.

The supervisory board has concluded unanimously that the executive board and its individual members performed well last year. The executive board operates as a well-attuned team in which the individual members performed well, continuing to pay attention to the specific areas of expertise assigned to them and operating from a broad, communal platform of responsibility. Within this context, the exchange of specific information regarding these areas of expertise between the individual members of the executive board as well as between the executive board and the supervisory board, has been both timely and of high quality, enabling those involved to properly perform their duties. Since the members of the executive board, each operating from their own specific background, have pro-actively and intensively exchanged information and experience, they have succeeded in implementing the principles of collective management.

Meetings of the audit committee in 2010The supervisory board has appointed an audit committee from among its members, consisting of Messrs Brouwer (chairman), Scholtes and Deuzeman. The meetings are attended by the chairman of the executive board, the CFO, the Internal Accountancy Service (IAD) manager and the Compliance department manager. The audit committee meets the prevailing independence requirements and has sufficient members with the required financial expert knowledge. The audit committee met four times in 2010 during meetings held in the months of February, June, September and November.

The activities of the audit committee include supervising the set-up, availability and functioning of the system of internal control and risk management measures, follow-up on the recommendations made by the external auditor and IAD performance.

Supervising the provision of financial information by the company, based on a recommendation by the audit committee to that effect, is a task carried out by the supervisory board. All meetings were attended by the Chairman of the executive board and the CFO of BinckBank.

Focal points during the audit committee meetings were the audits carried out by the IAD and Compliance department, including the subsequent findings and recommendations. The audit committee has assessed the set-up, availability and functioning of the internal control measures and found these to be adequate in relation to the researched risk areas.

This year, as in 2009, considerable progress has been made in implementing the internal risk management system in a Governance-Risk-Compliance application. The processes, risk and control measures have been entered into this application and facilitate the creation of a transparent record of the effectiveness of the identified control measures. Special attention in 2010 was given to fiscal affairs, the segmentation overview and the management letter and audit plan for 2010 drawn up by Ernst & Young.

In the third quarter of 2010, an external IAD quality assessment was performed as part of what was in fact a combined review on compliance with the applicable regulations carried out by the Institute of Internal Auditors (IIA), the Royal Netherlands Institute of Registered Accountants (NIVRA) and the Netherlands Association of Register EDP Auditors (NOREA). Their final judgment was that the internal system of quality control measures complies with the generally accepted standards in the Netherlands and that the internal audits are performed in accordance with the International Standard for professional internal auditing.

The audit committee has fulfilled its preparatory task in facilitating the integral supervisory capacity of the supervisory board.

Meetings of the risk and product development committee in 2010At the end of 2009, a risk and product development committee was installed next to the audit committee by the supervisory board in accordance with the Banking Code. This risk committee consists of Messrs Deuzeman, Brouwer and Van Westerloo and is currently chaired by Mr Deuzeman. The CEO and CFO of the executive board as well as board member Mr. Bortot have seats on the committee, as do the managers of the departments involved. The tasks of the risk and product development committee include advising the supervisory board on the contents of the risk profile and company risk appetite.


This ensures that the risks involved are analysed properly and dealt with correctly. The product approval process, initiated in compliance with the Banking Code, provides for supervision by the risk and product development committee. This risk committee met four times in 2010, in the months of March, June, September and November. Special attention was given to the implementation of the product approval process, the role of the Treasury Department, investment policy, capital adequacy assessment (ICAAP), the liquidity contingency plan (ILAAP), the risks facing Alex Asset Management, the outcome of the European stress test, the introduction of new products such as SRD and a Mutual funds supermarket and the plans for migrating (2011) customers to the European IT platform.

Remuneration of the executive boardThe Remuneration Policy for 2010 was laid down during the annual general meeting of 2010.

The ensuing Remuneration Policy 2010 was drawn up with due consideration for relevant social developments and with as much consideration as possible for the various recommendations as laid down in the Code, the Banking Code and the Principles for a controlled remuneration policy.

Outlines of the remuneration report

GeneralBest practice provision II.2.12 of the Code stipulates that information must be included in the remuneration report as to the manner in which the remuneration policy of the preceding year has been implemented. In addition, it must contain a remuneration policy overview for the following and subsequent years as envisaged by the supervisory board.

The remuneration report for calendar year 2010 (Remuneration Report 2010) can be found on BinckBank’s website (www.binck.com).

Remuneration Policy 2010

IntroductionThe remuneration policy for 2010 was laid down during the annual general meeting of 2010 (Remuneration Policy 2010). The Remuneration Policy 2010 serves as a framework within which the remunerations for 2010 of BinckBank’s executive board members have been formalised by the supervisory board.

Remuneration elementsThe Remuneration Policy 2010 provides for the following elements.:a) fixed gross annual salaryb) variable short-term paymentc) variable long-term paymentd) pension provisions and a WAO-excedent insurance e) car lease scheme and mobile telephone reimbur-

sement

The contents of the Remuneration Policy 2010 and the manner in which the remuneration policy has been implemented by the supervisory board in financial year 2010 are described in the paragraphs below.

a) fixed gross annual salaryThe fixed gross annual salaries are determined by the supervisory board within a predefined framework described in the Remuneration Policy 2010. In doing so the supervisory board makes a distinction between the tasks and responsibilities of the Chairman and those of the other members of the executive board.

The gross annual salaries have not changed in comparison to those of the preceding year, and, in accordance with the Remuneration Policy 2010, have been set by the supervisory board at:K.N. Beentjes € 375,000P. Aartsen € 300,000E.J.M. Kooistra € 300,000N. Bortot € 300,000

b) variable short-term paymentVariable short-term payment is a gross cash payment which, in addition to the fixed gross annual salary, can be awarded to an executive board member during a calendar year (pro rata), subject to a maximum of 1/3 of the gross annual salary. The extent to which a variable short-term payment is awarded depends on how much of the budgeted, adjusted net annual profit has been realised. Variable short-term payments can only be awarded if at least 80% of the budgeted, adjusted net annual profit has been realised.

The quantitative target for 2010 of an adjusted net annual profit of € 79.2 million has not been fully realised. The adjusted net annual profit amounted to € 75.2 million. This figure represents 95% of the required target and as such exceeds the minimum limit of 80% of the budgeted, adjusted annual net profit. The supervisory board has decided that 88% of the maximum variable short-term payment is to be awarded.

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c) variable long-term paymentVariable long-term payment is a variable, gross payment with which the executive board is obliged to purchase ordinary BinckBank shares which, in addition to the fixed, gross annual salary and a possible variable short-term payment, can be distributed (pro rata) to an executive board member. A variable, long-term payment cannot amount to any more than a 2/3 part of the fixed, gross annual salary.

The extent to which a variable long-term payment is awarded depends in equal parts on the degree to which respectively the qualitative and quantitative long-term targets defined by the supervisory board have been achieved according to the discretionary judgement of the supervisory board. If a variable long-term payment is awarded, the executive board member in question is bound to a lock-up period of five calendar years.

The awarding of a variable long-term payment for 50% depends on the long-term qualitative targets. These targets relate to concrete projects that enable the company to develop and expand. They include the introduction of a Mutual funds supermarket in the Netherlands and Belgium, the introduction of SRD in France, the preparation of automating additional rollout into new countries and the selection of a fourth country. Professional Services has entered into new agreements and TOM Broker BV has gone operational as MTF. Other qualitative targets focus on internal control and relate to system availability, contingency, defining future IT architecture and improving and implementing various reporting and risk management systems. The supervisory board concludes that 83% of these quantitative targets has been realised, and that therefore 83% of the maximum required variable long-term payment is awarded.

Whether the remaining 50% of the variable long-term payment is awarded depends on the extent to which the long-term qualitative targets concerning the long-term development of the earnings per share (EPS), customer satisfaction and the number of brokerage accounts have been achieved. The supervisory board has concluded that 65% of these quantitative targets have been realised and that 65% of the maximum required variable long-term payment based on those targets is therefore awarded.

In all, this means that 74% of the variable long-term payment has been awarded.

d) Pension scheme and WAO-excedent insurance The executive board members participate in a pension scheme in which 20% of the gross annual salary is paid by the company towards a defined contribution scheme in contributions. BinckBank pays 50% of the WAO-excedent insurance contributions. This insurance entitles those covered by it to receive 70% of their most recent salary. The annual contribution amounts to 2.3630% of the sum insured. The executive board members have participated in this scheme in 2010.

e) Car leasing scheme and reimbursement of mobile telephone expenses

The executive board members participate in BinckBank’s car leasing scheme and are reimbursed for mobile telephone expenses. The executive board members have participated in this scheme in 2010.

Loans extended to members of the executive boardAs at 31 December 2010, one executive board member had been extended a collateralised loan, namely Mr N. Bortot to the amount of € 339,000. At the end of 2009, there were two executive board members with collateralised loans, namely P. Aartsen to the amount of € 20,689 and N. Bortot to the amount of € 124,825.


Remuneration overview for the executive board in 2009 and 2010Remuneration of the executive board in 2010

Fixed basic remunera-

tion

Pension contribu-tion 20%

Social security

Short term perfor-mance-

related pay 2010 (cash)

Long term performance-

related pay 2010 (shares)*

Total perfor-mance

related pay 2010

Total remuneration

(fixed + variable)

Variable as a % of fixed

remunera-tion

Shares BinckBank

held at year-end

2010

of which shares in lock-up period

K.N. Beentjes € 375,000 € 75,000 € 7,387 € 110,398 € 184,563 € 294,961 € 752,348 79% 19,872 9,872

P. Aartsen € 300,000 € 60,000 € 7,387 € 88,318 € 147,650 € 235,968 € 603,355 79% 37,322 7,897

E.J.M. Kooistra € 300,000 € 60,000 € 7,387 € 88,318 € 147,650 € 235,968 € 603,355 79% 20,876 7,897

N. Bortot € 300,000 € 60,000 € 7,387 € 88,318 € 147,650 € 235,968 € 603,355 79% 51,984 7,897

Total € 1,275,000 € 255,000 € 29,548 € 375,352 € 627,513 € 1,002,865 € 2,562,413 130,054 33,563

* Members of the executive board are obliged to use the net value for the acquisition of shares BinckBank N.V. at the price of 27 April 2011, subject to a lock up of 5 years

Remuneration of the executive board in 2009

Fixed basic remunera-

tion

Pension contribu-tion 20%

Social security

Perfor-mance-related

pay 2009(cash)

Accrual for settlement of remuneration

policy 2009

Maximisa-tion

Banking Codes

Accrual for settlement of remuneration policy 2009***

after maximisation

Total perfor-mance

related pay 2009

Total remunira-tion (fixed + variable)

Variable as a % of

fixed remune-

ration

Shares BinckBank

held at year-end

2009

T.C.V. Schaap* € 141,667 € 28,333 € 2,284 € 0 € 0 € 0 € 0 € 0 € 172,284 0% nvt

K.N. Beentjes** € 250,000 € 50,000 € 4,568 € 84,375 € 280,424 -€ 114,799 € 165,625 € 250,000 € 554,568 100% 10,000

P. Aartsen € 300,000 € 60,000 € 6,852 € 101,250 € 336,509 -€ 137,759 € 198,750 € 300,000 € 666,852 100% 22,214

E.J.M. Kooistra € 300,000 € 60,000 € 6,852 € 101,250 € 336,509 -€ 137,759 € 198,750 € 300,000 € 666,852 100% 5,768

N. Bortot € 300,000 € 60,000 € 6,852 € 101,250 € 336,509 -€ 137,759 € 198,750 € 300,000 € 666,852 100% 39,280

Total € 1,291,667 € 258,333 € 27,408 € 388,125 € 1,289,952 -€ 528,077 € 761,875 € 1,150,000 € 2,727,408 77,262

* stand down on 28 April 2009 – after having stand down, Mr Schaap remained affiliated to the company for some time at a fee of € 65,000** appointed as a member of the executive board on 28 April 2009 – fixed remuneration rounded off to whole months*** the member of the executive board is obliged to use the net value for the acquisition of Binckbank N.V. shares at the price of 27 April 2010, subject to a lock-up period of 4

years

Remuneration of members of the supervisory board and committees in financial year 2010During the annual general meeting of shareholders held on 26 April 2010, it was decided that the following remunerations were to be applied to the members of the supervisory board as from 1 January 2010.

Supervisory boardAnnual remuneration:- Chairman of the supervisory board € 40,000 gross- Member of the supervisory board € 26,000 gross

Committees Annual committee compensation:- Chairman of the audit committee € 8,000 gross- Member of the audit committee € 6,000 gross- Chairman of the risk and product development

committee € 8,000 gross- Member of the risk and product development

committee € 6,000 gross

The commissions for the members of the supervisory board were paid out in conformity with the above.

The tables below provide overviews of the remunerations for the members of the supervisory board, the audit committee and the risk and product development committee and of the remaining terms of appointment for the individual members of the supervisory board.

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Consultation with the Works CouncilMr Scholtes, on behalf of the supervisory board, on 7 May 2010 attended a meeting with the Works Council. The supervisory board highly values its relationship with the Works Council and has found contact with its members to be constructive and valuable.

Financial statements and dividendThe 2010 financial statements were discussed and adopted by the supervisory board during their meeting of 10 March 2010 with the executive board and Ernst & Young, the external auditors. An auditor’s report was issued by Ernst & Young. The financial statements will be submitted to the annual general meeting of shareholders for adoption on 26 April 2011.

Remuneration overview for the members of the supervisory board in 2009 and 2010Remuneration of the supervisory board 2010

Fixed remuneration member of SB

Fixed remuneration member of AC

Fixed remuneration

member of RPC

Total Shares BinckBank held at year-end

2010

C.J.M. Scholtes € 40,000 € 6,000 € 46,000 -

J.K. Brouwer € 26,000 € 8,000 € 6,000 € 40,000 -

A.M. van Westerloo € 26,000 - € 6,000 € 32,000 -

L. Deuzeman € 26,000 € 6,000 € 8,000 € 40,000 -

Total € 118,000 € 20,000 € 20,000 € 158,000 0

Remuneration of the supervisory board 2009

Fixed remuneration member of SB

Fixed remuneration member of AC

Total Shares BinckBank held at year-end

2009

C.J.M. Scholtes € 40,000 € 4,000 - € 44,000 -

J.K. Brouwer € 26,000 € 6,000 - € 32,000 -

A.M. van Westerloo € 26,000 - - € 26,000 -

L. Deuzeman € 26,000 € 4,000 - € 30,000 -

Total € 118,000 € 14,000 - € 132,000 0

Overview of the terms of appointment for the members of the SBOverview of contract terms SB members

Date of (re)appointment

Date of contract expiry

C.J.M. Scholtes 19-4-2007 AGM 2011

J.K. Brouwer 28-4-2009 AGM 2013

A.M. van Westerloo 26-4-2010 AGM 2014

L. Deuzeman 19-11-2007 AGM 2011

The proposed dividend for 2010 amounts to € 0.51 per ordinary share. Bearing in mind the previously paid out interim dividend of € 0.24, the proposed final dividend amounts to € 0.27 per ordinary share less 15% dividend tax, to be made payable on Monday 4 May 2011.

Supervisory board


C.J.M. Scholtes (Chairman)J.K. BrouwerL. DeuzemanA.M. van Westerloo

From left to right: Dhr. Leo Deuzeman, Dhr. Hans Brouwer, Dhr. Kees Scholtes and Dhr. Fons van Westerloo

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CVs of the supervisory board members

Kees J.M. Scholtes, Chairman(1945 – Dutch nationality)

Mr Scholtes has been a member of the supervisory board for BinckBank since 2004 and was re-appointed for a term of four years during the annual general meeting of shareholders of 19 April 2007. Mr Scholtes will be proposed for re-appointment during the annual general meeting of shareholders on 26 April 2011. The supervisory board has appointed Mr Scholtes chairman of its board.

Mr Scholtes is a former director of Postbank N.V., NMB Postbank N.V. and ING Bank N.V., a former member of the executive committee of ING Asset Management B.V. and a former supervisory director of various investment funds at Postbank N.V., NMB Postbank N.V. and ING Bank N.V. In addition, Mr Scholtes was a former supervisory director for Parcom N.V., Barings Private Equity Holding, Euroclear Nederland (predecessors in title Niec and Necigef) and RBC Dexia Securities Services N.V. (former CDC Labouchere Securities Services N.V.) and a former member of the board of the Amsterdam Stock and Options Exchange (now NYSE Euronext). Mr Scholtes was also project manager during the formation of the Dutch Securities Institute and the Financial Services Foundation.

Mr Scholtes is currently also chairman of the supervisory board for IBUS Company N.V., a director of finance company Colonade B.V. and member of the investment committee of Kunst en Cultuur Pensioen en Levens-verzekering Maatschappij N.V.. As a member of the Enterprise Division’s Investigating Committee he is involved in monitoring the policies and state of events at Fortis and VDM.

Number of shares held in BinckBank at the end of 2010: 0

Hans K. Brouwer(1944 – Dutch nationality)

Mr Brouwer has been a member of the supervisory board of BinckBank since 2004 and was re-appointed for the maximum term of four years during the annual general meeting of shareholders on 28 April 2009.

In 1981, following a military career as cavalry officer, Mr Brouwer took up employment with the ABN Bank, during which time he was involved in various activities, among which the reorganisation of senior kader recruitment and training, the reorganisation of lending operations and foreign office development in regions such as Europe, the Middle East and the Far East. In 1988, Mr Brouwer was appointed board member of the Amsterdam Stock Exchange Association (VvdE), where he was responsible for regulations, trade supervision and – as a special project – restructuring the entire Amsterdam Stock Exchange Association organisation. Following the successful restructuring of the organisation, Mr Brouwer was appointed general director of the Amsterdam Stock Exchange Association in 1991. After the successful merger between the Amsterdam Stock Exchange and EOE Options Exchange into Amsterdam Exchanges (AEX) on 1 January 1997, he was appointed director of Amsterdam Exchanges N.V. and general manager of AEX-Effectenbeurs N.V.

Shortly before the merger with the Paris and Brussels stock exchanges (2002) – Euronext – Mr Brouwer withdrew from his position at Euronext and has since held a number of supervisory directorships at Van Meijel, Nobel, BinckBank and Vital Innovators. He is also a member of the supervisory board for Vita Valley. At the request of, among others, the World Bank, Mr Brouwer and a team of stock exchange specialists accompanied the set-up and further expansion of stock exchanges in various countries. A similar project was also completed in Baku/Azerbaijan. Mr. Brower is also chairman of the foundation AMINDHO, cultural and economic, reltaions Netherlands-Indonesia and chairman of the foundation ‘Jazz orchestra of the Concertgebouw‘.



Leo Deuzeman(1952 – Dutch nationality)

Mr Deuzeman was appointed for a period of four years as a member of the supervisory board of BinckBank during the annual general meeting of shareholders on 19 November 2007. Mr Deuzeman will be proposed for re-appointment at the annual general meeting of shareholders on 26 April 2011.

Mr Deuzeman is a business economist and was employed by Deloitte as a chartered accountant from 1979 to 1986. In the period 1976-1979, he was connected to the University of Groningen as a scientific member of staff with the Financial Department of the Faculty of Economic Sciences. From 1990 to 1998 and from April 2003 to April 2007, he held the position of CFO at Kempen & Co N.V., at which bank he fulfilled the role of director of finances and administration from 1986 to 1990. In addition, Mr Deuzeman was a managing partner of Greenfield Capital Partners N.V from 1998 to 2003 and held positions as a member of the board with Publifisque B.V., Managementmij Tolsteeg B.V., Kempen Management B.V., Asmey B.V., Arceba B.V., Kempen Finance B.V., Global Property Research B.V., Kempen Deelnemingen B.V., Greenpart B.V., Greenfield Management Services B.V. and Nethave Management N.V. He was also a supervisory director for Trustus Capital Management B.V., Engage B.V., Cegeka N.V. and Kempen Custody Services N.V.

Mr Deuzeman currently also holds positions as a supervisory director for the Blue Sky Group, Intereffekt Investment Funds and Monolith Investment Management in Amsterdam. He is the chairman of Stichting Administratiekantoor Monolith Fund in Amsterdam and is also chairman of the supervisory board for Capital Guards in Rotterdam.


Fons M. van Westerloo(1946 – Dutch nationality)

Mr Van Westerloo has been a member of BinckBank’s supervisory board since 2004. He was re-appointed for a term of four years during the annual general meeting of shareholders on 26 April 2010.

Mr Van Westerloo formerly held positions as a member of the Operational Management Committee for RTL Group S.A., CEO of RTL Nederland B.V., CEO of SBS Broadcasting B.V., director of RTL 5 and deputy manager of broadcasting organisation AVRO.

Mr Van Westerloo holds supervisory directorships at InShared BV (a subsidiary of Eureko/Achmea). He is also a supervisory director for NOC/NSF and a member of the supervisory board for Wereldomroep (Radio Netherlands Worldwide). He is a member of the Advisory Council of DDB Amsterdam B.V., Entertainment Studies Hogeschool INHOLLAND, 3Stone bedrijfsmakelaars, ITV media and Xsaga Events. He is also the chairman of the Press Council Foundation, National Home Shopping Awards Foundation and a member of the Wheel of Energy Foundation. He is an ambassador for the Royal Dutch Opera and a member of the supervisory board for the Royal Concertgebouw Orchestra.


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Our objective is to continue to exceed the expectations of our customers

75Annual report 2010

Our objective is to continue to exceed the expectations of our customers

Matthijs Aler Director Retail

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Financial statements 2010 BinckBank N.V.

Consolidated financial statements Consolidated statement of financial position • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 78Consolidated income statement • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 79Consolidated statement of comprehensive income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 80Consolidated statement of cash flow • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 81Consolidated statement of changes in equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 83

Notes to the consolidated financial statements 1 General information • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 84 2 Accounting principles used for consolidation• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 86 3 Related party disclosures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 87 4 Recognition and measurement of assets, equity and liabilities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 87 5 Recognition and measurement of income and expenses• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 96 6 Acquisition of business activities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 97

Notes to the consolidated statement of financial position 7 Cash and balances with central banks• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 98 8 Banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 98 9 Financial assets and liabilities at fair value through profit or loss • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 99 10 Available-for-sale financial assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 100 11 Loans and receivables • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 100 12 Held-to-maturity investments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 100 13 Investmet in associates and joint ventures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •101 14 Intangible assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 102 15 Property, plant and equipment • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 105 16 Current tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 106 17 Deferred tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 107 18 Other assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 108 19 Prepayments and accrued income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 108 20 Derivative positions held on behalf of clients • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 108 21 Customer deposits • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 108 22 Provisions • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 108 23 Other liabilities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 109 24 Accruals and deferred income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 109 25 Equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 109

Notes to the consolidated income statement 26 Net interest income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 113 27 Net fee and commission income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 113 28 Other income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •114 29 Result from financial instruments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •114 30 Impairment of financial assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •114 31 Employee expenses • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 115 32 Depreciation and amortisation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 115 33 Other operating expenses • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •116 34 Earnings per share • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •116


Other notes to the consolidated financial statements 35 Dividend distributed and proposed • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 117 36 Fair value of financial instruments • •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• • 117 37 Classification of assets en liabilities by expected maturity • •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •119 38 Related parties • •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• • 121 39 Off balance sheet commitements • •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• 122 40 Events after balance sheet date • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 123 41 Segment information • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 123 42 Risk management • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 126

Company financial statements Company balance sheet • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 148Company income statement • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 148Company statement of changes in equity• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 149

Notes to the company financial statements a General • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 151 b Accounting policies • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 151

Notes to the company balance sheet c Cash and balances with central banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •152 d Banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •152 e Loans and receivables • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •152 f Bonds and other fixed-income securities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •153 g Equities and other non-fixed-income securities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •153 h Investment in associaties and joint ventures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 154 i Intangible assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •155 j Property, plant and equipment • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 156 k Current tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •157 l Deferred tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •157 m Other assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •157 n Prepayments and accrued income• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •157 o Customer deposits • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 158 p Other liabilities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 158 q Accruals and deferred income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 158 r Provisions• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 159 s Equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 160

Other notes to the company financial statements t Note on audit expenses • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 162 u Off balance sheet commitements • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 163 v Remuneration of the executive board and the supervisory board • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 164 w Events after balance sheet date • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 164

Other data Auditos report • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 165Provisions of the articles of association regarding priority shares (articles 15 and 21) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 166Provisions of the articles of association regarding profit appropriation (article 32) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 167Proposal for profit appropriation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 167

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Consolidated statement of financial position

Note 31 December 2010 31 December 2009x € 1,000 x € 1,000

AssetsCash and balance with central banks 7 105,972 48,936 Banks 8 177,316 179,692 Financial assets held for trading 9 169 - Financial assets at fair value through profit and loss 9 13,856 37,294 Available-for-sale financial assets 10 1,599,700 1,511,903 Loans and receivables 11 496,266 410,169 Held-to-maturity financial assets 12 4,121 8,329 Investment in associates and joint ventures 13 3,067 1,953 Intangible assets 14 320,757 348,561 Property, plant and equipment 15 43,901 12,512 Current tax 16 4,949 1,972 Deferred tax 17 - 5,988 Other assets 18 13,050 14,286 Prepayments and accrued income 19 49,840 48,828 Derivative positions held on behalf of clients 20 383,804 299,587 Total assets 3,216,768 2,930,010

LiabilitiesBanks 8 25,610 - Customer deposits 21 2,258,290 2,089,814 Financial liabilities held for trading 9 50 - Financial liabilities at fair value through profit and loss 9 1,485 - Provisions 22 1,268 2,660 Current tax 16 468 282 Deferred tax 17 12,695 14,490 Other liabilities 23 48,023 21,210 Accruals and deferred income 24 16,162 21,608 Derivative positions held on behalf of clients 20 383,804 299,587 Total liabilities 2,747,855 2,449,651

Equity attributable to:Owners of the parent 25 468,986 480,359 Non-controlling interests (73) - Total equity 468,913 480,359

Total enquity & liabilities 3,216,768 2,930,010


Consolidated income statement

Note 2010 2009x € 1,000 x € 1.000

Income Interest income 60,874 71,048 Interest expense (17,287) (27,223)Net interest income 26 43,587 43,825

Fee and commission income 177,058 172,710 Fee and commission expense (50,088) (43,470)Net fee and commission income 27 126,970 129,240 Other income 28 13,599 9,661 Result from financial instruments 29 620 4,353 Impairment of financial assets 30 70 (857)Total income from operating activities 184,846 186,222

ExpensesEmployee expenses 31 45,480 43,185 Depreciation and amortisation 32 34,798 35,939 Other operating expenses 33 44,223 43,388 Total operating expenses 124,501 122,512 Result from business operations 60,345 63,710

Share in results of associates and joint ventures 13 (1,386) (1,466)Other non-operating income 6 23 - Result before tax 58,982 62,244 Tax 16 (14,837) (15,083)Net result 44,145 47,161

Result attributable to:Owners of the parent 44,240 47,161 Non-controlling interests (95) - Net result 44,145 47,161

Basic and diluted earnings per share (EPS) 34 € 0.60 € 0.63

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Note 2010 2009x € 1,000 x € 1,000

Net result from income statement 44,145 47,161

Other comprehensive incomeExchange-rate conversion from foreign associates

25 - (70)

Net gain/(loss) on fair value of available-for-sale financial assets

25 (21,070) 10,912

Gains and losses through profit and loss 25 (1,467) (4,093)Tax on results through equity 25 6,138 (1,862)Other comprehensive income, net of tax (16,399) 4,887

Total comprehensive income, net of tax 27,746 52,048

Result attributable:Owners of the parent 27,841 52,048 Non-controlling interests (95) - Total realised and unrealised results, after tax 27,746 52,048

Consolidated statement of comprehensive income


Consolidated statement of cash flows

2010 2009x € 1,000 x € 1,000

Cash flow from operating activitiesNet result for the year 44,145 47,161

Adjustments for:Amortisation of intangible assets and depreciation of property, plant and equipment

34,798 35,939

Provisions 1,280 2,567 Impairment losses on loans and receivables (189) 857 Movements in deferred tax 10,331 4,504 Share in undistributed results of associates and joint ventures 1,386 1,466 Other non-cash movements 101 32

Movements in:Banks (assets) (5,780) - Financial assets and liabilities held for trading (119) - Financial assets at fair value through profit and loss 24,923 (261)Loans and receivables (85,908) (182,651)Taxes, other assets and prepayments and accrued income (2,753) (15,378)Banks (liabilities) 25,610 - Customer deposits 168,476 342,115 Tax liabilities, other liabilities, accruals and deferred income 21,553 (28,520)Net cash flow from operating activities 237,854 207,831

Cash flow from investment activities Available-for-sale financial assets (110,334) (206,852)Held-to-maturity financial assets 4,208 4,229 Disposal of associates and subsidiary - 1,606 Investments in associates and joint ventures (2,500) (3,000)Investments in intangible assets (2,081) (240)Investments in property, plant and equipment (36,302) (9,216)Net cash flow from investment activities (147,009) (213,473)

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Consolidated statement of cash flows (continued)

2010 2009x € 1,000 x € 1,000

Cash flow from financing activitiesBuy-back of own shares (4) (17,988)Sale of own shares 1,454 - Non-controlling interests on initial recognition 22 - Dividends paid: • ••Final•dividend•preceding•year (22,977) (15,773)• ••Interim•dividend•current•year (17,788) (15,670)Net cash flow from financing activities (39,293) (49,431)

Net cash flow 51,552 (55,073)

Opening balance of cash and cash equivalents 228,628 283,701 Closing balance of cash and cash equivalents 280,180 228,628 Movement in cash and cash equivalents 51,552 (55,073)

The cash and cash equivalents presented in the consolidated cash flow statement are included in the balance sheet under the following headings at the amounts stated below:Cash 105,972 48,936 Banks 177,316 179,692 Banks – non-cash equivalents (3,108) - Total cash equivalents 280,180 228,628

Cash flow from operating activities includes the following items: • ••Tax•paid• (17,814) (12,432)• ••Interest•received 58,591 68,491 • ••Interest•paid• (18,359) (33,573)• ••Commission•received• 173,205 169,217 • ••Commission•paid (52,235) (41,246)


Consolidated statement of changes in equity

Issued share

capital

Share premium reserve

Treasury shares

Fair value reserve

Unappro-priated profit

Other reserves

Non-controlling

interests

Total equityx € 1,000

1 January 2010 7,607 386,978 (18,097) 13,789 47,161 42,921 - 480,359

Net result for the year - - - - 44,240 - (95) 44,145

Other comprehensive income

- - - (16,399) - - - (16,399)

Total comprehensive income

- - - (16,399) 44,240 - (95) 27,746

Payment of final dividend

- - - - - (22,977) - (22,977)

Payment of interim dividend

- - - - - (17,788) - (17,788)

Grant of rights to shares - - - - - 101 - 101

Sale of shares to executive board and employees

- - 1,053 - - 401 - 1,454

Buy-back of shares - - (4) - - - - (4)

Cancelled shares (157) (13,556) 13,713 - - - - -

Non-controlling interests on initial recognition

- - - - - - 22 22

Transfer of retained earnings to other reserves

- - - - (47,161) 47,161 - -

31 December 2010 7,450 373,422 (3,335) (2,610) 44,240 49,819 (73) 468,913

Issued share

capital


Treasury shares

Fair value reserve


Other reserves

Non-controlling

interests

Total equityx € 1,000

1 January 2009 7,709 392,395 (5,628) 8,832 33,145 41,188 - 477,641

Net result for the year - - - - 47,161 - - 47,161

Other comprehensive income

- - - 4,957 - (70) - 4,887

Total comprehensive income

- - - 4,957 47,161 (70) - 52,048

Payment of final dividend

- - - - - (15,773) - (15,773)

Payment of interim dividend

- - - - - (15,670) - (15,670)


Buy-back of shares - - (17,988) - - - - (17,988)



- - - - (33,145) 33,145 - -

31 December 2009 7,607 386,978 (18,097) 13,789 47,161 42,921 - 480,359

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Notes to the consolidated financial statements

1. General information

Company information BinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law, whose shares are publicly traded. BinckBank N.V. is officially domiciled at Barbara Strozzilaan 310, 1083 HN Amsterdam. BinckBank N.V. provides conventional and internet broking services in securities and derivative transactions for private and professional investors. In the following pages, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

BinckBank’s consolidated financial statements for the period ending on 31 December 2010 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 10 March 2011.

Executive board: Supervisory board: K.N. Beentjes (chairman) C.J.M. Scholtes (chairman)E.J.M. Kooistra (CFO) J.K. BrouwerP. Aartsen L. DeuzemanN. Bortot A.M. van Westerloo

Presentation of the financial statements The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board and endorsed by the European Commission.

Unless otherwise stated, the consolidated financial statements are in euros, with all amounts rounded to the nearest thousand.

Implications of new, amended and improved standards New and amended IFRS standards and IFRIC interpretations effective in 2010 New or amended standards take effect on the date as stated by IFRS and after ratification by the EU, whereby earlier application is permitted in some cases.

•• IFRS 1 First-time adoption of International Financial Reporting Standards (revised), effective for financial years beginning on or after 1 January 2010. Since BinckBank is not a first-time adopter of IFRS, the revised standard does not apply.

•• IFRS 1 First-time adoption of International Financial Reporting Standards – Additional exemptions for first-time adopters, effective for financial years beginning on or after 1 January 2010. Since BinckBank is not a first-time adopter of IFRS, the revised standard does not apply.

•• IFRS 2 Share-based payments – share-based payment transactions settled in cash in a group, effective as of 1 January 2010. This change clarifies the scope of the standard and the treatment of share-based payment transactions settled in cash within a group, and has no effect for BinckBank.

•• IFRS 3 Business combinations (revised) and IAS 27 Consolidated and company financial statements (amended), effective as of 1 July 2009. The changes pursuant to IFRS 3 (revised) and IAS 27 (amended) will be applied prospectively and affect business combinations, loss of control over subsidiary companies and transactions with non-controlling interests. In the revised IFRS 3, transaction costs that can be directly attributed to the acquisition are no longer allocated to the purchase price of the business combination. In the revised IFRS 3, transaction costs that can be directly attributed to the acquisition are no longer allocated to the purchase price of the business combination. In addition, IFRS 3 allows the acquirer, on a transaction by transaction basis, to value any non-controlling interest at fair value on the acquisition date, or at the proportionate interest in the fair value of the acquiree’s identifiable assets and liabilities.


• IAS 39 Financial Instruments: recognition and measurement – eligible hedged items, effective as of 1 July 2009. BinckBank has concluded that this change has no effect on its financial position and results, since it does not hold any such hedged items.

• IFRIC 15 Agreements for the construction of real estate, effective as of 1 January 2009, does not apply to BinckBank. • IFRIC 16 Hedges of a net investment in a foreign operation, effective as of 1 July 2009, does not apply to BinckBank. • IFRIC 17 Distributions of non-cash assets, effective as of 1 July 2009, does not apply to BinckBank. • IFRIC 18 Transfer of assets from customers, effective for transactions after 1 July 2009, does not apply to BinckBank. • Improvements to IFRS standards (published in April 2009): this is a collection of minor amendments to a number of

IFRS standards which will not lead to any material adjustments for BinckBank. Improvements are only applied to the extent they are ratified by the EU.

The following standards, amendments of standards and interpretations that have not yet taken effect or have not yet been ratified by the European Union have not yet been applied by BinckBank: • IFRS 9 Financial instruments, effective as of 1 January 2013. BinckBank does not expect to apply this standard before 1

January 2013 and is currently studying and evaluating its effects. • IAS 24 Related party disclosures (revised), effective as of 1 January 2011. BinckBank does not expect to apply this

standard before 1 January 2011 and is currently studying and evaluating its effects. • IAS 32 Financial Instruments: presentation – Classification of rights issues, effective for financial years beginning on

or after 1 February 2010. BinckBank has concluded that this change has no effect on its financial position and results, since it has not issued any rights in foreign currency.

• IFRIC 14 requirements relating to minimum funding of an asset arising from a defined benefit pension plan, effective for financial years beginning on or after 1 January 2011. BinckBank has concluded that this change has no effect on its financial position and results, since it does not operate a defined benefit pension plan.

• IFRIC 19 Extinguishing financial liabilities with equity instruments, effective for financial years beginning on or after 1 July 2010, does not apply to BinckBank.

Changes in accounting principles The principles for valuation and determination of the result are consistent with those applied in the previous year, with additions relating to lease contracts and property, plant and equipment.

Change in presentation In the second quarter of 2010, we changed the managerial responsibility for our subsidiary Syntel B.V. This responsibility has been transferred from the board member responsible for the Professional Services business unit to the chairman of the executive board. The results of Syntel are therefore no longer reported in the Professional Services business unit, but are included in group operations. Furthermore, in order to improve the quality of the management information, the allocation ratios of the indirect costs have been revised. The new segmentation reflects the revised managerial responsibility. The comparative figures for 2009 have been adjusted accordingly.

Significant accounting judgements and estimates The preparation of the financial statements involves making assumptions and estimates on the recognition and measurement of assets and liabilities, contingent rights and liabilities and income and expense items. The most significant assumptions for the future and other key sources of estimation uncertainty at balance sheet date that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are:

Fair value of financial instruments Where the fair value of financial assets and financial liabilities cannot be obtained from active markets, it is arrived at using valuation methods, including discounted cash flow models. Observable market data is used as the input to these models wherever possible but, where this is not possible, judgements are required in determining fair values. These judgements involve consideration of input factors including liquidity risk, credit risk and volatility. Changes in assumptions regarding these factors can affect the fair value of financial instruments. The valuation of financial instruments is explained in detail in Note 36.

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Impairment of loans and receivables BinckBank performs periodical tests to ascertain whether the fair value of the securities portfolio serving as collateral for securities lending is sufficient to cover the loans. If the collateral provided by the securities portfolio is not sufficient to cover the collateralised lending, this is an initial indication that an impairment has occurred. BinckBank makes individual estimates of the future cash flows, proceeds from realisation of collateral net of transaction costs and the costs of collecting the receivables. BinckBank assesses periodically whether any changes have taken place which necessitate an adjustment of the provision for impairments.

Impairment of goodwill BinckBank performs an impairment test on the carrying amount of goodwill at least once a year. This involves estimating the value in use of the cash-generating units to which the goodwill is attributed. In order to estimate the value in use, BinckBank makes an estimate of the expected future cash flows from the cash-generating unit and also determines a suitable discount rate for calculating the net present value of those cash flows.

Fair value of identified intangible assets acquired with acquisitions BinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty percentage. An impairment test is performed on each balance sheet date.

Expected useful life of intangible assets and property, plant and equipment BinckBank applies standard amortisation and depreciation periods for various groups of assets. BinckBank assesses each individual asset periodically to establish whether the standard amortisation or depreciation period still corresponds to the expected useful life of the asset concerned. Circumstances may occur during the use of the asset which may lead to a situation in which the standard period no longer corresponds to the actual useful life. As soon as a deviation is identified, the remaining carrying amount of the asset is written off over the revised remaining useful life on a straight-line basis.

Deferred tax assets Deferred tax assets are recognised if it is probable that future taxable profits will be generated to allow the tax loss carryforwards to be utilised.

2. Accounting principles used for consolidationThe consolidated financial statements include the assets and liabilities and the income and expense items of the company and its subsidiaries. Subsidiaries are entities over which BinckBank has control. Control is deemed to exist if BinckBank is able, either directly or indirectly, to govern the financial and operating policies of the company so as to obtain benefits from its activities.

Subsidiaries are fully consolidated as soon as BinckBank obtains control. If BinckBank ceases at any point to control a subsidiary, the subsidiary is deconsolidated immediately.

The accounting principles of the subsidiaries and their reporting periods are the same as those of BinckBank.

3. Related party disclosuresUnrealised gains on transactions with associates are eliminated in proportion to BinckBank’s interests in the companies concerned.

There were transactions between BinckBank and its subsidiaries during the year. These intercompany transactions have been eliminated in the consolidated financial statements.


4. Recognition and measurement of assets, equity and liabilities

Foreign currency translation The consolidated financial statements are in euros, this being BinckBank’s functional as well as presentation currency. Items recognised in the financial statements of each entity are measured on the basis of the relevant entity’s functional currency. Transactions in foreign currencies are translated on initial recognition at the functional currency’s exchange rate on the transaction date.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on the balance sheet date. Differences relating to movements in exchange rates are recognised in the income statement. Non-monetary items in foreign currencies measured at fair value are translated at the exchange rate at the moment the fair value is determined. Currency translation differences on non-monetary items carried at fair value through profit and loss are likewise recognised in the income statement. The results of financial transactions and costs are translated into euros at the exchange rate prevailing on the transaction date in the income statement.

At the reporting date, the assets and liabilities of foreign associates are translated into BinckBank’s functional currency at the exchange rate prevailing on the balance sheet date while the income statement is translated at the weighted average exchange rate for the year. Translation differences are recognised directly in a separate component of equity. If a foreign currency entity is sold, the deferred cumulative amount included in equity for the relevant entity is recognised in the income statement.

Financial assets and liabilities

Initial recognition of financial assets and liabilities in the balance sheet Financial assets and liabilities bought and sold in accordance with standard market conventions are recognised at the transaction date of the relevant purchase or sale. Other financial assets and liabilities are recognised in the balance sheet at the time of acquisition.

On initial recognition, financial instruments may be assigned to a specific category, their accounting treatment being decided at that time. Initial recognition of financial assets and liabilities is at fair value, including directly attributable transaction costs, except for the category which is carried at fair value through profit and loss, where the transaction costs are expensed.

Derecognition of financial assets and liabilities A financial asset (or a component of a financial asset or part of a group of similar financial assets) is no longer shown in the balance sheet if: •• BinckBank ceases to have a right to the cash flows from the asset; or •• BinckBank retains the right to receive the cash flows from the asset but has entered into an obligation to pay them to

a third party in their entirety and without significant delay under the terms of a specific contract; or • BinckBank has transferred its rights to receive the cash flows from the asset and has either (a) largely transferred all

risks and rewards of ownership of the asset or (b) not largely transferred all risks and rewards of ownership of the asset or retained them fully, but has transferred control of the asset.

If BinckBank has transferred its rights to receive the cash flows from an asset but has not largely transferred all risks and rewards of ownership of the asset, or retained them fully and has not transferred control of the asset, that asset continues to be recognised for as long as BinckBank remains involved with the asset. Financial liabilities cease to be shown in the balance sheet as soon as the performance relating to the obligation has been completed or the obligation has been removed or has expired.

Loans and receivables and the related impairments are written off if there is no longer any real possibility of being able to recover the outstanding debt following realisation of the collateral.

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Determination of fair value The fair value of a financial instrument is based on the market price if there is an active market for that instrument. Financial assets are carried at the bid price, financial liabilities are carried at the offer price and risk off-setting positions are carried at the mid-price, excluding transaction costs.

For certain financial assets and liabilities, a quoted market price is not available. Various valuation methods are used to obtain a fair value for these financial assets and liabilities, ranging from net present value calculations to valuation models taking into account relevant price factors, including market prices of the underlying instruments referred to, market parameters (volatilities, correlations, credit risks) and client behaviour. BinckBank only makes use of third-party valuation models and does not make any estimates of its own with regard to the inputs used. All the valuation methods employed are internally evaluated and approved. The majority of the data used in these valuation methods is validated on a daily basis.

Valuation methods are inherently subjective. Measuring the fair value of certain financial assets and liabilities is accordingly largely dependent on estimates. Valuation methods involve various assumptions with respect to price factors. The use of other valuation methods and assumptions might produce estimates of fair values that are materially different.

Offsetting of financial assets and liabilities Financial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when there is a legally enforceable right to set off the amounts and an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

Accounting treatment after initial recognition The accounting treatment after initial recognition depends on the categories described below.

Financial assets or financial liabilities at fair value through profit and loss An instrument is classified as carried at fair value through profit and loss if it is held for trading purposes or if it was designated as such on initial recognition for one of the following reasons: •• It eliminates or substantially reduces inconsistencies in measurement and recognition which would otherwise arise

on the recognition of assets or of income and expenses on a different basis. •• The performance of the financial asset concerned is assessed on the basis of its fair value in accordance with a

documented risk management or investment strategy. Reporting to management is on the basis of fair value. •• The host contract of the financial instruments contains one or more embedded derivatives and the entire contract is

recognised at fair value through profit and loss. This is only permissible provided: • •• the•embedded•derivative•has•a•significant•influence•on•the•contractually•agreed•cash•flows•or•• •• •it•is•evident•on•initial•recognition•of•the•financial•instruments•that•separation•of•the•embedded•derivative•is•not•

permissible (e.g. option of premature settlement at amortised cost).

Derivatives not held on behalf of clients are regarded as being held for trading purposes. Derivatives are financial instruments requiring only a limited net initial investment or none at all, with future settlement dependent on the underlying notional amount of the contract and movements in certain rates or prices (e.g. an interest rate or the price of a financial instrument). Financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement under Result from financial instruments.

Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. In BinckBank’s case, these items mainly concern current account loans collateralised by securities and short-term money-market loans. After initial recognition the items are valued at amortised cost, using the effective interest-rate method. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired.

Held-to-maturity financial assets Financial assets with fixed or determinable payments and a fixed maturity date are designated as investments to be held to maturity if BinckBank specifically intends to hold them until maturity and is in a position to do so. Held-to-maturity investments are recognised at amortised cost, measured using the effective interest-rate method, less any impairments.


Available-for-sale financial assets Available-for-sale financial assets are those financial assets that are designated as being available for sale or are not included in one of the above categories. After initial recognition, available-for-sale financial assets are measured at fair value. Any gain or loss is shown, net of tax, as an unrealised result in the fair value reserve until the investment is derecognised or determined to be impaired. At such time the cumulative gain or loss previously shown in equity is recognised in the income statement in the Result from financial instruments.

Impairment of financial assets On a regular basis and at each balance sheet date, BinckBank assesses whether there is objective evidence, provided by one or more events, of impairment of financial assets individually or groups of financial assets collectively. Impairments are only recognised when there is an adverse effect on the future cash flows. If impairment is indicated, the amount of any impairment is determined as follows for available-for-sale financial assets, loans and receivables and held-to-maturity financial assets:

Loans and receivables BinckBank assesses whether there is objective evidence of impairment of the lending portfolio (including any related facilities and guarantees). In the case current account loans collateralised by securities, there is an objective indication if the fair value of the collateral is lower than the carrying amount of the current account loan. Evidence that a loan or receivable is impaired is obtained via the group’s lending assessment process. This involves assessment of clients’ creditworthiness as well as assessment of the nature of clients’ brokerage transactions and monitoring of client transactions and balances.

The amount of any impairment is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the asset. The loss is presented in the income statement in Impairment of financial assets. In computing the present value of the estimated future cash flows from a financial asset for which collateral security has been provided, account is taken of the cash flows which will probably arise on execution of the collateral security less the costs which will necessarily be incurred in obtaining and selling the assets provided by way of security.

In the event of impairment, the impairment provision is increased by the amount of the impairment. The affected assets are only written down when all the necessary procedures have been completed and the amount of the loss has been determined. If, in a subsequent period, the amount of an impairment decreases and the decrease can be objectively related to an event occurring after the initial write-down, the previously recognised impairment is reversed. Reversal of an impairment is recognised in the provision and in the income statement, provided the carrying amount of the asset does not exceed the amortised cost at the reversal date. Amounts subsequently collected after having been written off are credited to the income statement in Impairment of financial assets.

The methodology and the assumptions used in estimating future cash flows are regularly evaluated in order to reduce variances between estimated and actual losses.

Held-to-maturity financial assets Held-to-maturity investments are individually assessed and the amount of any impairment is measured using the same method as has been explained for loans and receivables.

BinckBank does not regard possible future events as objective indicators and such forecasts are accordingly not used as evidence of impairment of a financial asset or a portfolio of financial assets. Losses based on future events are not recognised, regardless of probability.

Available-for-sale financial assets An investment in equities is considered to have been impaired if there is a significant or prolonged fall in the fair value to below cost. An increase in value in the period after an impairment is reported in equity as a revaluation.

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Investments in interest-bearing securities are assessed for impairment if there are objective indications of financial problems at the issuer or borrower, there is no longer an active market, or there are other such indications. If there are such indications, the cumulative net loss previously recognised directly in equity is transferred from equity to the income statement in Impairments of financial assets. Reversals of impairments in subsequent years relating to interest-bearing securities are reversed through the income statement if the increase in the fair value of the instrument can be objectively related to an event occurring after the previous impairment was recognised in the income statement.

Loans and receivables under renewed contracts In the case of existing loans and receivables, it is possible for renewed contracts to be concluded with clients. These loans are no longer treated as overdue. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable. These loans and receivables are periodically tested for impairment on an individual basis, using the original effective interest rate.

Acquisitions and goodwill All acquisitions are accounted for using the acquisition method. The identifiable assets, equity and liabilities of the acquired company or activities are recognised at fair value. BinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty percentage.

Earn-out arrangements may be agreed as part of business acquisitions. BinckBank makes an estimate of the earn-out payments on the basis of the expected future results of the acquired companies. These earn-out payments form part of the price paid for the acquired company. An annual assessment is made to determine whether the earn-out obligation should be adjusted in the light of any changes to the development of the results. Adjustments to the earn-out calculations after completion of the acquisition are recognised directly in the income statement.

On initial recognition, goodwill acquired in a business combination is measured as the difference between the cost of the business combination and BinckBank’s share of the net fair value of the acquired company’s identifiable assets, liabilities and contingent liabilities, if positive. Subsequently, goodwill is carried at cost less any cumulative impairments. A negative difference between cost and fair value is expensed immediately.

The valuation of a third-party interest in the acquired company is made at either the fair value on the acquisition date or the proportional share in the identifiable assets and liabilities of the acquired company.

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. For this impairment test, goodwill acquired in a business combination is allocated to BinckBank’s cash-generating units or groups of cash-generating units that are expected to benefit from the synergy of the business combination.

An impairment is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. If the recoverable amount is lower than the carrying amount, an impairment is recognised. Impairment of goodwill is not reversed.

Necessary adjustments to the fair value of acquired assets, equity and liabilities measured at the time of acquisition that are identified before the end of the first reporting period after the business combination result in an adjustment of the goodwill. Necessary adjustments identified at a later date are recognised through profit or loss. Gains and losses on the disposal of a company or activity are measured as the difference between the proceeds from disposal and the carrying amount of the company or activity, including goodwill and currency translation reserve.

Transaction costs associated with an acquisition are recognised directly in the income statement.


Cash and cash equivalents Cash and cash equivalents consist of cash, balances with (central) banks and short term deposits (call money) with original maturities of three months or less that are readily convertible into known amounts of cash and on which there is a negligible impairment risk.

Associates and joint ventures

AssociatesAssociates are entities in which BinckBank generally holds between 20% and 50% of the voting rights or in which BinckBank is able to exercise significant influence in some other way but over which BinckBank does not have control. Investments in associates are accounted for using the equity method. The item includes goodwill paid on acquisition, less any cumulative impairments. With equity accounting, BinckBank’s share in the results of an associate is recognised in the income statement as share in profits of associates. BinckBank’s share in changes in an associate’s reserves is recognised directly in BinckBank’s equity. The carrying amount of the investment is adjusted for the reported results and changes in reserves. If the carrying amount of the investment in an associate falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate. Where necessary, the accounting principles of associates are adjusted in order to ensure consistency with those of BinckBank.

Joint venturesJoint ventures are entities over which BinckBank exercises joint control. This control is established in an agreement, and strategic decisions regarding financial and operating policy are taken by unanimous vote. Joint ventures are reported using the equity method from the date on which BinckBank has joint control for the first time until the date on which this control ceases. Under the equity method, BinckBank’s share in the results of the joint venture is reported in BinckBank’s income statement as share in results of associates and joint ventures. BinckBank’s share of changes in a joint venture’s reserves is recognised directly in BinckBank’s equity. The value of the joint venture is adjusted for these results and movements in reserves. If the carrying amount of the investment in a joint venture falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the joint venture concerned or has already made payments on behalf of the joint venture. Where necessary, the accounting principles of joint ventures are adjusted in order to ensure consistency with those of BinckBank.

Intangible assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less cumulative amortisation and any cumulative impairments.

Intangible assets are determined as having either a definite or an indefinite useful life. Intangible assets with a definite useful life are amortised over the useful life and tested for impairment if there are indications that an asset may be impaired. The useful lives of the intangible assets are assessed annually and adjusted if there has been a change. Amortisation of intangible assets with a definite useful life is presented in the income statement in depreciation and amortisation.

Intangible assets with an indefinite useful life are subjected to an annual impairment test, either individually or at the level of the cash-generating unit. These intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reassessed annually, including an assessment of whether the indefinite useful life is still justifiable.

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The activities relating to research and development of software are recognised and measured as follows:

Costs of research are recognised in the income statement when they occur. An intangible asset arising from development costs incurred in an individual project is only recognised if BinckBank can demonstrate that: • completion of this intangible asset is technically feasible, so that it will be available for use or for sale • it is BinckBank’s intention to complete the intangible asset and use or sell it; • BinckBank is capable of using or selling the intangible asset; • future economic benefits are achievable; • adequate technical, financial and other resources are available to complete the development of the intangible asset

and for its use or sale; and • it is possible to measure the costs incurred during development reliably.

After initial recognition of the development costs, the asset is carried at cost less any cumulative amortisation and cumulative impairments. Any such capitalised costs are amortised over the period in which the expected future economic benefits from the project concerned are to be realised. The carrying amount of the development costs is tested for impairment annually if the asset is not yet in use or if there are indications of impairment during the year.

Property, plant and equipment Real estate for own use is carried at historical cost less cumulative depreciation and impairment losses. All other assets recognised in the balance sheet as operating assets are carried at historical cost less cumulative depreciation and any impairments.

Real estate and operating assets are subject to straight-line depreciation on the basis of useful life, taking account of the residual value. The expected useful life is: Real estate (own use) 50 yearsComputer hardware 5 yearsFixtures, fittings and equipment 5-10 yearsOther non-current assets 5 years

If an asset consists of various ‘components’ with different useful lives and/or different residual values, the asset is divided into these components and depreciation is applied separately. Useful life and residual value are assessed annually. If it emerges that the estimated values differ from previous estimates, the values are adjusted. If the carrying amount of an asset is higher than the estimated recoverable amount, an impairments is recognised and charged to the income statement. Results on the sale of real estate and operating assets, being the difference between the sale proceeds and the carrying amount, are recognised in the income statement in the period in which the sale occurred. Repair and maintenance costs are charged to the income statement in the period to which they relate. The costs of significant renovations are capitalised if it is likely that additional future benefits will be realised from the existing asset. Significant renovations are written off on the basis of the remaining useful life of the asset concerned.

Prepayments arising from an operational lease are recognised in investments in real estate. Amortisation of the leasehold is applied on a linear basis over the remaining life to maturity.

Tax

Current tax This item concerns tax assets and liabilities for current and prior years, carried at the amount expected to be claimed from or paid to the tax authorities. The tax amount is computed on the basis of enacted tax rates and applicable tax law.


Deferred tax Deferred tax liabilities are recognised, based on the temporary differences at the balance sheet date between the tax base of assets and liabilities and their carrying amount in these financial statements. Deferred tax liabilities are recognised for all taxable temporary differences except: • where the deferred tax liability arises on the initial recognition of goodwill or the initial recognition of an asset or a

liability in a transaction that is not a business combination and does not affect the operating profit before tax or the taxable profit;

• in the case of taxable temporary differences connected with investments in subsidiaries and associates, where BinckBank is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, unused tax facilities and unused tax loss carryforwards when it is probable that taxable profits will be available against which the deferred tax asset can be utilised, enabling the deductible temporary differences, unused tax facilities and unused tax loss carryforwards to be used.

The carrying amount of the deferred tax assets is assessed at the balance sheet date and reduced if it is not probable that sufficient taxable profits will be available against which some or all of the deferred tax asset can be utilised. Unrecognised deferred tax assets are reassessed at the balance sheet date and recognised to the extent that it is probable that taxable profits will be available in the future against which the deferred tax asset can be utilised. Deferred tax assets and liabilities are carried at amounts measured at the tax rates expected to be applicable to the period in which the asset is realised or the liability is settled, based on enacted tax rates and applicable tax law. The tax on items recognised directly in equity is accounted for directly in equity instead of in the income statement. Deferred tax assets and liabilities are presented as a net amount if there is a legally enforceable right to set off deferred tax assets against deferred tax liabilities and the deferred tax is related to the same taxable entity and the same tax authority.

Other assets This item includes other receivables. The receivables included in this item are carried at amortised cost less any impairments.

Work in progress Work in progress relates exclusively to the external activities of the subsidiary Syntel. Work in progress is carried at the cost of the work performed, plus a proportion of the expected final results based on progress and less invoiced instalments, prepayments and provisions. For anticipated losses on work in progress, provisions are recognised as soon as such losses are identified and are deducted from the cost, any already recognised profits also being reversed. The cost comprises the direct project costs, made up of direct wage costs, materials, costs of subcontracted work, other direct costs and charges for the hire and maintenance of the equipment used. The progress of the project is measured on the basis of the cost of the work performed in relation to the expected cost of the project as a whole. Profits are not recognised on work in progress before it is possible to make a reliable estimate of the final result. For each project, the balance of the value of the work in progress less invoiced instalments and prepayments is measured. In the case of projects on which the invoiced instalments and prepayments exceed the value of the work, this balance is included in other liabilities instead of other assets.

Impairments of non-financial assets The carrying amount of BinckBank’s assets is tested at each balance sheet date in order to determine whether there are indications of impairment. If so, the recoverable amount of the asset is estimated. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. An impairment is recognised if the carrying amount of an asset or cash-generating unit exceeds the recoverable amount.

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Derivatives positions held on behalf of clients BinckBank executes derivatives transactions on behalf of its clients and holds the resultant positions in its own name but for the client’s account and at the client’s risk. The positions are recognised at fair value, measured according to the quoted price at the balance sheet date. Financial settlement with the clients concerned in respect of such transactions and positions is effected immediately. The clients have lodged adequate collateral with BinckBank in the form of cash balances, bank guarantees and securities to cover the risks arising out of the derivatives positions held.

Customer deposits Savings comprise the balances on savings accounts held by clients. Savings are measured at fair value on initial recognition, including transaction costs incurred. Savings are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest-rate method, is recognised in the income statement under the heading of interest expense over the term to maturity of the accounts concerned.

Demand deposits relate to non-subordinated liabilities to non-banks that are not embodied in debt securities. These liabilities are measured at fair value on initial recognition, including transaction costs incurred. They are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of these liabilities to clients.

ProvisionsA provision is recognised if (I) BinckBank has a present obligation (legal or constructive) as a result of a past event; (II) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and (III) a reliable estimate can be made of the amount of the obligation. If BinckBank expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted at a rate, before tax, that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

PensionsBinckBank operates a pension plan for its executive board and employees based on a defined contribution system. In a defined contribution system, a percentage of the employee’s fixed salary is paid as contribution to a pension insurer. The percentage payable is age-related. The pension contributions are recognised in the year to which they relate.

Other liabilities All loans are carried on initial recognition at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest-bearing loans are subsequently carried at amortised cost calculated using the effective interest-rate method.

Shareholders, equityThe costs associated with the issue of new shares are charged to the share premium account.

Treasury shares Equity instruments which are reacquired (treasury shares) are deducted from equity at the acquisition price including transaction costs. Gains or losses on the purchase, sale, issue or cancellation of BinckBank’s own equity instruments are not recognised in the income statement.

Off balance sheet commitmentsContingent liabilities are liabilities that are not recognised in the balance sheet because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within BinckBank’s control. The maximum potential credit risk associated with these contingent liabilities faced by BinckBank is disclosed in the notes. In estimating the maximum potential credit risk, it is assumed that all counterparties default on their contractual obligations and all assets provided by way of collateral security are worthless.


Leasing Lease contracts whereby the risks and benefits relating to the right of ownership are held to a significant extent by the lessor are designated as operating leases. Lease payments made in the capacity of lessee in relation to operating leases are applied to the result during the lease period, after deduction of any premiums received from the lessor. BinckBank is only involved in operational lease contracts as a lessee.

BinckBank has not entered into any financial lease contracts of material significance, either as lessor or as lessee.

Earnings per ordinary share The basic earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders for the period by the weighted average number of shares in issue during the period. The diluted earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of shares during the period, adjusted for possible dilution resulting for example from outstanding option rights.

Cash flow statement The cash flow statement has been prepared using the indirect method, in which cash flows are analysed according to operating, investing and financing activities. In the cash flow from operating activities, the net result is adjusted for income and expenses that have not resulted in receipts and expenses in the same financial year and for changes in provisions and suspense items. Cash includes the cash in hand together with freely available balances on deposit with central banks and other financial instruments with maturities of less than three months from the date of acquisition. Where applicable, movements associated with currency translation differences are eliminated.

5. Recognition and measurement of income and expenses

General Income and expense items are recognised in the period to which they relate, having due regard to the above accounting principles. Revenues are recognised if it is probable that their economic benefits will flow to BinckBank and the revenue can be reliably measured.

Interest income Interest income consists of the interest on financial assets attributable to the period. Interest on financial assets is measured using the effective interest-rate method based on the actual acquisition price. The effective interest-rate method is based on the expected flow of cash receipts, taking account of the risk of premature redemption of the underlying financial instrument and the direct costs and revenues, such as the transaction costs charged and any discount or premium. If the risk of early redemption cannot be sufficiently reliably measured, BinckBank assumes the cash flows during the entire term to maturity of the financial instruments. Interest income on financial assets subject to impairment which have been written down to the estimated recoverable value or fair value are subsequently recognised on the basis of the interest rate used to measure the recoverable value by discounting the future cash flows.

Interest expense This item includes the interest expense on all financial obligations and is measured on the basis of the effective interest-rate method.

Net fee and commission income Commission income and expense comprises payments, excluding interest, received or receivable from third parties and paid or payable to third parties, respectively, whether on a non-recurring or more regular basis, in respect of services provided.

Other income Other income comprises amounts charged to third parties during the year in respect of goods and services supplied relating to hardware and software after deduction of sales expenses, together with income not classified under other income items.

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Work in progress on contracts for third parties BinckBank uses the percentage of completion method to measure the revenue generated by each contract on the balance sheet date. The percentage of completion is determined by comparing the total estimated costs for a project with the actual costs up to the balance sheet date. BinckBank recognises the positive or negative balance of the revenue less invoiced instalments for each project in other assets or other liabilities, respectively.

Share in results of associates and joint ventures This concerns BinckBank’s share in the results of its associates and joint ventures. If the carrying amount of the investment in an associate or joint venture falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate or joint venture concerned or has already made payments on behalf of the associate or joint venture.

Tax Tax is recognised in the income statement in unrealised results, unless the tax relates to items recognised directly in equity, in which case it is recognised directly in equity.

6. Acquisition of business activities On 9 November 2010 BinckBank acquired a 60% interest in the share capital and voting rights of ThinkCapital Holding B.V. (hereinafter ‘ThinkCapital’). The acquisition enables BinckBank to benefit from the rapidly-increasing interest in index-tracker funds. ThinkCapital and BinckBank are joining forces with the intention of putting tracker funds on the map in the Netherlands. Tracker funds are investment products that follow an index and can be managed at low cost. BinckBank will provide the distribution network, while ThinkCapital will be responsible for product development. ThinkCapital will also focus on index investing for the institutional market for passive asset management.

The fair value of the identifiable assets and liabilities and the goodwill as at the acquisition date are as follows:

ThinkCapital fair value ThinkCapital carrying amountx € 1,000 x € 1,000

AssetsBanks 13 13Property, plant and equipment - 7Deferred tax assets - 269Other assets 199 199Prepayments and accrued income 12 12Total assets 224 500

LiabilitiesOther liabilities 80 80Accruals and deferred income 88 88Total liabilities 168 168

Net capital 56Non-controlling interests (40%) (22)Acquired identifiable assets and liabilities 34Purchase price 11Purchase benefit (23)

Cash outflow on acquisition:Cash paid (11)Net cash acquired 8Net cash outflow (3)

The acquisition was funded out of available financial assets.


The acquisition of ThinkCapital has been recognised using the acquisition method as described in IFRS 3. The gain realised by BinckBank in the acquisition reflects the distribution capacity that BinckBank will provide. The gain from the acquisition is recognised in the consolidated income statement under Other non-operating income. The non-controlling interest is recognised at the fair value as at the acquisition date.

The share of ThinkCapital in the result of BinckBank from the acquisition date is a loss of € 311,000. The total operating income for this period amounted to a negative sum of € 26,000. If the acquisition had taken place at the beginning of the year, the result after tax of BinckBank would have been € 43.5 million. The total operating income of BinckBank would have amounted to € 184.8 million.

No other acquisitions took place in 2010 or 2009.

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Notes to the consolidated balance sheet

31 December 2010 31 December 2009 x € 1,000 x € 1,000

7. Cash and balances with central banks 105,972 48,936This item includes all cash and any credit balances available on demand from the central banks in countries where BinckBank has offices.

8. BanksDue from banks 177,316 179,692 This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:Credit balances available on demand 169,175 174,663 Call money 5,033 5,029 Receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank

3,108 -

177,316 179,692 The call money receivables have original maturities of less then three months. Interest is received on these balances at a variable rate based on market interest rates.

The development of the receivable from DNB in relation to DGS DSB Bank is as follows:Balance as at 1 January - - Paid to DNB 5,780 - Reclassification from provisions (2,672) - Balance as at 31 December 3,108 -

In December 2010, BinckBank N.V. paid an initial gross contribution into the Deposit Guarantee Scheme (DGS) in relation to the settlement of the bankruptcy of DSB Bank. The receivable in relation to the DGS for DSB Bank is a claim via DNB on the estate of DSB Bank. Under the DGS, De Nederlandsche Bank (DNB) has so far paid € 3.5 billion to the account holders of DSB Bank. DNB has charged this amount to the participating banks proportionally. In BinckBank’s case, the total sum involved is € 15,625,000. The contribution to the DGS in any year is however capped at 5% of a bank’s own funds, and the contribution BinckBank had to make in 2010 was thus only € 5,780,000. After settlement of payments from the estate of DSB, the remainder will potentially be charged to BinckBank in subsequent years. The expected total loss from the bankruptcy of DSB is unchanged in comparison to 2009 and is estimated by the Dutch Bankers’ Association at € 600 million. A provision of € 2,620,000 had already been formed in 2009 in relation to the expected loss arising from BinckBank’s obligations under the DGS.



Due to banks 25,610 -

At year-end 2010 BinckBank has sweeping arrangements with various banks whereby the debit and credit balances in a large number of bank accounts are regulated with a fixed treasury contra-account. This is only visible on the statement for the next business day; therefore at year-end 2010 BinckBank had an obligation in a single bank account for a very short period.

9. Financial assets and liabilities at fair value with changes in fair value through profit or loss

Financial assets held for trading 169 - This item comprises:SRD derivative receivables 169 -

169 - Financial assets at fair value through profit and loss 13,856 37,294 This item comprises: Equity positions in relation to SRD receivables 13,856 - Bond position in the investment portfolio - 37,294

13,856 37,294

Financial liabilities held for trading 50 -

This item comprises:SRD derivative payables 50 -

50 - Financial liabilities at fair value through profit and loss 1,485 - This item comprises:Equity positions in relation to SRD payables 1,485 -

1,485 - At the end of September 2010 BinckBank commenced its offering of SRD (Service de Règlement Différé) contracts in France. An SRD contract is a transaction in a selected number of equities listed on Euronext Paris whereby payment for shares purchased or delivery of shares sold may be deferred until the last trading day of the month. The corresponding equity transaction in the cash market is executed by BinckBank in order to cover the price risk. If fact what happens is that BinckBank advances the transaction sum to the client (in case of an SRD long) or the client is anabled to take a short position (SRD short). Under IFRS, SRD receivables and payables are classified as a derivative and are recognised as financial assets and liabilities held for trading purposes. Financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement under result from financial instruments. The corresponding positions in equities are classified as financial assets and liabilities at fair value through profit and loss, because otherwise the treatment would not be consistent with the associated derivatives. Both unrealised and realised gains and losses are recognised directly in the income statement under result from financial instruments. Since BinckBank takes a position in equities which exactly offsets the SRD derivatives position held by the client, there is a natural hedge of the price risk.

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10. Available-for-sale financial assets 1,599,700 1,511,903 This item comprises:Government bonds/government-guaranteed bonds 432,322 832,205 Other bonds 1,167,378 679,698

1,599,700 1,511,903

Movements in available-for-sale financial assets were:Balance as at 1 January 1,511,903 1,298,233 Purchases 1,229,360 1,156,581 Sales (541,308) (396,879)Redemptions (577,718) (552,851)Revaluation gains and losses (22,537) 6,819 Balance as at 31 December 1,599,700 1,511,903

11. Loans and receivables 496,266 410,169This item comprises receivables from private sector clients, including overnight loans and overdrafts that are collateralised by securities and bank guarantees (collateralised loans).

The analysis is as follows:Receivable from government institutions 20,000 - Receivables collateralised by securities 470,741 407,627 Receivables collateralised by bank guarantees 5,453 2,412 Other receivables 558 805 Loans and receivables, gross 496,752 410,844 Less: impairment provision (486) (675)

496,266 410,169

The interest rate is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after realisation of collateral (securities and bank guarantees).

The changes in impairment provisions were as follows:Balance as at 1 January 675 477 Added 32 315 Recovered (102) (108)Write-offs (119) (9)Balance as at 31 December 486 675

The impairment provision is calculated on a specific basis.

12. Held-to-maturity financial assets 4,121 8,329The portfolio of interest-bearing securities classified as held-to-maturity financial assets concerns government bonds with remaining maturities of between 0 and 1 years.



13. Investment in associates and joint ventures 3,067 1,953 This item comprises: TOM Holding B.V. 2,174 1,953 BeFrank N.V. 893 -

3,067 1,953

The development of this item was as follows:Balance as at 1 January 1,953 2,675 Capital increases and acquisitions 2,500 3,000 Disposals - (1,056)Redemption of loan to Accion N.V. - (550)Write-down of loan to Accion N.V. - (650)Result on associates and joint ventures (1,386) (1,466)Balance as at 31 December 3,067 1,953

The item capital increases and acquisitions relates to investments in TOM Holding B.V. and the incorporation of the joint venture BeFrank N.V.

The item disposals relates to the sale of the remaining interest in Florint B.V. to the other shareholders as agreed upon in February 2009. At year-end 2009 the investment in and loan to Accion N.V. was written down to nil. The revaluation of the loan is recognised in the income statement under impairment of financial assets.

Country Interest Share in equity

Share in result

Assets Liabilities excl.

equity Associates 2010TOM Holding B.V. NL 37.5% 2,174 (1,279) 6,564 767 Total 2,174 (1,279) 6,564 767

Associates 2009 Florint B.V. NL 0% - (29) - - Accion N.V. NL 39% - (390) - - Total - (419) - -

Coun-try

Inte-rest

Share in equity

Share in result

Fixed assets

Current assets

Long-term

liabilities

Current liabilities

Total reve-nue

Total ex-

penseJoint ventures 2010BeFrank N.V. NL 50% 893 (107) - 1,848 - 62 - (284)Total 893 (107) - 1,848 - 62 - (284)

Joint ventures 2009TOM Holding B.V. NL 50% 1,953 (1,047) 1,525 2,992 - 611 51 (2,670)Total 1,953 (1,047) 1,525 2,992 - 611 51 (2,670)

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On 13 July 2010 it was announced that ABN AMRO Clearing Bank N.V. had acquired a 25% equity interest in TOM Holding B.V. by means of a share issue. As a result of the investment by ABN AMRO Clearing Bank N.V. TOM Holding B.V. is now classified as an associate rather than as a joint venture. Due to the dilution of the interest in TOM Holding B.V., on the revaluation to net asset value a positive result of € 467,000 was realised, which is recognised in the income statement under result from associates and joint ventures.

31 December 2010 31 December 2009x € 1,000 x € 1,000

14. Intangible assets 320,757 348,561The movements in 2010 were as follows:

Brand name

Coredeposits

Customer base

Software Goodwill Total

Balance as at 1 January 2010 18,843 67,276 105,218 4,295 152,929 348,561 Investments - - - 2,081 - 2,081 Disposals - cost - - - (715) - (715)Disposals - cumulative amortisation - - - 715 - 715 Amortisation (6,281) (8,410) (13,291) (1,903) - (29,885)Balance as at 31 December 2010 12,562 58,866 91,927 4,473 152,929 320,757

Cumulative cost 31,405 84,095 131,988 11,412 152,929 411,829 Cumulative amortisation and impairments (18,843) (25,229) (40,061) (6,939) - (91,072)Balance as at 31 December 2010 12,562 58,866 91,927 4,473 152,929 320,757

Amortisation period (years) 5 10 5 - 10 5

The movements in 2009 were as follows:Brandname

Coredeposits

Customer base


Balance as at 1 January 2009 25,124 75,685 118,511 6,089 152,929 378,338 Investments - - - 240 - 240 Disposals - cost - - - (460) - (460)Disposals - cumulative amortisation - - - 460 - 460 Amortisation (6,281) (8,409) (13,293) (2,034) - (30,017)Balance as at 31 December 2009 18,843 67,276 105,218 4,295 152,929 348,561



The items ‘Brand name’ and ‘Core deposits’ arise from the acquisition of Alex Beleggersbank in 2007. The item Customer base arises from the acquisitions of Syntel in 2006 and Alex Beleggersbank in 2007.

Software includes purchased software and proprietary software developed by Syntel, which is sold to its clients, as well as Syntel-developed software for supporting BinckBank’s operations. The hours charged to these software development projects have been capitalised by BinckBank as software at an average hourly rate reflecting only direct staff costs.

‘Goodwill’ relates to the excess of the purchase price paid to acquire the activities of Alex Beleggersbank in 2007 and Syntel in 2006 over the fair value of the identifiable assets and liabilities.


Impairment testing of other intangible assets The various categories of intangible assets are tested annually or more frequently if events or changes in circumstances indicate that the carrying amount, less applicable annual amortisation, may be impaired. In the first instance, the test is made on the basis of the indicators mentioned in IAS 36.12, in addition to the indicators identified by BinckBank, compared with the assumptions on which the measurement of the identified immaterial assets was based at the time of the acquisition:

Intangible asset IndicatorBrand name Reputational damage to the Alex brand

Decision to limit the use of the Alex brandCore deposits Low customer deposits under the Alex brand compared to purchase date

Less interest margin compared to purchase dateCustomer base Higher attrition rate in Alex accounts compared to purchase date

Lower average revenues per acquired account than forecast at purchase date Software Decision to limit the use of the acquired softwareGeneral Higher market interest rates, adverse effect on the discount rate

If the test reveals an indication of impairment, BinckBank performs a full calculation of the recoverable amount of the cash-generating units. This calculation is made in the same way as that described for the calculation of the value in use.

Goodwill impairment test Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. The annual test as of 30 September 2010 gave no indication that the goodwill had been impaired. As at 31 December 2010, there were no changes in the circumstances such as to indicate impairment.

The goodwill has been allocated to the following individual cash-generating units:


Goodwill Retail (Alex Beleggersbank) 142,882 142,882 Syntel 8,014 8,014 Business process outsourcing (BPO) 2,033 2,033

152,929 152,929

Principal assumptions used in calculating the value in use: The recoverable amount of the cash-generating units is based on the value in use. Use has been made of cash flow projections over a period of five years, based on financial estimates used by management for setting targets. The cash flows beyond the five-year horizon have been extrapolated, using growth rates of between 0% and 2%. Management has compared the principal assumptions against market estimates and market expectations.

The following assumptions have been used: 2010 Retail Syntel BPODiscount rate 10.35% 11.6% 11.6%Expected growth rate beyond five-year horizon 2% 2% 0%

2009 Retail Syntel BPODiscount rate 11.4% 11.4% 11.4%Expected growth rate beyond five-year horizon 2% 2% 0%

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Principal assumptions used in calculating the value in use of Alex Beleggersbank as at 30 September 2010 The principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were: •• Natural attrition rate and inflow of new private investors based on the trends of the past five years and the budget,

including a multi-year forecast, respectively. The conservatively estimated growth in the number of clients discounted in the expected numbers of transactions and in the amounts of customer deposits and funds invested.

•• Interest margin based on the actual interest margin achieved over the past year, allowing for the long-term effect of low interest rates.

•• Commission income and expense, based on the expected average number of transactions and the average commission income and expense per transaction. The average income, expense and number of transactions are based on the averages in the previous year.

Principal assumptions used in calculating the value in use of Syntel BPO activities as at 30 September 2010 The principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were: •• Estimated sales based on sales for the year immediately preceding the budget year, applying an annual growth rate

of 2%. •• •Costs based on standardised costs for the year immediately preceding the budget year, applying an annual rate of

increase of 3%.



15. Property, plant and equipment 43,901 12,512 The movements in 2010 were as follows:

Real estate Fixtures, fittings and equipment

Computer hardware

Other Total

Balance as at 1 January 2010 - 459 12,046 7 12,512 Investments 24,998 8,182 3,122 - 36,302 Disposals - cost - (1,120) (1,949) - (3,069)Disposals - cumulative depreciation - 1,120 1,949 - 3,069 Depreciation (333) (681) (3,896) (3) (4,913)Balance as at 31 December 2010 24,665 7,960 11,272 4 43,901

Cumulative cost 24,998 9,294 18,522 18 52,832 Cumulative depreciation and impairments (333) (1,334) (7,250) (14) (8,931)Balance as at 31 December 2010 24,665 7,960 11,272 4 43,901

Depreciation period in years 50 5 - 10 5 5

The movements in 2009 were as follows:Real estate Fixtures,

fittings and equipment

Computer hardware

Other Total

Balance as at 1 January 2009 - 816 8,392 10 9,218 Investments - 113 9,103 - 9,216 Disposals - cost - - (3,592) - (3,592)Disposals - cumulative depreciation - - 3,592 - 3,592 Depreciation - (470) (5,449) (3) (5,922)Balance as at 31 December 2009 - 459 12,046 7 12,512

Cumulative cost - 2,232 17,349 18 19,599 Cumulative depreciation and impairments - (1,773) (5,303) (11) (7,087)Balance as at 31 December 2009 - 459 12,046 7 12,512


The investment in real estate includes prepayments in relation to a leasehold (operational lease) which expires on 15 April 2056. An amount of € 208,000 relating to amortisation of the leasehold is included under depreciation and amortisation in 2010 (2009: nil).

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16. Current taxCurrent tax assets 4,949 1,972 The balance as at year-end relates mainly to the current year.Current tax liabilities (468) (282)

These concern corporation tax payable by subsidiaries which are not part of the tax group.

The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows:

2010Amount

2010Percentage

2009Amount

2009Percentage

Standard tax rate 15,040 25.5% 15,872 25.5%Effect of different tax rates (in other countries)

44 0.1% 863 1.4%

Effect of substantial-holding privileges

353 0,6% 374 0.6%

Effect of changes in tax rates (271) (0.5%) - 0.0%Other effects on the tax rate (329) (0.5%) (2,026) (3.3%)Total tax expense/tax burden 14,837 25.2% 15,083 24.2%

The effect of changes in tax rates relates to the adjustment of the deferred tax liabilities as a result of a change in the tax rate in the Netherlands from 25.5% to 25%.

The other effects on the tax rate include the various tax facilities used and corrections to tax in previous reporting years.


31 December 2010

31 December 2009

17. Deferred taxCompositionDeferred tax assets - 5,988 Deferred tax liabilities (12,695) (14,490)Net deferred tax asset / (liability) (12,695) (8,502)

Maturity of deferred tax assets< 1 year - 1,895 1 - 5 years - 4,093 > 5 years - -

- 5,988 Maturity of deferred tax liabilities< 1 year (1,408) (5,614)1 - 5 years (2,679) (3,293)> 5 years (8,608) (5,583)

(12,695) (14,490)

1 January 2010 Movement via income statement

Movement via balance sheet

31 December 2010

Origin of deferred tax assets and liabilities Tax loss carryforwards 5,988 (5,988) - - Available-for-sale financial assets (5,268) 32 4,516 (720)Goodwill and intangible assets (5,584) 165 (2,792) (8,211)Depreciation period differences for non-current assets

- 58 (2,958) (2,900)

Other (3,638) 2,428 346 (864)Net asset / (liability) (8,502) (3,305) (888) (12,695)

1 January 2009 Movement via income statement

Movement via balance sheet

31 December 2009

Origin of deferred tax assets and liabilitiesTax loss carryforwards 5,980 8 - 5,988 Available-for-sale financial assets (3,406) - (1,862) (5,268)Goodwill and intangible assets (2,792) - (2,792) (5,584)Other (1,918) (1,426) (294) (3,638)Net asset / (liability) (2,136) (1,418) (4,948) (8,502)

In 2010 BinckBank charged the deferred tax claims relating to deductible losses of foreign subsidiaries and branches to the income statement in connection with the use of these losses or a revision to the future expectation of the use of these losses. Deferred tax liabilities regarding losses of foreign branches already deducted in the Netherlands have also been charged to the income statement. The total compensating tax losses at year-end 2010 were nil (2009: € 17.8 million).

The item Available-for-sale financial assets relates to the deferred tax on unrealised profits as a result of the revaluation of the investment portfolio.

The Goodwill and intangible assets in the deferred tax liabilities relate to the differences between the commercial and fiscal amortisation of the goodwill and intangible assets acquired due to the acquisition of Alex.

The Depreciation period differences for non-current assets relate to tax facilities with regard to accelerated depreciation on certain investments in fixed assets in 2009 and 2010.

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18. Other assets 13,050 14,286 This item comprises:Trade receivables 4,448 1,783 Receivables relating to securities sold, but not yet delivered 7,270 11,755 Other receivables 1,332 748

13,050 14,286 Trade receivables, receivables relating to securities sold but not yet delivered and other receivables have maturities of less than one year.

19. Prepayments and accrued income 49,840 48,828 This item comprises:Interest receivable 35,383 33,100 Commission receivable 9,772 5,919 Other prepayments and accrued income 4,685 9,809

49,840 48,828 Other prepayments and accrued income concern mainly prepaid IT maintenance contracts, which are paid up to three years in advance.

20. Derivatives positions held on behalf of clients 383,804 299,587 The derivative positions held on behalf of clients are held in BinckBank’s own name but for the client’s account and at the client’s risk.

21. Customer deposits 2,258,290 2,089,814 This item comprises:Demand deposits savings accounts 717,181 874,181 Demand deposits in current accounts 1,541,109 1,215,633

2,258,290 2,089,814

22. Provisions 1,268 2,660 This item comprises:Obligations under the deposit guarantee scheme - 2,620 Other provisions 1,268 40

1,268 2,660

The movement in the provision for obligations under the deposit guarantee scheme was as follows:Balance as at 1 January 2,620 - Addition charged to income 52 2,620 Reclassification to banks (2,672) - Balance as at 31 December - 2,620

The provision concerns an estimate of the contribution payable by BinckBank for the compensation of clients arising from the deposit guarantee scheme.



The provision formed for the inability to pay and subsequent bankruptcy of DSB Bank has been reclassified to the item banks (see note 8) as a result of a payment of a gross contribution to De Nederlandsche Bank in December 2010.

The movement in the other provisions were as follows:Balance as at 1 January 40 93 Released to income (40) (53)Addition charged to income 683 - Other movements 585 - Balance as at 31 December 1,268 40

The item other provisions includes onerous contracts, restructuring and legal disputes.

23. Other liabilities 48,023 21,210 This item comprises:Liabilities in respect of securities transactions not yet settled 34,939 10,942 Tax and social security contributions 3,319 2,605 Trade payables 6,474 3,044 Other liabilities 3,291 4,619

48,023 21,210

24. Accruals and deferred income 16,162 21,608 This item comprises:Accrued interest 4,530 5,602 Employee expenses 6,832 9,144 Stock exchange and clearing costs payable 975 3,122 Other accruals and deferred income 3,825 3,740

16,162 21,608 Employee expenses under this heading mostly concern performance-related pay to board members and employees of BinckBank.

25. Equity 468,913 480,359 This item comprises:Issued share capital 7,450 7,607 Share premium reserve 373,422 386,978 Treasury shares (3,335) (18,097)Fair value reserve (2,610) 13,789 Unappropriated profit 44,240 47,161 Other reserves 49,819 42,921 Non-controlling interests (73) -

468,913 480,359

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Number Amount Number Amount Issued share capital 7,450 7,607

A total of 74,500,000 ordinary shares were in issue, each with a nominal value of € 0.10. The share capital is fully paid up. 1,568,928 shares were cancelled on 9 July 2010. 1,024,580 shares were cancelled on 17 July 2009.

Balance as at 1 January 76,068,928 7,607 77,093,508 7,709 Cancellation of treasury shares (1,568,928) (157) (1,024,580) (102)Balance as at 31 December 74,500,000 7,450 76,068,928 7,607

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium reserve 373,422 386,978 Balance as at 1 January 386,978 392,395 Cancellation of treasury shares (13,556) (5,417)Balance as at 31 December 373,422 386,978

The share premium reserve is exempt from tax.

Treasury shares (3,335) (18,097) Number Amount Number Amount

Balance as at 1 January 2,070,509 (18,097) 1,053,442 (5,628)Issued to executive board and employees (120,495) 1,053 - - Cancellation of treasury shares (1,568,928) 13,713 (1,024,580) 5,519 Buy-back of own shares 425 (4) 2,041,647 (17,988)Balance as at 31 December 381,511 (3,335) 2,070,509 (18,097)As at 1 January 2010, the number of treasury shares held was 2,070,509, acquired at an average purchase price of € 8.74. 425 shares were repurchased in 2010 at an average price of € 10.15, and 120,495 shares were sold to the executive board and employees in connection with the settlement of the long-term bonus scheme with an average purchase price of € 8.74.1,568,928 shares were cancelled on 9 July 2010 at an average purchase price of € 8.74. On 17 July 2009, 1,024,580 shares were cancelled at an average purchase price of € 5.39. The carrying amount of the treasury shares as at year-end 2010 was measured at the average purchase price of € 8.74. The change in equity in respect of treasury shares reflects the amounts bought and sold. The quoted share price as at year-end 2010 was € 11.60 (2009: € 12.54).



Fair value reserve (2,610) 13,789 The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets.

This item comprises:Unrealised profits 2,881 19,140 Unrealised losses (6,361) (83)Tax on unrealised profits and losses 870 (5,268)

(2,610) 13,789

The movements in the fair value reserve were as follows:Balance as at 1 January 13,789 8,832 Movement in fair value (21,070) 10,912 Realisation of revaluations through profit and loss (1,467) (4,093)Tax on the movement in value 6,138 (1,862)Balance as at 31 December (2,610) 13,789

Unappropriated profit 44,240 47,161 Balance as at 1 January 47,161 33,145 Addition to other reserves (47,161) (33,145)Result for the year 44,240 47,161 Balance as at 31 December 44,240 47,161

Other reserves 49,819 42,921 These comprise:(I) Foreign currency translation reserve - - (II) Other reserves 49,819 42,921

49,819 42,921 (I) Foreign currency translation reserveBalance as at 1 January - 70 Change - 12 Released to income - (82)Balance as at 31 December - -

The foreign currency translation reserve comprises exchange differences arising from translation of the financial statements of foreign subsidiaries using a reporting currency other than the consolidation reporting currency (€). The liquidation of Hills Independent Traders Ltd. was completed in 2009, whereby the foreign currency translation reserve is released to income.

(II) Other reservesBalance as at 1 January 42,921 41,118 Grant of rights to shares 101 101 Sale of shares to executive board and employees 401 - Payment of final dividend (22,977) (15,773)Payment of interim dividend (17,788) (15,670)Appropriation of profit for previous year 47,161 33,145 Balance as at 31 December 49,819 42,921

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Bonus scheme for Syntel staffOn acquisition of Syntel, a bonus scheme was agreed with a group of Syntel employees. At the time of acceptance of this bonus arrangement, each employee opted to be paid either in BinckBank shares (equity settlement) or in cash at an amount based on the BinckBank share price (cash settlement). This bonus will be recognised as an expense provided the recipient remains an employee of Syntel for a period of four years, with 25% of the amount made available to each employee being released for each year in continued service. A total of 30,820 shares was issued to Syntel staff under the equity-settled programme on 29 December 2006. The equity settled programme for Syntel was fully settled at year-end 2010.

Long-term bonus schemeA long-term bonus scheme was in operation from 1 January 2008 to 31 December 2009 under which the executive board and a group of staff are granted rights to phantom BinckBank shares, depending on the position of BinckBank relative to the Total Shareholder Return reference group. The future payment in cash depended on the development of BinckBank’s share price (cash settlement) on condition that the recipient remained an employee of BinckBank for three years following the grant. The long-term bonus scheme for the executive board and employees was terminated and settled in May 2010, after approval by the general meeting of shareholders. 120,495 shares were sold under this scheme at a price of € 12.08.

Number Amount Number Amount Phantom shares as at 1 January 278,469 1,877 88,274 892 Phantom shares granted - - 201,391 1,098 Phantom shares reacquired (278,469) (1,877) (11,196) (113)Phantom shares as at 31 December - - 278,469 1,877

Phantom shares granted to the executive board - - 140,888 934 Phantom shares granted to other employees - - 137,581 943

- - 278,469 1,877 201,391 phantom shares were granted to the executive board and employees in 2009. At the time of the grant, the share price was € 5.45. The value of the phantom shares at the time of the grant was € 1,098,000.

On the settlement of the long-term bonus scheme in May 2010, 278,469 phantom shares were reacquired at an average price of € 6.74. There were no outstanding rights to phantom shares at year-end 2010.


Notes to the consolidated income statement

2010 2009 x € 1,000 x € 1,000

26. Net interest income 43,587 43,825 This includes all income and expense items relating to the lending and borrowing of money, providing they are of a similar nature to interest, as well as interest income on credit balances or interest expense on overdrafts.

This item comprises:Interest incomeBalances with central banks 477 568 Financial assets at fair value through profit and loss 1,200 1,506 Available-for-sale financial assets 38,050 51,735 Held-to-maturity financial assets 221 384 Loans and receivables 20,840 16,420 Other interest income 86 435

60,874 71,048

The interest income recognised on non-performing loans is € 21,000 (2009: € 34,000).

Interest expenseInterest on customer deposits measured at amortised cost 17,036 26,919 Interest on accounts with credit institutions 251 242 Other interest expense 0 62

17,287 27,223

27. Net fee and commission income 126,970 129,240 Net fee and commission income comprises fees for services performed for and by third parties in respect of securities transactions and related services.

This item comprises:Commission incomeTransaction income 149,539 155,515 Other commission income 27,519 17,195

177,058 172,710 Other commission income includes distribution fees, custody fees, management fees, performance fees and fees charged for BPO services.

Commission expenseStock exchange and clearing costs 33,618 32,837 Other commission expense 16,470 10,633

50,088 43,470 Other commission expense includes commission sharing agreements

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2010 2009 x € 1,000 x € 1,000

28. Other income 13,599 9,661 This item comprises:Revenue from IT services 10,597 7,781 Other income 3,002 1,880

13,599 9,661

The item revenue from IT services net of cost of sales is € 3,828,000 in 2010 (2009: € 2,984,000). The item other income includes fees for subscriptions and courses, currency results, and other income and expense items that cannot be accounted for under other items.

29. Result from financial instruments 620 4,353 This item comprises:Result from SRD (Service de Règlement Différé)Result on SRD derivative positions 321 - Result on SRD equity positions (321) -

- - The SRD receivables and payables are classified as derivatives and are recognised as financial assets and liabilities held for trading. Movements in value are recognised directly in the income statement under Result from financial instruments. The corresponding positions in equities are classified as financial assets and liabilities at fair value through profit or loss. Movements in value are also recognised under result from financial instruments. Since BinckBank takes a position in equities which exactly offsets the SRD derivatives position, there is a natural hedge of the price risk.

Result from other financial instrumentsFinancial assets at fair value through profit and loss (847) 260 Available-for-sale financial assets 1,467 4,093

620 4,353

30. Impairment of financial assets 70 (857)This item comprises:Available-for-sale financial assets - - Loans and receivables 70 (857)Held-to-maturity financial assets - -

70 (857)The impairment on loans and receivables in 2009 includes a write-down of € 650,000 of a loan to Accion N.V. (see also note 13).


2010 2009 x € 1,000 x € 1,000

31. Employee expenses 45,480 43,185 This item comprises:Salaries 29,416 26,910 Social insurance contributions 4,020 3,437 Pension costs 2,524 2,408 Profit sharing and performance-related pay 4,502 6,623 Other employee expenses 5,018 3,807

45,480 43,185 The research and development costs not capitalised by the subsidiary Syntel B.V. in 2010 amounted to € 238,000 (2009: € 34,000).

Average number of employeesThe average number of employees in 2010, including members of the executive board, was 610 (2009: 587). The number at year-end 2010 was 646 (year-end 2009: 598).

The following expenses are included in employee expenses in relation to associated parties (executive board and supervisory board) .Salaries 1,275 1,292 Social insurance contributions 30 27 Pension costs 255 258 Performance-related pay 1,003 1,150 Other employee expenses 158 132

2,721 2,859 The other employee expenses entirely relate to and exclusively concern expenses in relation to the supervisory board. Details of the remuneration paid to the individual members of the executive board and supervisory board of BinckBank N.V. are disclosed in the remuneration section of the annual report (page 65). At year-end 2010, members of the executive board had loans collateralised by securities on the general conditions applying to employees of € 339,000 (2009: € 146,000).

32. Depreciation and amortisation 34,798 35,939 This item comprises depreciation and amortisation on:Intangible assets 29,885 30,017 Property, plant and equipment 4,913 5,922

34,798 35,939 In 2009, revisions were made to the useful life of various intangible assets and property, plant and equipment in connection with the renewal of the data centres. This led to a charge of € 1,754,000 to the income statement. Accelerated depreciation was applied to a limited number of property, plant and equipment items in 2009 and 2010 in relation to the move to new offices.

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2010 2009 x € 1,000 x € 1,000

33. Other operating expenses 44,223 43,388 This item comprises:Marketing costs 16,696 13,299 IT costs 9,965 9,500 Audit and professional services 2,320 2,491 Premises costs 4,071 5,029 Communication and information costs 5,956 5,731 Miscellaneous overheads 5,215 7,338

44,223 43,388 The item miscellaneous overheads in 2009 includes costs associated with obligations under the deposit guarantee scheme.

34. Earnings per shareThe basic earnings per ordinary share are calculated by dividing the profit attributable to ordinary shareholders for the period by the weighted average number of shares in issue during the period.

The calculation of the earnings per share is based on the following:Net result after tax 44,145 47,161 Result attributable to minority shareholders (95) - Result attributable to shareholders of BinckBank N.V. 44,240 47,161

Number of shares in issue on 1 January 76,068,928 77,093,508 Less: repurchased shares on 1 January (2,070,509) (1,053,442)

73,998,419 76,040,066 Weighted average number of shares relating to (*):Issued to executive board and employees 82,095 - Repurchased (249) (1,142,360)Average number of shares in issue 74,080,265 74,897,706

(*) The above numbers are based on the total numbers disclosed in note 25, taking account of the date of movement in equity.Earnings per share (in €) 0.60 0.63 There are no rights outstanding that could lead to a dilution of earnings per share. The diluted earnings per share are therefore the same as the basic earnings per share, and consequently are no longer separately disclosed in these financial statements.No other transactions in ordinary shares or potential ordinary shares were conducted between the reporting date and the date of completion of these financial statements.


2010 2009 x € 1,000 x € 1,000

35. Dividend distributed and proposedDeclared and paid during the yearDividend on ordinary shares:Final dividend for 2009: € 0.31 (2008: € 0.21) 22,977 15,773 Interim dividend for 2010: € 0.24 (2009: € 0.21) 17,788 15,670

40,765 31,443

Proposed for approval by the general meeting of shareholders (not recognised as a liability as at 31 December)Dividend on ordinary shares: 20,115 23,581 Final dividend for 2010: € 0.27 (2009: € 0.31)

36 Fair value of financial instruments A significant proportion of the financial instruments are recognised in the balance sheet at fair value. BinckBank uses the following three measurement levels for the classification and disclosure of financial instruments measured at fair value:

Level 1: Fair value based on price quotations in active markets Level 2: Fair value based on observable market data Level 3: Fair value not based on observable market data

31 December 2010Level 1 Level 2 Level 3 Totalx € 1,000 x € 1,000 x € 1,000 x € 1,000

Financial assets held for trading - 169 - 169 Financial assets at fair value through profit and loss 13,856 - - 13,856 Available-for-sale financial assets - 1,599,700 - 1,599,700 Total assets 13,856 1,599,869 - 1,613,725

Financial liabilities held for trading - 50 - 50 Financial liabilities at fair value through profit and loss 1,485 - - 1,485 Total liabilities 1,485 50 - 1,535

31 December 2009Level 1 Level 2 Level 3 Totalx € 1,000 x € 1,000 x € 1,000 x € 1,000

Financial assets held for trading - - - - Financial assets at fair value through profit and loss - 37,294 - 37,294 Available-for-sale financial assets - 1,511,903 - 1,511,903 Total assets - 1,549,197 - 1,549,197

Financial liabilities held for trading - - - - Financial liabilities at fair value through profit and loss - - - - Total liabilities - - - -

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Level 1: Fair value based on price quotations in active markets The fair value of all financial instruments in this category is determined on the basis of published prices originating from a stock exchange, broker or data provider providing that these prices reflect current and regularly occurring market transactions. In BinckBank’s case, this concerns the equity positions relating to SRD receivables and payables.

Level 2: Fair value based on observable market data The fair value of all financial instruments in level 2 is determined using a valuation technique for which the input is derived from market prices; however there is no demonstrably active market. In this case the available prices are substantiated mainly using market information such as interest rates and current risk premiums associated with the various credit ratings.

In BinckBank’s case, this concerns the following financial instruments: •• Derivatives positions in relation to SRD receivables and payables. This concerns OTC (Over The Counter) derivatives which are directly agreed with individual clients and not traded in a

separate market. The value is directly derived from the market prices of the underlying equities. •• Investment portfolio - bonds The investment portfolio concerns liquid bonds that are mainly traded between professional market participants

without the intermediation of a regulated market. Prices are available from brokers on request. Transactions in these bonds are not centrally registered or published by a stock exchange, and BinckBank is thus of the opinion that there is no demonstrably active market. The comparative figures for 2009 have been adjusted accordingly. No financial assets were reclassified from level 2 to level 1 in 2010.

Level 3: Fair value not based on observable market data Any financial instruments in this category are individually assessed. Valuation is based on a management best estimate, taking account of the last known prices and analysis by external valuation agencies. BinckBank has no financial instruments in this category.

Fair value The following analysis compares the carrying amounts and fair values of all the financial instruments recognised in BinckBank’s financial statements.

Carrying amount Fair value2010 2009 2010 2009

x € 1,000 x € 1,000 x € 1,000 x € 1,000 Financial assetsCash and balances with central banks 105,972 48,936 105,972 48,936 Banks 177,316 179,692 177,316 179,692 Financial assets held for trading 169 - 169 - Financial assets at fair value through profit and loss 13,856 37,294 13,856 37,294 Available-for-sale financial assets 1,599,700 1,511,903 1,599,700 1,511,903 Loans and receivables 496,266 410,169 496,266 410,169 Held-to-maturity financial assets 4,121 8,329 4,185 8,529 Total financial assets 2,397,400 2,196,323 2,397,464 2,196,523

Financial liabilitiesBanks 25,610 - 25,610 - Customer deposits 2,258,290 2,089,814 2,258,290 2,089,814 Financial liabilities held for trading 50 - 50 - Financial liabilities at fair value through profit and loss 1,485 - 1,485 - Total financial liabilities 2,285,435 2,089,814 2,285,435 2,089,814


37. Classification of assets & liabilities by expected maturityThe table below shows the assets and liabilities classified by expected remaining life to maturity.

As at 31 December 2010< 12 months > 12 months Total

x € 1,000 x € 1,000 x € 1,000AssetsCash and balances with central banks 105,972 - 105,972 Banks 174,208 3,108 177,316 Financial assets held for trading 169 - 169 Financial assets at fair value through profit and loss 13,856 - 13,856 Available-for-sale financial assets 448,687 1,151,013 1,599,700 Loans and receivables 496,266 - 496,266 Held-to-maturity financial assets 4,121 - 4,121 Investment in associates and joint ventures - 3,067 3,067 Intangible assets - 320,757 320,757 Property, plant and equipment - 43,901 43,901 Current tax 4,949 - 4,949 Deferred tax - - - Other assets 13,050 - 13,050 Prepayments and accrued income 49,840 - 49,840 Derivatives positions held on behalf of clients 383,804 - 383,804 Total assets 1,694,922 1,521,846 3,216,768

LiabilitiesBanks 25,610 - 25,610 Customer deposits 2,258,290 - 2,258,290 Financial liabilities held for trading 50 - 50 Financial liabilities at fair value through profit and loss 1,485 - 1,485 Provisions 1,268 - 1,268 Corporation tax 468 - 468 Deferred tax 1,408 11,287 12,695 Other liabilities 48,023 - 48,023 Accruals and deferred income 16,162 - 16,162 Derivatives positions held on behalf of clients 383,804 - 383,804 Total liabilities 2,736,568 11,287 2,747,855

Net (1,041,646) 1,510,559 468,913

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37. Classification of assets & liabilities by expected maturity (continued)The table below shows the assets and liabilities classified by expected remaining life to maturity.

As at 31 December 2009< 12 months > 12 months Total

x € 1,000 x € 1,000 x € 1,000AssetsCash and balanced with central banks 48,936 - 48,936 Banks 179,692 - 179,692 Financial assets at fair value through profit and loss 37,294 - 37,294 Available-for-sale financial assets 544,796 967,107 1,511,903 Loans and receivables 410,169 - 410,169 Held-to-maturity financial assets 4,154 4,175 8,329 Investment in associates and joint ventures - 1,953 1,953 Intangible assets - 348,561 348,561 Property, plant and equipment - 12,512 12,512 Current tax 1,972 - 1,972 Deferred tax 1,895 4,093 5,988 Other assets 14,286 - 14,286 Prepayments and accrued income 48,828 - 48,828 Derivatives positions held on behalf of clients 299,587 - 299,587 Total assets 1,591,609 1,338,401 2,930,010

LiabilitiesBanks - - - Customer deposits 2,089,814 - 2,089,814 Provisions - 2,660 2,660 Current tax - 282 282 Deferred tax 5,614 8,876 14,490 Other liabilities 21,210 - 21,210 Accruals and deferred income 21,608 - 21,608 Derivatives positions held on behalf of clients 299,587 - 299,587 Total liabilities 2,437,833 11,818 2,449,651

Net (846,224) 1,326,583 480,359


38. Related partiesThe consolidated financial statements include the following BinckBank related parties:

Country Interest year-end 2010

Interest year-end 2009

Consolidated companies:Syntel Beheer B.V. Netherlands 100% 100%Bewaarbedrijf BinckBank B.V. Netherlands 100% 100%Stichting Effectengiro Binck Netherlands - 100%ThinkCapital Holding B.V. Netherlands 60% -Binck België N.V. Belgium 100% 100%

Joint ventures:BeFrank N.V. Netherlands 50% -

Associates:TOM Holding B.V. Netherlands 37.5% 50%Accion N.V. Netherlands - 39%

The group of related parties consists of consolidated companies, joint ventures, associates, and the executive board and supervisory board of BinckBank. The interest presented is equal to the voting rights held in relation to the company concerned.

Terms and conditions of transactions with related parties Transactions with related parties are conducted on commercial terms and conditions and at market prices. As at year-end 2010, BinckBank did not recognise any bad debt provisions for receivables from related parties (2009: nil). The judgement concerning the need for such provisions is made each year on the basis of an assessment of the financial position of the individual related parties and the markets in which they operate. No guarantees have been issued or received with regard to related parties.

ThinkCapital Holding B.V.An interest of 60% of the share capital of ThinkCapital Holding B.V. was acquired on 9 November 2010 (see note 6). A credit facility of up to € 1,100,000 was provided in 2010 at market rates with an end date of 9 November 2014. € 250,000 of the credit facility had been drawn down at year end. A sum of € 1,000 was charged in interest in 2010. BinckBank provided premises, office data systems and administrative services to ThinkCapital Holding B.V. in 2010, for which an invoice was issued in the amount of € 6,000. At year-end 2010, BinckBank had a receivable from ThinkCapital Holding B.V. of € 8,000.

BeFrank N.V.In 2010 BinckBank invested € 1,000,000 into BeFrank for an interest of 50% in the joint venture with Delta Lloyd in the field of defined contribution pension plans. An amount of € 40,000 was charged in relation to ICT services in 2010. At year-end 2010, BinckBank had a receivable from BeFrank N.V. of € 51,000.

TOM Holding B.V.BinckBank made an additional capital investment of € 1,500,000 in TOM Holding B.V. in 2010. On 13 July 2010 it was announced that ABN AMRO Clearing Bank N.V. had acquired a 25% equity interest in TOM Holding B.V. As a result of the participation by ABN AMRO Clearing Bank N.V., TOM Holding B.V. is now classified as an associate instead of a joint venture.

BinckBank provided administrative services and premises to TOM in 2010, for which a fee of € 95,000 is recognised. At year-end 2010, BinckBank had a receivable from TOM Holding B.V. of € 37,000.

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Accion N.V.The operations of Accion N.V. were terminated at year-end 2009. The company was liquidated in December 2010.

Stichting Effectengiro BinckStichting Effectengiro Binck was dissolved in December 2010.

No transactions involving the executive board or the supervisory board other than under contracts of employment took place during the year. See note 31 on employee expenses and the general remuneration report on page 65 in the annual report for further details.

Transactions with consolidated companies are fully eliminated in the consolidated financial statements.


39. Off balance sheet commitmentsContingent liabilitiesLiabilities in respect of contracts of suretyship and guarantees 2,929 3,217 Liabilities in respect of irrevocable facilities - -

To meet the requirements of its clients, BinckBank offers products such as contracts of suretyship and guarantees in relation to loans. The underlying value of these products is not presented on the face of the balance sheet. The above figure represents the maximum potential credit risk for BinckBank attached to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

With acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the Dutch Shareholders’ Association (the VEB). If BinckBank terminates the VEB agreement, it will be liable to pay an amount equal to the custody fee and dividend commission paid by each client of Alex Bottom-Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each client on exceeding set limits.

Lease commitments The company has leases on office premises in the Netherlands, Belgium, France and Spain. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined expense relating to office rents and operating lease payments for the vehicles in 2010 was € 4.5 million (2009: € 4.5 million).


The aged analysis of the outstanding liabilities is as follows: Within one year 2,780 4,178One to five years 5,252 6,393Longer than five years - 555

Legal proceedings BinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or profitability.


Deposit guarantee scheme The deposit guarantee scheme is intended to guarantee certain deposits by account holders if a bank goes bankrupt. The scheme provides security for deposits of up to € 100,000 and applies per account holder per bank. In case of a joint account operated by two persons, the maximum applies per person. More or less all savings accounts, current accounts and term deposits are covered. Equities or bonds are not covered. In case of a subordinated deposit, the principal sum is not covered by the deposit guarantee scheme, although the interest on the principal is covered.

If a credit institution finds itself in difficulties and does not have sufficient funds to pay all or part of the guaranteed amounts to its account holders, De Nederlandsche Bank will make up the difference. The total amount paid out by DNB will then be recovered from the banks on a pro rata basis.

Investor compensation scheme Despite the fact that all banks and investment firms in the Netherlands are subject to regulation by DNB and the AFM, a bank or investment firm may encounter problems with payments. In this case, the investors compensation system guarantees a minimum level of protection in the event that the bank or investment firm cannot meet its obligations arising from the investment services it provides to its clients. The investors compensation scheme provides a guarantee of up to € 20,000 per person per institution.

40 Events after balance sheet date At the beginning of 2011, BinckBank announced it would be opening a branch in Italy in mid 2012.

41 Segment information As an online broker, BinckBank offers its retail clients fast and low-cost access to all the world’s major financial markets. Moreover, as an asset management bank, BinckBank provides support to its clients in the management of their assets through online asset management services and online savings accounts. In addition to fast and low-cost order execution, BinckBank also provides services to professional clients relating to the administrative processing of securities and financial transactions by means of an outsourcing system (BPO), or through the licensing of the related software. The company has offices in the Netherlands, Belgium, France and Spain.

The managerial responsibility for our subsidiary Syntel B.V. was changed in 2010. This responsibility has been transferred from the board member responsible for the Professional Services business unit to the chairman of the executive board. The results of Syntel are therefore no longer reported in the business unit Professional Services; they are included in group operations. Furthermore, in order to improve the quality of the management information, the allocation ratios of the indirect costs have been reviewed. The new segmentation reflects the revised managerial responsibilities. The comparative figures for 2009 have been adjusted accordingly.

A segment is a clearly distinct element of BinckBank that provides services with a risk or return profile that is different from the other segments (a business segment), or which provides services to a particular economic market (market segment) that has a different risk and return profile to that of other segments. In terms of organisation, the operations of BinckBank are divided into two primary business segments. The executive board determines the performance targets, and authorises and monitors the budgets prepared for these business segments. The management of the business segment is responsible for setting policy for that segment, in accordance with the strategy and performance targets formulated by the executive board. The business segments are: •• Retail •• Professional Services

The Retail business unit operates as an (internet) broker for the private client market. The Professional Services business unit provides brokerage services in securities and derivatives transactions on behalf of professional parties in the Netherlands and abroad, including the provision of the majority of the related administration. All directly attributable income and expenses are recognised within the Retail and Professional Services business segments, together with the attributed costs of the group activities.

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Group operations includes the departments directly managed by the executive board and for which the income and expenses are not included in one of the other divisions. This includes central Treasury results, including results on sales in the investment portfolio, external activities of the IT department, which include the subsidiary company Syntel B.V. and extraordinary expenses, for example in relation to the deposit guarantee system.

The managerial responsibility for the subsidiary ThinkCapital Holding B.V. is placed with the board member responsible for the Professional Services business unit. As from the acquisition date therefore, the results of ThinkCapital Holding B.V. are recognised in the result of the Professional Services business unit.

The same accounting principles are used for a segment as those described for the consolidated balance sheet and income statement of BinckBank. The prices used for transactions between segments are the prices that would occur under normal market conditions (‘at arm’s length’).

The results of associates and joint ventures are attributed to business segments to the extent that the business segments exercise direct influence on the associates and joint ventures. All other results of associates and joint ventures are recognised at group level.

Investments in intangible assets and property, plant and equipment are attributed to the business segments to the extent that the investments are directly acquired by the business segments. All other investments are recognised at group level.

Tax is managed at group level and is not attributed to the operating segments.

Syntel charged a sum of € 5,465,000 (2009: € 5,076,000) for services provided to BinckBank. These costs have been eliminated in the segment information presented below and replaced by the allocation of the actual costs.

As was the case in 2009, no client or group of associated clients was responsible for more than 10% of the bank’s total income in 2010.


Business segmentation

x € 1,000Retail Professional

ServicesGroup

operationsTotal

2010 2009 2010 2009 2010 2009 2010 2009Interest income 55,069 64,091 5,515 6,029 290 928 60,874 71,048 Interest expense (16,363) (26,402) (671) (517) (253) (304) (17,287) (27,223)

Net interest income 38,706 37,689 4,844 5,512 37 624 43,587 43,825 Commission income 147,310 151,274 29,748 21,436 - - 177,058 172,710 Commission expense (34,873) (32,340) (15,191) (11,130) (24) 0 (50,088) (43,470)

Net fee and commission income 112,437 118,934 14,557 10,306 (24) 0 126,970 129,240

Other income 964 1,124 8 19 12,627 8,518 13,599 9,661 Result from financial instruments - - - - 620 4,353 620 4,353

Impairment of financial assets 70 (207) - - - (650) 70 (857)

Total income from operating activities 152,177 157,540 19,409 15,837 13,260 12,845 184,846 186,222

Employee expenses (33,416) (33,656) (8,019) (7,058) (4,045) (2,471) (45,480) (43,185)Depreciation and amortisation (33,413) (34,639) (908) (1,047) (477) (253) (34,798) (35,939)

Other operating expenses (38,294) (35,140) (3,689) (3,280) (2,240) (4,968) (44,223) (43,388)Total operating expense (105,123) (103,435) (12,616) (11,385) (6,762) (7,692) (124,501) (122,512)

Result from business operations 47,054 54,105 6,793 4,452 6,498 5,153 60,345 63,710

Share in results of associates and joint ventures (1,386) (1,466)

Other non-operating income 23 - Result before tax 58,982 62,244 Tax (14,837) (15,083)Net result 44,145 47,161

Total assets 2,396,899 2,284,137 318,644 235,936 501,225 409,937 3,216,768 2,930,010 Total liabilities 1,989,064 1,879,414 294,599 220,994 464,192 349,243 2,747,855 2,449,651

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The analysis below shows the geographical distribution of income from operating activities and the property, plant and equipment and intangible assets of BinckBank. Income is allocated on the basis of the country of domicile of the branch where the account is opened, and the property, plant and equipment and intangible assets on the basis of the country in which the assets are held.

Segmentation of continued operations by region

x € 1,000Netherlands Other countries Total

2010 2009 2010 2009 2010 2009Total income from operating activities

166,947 177,426 17,899 8,796 184,846 186,222

Property, plant and equipment and intangible assets

364,493 360,797 165 276 364,658 361,073

42 Risk management

Introduction In the conduct of their operations, banks face a variety of risks. Risk is defined as the probability that a particular event could lead to a loss for a bank. Banks have to hold capital in order to be able to absorb potential losses in the event of an unfavourable scenario, so that they can continue to conduct their business when such losses are incurred.

BinckBank strives to achieve a moderate risk profile, so that the effects of unexpected events on profit and equity will be limited. BinckBank devotes considerable attention to risk management and employs risk management systems. Adequate control measures, reporting systems and information systems incorporating limits are part of the risk management process. The identification of risks and the creation and updating of appropriate control measures constitute an ongoing process within BinckBank. Risk management is itself an ongoing process which is affected by both changing market conditions and the increasing complexity of legislation and regulation.

BinckBank published its Capital Adequacy & Risk Report (Basel II, Pillar III) on 25 October 2010, which describes the risks and control measures relevant to BinckBank in detail. This report gives additional information on the basis of Pillar III. The note on financial risks in the financial statements is based on the requirements of IFRS 7.

BinckBank’s risk management focuses on: •• Pillar I •• Credit•risk•• •• Market•risk•• •• Operational•risk• •• Pillar II • Interest-rate risk • Liquidity risk • Credit risk • Concentration risk • Margin risk • Counterparty risk

After a general section on risk and capital management, these types of risk are described separately below.


BinckBank’s risk profile BinckBank has a fundamentally different risk profile from that of a traditional Dutch bank. Its banking operations are relatively simple and concern the settlement of client transactions, the provision of collateralised loans secured by securities portfolios that can be readily liquidated, the facilitation of payments to regular contra accounts at other banking institutions, and interest-based activities relating to customer deposits. These activities are in general classified as relatively low-risk. Transaction settlement, on the other hand, is a complex process. Each year, BinckBank processes millions of administrative transactions for more than 400,000 accounts in a very large number of financial products on several trading platforms through brokers and stock exchange memberships. This, together with BinckBank’s heavy reliance on IT, translates into a relatively large operational risk.

Recent changes to capital requirements set by Basel Committee on Banking Supervision The Basel Committee on Banking Supervision is developing a new guideline so that European banks are better able to handle periods of financial stress. On 12 September 2010, an expert group advising the Basel Committee published proposals containing a significant increase in the capital requirements. These reforms, together with the introduction of a global liquidity standard, constitute the core of the global financial reform agenda.

The major changes are the following:1. Additional capital solidity requirements2. Additional Tier 1 capital requirements3. Holding countercyclical capital buffers4. Introduction of leverage ratio5. Introduction of liquidity ratios

The implications for BinckBank are explained below in broad terms.

1. Additional capital solidity requirementsThe capital of a bank can comprise Tier I, Tier II and Tier III capital. Tier I capital qualifies as the strongest, since its components are equity capital and retained earnings. Under the new banking guideline, stricter requirements apply to capital instruments for them to qualify as Tier I or Tier II capital. Tier III instruments are being phased out. BinckBank is financed solely with Tier I capital and has an ample capital buffer.

2. Additional Tier I capital requirementsThe package of reforms will lead to the minimum core capital increasing from 2% to 4.5%. On top of the 4.5% minimum, banks will have to form an additional buffer of 2.5%, from Tier I capital. Although a bank can draw on this buffer in a time of crisis, it can only do so if no dividend is distributed. Banks will want to avoid this scenario. In practice, therefore, they will have to have 7% available as Tier I capital (from 2019 onwards), whereas currently this only needs to be 2%. As BinckBank is financed solely with Tier I capital and its BIS ratio as at 31 December 2010 is 23.9%, we do not expect to have to increase this type of capital.

3. Holding countercyclical capital buffers On top of the new standard buffer of 7%, a countercyclical buffer is being introduced. In strong economic times, no more than 2.5% has to be held as a buffer. Taking the average over the economic cycle, this means an additional requirement of 1.25%. This additional capital is subject to less stringent solidity requirements, as the point of the buffer is to reserve additional capital when things are going well financially. Given BinckBank’s current BIS ratio of 23.9%, it is unlikely to need an additional capital reservation for the time being.

4 Introduction of leverage ratio The Basel Committee is introducing the leverage ratio in addition to the existing capital requirements for risk-weighted assets. It is the ratio of Tier I capital to the total gross credit exposure of a bank, including off-balance-sheet loans, ignoring all types of risk weighting. In future, banks will not be allowed to have an exposure that exceeds 33 times their equity capital. The Basel Committee will most likely implement this ratio as from 1 January 2018. BinckBank’s current leverage ratio easily satisfies this criterion.

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5 Introduction of liquidity ratios The purpose of the liquidity coverage ratio is to boost the resilience of a bank’s liquidity in the short term. It works by ensuring that sufficient high-grade liquid assets are held to survive an acute stress scenario lasting a month. In the case of BinckBank, its investment policy is structured in a way that there are sufficient liquid assets to satisfy the stricter liquidity requirements. An initial assessment shows that BinckBank has a liquidity ratio of approximately 700%, as against the guideline of 100% that the Basel Committee on Banking Supervision specifies.

The net stable funding ratio is a test of the extent to which a bank allocates its funds to operations, including off-balance-sheet activities, taking liquidity risk factors into account. In this connection, a distinction is made between stable and less stable types of funding in order to estimate the size of the stable funding. The stable funding is examined in the light of all the bank’s operations, with a risk assessment being made in relation to the liquidity aspects. The value of the net stable funding ratio provides an estimate of the ratio of available funds to required funds. BinckBank meets this requirement comfortably, as its net stable funding ratio is double the liquidity requirement that is expected to be set. The following table gives the schedule for the changes.

SummaryOver the next few years, the Basel Committee on Banking Supervision is expected to provide more clarity about the details of the new capital and liquidity requirements. If a final decision is made or significant developments occur that affect BinckBank’s capital position, we will address the issue in future Capital Adequacy & Risk reports. The above descriptions of the new capital requirements therefore give only an indication of new developments in this area.

Phase-in timetable Phase-in arrangements (shading indicates transition periods) (All dates are as of 1 January)

2011 2012 2013 2014 2015 2016 2017 2018 2019Leverage ratio Supervisory

monitoringParallel run 1 January 2013 – 1 January 2017 Disclosure starts 1 January 2015

Migration to Pillar I

Minimum common equity capital ratio (after increased deductions)

3.5% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5%

Capital conservation buffer 0.625% 1.250% 1.875% 2.500%Minimum common equity plus capital conservation buffer

3.5% 4.0% 4.5% 5.125% 5.750% 6.375% 7.0%

Phase in of deductions from CET1 (inc. amounts exceeding the limit for DTAs, MSRs and financials)

20% 40% 60% 80% 100% 100%

Minimum Tier I capital 4.5% 5.5% 6.0% 6.0% 6.0% 6.0% 6.0% Minimum totaal capital (BIS ratio)

8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%

Minimum totaal capital plus conservation buffer

8.0% 8.0% 8.0% 8.625% 9.250% 9.875% 10.5%

Capital instruments that no longer qualify as non-core Tier I or Tier II capital

Phased out over 10-year horizon beginning 2013

Liquidity coverage ratio Obser-

vation period begins

Introduce minimum standard

Net stable funding ratio Obser-vation period begins

Introduce minimum standard


Legal structure BinckBank is public limited company listed on the Stock Exchange of NYSE Euronext Amsterdam. BinckBank has a number of Dutch subsidiaries and one foreign subsidiary. BinckBank has obtained all the necessary licences for its activities. BinckBank currently has branches in Belgium, France and Spain. The flows of funds with respect to these branch offices are regulated centrally by the Treasury department. Treasury ensures that each branch continuously has adequate liquidity so that clients in all countries can access their cash balances at all times. BinckBank is regulated by both DNB and the AFM. Binck België N.V. and the foreign branches are also subject to regulation by local regulators.

Risk management organisationIn the current organisation, risk management is concentrated around the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), who collectively manage the various departments involved in the management of risk. Each of these departments has its own charter which defines its duties and responsibilities in relation to risk management. This charter has been coordinated to avoid both duplications and gaps in the risk management mechanisms. The independence of the various functions/departments is safeguarded by segregating the reporting lines.

The Governance Risk Compliance Framework is as follows:

Audit Committee (AC) Risk & product developmentcommittee (RPC)

Executive board

IAD(escalation

to AC)

Risk management(escalation to RPC)

Supervisory board

1st line ‘of defence’ 2nd line ‘of defence’ 3rd line ‘of defence’

Regu

lato

rs (D

NB/

AFM

/CBF

A/AM

F)

Exte

rnal

Acc

ount

ant

Compliance(escalation to AC)

Information security(escalation to CEO)

Creditcommittee

Operationalrisk

committee

Finance & Control

Treasurycommittee

Retail Professional Services

Operations

IT

Treasury

Marketing & Sales

BinckBank N.V.

BewaarbedrijfBinckBank B.V.

BinckBelgië N.V.

FintegrationB.V.

Syntel Beheer B.V.

Syntel B.V.

BinckBank N.V.Belgium branch

BinckBank N.V. France branch

100%

BinckBank N.V. Spain branch

TOM Holding B.V.

TOM B.V.

60%

100%

100% 100%

100%

TOM Broker B.V.

BeFrank N.V.

50%

100% 100%

ThinkCapitalHolding B.V.

37,5%

ThinkCapitalAsset Mgt B.V.

100%

BeFrankPPI N.V.

100%

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BinckBank operates according to the ‘three lines of defence’ principle, in which the business units have primary responsibility for the management of risk. The first-line departments are supported and monitored by second-line specialised departments, such as Risk management, Finance & Control, Compliance and Information security. The Internal Audit Department (IAD) forms the third line of defence. The Audit Committee, Risk and Product Development Committee and the supervisory board, together with the regulators and the external auditor, form the last link in the Governance Risk Compliance Framework.

Risk management departments and committees BinckBank has an organisational structure in which the segregation of duties is safeguarded. There are also several consultative bodies and departments that are closely involved in the management of certain types of risk, the most important of which are further explained below.

Treasury committee The Treasury committee is mainly concerned with the management of liquidity risk, credit risk in the investment portfolio and market risk (interest-rate risk and currency risk), and determines the investment policy for the interest-rate business. This relates to matters such as strategic allocation of freely available funds to the investment portfolio and determination of the funds to be held in cash. Regarding the funds to be held in cash, issues are dealt with such as the placement of call money, the risk measure or rating policy in this respect and the exposure limits per counterparty and per sector.

Operational risk committee Operational risk management is the responsibility of the Operational risk committee, which consists of representatives of line management and specialist support departments. This committee manages risks relating to human factors and structuring of business processes, such as information security risk, legal risk and compliance risk. Its principal tasks include decisionmaking on sound and controlled operation, coordination and promotion of operational risk control and design of the main business processes. The framework of standards and guidelines within which these decisions are made has been configured by specialist support departments which support decisionmaking and policy implementation by line management. This committee also has responsibility for giving the final approval of the introduction of ‘new products’ as described in the Banking Code.

Credit committee BinckBank has a Credit committee which is mainly responsible for the management of credit risk in client portfolios, including concentration risk, margin risk and counterparty risk. Matters dealt with at the meetings of the Credit committee include: policy regarding the approval of collateralised lending, margin requirements, bank guarantees and pledged accounts. The Risk manager has the option of escalating issues to the Risk and product development committee.

Risk management The Risk management department is responsible for the day-to-day implementation of the policy formulated by the Credit committee for the management of credit and market risk and reports directly to the CFO, the Credit Committee and the Operational risk committee. Internal control exists to facilitate operational improvement, by supporting the business units in defining their administrative organisation and internal control structures and verifying the existence of risk control measures.

Finance & control department The Finance & Control department is responsible for the timely administration and reporting of financial data to internal and external stakeholders. This includes all mandatory reporting to DNB and AFM. The Finance & control department reports directly to the executive board (CFO).

Compliance department The Compliance department is responsible for monitoring compliance with the applicable codes of conduct and the relevant securities legislation and regulation and is concerned primarily with management of integrity risk. Through its code of conduct, insider trading regulations and whistleblower’s charter, BinckBank demonstrates the importance it attaches to values such as integrity and dependability.


Information security department BinckBank has an Information security department, which is responsible for formulating and implementing information security policy. The Information security department has the option of escalating issues to the chairman of the executive board.

Internal Audit Department (IAD)In line with the definition of Internal Auditing by the Institute of Internal Auditors, the mission of IAD is to provide independent and objective assurance. The purpose of the IAD is to perform assurance tasks in order to add value to and improve the functioning of the internal organisation. The IAD thus contributes to the realisation of the organisational targets by means of a systematic and disciplined approach for evaluation and improvement of the effectiveness of risk management, control and governance processes. The IAD does not provide consulting services.

The IAD provides additional assurance with respect to: •• the effectiveness and efficiency of the business activities; •• the reliability and integrity of the financial and operational information and reporting; •• the safeguarding of assets; and •• compliance with relevant legislation and regulation.

The audits conducted by the IAD focus on the design, existence and operation of: •• the quality and effectiveness of the operation of governance; •• the risk management and control within the organisation and processes •• the automated systems and the control measures surrounding and embedded in these systems.

In addition to scheduled audits, audits may be conducted on the request of management or the audit committee.

The scope or operating area of the IAD includes all activities carried out under the responsibility of BinckBank. Joint ventures are independent entities with their own licence and outside the scope of the IAD.

The IAD reports to the executive board of BinckBank; within the executive board, the IAD portfolio is the responsibility of the chairman. In addition, the IAD has direct access to the chairman of the audit committee of BinckBank. The IAD’s independence is safeguarded by this double reporting line and the fact that it is separate from the daily internal control reporting line.

Supervision of activities

Supervisory board The supervisory board discusses the strategy and the risks associated with the business each year, and, on the basis of reports, assesses the structure and operation of the internal risk management and control systems.

Audit committee The audit committee is responsible for overseeing the implementation and operation of the system of internal control and risk management and monitoring the implementation of the external auditor’s recommendations and the functioning of the IAD. Supervision of the provision of financial information by the company is the responsibility of the supervisory board.

Risk and product development committee The Risk and product development committee (RPC) advises the supervisory board on matters including the risk profile and the risk appetite of BinckBank. It also monitors the adequacy of the liquidity and the capital, as well as establishing, testing and analysing new products or changes to existing products and services with regard to the duty of care towards the client. The RPC is moreover responsible for identifying, analysing and advising on all other material risks to BinckBank.

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Capital management The aim of capital management at BinckBank is to maintain a sound solvency position, seeking constantly to strike the right balance between the equity capital it holds and the risks to which it is exposed. Since the introduction of Basel II, BinckBank uses the complementary method to determine the adequacy of its capital. This involves holding capital for the complementary risks identified by BinckBank, such as interest-rate risk, concentration risk, margin risk and counterparty risk, in addition to the minimum capital requirements prescribed under Pillar I. The adequacy of this retained capital under Pillar II is tested on a regular basis, which may lead to higher or lower internal capital requirements. The testing process is known as the ICAAP (Internal Capital Adequacy Assessment Process). The ICAAP is used by BinckBank to determine its internal capital (or ICAAP capital). The result of the ICAAP is expressed as the solvency ratio. BinckBank’s internal capital target is to achieve a solvency ratio between 12% and 20%.

Capital adequacy BinckBank continuously assesses the adequacy of its capital. During the past year it emerged that, as a result of the growth of the business operations, the risks under Pillars I and II have increased further. Despite the increase in the capital required under Pillars I and II, as a result of the strong increase in the bank’s Tier I capital the solvency ratio has risen from 13% as at 31 December 2009 to 15.7% as at 31 December 2010. The current level of Tier I capital is sufficient to continue the growth in our activities and puts BinckBank in a sound position to cope with periods of financial stress. The capital adequacy is assessed on a monthly basis, based on the capital requirements under Pillars I and II and results of a fixed set of stress tests. The results provide information on the adequacy of the capital and the extent to which BinckBank can continue its operations in the event of a stress scenario. The capital requirement under Pillar I is expressed in the BIS ratio. The capital adequacy under Pillars I and II is expressed in the solvency ratio.


Calculation of equity capital and actual Tier 1 capital(x € 1,000)

31 December 2010 31 December 2009Issued and paid-up capital 7,450 7,607 Share premium reserve 373,422 386,978 Treasury shares (3,335) (18,097)Other reserves 47,209 56,710 Unappropriated profit 44,240 47,161 Non-controlling interests (73) - Total equity 468,913 480,359

Less: goodwill (152,929) (152,929)Less: other intangible assets (164,155) (192,537)Less: fair value reserve 2,610 (13,789)Less: proposed dividend (20,115) (23,582)Core capital 134,324 97,522 Less: equity investments in financial subsidiaries (3,067) (1,953)Total available capital (A) - Tier 1 131,257 95,569

Credit risk - Pillar I 17,884 13,391 Market risk (= currency risk) 96 197 Operational risk 26,003 27,933 Total required capital (B) - Pillar I 43,983 41,521

Interest-rate risk 8,349 8,906 Liquidity risk 954 975 Credit risk - Pillar II 13,647 7,266

Concentratierisico 9,062 5,439 Margin risk 3,585 827 Counterparty risk 1,000 1,000

Total required capital - Pillar II 22,950 17,147 Total required capital (C) - Pillar I + II 66,933 58,668

BIS ratio (= A/B x 8%) 23.9% 18.4%Solvency ratio (= A/C x 8%) 15.7% 13.0%

Credit risk - Pillar I Credit risk is the risk of a counterparty and/or issuing institution involved in trading in or issuing a financial instrument defaulting on an obligation and thus harming BinckBank financially. Credit risk relates to items included in the balance sheet under cash, banks, financial assets (including collateralised lending) and other assets. With these balance sheet items, the most important consideration is the creditworthiness of the counterparty (except collateralised lending, because these items are fully covered by securities as collateral).

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LendingBinckBank lends to central governments, lower-tier public authorities if guaranteed by central government, central banks and other banks and credit institutions with a credit rating equal to or better than F1 (Fitch or equivalent). These are short-term loans with terms ranging from one day to a maximum of one month. BinckBank is exposed to counterparty risk (the risk of default by a counterparty to which credit has been extended). BinckBank extends credit to counterparties within a system of limits for each counterparty, which are set in advance by the Treasury Committee. Lending to counterparties by the Treasury department is governed by strict rules, in accordance with Treasury policy and subject to internally set limits on both the amount and maturities of loans to approved counterparties. The resultant credit risk is monitored via regular credit reviews.

Investment portfolio - bonds In the assessment of the creditworthiness of the investments in bonds, use is made of the long-term credit ratings published by rating agencies. New investments must have a rating of AA- or higher. The credit rating of securities paper must be at least A-.

Collateralised lending Via a separate client agreement, BinckBank offers clients loans against securities collateral. Loans can be used to cover the margin requirement on derivative positions, purchase securities or furnish bank guarantees against the brokerage account. In all these cases, BinckBank is exposed to credit risk with respect to the client. Given the nature of the loans and the collateral provided, however, the credit risk is limited. In the case of lending against the collateral of financial instruments, the amount of credit advanced depends partly on the liquidity and price of the instrument in question. Monitoring of credit risk is conducted by the Risk management department, which carries out automated checks on the basis of real-time prices. The credit risk therefore resides in movements in value of the collateral received.

Credit risk - Pillar II

Concentration risk The Risk management department closely monitors undesirable concentration within client portfolios. Concentration risk arises when there is an excessive concentration of investments in specific funds for clients with non-diversified investment portfolios. The credit collateralised by securities is in this case too dependent on one or more names. The Risk management department monitors such concentrations daily and takes action where necessary to moderate them. As at 31 December 2010, BinckBank has reserved € 9.1 million capital for this risk.

Margin risk The clients of BinckBank can take positions in listed derivatives (options and futures). The credit risk arising from taking short positions in options is covered by requiring clients to provide cover in the form of money and/or securities (margin requirements). The Risk management department monitors that clients continue to meet their margin requirements. At year-end 2010, the total margin requirement of clients was € 270 million (2009: € 217 million). Due to the declining volatility in the financial markets, the margin requirement for written options was reduced by BinckBank in the course of 2010. This led to a significant increase in the open written option positions. Since the risk associated with written option positions is not adequately expressed in the Pillar I minimum capital requirements, BinckBank has itself imposed a capital requirement of € 3.6 million. This amount expresses the size of client deficits not covered by securities in the event of a 12.5% decline in the financial markets within a period of 5 trading days.

Counterparty risk BinckBank is exposed to counterparty risk as a result of its institutional brokerage operations. This concerns a very limited number of clients that have orders executed via BinckBank on an occasional basis. A maximum limit is established for each counterparty in terms of the total outstanding settlements, based on the creditworthiness of the counterparty which is individually established by Risk management. Risk management monitors these limits and notifies the counterparty if it is approaching the set limit.

Counterparty risk is incurred in relation to a limited number of clients for which the risks lie mainly in cross-border settlement. BinckBank’s Credit Committee has decided to reserve € 1 million capital for this risk. No stress testing is performed for counterparty risk.


Maximum credit risk The table below presents the maximum credit risk associated with the various financial instruments. The maximum credit risk is shown gross, without taking account of the effects of credit risk mitigation provided by set-off agreements and the collateral that has been furnished. The maximum credit risk in derivative positions for the account and risk of clients is shown by the margin requirement as described above, and is not included in the table below.

2010 2009 x € 1,000 x € 1,000

Credit riskCash and balances with central banks 105,972 48,936 Banks 177,316 179,692 Financial assets held for trading 169 - Financial assets at fair value through profit and loss 13,856 37,294 Available-for-sale financial assets 1,599,700 1,511,903 Loans and receivables 496,266 410,169 Held-to-maturity financial assets 4,121 8,329

2,397,400 2,196,323 Guarantees 2,929 3,217

2,400,329 2,199,540

The quality of the loans and advances and the provision for bad debts are shown in the tables below:

Not yet due 496,194 410,039 Past due 558 805 Total 496,752 410,844 Bad debt provision (486) (675)Net loans and receivables 496,266 410,169

Past due items are residual items remaining after realisation of the collateral (securities and bank guarantees). The provision is formed on a case-by-case basis.

Loans and receivables by percentage covered:Money-market loans 20,000 - < 25% of the value of the collateral 77,081 75,037 between 25% and 50% of the value of the collateral 189,551 160,509 between 50% and 75% of the value of the collateral 205,122 171,635 > 75% of the value of the collateral 4,440 2,858 Past due 558 805

496,752 410,844 There are no items in arrears or for which provisions have been recognised in any of the other categories of financial assets.

Loans and receivables under renewed contractsIn the case of existing loans and receivables, it is possible for renewed contracts to be concluded with clients.The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable.

Loans and receivables under renewed contracts 61 74

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Deficits procedure Clients with a loan agreement are monitored by Risk management with respect to their available spending limit (ASL). The ASL is the balance of the weighted value of the collateral received from the client less the client’s obligations in the form of collateralised lending and margin requirements. There is a shortfall in the ASL if the collateral in the client’s portfolio no longer provides sufficient cover for the client’s obligations. As soon as a negative ASL is identified, the deficits procedure is initiated. Use of a deficits procedure is a statutory requirement. The deficits procedure used by BinckBank is as follows:

BinckBank checks for each client whether the collateral sufficiently covers the collateralised loans and/or margin requirements (margin and current orders) on a daily basis. BinckBank does this by calculating the client’s ASL. In the case of a negative ASL, the client must make up the deficits within five business days. If there is a deficits as a result of futures positions, this must be made up within one day. If the client’s ASL is still negative at 15:00 hours on the last day on which the deficits must be made up, BinckBank will start to liquidate the client’s securities positions on its own volition. Securities positions will be closed until the ASL in the client’s account is returned to a positive value.

Risk concentration per economic sector The following table presents the credit risk, analysed by economic sector.

Risk concentration per economic sector as at 31 December 2010 x € 1,000

Financial institu-

tions

Govern-ment/gov-

ernment guaran-

teed

Private individuals

Other private sector

Total

Cash and balances with central banks - 105,972 - - 105,972 Banks 177,316 - - - 177,316 Financial assets held for trading - - - 169 169 Financial assets at fair value through profit and loss - - - 13,856 13,856 Available-for-sale financial assets 1,167,379 432,321 - - 1,599,700 Loans and receivables - 20,000 476,266 - 496,266 Held-to-maturity financial assets - 4,121 - - 4,121

1,344,695 562,414 476,266 14,025 2,397,400 Guarantees - - 2,460 469 2,929

1,344,695 562,414 478,726 14,494 2,400,329

Risk concentration per economic sector as at 31 December 2009x € 1,000

Financial institu-

tions

Govern-ment/gov-

ernment guaran-

teed

Private individuals

Other private sector

Total

Cash and balances with central banks - 48,936 - - 48,936 Banks 179,692 - - - 179,692 Financial assets held for trading - - - - - Financial assets at fair value through profit and loss 37,294 - - - 37,294 Available-for-sale financial assets 842,742 617,215 - 51,946 1,511,903 Loans and receivables - - 410,169 - 410,169 Held-to-maturity financial assets - 8,329 - - 8,329

1,059,728 674,480 410,169 51,946 2,196,323 Guarantees - - 2,622 595 3,217

1,059,728 674,480 412,791 52,541 2,199,540


Risk categories of financial assetsAssessment of the creditworthiness of the financial assets and liabilities is based on credit ratings provided by rating agencies.

Cash and loans to banks are classified on the basis of the short-term credit rating of rating agencies. For the investment portfolio, the long-term rating is used. New investments must be rated at least AA-. Loans and receivables concern credit provided against collateral to private individuals and SME clients. These are not rated by rating agencies. Collateralised lending is not assessed on the basis of a rating, but on the quality of the collateral in securities.

Risk categories of financial assets as at 31 December 2010x € 1,000

Short-term rating Long-term rating

Unrated TotalF1+ F1 AAA

between AA+ en

AA-

between A+ en A-

Cash and balances with central banks

105,972 - 105,972

Banks - 174,208 3,108 177,316 Financial assets held for trading

- - - 169 169

Financial assets at fair value through profit and loss

- - - 13,856 13,856

Available-for-sale financial assets

1,367,245 232,455 - 1,599,700

Loans and receivables 496,266 496,266 Held-to-maturity financial assets

4,121 - - 4,121

Total 105,972 174,208 1,371,366 232,455 - 513,399 2,397,400

Risk categories of financial assets as at 31 December 2009x € 1,000

Short-term rating Long-term rating

Unrated TotalF1+ F1 AAA

between AA+ en

AA-

between A+ en A-


48,936 - 48,936

Banks 385 179,307 - 179,692 Financial assets held for trading

- - - - -


37,294 - - - 37,294


1,237,025 274,878 - 1,511,903

Loans and receivables 410,169 410,169 Held-to-maturity financial assets

8,329 - - 8,329

Total 49,321 179,307 1,282,648 274,878 - 410,169 2,196,323

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Risk concentration per country

The following table presents the credit risk, analysed by country.

Geographical distribution as at 31 December 2010x € 1,000

Nether-lands

Germany Spain Ireland Other EU countries

Non-EU countries

Total


99,328 - - - 6,644 - 105,972

Banks 150,540 - 38 - 24,785 1,953 177,316 Financial assets held for trading

- - - - 169 - 169


- - - - 13,856 - 13,856


91,410 1,418,905 73,535 - 15,850 - 1,599,700

Loans and receivables 470,823 569 461 158 10,976 13,279 496,266 Held-to-maturity financial assets

4,121 - - - - - 4,121

Total 816,222 1,419,474 74,034 158 72,280 15,232 2,397,400 % distribution 34% 59% 3% 0% 3% 1% 100%

Geographical distribution as at 31 December 2009x € 1,000

Nether-lands

Germany Spain Ireland Other EU countries

Non-EU countries

Total


43,855 - - - 5,081 - 48,936

Banks 174,766 - 51 - 3,833 1,042 179,692 Financial assets held for trading

- - - - - - -


- 37,294 - - - - 37,294


71,585 1,073,388 184,019 167,041 15,870 - 1,511,903

Loans and receivables 391,119 446 1,371 10 8,128 9,095 410,169 Held-to-maturity financial assets

8,329 - - - - - 8,329

Total 689,654 1,111,128 185,441 167,051 32,912 10,137 2,196,323 % distribution 31% 51% 8% 8% 1% 1% 100%

The debt crisis in the PIIGS countries and the associated uncertainty led BinckBank to restructure its investment portfolio in 2010 and to reduce its positions in Spanish and Irish bonds.


Credit risk weighting and capital requirement This table presents the credit risk weight with the capital requirement according to the standard method of Basel II.

Credit risk standard approach as at 31 December 2010x € 1,000

Risk weight Credit risk mitigation Risk-weighted

assets

Capital require-

ment (8%)

0% 10% 20% 50% 75% 100% Substitu-tion

Collateral

Claims or contingent claims on central governments or central banks

551,755 - - - - - - - - -

Claims or contingent claims on regional governments or local authorities

24,992 - - - - - - - - -

Claims or contingent claims on financial institutions

4,869 1,160,503 182,800 - - 2,345 153,261 12,261

Claims or contingent claims on corporate clients

- - - - - - - -

Retail claims or continguent retail claims

383,804 - - - 497,771 - (5,453) (492,318) - -

Past due items - - - - - 72 - - 72 6

Other receivables - - - - - 70,212 - - 70,212 5,617

Total 965,420 1,160,503 182,800 - 497,771 70,284 (3,108) (492,318) 223,545 17,884

Credit risk standard approach as at 31 December 2009x € 1,000

Risk weight Credit risk mitigation Risk-weighted

assets

Capital require-

ment (8%)

0% 10% 20% 50% 75% 100% Substitu-tion

Collateral

Claims or contingent claims on central governments or central banks

893,555 - - - - - - - - -

Claims or contingent claims on regional governments or local authorities

7,958 - - - - - - - -

Claims or contingent claims on financial institutions

299 640,534 210,793 - - - 2,412 - 106,865 8,549

Claims or contingent claims on corporate clients

- - 50,675 - - - - - 10,135 811

Retail claims or continguent retail claims

299,587 - - - 412,660 - (2,412) (410,248) - -

Past due items - - - - - 130 - - 130 10

Other receivables - - - - - 50,262 - - 50,262 4,021

Total 1,201,399 640,534 261,468 - 412,660 50,392 - (410,248) 167,392 13,391

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Pillar I – market risk The only market risk to which BinckBank is exposed is currency risk. Currency risk is the risk presented by movements in the value of items denominated in foreign currencies due to movements in exchange rates. It is BinckBank’s policy not to take active foreign-exchange trading positions. Foreign-exchange positions arising out of operating activities must be hedged the same day they become known. Because of the current system configuration within BinckBank, foreign-exchange positions arising from some client transactions are not visible until the next trading day. The currency risk on these positions during this one trading day’s delay is regarded as an accepted risk. The maximum risk is approximately € 100,000.

Pillar I – operational risk Operational risk is generally the result of deficiencies in the daily processing and settlement of transactions with clients or other parties or in the procedures and actions designed to ensure prompt detection of errors, quantitative or qualitative deficiencies or limitations in human resources, deficient decision-making due to inadequate management information and non-compliance with internal control procedures.

The capital requirements are calculated using the basic indicator approach, which sets the capital requirement for operational risk at 15% of the average total revenue in the three preceding financial years, as prescribed by the regulator. In previous years, as a result of the rapid growth of BinckBank the capital requirements under Pillar I were calculated at 15% of the revenue in the preceding financial year.


Income from operating activities in the year 184,846 186,222 Income from operating activities in the previous year 186,222 149,008 Income from operating activities 2 years ago 149,008 158,085 Principle for calculation of operational risk according to Basel II (average of last three years)

173,359 164,438

Principle used internally by BinckBank 173,359 186,222 Operational risk % (basic indicator approach) 15% 15%Capital requirement for operational risk 26,003 27,933

The internal target is for annual losses on normal activities due to operational risks not to exceed 1% of gross commission income. ‘Losses due to operational risks’ here means: •• The financial result of out-trades and compensation paid to clients •• Other direct loss due to faults in IT systems, automated information processing and operating processes.

Losses due to operational risk in 2010 amounted to 0.94% of total gross commission income and thus remained within the internal limit. Operational losses in 2009 came to 0.61%.

Operational risk management is built into the structure of the organisation, which embodies a number of the internal control measures and principles that BinckBank uses to manage operational risk. The main elements are: •• Locate the responsibility for managing operational risk as close as possible to the processes themselves, i.e. with the

line management; •• Record the operating processes, risk management processes and organisational structure and their interrelationship

in writing; •• Embed procedures for reporting and escalation to management; •• Implement controls within each process chain to ensure accurate information, together with performance and risk

indicators; •• •Learn from incidents and errors. Where possible, record the details of incidents that resulted (or almost resulted) in

losses and compare the records against the findings of risk assessments;


•• Automated recording and execution of transactions with associated audit trails. Daily transaction and position reconciliation, including reporting to management;

•• Procedures for staff recruitment and mentoring and functional segregation and job descriptions for all employees and departments;

•• Clear reporting lines, recording of required management information and periodic internal consultation. Internal control and internal audit studies, compulsory dual control for representation and contractual binding of the company;

•• Maintenance of a capital buffer for losses arising from unforeseen (uninsured) events and check the adequacy of the buffer with regular stress testing;

•• Maintain an insurance portfolio including directors’ liability insurance, company liability insurance, inventory insurance, buildings insurance and consequential loss insurance policies.

IT risk forms part of the operational risk of BinckBank. IT risk is the current and future risk to BinckBank’s financial position and results posed by deficiencies in the technology employed. BinckBank depends on IT in general to a large extent. Failures in IT could result in a significant threat to BinckBank’s capital and result. The IT organisation is designed to manage that risk and incorporates a series of internal monitoring procedures covering IT policy, security policy, incident management, change management and availability and performance management. BinckBank also has a fallback facility which it can use in emergencies. Each year, BinckBank commissions external agencies to audit and report on specific areas of its IT operations.

As an internet bank, BinckBank is by definition exposed to a significant inherent risk of external fraud by online criminals. BinckBank is fully aware of this risk. BinckBank operates a highly active security policy, which is continually evaluated. An important element of this policy is the annual ‘legal hack’ exercise, in which BinckBank invites a third party to attempt to break into its systems.

Risks relating to outsourcing of business processes are current and future risks to the company’s financial position and results posed by third-party provision on a structural basis of services which are part of BinckBank’s business processes. BinckBank has outsourced the following processes: payroll processing and financial accounting for Belgium and France, external custody of securities and some order execution. Service level agreements have been entered into for all outsourced activities and are reviewed regularly.

Pillar II – interest-rate risk Interest-rate risk refers to the exposure to movements in the yield curve affecting future profitability. Interest-rate risk affects items in the balance sheet recognised under banks, loans and receivables, interest-bearing securities, other liabilities and customer deposits. BinckBank manages this risk in relation to its banking operations by actively matching the maturities of its assets and liabilities within certain limits

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Duration schedule as at 31 December 2010x € 1,000

< 1 month > 1 month< 1 year

> 1 year< 2 years

> 2 years< 5 years

> 5 years

Non-interest bearing

Total

Assets

Cash and balances with central banks 105,972 - - - - - 105,972 Banks 169,203 5,005 - - - 3,108 177,316 Financial assets held for trading - - - - - 169 169 Financial assets at fair value through profit and loss

- - - - - 13,856 13,856

Available-for-sale financial assets 46,000 420,605 713,622 419,473 - - 1,599,700 Loans and receivables 496,266 - - - - - 496,266 Held-to-maturity financial assets - 4,121 - - - - 4,121

817,441 429,731 713,622 419,473 - 17,133 2,397,400

Liabilities

Banks 25,610 - - - - - 25,610 Customer deposits 2,258,290 - - - - - 2,258,290 Financial liabilities held for trading - - - - - 50 50 Financial liabilities at fair value with movements in value recognised in the income statement

- - - - - 1,485 1,485

2,283,900 - - - - 1,535 2,285,435

Duration schedule as at 31 December 2009x € 1,000

< 1 month > 1 month< 1 year

> 1 year< 2 years

> 2 years< 5 years

> 5 years

Non-interest bearing

Total

Assets

Cash and balances with central banks 48,936 - - - - - 48,936 Banks 174,692 5,000 - - - - 179,692 Financial assets held for trading - - - - - - - Financial assets at fair value through profit and loss

4,259 33,035 - - - - 37,294

Available-for-sale financial assets 41,901 603,678 310,894 555,430 - - 1,511,903 Loans and receivables 410,169 - - - - - 410,169 Held-to-maturity financial assets - 4,154 4,175 - - - 8,329

679,957 645,867 315,069 555,430 - - 2,196,323

Liabilities

Banks - - - - - - - Customer deposits 2,089,814 - - - - - 2,089,814 Financial liabilities held for trading - - - - - - Financial liabilities at fair value with movements in value recognised in the income statement

- - - - - -

2,089,814 - - - - - 2,089,814


Sensitivity analysis of interest-rate risk Interest-rate risk exists because of the possibility that changes in market interest rates can have a negative effect on future profitability. The interest-rate risk of the banking operations can best be illustrated by means of a sensitivity analysis. The sensitivity of the bank’s result and equity to parallel movements in the yield curve is reported to the Treasury Committee on a monthly basis.

Risk of a gradual parallel movement of the yield curve A gradual movement in market interest rates (the yield curve) has an effect on the future interest income from collateralised lending and the investment portfolio, and on the interest BinckBank pays on savings and investment accounts. BinckBank manages this risk in relation to its banking operations by actively matching the maturities of its assets and liabilities within certain limits. In these simulations at total level in euros the effect on the result is displayed of movements in the yield curve of +200, +100, -100 and -200 basis points during a period of one year after the balance sheet date with an unchanged interest base.

The effect on the result before tax over periods of one and two years after the balance sheet date is shown in the table below.

Sensitivity analysis of interest-rate result

Gradual parallel yield-curve movement in basis pointsEffect on the result


Over a period of 1 year+200 (1,416) (1,416)+100 (697) (708)-100 (96) 812-200 643 3,380

Over a period of 2 years+200 5,025 (3,322)+100 269 (1,661)-100 (3,987) 3,484-200 (4,585) 11,192

Risk of a sudden parallel movement of the yield curve In addition to gradual movements in the yield curve, sudden movements can also occur, known as interest-rate shocks. In BinckBank’s case, interest-rate shocks are reflected in changes in value in the investment portfolio. BinckBank has an investment portfolio made up of fixed-income securities which is diversified across various maturities. The actual investments in the portfolio are selected by the Treasury Committee. The portfolio is susceptible to gains and losses due to movements in the yield curve and the creditworthiness of the institutions issuing or guaranteeing the bonds. The effective interest rate on the portfolio of fixed-income investments classified as available for sale is 1.56% (2009: 3.12%).

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The effect on capital of an interest-rate shock of 100 basis points is shown in the table below (before tax):

Sudden parallel yield-curve movement in basis pointsEffect on capital


100 (24,400) (22,500)-100 20,400 22,000

The above figures relate only to a movement in the unrealised result. This will only lead to losses if the bank is forced to liquidate its investment portfolio as a result of substantial client withdrawals in combination with an interest-rate shock.

Pillar II – liquidity risk Liquidity risk is the risk that BinckBank will have difficulty in meeting its financial obligations settled in cash or other financial assets. BinckBank gives high priority to the management of this risk, to ensure that it always holds enough liquid reserves and can always meet its financial obligations. Liquidity risk management is designed to take account of the effects of BinckBank-specific stress factors – such as negative publicity, increased trading activity by clients (net purchases) and variation of competitors’ interest rates.

The table below shows the value of the undiscounted liabilities classified by remaining contractual maturity.

Remaining contractual maturity of liabilities (undiscounted) as at 31 December 2010x € 1,000

On demand

< 3 months

> 3 months< 1 year

> 1 year< 5 year

> 5 year Total

LiabilitiesBanks 25,610 - - - - 25,610 Customer deposits 2,262,820 - - - - 2,262,820 Financial liabilities held for trading - 50 - - - 50 Financial liabilities at fair value through profit and loss - 1,485 - - - 1,485

Total 2,288,430 1,535 - - - 2,289,965

Remaining contractual maturity of liabilities (undiscounted) as at 31 December 2009x € 1,000

On demand

< 3 months

> 3 months< 1 year

> 1 year< 5 years

> 5 years Total

LiabilitiesBanks - - - - - - Customer deposits 2,095,416 - - - - 2,095,416 Financial liabilities held for trading - - - - - - Financial liabilities at fair value through profit and loss - - - - - -

Total 2,095,416 - - - - 2,095,416

If clients withdraw their assets en masse or client assets are used collectively to invest, there is a risk that BinckBank will be unable to meet its obligations to creditors. BinckBank’s liquidity risk policy therefore focuses primarily on managing this aspect of liquidity risk.


The extent to which the maturities of assets and liabilities match is of fundamental importance to BinckBank. It is unusual for banks to achieve complete maturity matching of assets and liabilities because transactions are frequently not predictable and are also extremely diverse in nature. The maturities of assets and liabilities and the scope for replacing interest-bearing liabilities as and when they mature in an economically acceptable manner are important factors for both the assessment of the bank’s liquidity and the extent to which the bank is exposed to movements in interest rates and exchange rates.

At the end of December BinckBank had an ample position in immediately available liquid assets. BinckBank also has repo facilities with external banks to safeguard its liquidity position. Should these measures not be adequate, BinckBank can use its Target 2 facility at the central bank to raise additional cash secured by the investment portfolio (marginal lending facility). This avoids a situation in which due to high cash outflows, BinckBank is forced to liquidate its investment portfolio at distressed levels.

BinckBank’s liquidity policy includes checks, warning limits and additional measures in the event of high cash outflow due to client withdrawals or investments. The liquidity policy is formulated in a liquidity contingency plan.

The following measures are taken to cover liquidity risks:

1. Daily reports to the executive board and the members of the Treasury Committee regarding the liquidity position and related cash flows for the next three days. In stress situations, these reports can be provided hourly.

2. Use of a system of early warning indicators. 3. Retention of 3%-10% of customer deposits in cash in bank accounts. 4. Alternative sources of liquidity: a. Loan facility at DNB via Target 2, b. Repo facilities, 5. Investment portfolio consisting of highly liquid bonds.

The following table presents the fair value of the financial assets and liabilities based on expected remaining maturity. Assets maturing within two weeks are treated as being available on demand. Customer deposits are treated as available on demand in the table. In practice, a longer maturity is allocated to these products. The positions as at year end are representative of the positions during the year. In addition, the loan facilities and possibilities for liquidation of the interest-bearing securities are shown. This concerns securities which can be traded in an active market or used as collateral for a loan from DNB.

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Maturity calendar as at 31 December 2010x € 1,000

On demand

< 3 months > 3 months< 1 year

> 1 year< 5 years

> 5 years Total

AssetsCash and balances with central banks

105,972 - - - - 105,972

Banks 169,174 5,034 - 3,108 - 177,316 Financial assets held for trading - 169 - - - 169 Financial assets at fair value through profit and loss

- 13,856 - - - 13,856


- 86,514 362,173 1,151,013 - 1,599,700

Loans and receivables 476,266 20,000 - - - 496,266 Held-to-maturity financial assets - - 4,121 - - 4,121

751,412 125,573 366,294 1,154,121 - 2,397,400 Guarantees 225 55 236 2,413 2,929

751,412 125,798 366,349 1,154,357 2,413 2,400,329

LiabilitiesBanks 25,610 - - - - 25,610 Customer deposits 2,258,290 - - - - 2,258,290 Financial liabilities held for trading

- 50 - - - 50

Financial liabilities at fair value through profit and loss

- 1,485 - - - 1,485

2,283,900 1,535 - - - 2,285,435

Liquidity surplus / deficit on basis of contractual maturities

(1,532,488) 124,263 366,349 1,154,357 2,413 114,894

Credit, lending facilities and possibilities for liquidation

1,603,821 (86,514) (366,294) (1,151,013) - -

Liquidity surplus / deficit taking account of credit, lending facilities and possibilities for liquidation

71,333 37,749 55 3,344 2,413 114,894


Maturity calendar as at 31 December 2009x € 1,000

On demand

< 3 months > 3 months < 1 year

> 1 year < 5 years

> 5 years Total

AssetsCash and balances with central banks

48,936 - - - - 48,936

Banks 174,663 5,029 - - - 179,692 Financial assets held for trading - - - - - - Financial assets at fair value through profit and loss

- 4,259 33,035 - - 37,294


- 88,903 455,893 967,107 - 1,511,903

Loans and receivables 410,169 - - - - 410,169 Held-to-maturity financial assets - - 4,154 4,175 - 8,329

633,768 98,191 493,082 971,282 - 2,196,323 Guarantees - 272 - - 2,350 2,622

633,768 98,463 493,082 971,282 2,350 2,198,945

LiabilitiesBanks - - - - - - Customer deposits 2,089,814 - - - - 2,089,814 Financial liabilities held for trading

- - - - - -

Financial liabilities at fair value through profit and loss

- - - - - -

2,089,814 - - - - 2,089,814

Liquidity surplus / deficit on basis of contractual maturities

(1,456,046) 98,463 493,082 971,282 2,350 109,131

Credit, lending facilities and possibilities for liquidation

1,557,526 (93,162) (493,082) (971,282) - -

Liquidity surplus / deficit taking account of credit, lending facilities and possibilities for liquidation

101,480 5,301 - - 2,350 109,131

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Company balance sheet (before appropriation of profit)

Note 31 December 2010 31 December 2009x € 1,000 x € 1,000

Assets Cash and balances with central banks c 105,970 48,934 Banks d 171,254 173,352 Loans and receivables e 496,266 410,169 Bonds and other fixed-income securities f 1,603,821 1,286,891 Equities and other non-fixed-income securities g 14,025 - Investment in associates and joint ventures h 303,711 302,997 Intangible assets i 320,348 347,869 Property, plant and equipment j 43,520 12,226 Current tax k 4,949 1,970 Deferred tax l - 3,152 Other assets m 9,375 12,553 Prepayments and accrued income n 49,054 43,068 Derivatives positions held on behalf of clients 22 383,804 299,587 Total assets 3,506,097 2,942,768

LiabilitiesBanks d 25,610 - Customer deposits o 2,258,290 2,089,814 Current tax k 6 6 Deferred tax l 12,695 12,680 Other liabilities p 341,424 37,404 Accruals and deferred income q 14,014 20,258 Derivatives positions held on behalf of clients 22 383,804 299,587 Provisions r 1,268 2,660

Total liabilities 3,037,111 2,462,409

Issued share capital 7,450 7,607 Share premium 373,422 386,978 Treasury shares (3,335) (18,097)Revaluation reserve (2,610) 10,616 Legal reserves - 3,173 Other reserves 49,819 42,921 Unappropriated profit 44,240 47,161 Equity s 468,986 480,359 Total liabilities 3,506,097 2,942,768

Company income statement2010 2009

x € 1,000 x € 1,000Share in results in associates and joint ventures (after tax) 15,624 14,006 Other results (after tax) 28,616 33,155 Net result 44,240 47,161


Company statement of changes in equity

x € 1,000Issued share

capital


Treasury shares

Reva-luation reserve

Legal reserves

Other reserves


Total equity

1 January 2010 7,607 386,978 (18,097) 10,616 3,173 42,921 47,161 480,359

Unrealised gain on available-for-sale assets (after tax)

- - - (14,478) - - - (14,478)

Realisation of revaluations through profit and loss

- - - 1,252 - - - 1,252

Reserve for revaluation of associates

- - - - (3,173) - - (3,173)

Foreign currency translation - - - - - - - -

Result recognised directly in equity - - - (13,226) (3,173) - - (16,399)

Result for the year - - - - - - 44,240 44,240

Total income and expense - - - (13,226) (3,173) - 44,240 27,841

Payment of final dividend - - - - - (22,977) - (22,977)

Payment of interim dividend - - - - - (17,788) - (17,788)


Sale of shares to executive board and employees

- - 1,053 - - 401 - 1,454

Buy-back shares - - (4) - - - - (4)



- - - - - 47,161 (47,161) -

31 December 2010 7,450 373,422 (3,335) (2,610) - 49,819 44,240 468,986

x € 1,000Issued share

capital


Treasury shares

Reva-luation reserve

Legal reserves

Other reserves


Total equity

1 January 2009 7,709 392,395 (5,628) 6,616 2,216 41,188 33,145 477,641

Unrealised gain on available-for-sale assets (after tax)

- - - 6,769 - - - 6,769

Realisation of revaluations through profit and loss

- - - (2,769) - (82) - (2,851)

Reserve for revaluation of associates

- - - - 957 - - 957

Foreign currency translation - - - - - 12 - 12

Result recognised directly in equity - - - 4,000 957 (70) - 4,887

Result for the year - - - - - - 47,161 47,161

Total income and expense - - - 4,000 957 (70) 47,161 52,048

Payment of final dividend - - - - - (15,773) - (15,773)

Payment of interim dividend - - - - - (15,670) - (15,670)


Buy-back shares - - (17,988) - - - - (17,988)



- - - - - 33,145 (33,145) -

31 December 2009 7,607 386,978 (18,097) 10,616 3,173 42,921 47,161 480,359

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Notes to the company financial statements

a. General

Company information BinckBank N.V. is a company established in the Netherlands with its domicile in Amsterdam, whose shares are publicly traded. BinckBank N.V. provides conventional and internet broking services in securities and derivative transactions for private and professional investors. In the following pages, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

The company financial statements for BinckBank for the period ending on 31 December 2010 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 10 March 2011.

Amsterdam,

Executive board: Supervisory board:K.N. Beentjes (voorzitter) C.J.M. Scholtes (voorzitter) E.J.M. Kooistra (CFO) J.K. BrouwerP. Aartsen L. DeuzemanN. Bortot A.M. van Westerloo

Presentation of the financial statements Utilising the option provided by Part 9 of Book 2 of the Netherlands Civil Code, BinckBank has prepared its company financial statements using the same accounting principles as those used for the consolidated financial statements. In accordance with the provisions of Article 2:402 of the Netherlands Civil Code, the company income statement shows only the share in results of subsidiaries and associates after tax and other profits after tax.

b. Accounting principles

General

Details of the accounting principles can be found in the notes to the consolidated financial statements and, unless otherwise stated, apply equally to the company financial statements.

The statement as referred to in Articles 2:379 and 2:414 of the Netherlands Civil Code is filed with the Trade Register of the Chamber of Commerce in Amsterdam.

AssociatesThe investments in group companies are recognised at net asset value. The reporting dates of these companies are the same and the accounting principles applied to their financial reporting are in accordance with those applied by BinckBank for similar transactions and events in similar circumstances.


Notes to the company balance sheet


c. Cash and balanced with central banks 105,970 48,934 This item includes all cash in legal tender, including bank notes and coins in foreign currency, and any credit balances available on demand from the central banks in countries where BinckBank has offices.

d. BanksDue from banks 171,254 173,352 This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:Credit balances available on demand 163,113 168,323 Call money 5,033 5,029 Receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank

3,108 -

171,254 173,352

The call money receivables have original maturities of less than three months. Interest is received on these balances at a variable rate based on EONIA or EURIBOR. For the receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank, see note 8 to the consolidated balance sheet.

Due to banks 25,610 - At year-end 2010 BinckBank has sweeping arrangements with various banks whereby the debit and credit balances in a large number of bank accounts are regularised with a permanent treasury contra-account. This is only visible on the first statement for the following day; therefore at year-end 2010 BinckBank had an obligation in a single bank account for a very short period.

e. Loans and receivables 496,266 410,169 This item comprises receivables from private sector clients, including overnight loans and overdrafts collateralised by securities and bank guarantees (collateralised loans). All accounts receivable have a remaining maturity of less than one year. The analysis is as follows:Receivable from government institutions 20,000 - Receivables collateralised by securities 470,741 407,627 Receivables collateralised by bank guarantees 5,453 2,412 Other receivables 558 805 Loans and receivables, gross 496,752 410,844 Less: impairment provision (486) (675)

496,266 410,169

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The interest rate is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after execution of collateral (securities and bank guarantees).

f. Bonds and other fixed-income securities 1,603,821 1,286,891This concerns the investment portfolio consisting of:Financial assets at fair value through profit and loss - 21,256Available-for-sale financial assets 1,599,700 1,257,306Held-to-maturity financial assets 4,121 8,329

1,603,821 1,286,891

Financial assets at fair value through profit and lossThis item comprises:Other bonds - 21,256

- 21,256

Available-for-sale financial assetsThis item comprises:Government bonds/government-guaranteed bonds 432,322 667,364 Other bonds 1,167,378 589,942

1,599,700 1,257,306 This item concerns a portfolio of interest-bearing securities with remaining maturities of between 0 and 3 years.

This item comprises:Deze post bestaat uit:Government bonds/government-guaranteed bonds 4,121 8,329

4,121 8,329

The portfolio of interest-bearing securities classified as held-to-maturity financial assets concerns government bonds with remaining maturities of between 0 and 1 years.

g. Equities and other non-fixed-income securities 14,025 -

The trading portfolio comprises:SRD derivatives payables 169 - Equity positions in relation to SRD payables 13,856 -

14,025 - In 2010 BinckBank commenced its offering of SRD (Service de Règlement Différé) contracts in France. For further information regarding this financial instrument, see note 9 to the consolidated financial statements.



h. Investment in associates and joint ventures

303,711 302,997

This item comprises:Group companies 300,644 301,044 Other associates 2,174 - Joint ventures 893 1,953

303,711 302,997

Movements during the year were as follows:

Balance as at 1 January 302,997 285,236 Capital increases and acquisitions 5,513 7,112 Disposals and dissolutions - (1,373)Dividends and capital refunds (17,250) (1,750)Redemption of loan to Accion N.V. - (550)Write-down of loan to Accion N.V. - (650)Result in associates and joint ventures 15,624 14,006 Movement in revaluation reserve for associates

(3,173) 957

Exchange differences and other movements

- 9

Balance as at 31 December 303,711 302,997

The item capital increases and acquisitions includes investments in TOM Holding B.V., the incorporation of BeFrank N.V. and the acquisition of ThinkCapital Holding B.V. The item disposals relates to the sale of the remaining interest in Florint B.V. to the other shareholders as agreed upon in February 2009. At year-end 2009 the investment in and loan to Accion N.V. was written down to nil.

Statement of group companiesThe following statement lists the group companies.

Place Country Interest year-end 2010

Interest year-end 2009

Binck België N.V. Antwerp Belgium 100% 100%Bewaarbedrijf BinckBank B.V. Amsterdam Netherlands 100% 100%Syntel Beheer B.V. Reeuwijk Netherlands 100% 100%ThinkCapital Holding B.V. Amsterdam Netherlands 60% 0%

For the other capital holdings, see note 13 to the consolidated balance sheet on associates and joint ventures.

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i. Intangible assets 320,348 347,869

The movements in 2010 were as follows:Brand name

Core deposits

Customer base


Balance as at 1 January 2010 18,843 67,276 104,846 3,975 152,929 347,869 Investments - - - 2,022 - 2,022 Disposals - cost - - - (359) - (359)Disposals - cumulative amortisation - - - 359 - 359 Amortisation (6,281) (8,410) (13,105) (1,747) - (29,543)Balance as at 31 December 2010 12,562 58,866 91,741 4,250 152,929 320,348

Cumulative cost 31,405 84,095 131,058 10,322 152,929 409,809 Cumulative amortisation and impairments

(18,843) (25,229) (39,317) (6,072) - (89,461)

Balance as at 31 December 2010 12,562 58,866 91,741 4,250 152,929 320,348


The movements in 2009 were as follows:Brand name

Core deposits

Customer base


Balance as at 1 January 2009 25,124 75,685 117,953 5,656 152,929 377,347

Investments - - - 135 - 135 Disposals - cost - - - (460) - (460)Disposals - cumulative amortisation - - - 460 - 460 Amortisation (6,281) (8,409) (13,107) (1,816) - (29,613)

Balance as at 31 December 2009 18,843 67,276 104,846 3,975 152,929 347,869





j. Property, plant and equipment 43,520 12,226 The movements in 2010 were as follows:

Real estate

Fixtures, fittings and equipment

Computer hardware

Other Total

Balance as at 1 January 2010 - 345 11,874 7 12,226

Investments 24,998 8,125 2,939 - 36,062 Disposals - cost - (958) (1,908) - (2,866)Disposals - cumulative depreciation - 958 1,908 - 2,866 Depreciation and amortisation (333) (618) (3,814) (3) (4,768)Balance as at 31 December 2010 24,665 7,852 10,999 4 43,520

Cumulative cost 24,998 8,231 17,464 18 50,711 Cumulative depreciation and impairments (333) (379) (6,465) (14) (7,191)Balance as at 31 December 2010 24,665 7,852 10,999 4 43,520


The movements in 2009 were as follows:Real

estateFixtures,

fittings and equipment

Computer hardware

Other Total

Balance as at 1 January 2009 - 679 7,952 10 8,641 Investments - 75 9,002 - 9,077 Disposals - cost - - (3,254) - (3,254)Disposals - cumulative depreciation - - 3,254 - 3,254 Depreciation and amortisation - (409) (5,080) (3) (5,492)Balance as at 31 December 2009 - 345 11,874 7 12,226

Cumulative cost - 1,064 16,433 18 17,515 Cumulative depreciation and impairments - (719) (4,559) (11) (5,289)Balance as at 31 December 2009 - 345 11,874 7 12,226


The investment in real estate includes prepayments in relation to a leasehold (operating lease) which expires on 15 April 2056. An amount of € 208,000 relating to amortisation of the leasehold is included under depreciation and amortisation in 2010 (2009: nil).

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k. Current taxCurrent tax assets 4,949 1,970 Current tax liabilities (6) (6)Net asset / (liability) 4,943 1,964

The balance as at year-end 2010 relates mainly to the reporting period.

l. Deferred taxCompositionDeferred tax assets - 3,152 Deferred tax liabilities (12,695) (12,680)Net asset / (liability) (12,695) (9,528)

Origin of deferred tax assets and liabilities:Available-for-sale financial assets (720) (3,634)Goodwill and other intangible assets (8,211) (5,584)Depreciation period differences for non-current assets (2,900) - Other assets / (liabilities) (864) (310)Net asset / (liability) (12,695) (9,528)

m. Other assets 9,375 12,553 This item comprises:Trade receivables 824 120 Receivables relating to securities sold, but not yet delivered 7,270 11,755 Other receivables 1,281 678

9,375 12,553 - of which receivables from group companies 141 -

Trade receivables, receivables relating to securities sold but not yet delivered and other receivables have maturities of less than one year.

n. Prepayments and accrued income 49,054 43,068 This item comprises:Interest receivable 35,338 27,884 Commission receivable 9,772 5,919 Other prepayments and accrued income 3,944 9,265

49,054 43,068



o. Customer deposits 2,258,290 2,089,814 This item comprises:Demand deposits savings accounts 717,181 874,181 Demand deposits current accounts 1,541,109 1,215,633

2,258,290 2,089,814

p. Other liabilities 341,424 37,404 This item comprises:SRD derivative payables 50 - Equity positions in relation to SRD payables 1,485 - Liabilities in respect of securities transactions not yet settled 34,939 10,890 Tax and social security contributions 2,918 2,106 Amounts owed to group companies 294,403 17,465 Trade payables 6,455 4,167 Other liabilities 1,174 2,776

341,424 37,404 In 2010 BinckBank commenced its offering of SRD (Service de Règlement Différé) contracts in France. For further information regarding this financial instrument, see note 9 to the consolidated financial statements.

q. Accruals and deferred income 14,014 20,258 This item comprises:Accrued interest 4,530 5,602 Employee expenses 5,738 8,115 Stock exchange and clearing costs payable 975 3,122 Other accruals and deferred income 2,771 3,419

14,014 20,258

Employee expenses under this heading mostly concern performance-related pay to board members and employees of BinckBank.

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31 december 2010 31 december 2009x € 1,000 x € 1,000

r. Provisions 1,268 2,660 This item comprises:Obligations under the deposit guarantee scheme - 2,620 Other provisions 1,268 40

1,268 2,660

The movement in the provision for obligations under the deposit guarantee scheme was as follows:

Balance as at 1 January 2,620 - Addition charged to income 52 2,620 Reclassification to banks (2,672) - Balance as at 31 December - 2,620

The provision concerns an estimate of the contribution payable by BinckBank for the compensation of clients arising from the deposit guarantee scheme.

The provision formed for the inability to pay and subsequent bankruptcy of DSB Bank has been reclassified to the item banks (see note d) as a result of a payment of a gross contribution to De Nederlandsche Bank in December 2010.

The movements in the other provisions were as follows:Balance as at 1 January 40 93 Released to income (40) (53)Addition charged to income 683 - Other movements 585 - Balance as at 31 December 1,268 40

The item other provisions includes onerous contracts, restructuring and legal disputes.


31 december 2010 31 december 2009x € 1,000 x € 1,000

s. Equity 468,986 480,359 Issued share capital 7,450 7,607 A total of 74,500,000 ordinary shares were in issue, each with a nominal value of € 0.10. The share capital is fully paid up. 1,568,928 shares were cancelled on 9 July 2010. 1,024,580 shares were repurchased on 17 July 2009.

Number Amount Number AmountBalance as at 1 January 76,068,928 7,607 77,093,508 7,709 Cancellation of treasury shares (1,568,928) (157) (1,024,580) (102)Balance as at 31 December 74,500,000 7,450 76,068,928 7,607

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium reserve 373,422 386,978 Balance as at 1 January 386,978 392,395 Cancellation of treasury shares (13,556) (5,417)Balance as at 31 December 373,422 386,978

The share premium reserve is exempt from tax.

Treasury shares (3,335) (18,097)

Number Amount Number Amount Situation at opening date 2,070,509 (18,097) 1,053,442 (5,628)Issued to executive board and employees (120,495) 1,053 - - Cancellation of treasury shares (1,568,928) 13,713 (1,024,580) 5,519 Repurchased shares 425 (4) 2,041,647 (17,988)Situation at end of financial year 381,511 (3,335) 2,070,509 (18,097)

As at 1 January 2010, the number of treasury shares held was 2,070,509, acquired at an average purchase price of € 8.74. During 2010, 425 shares were acquired at an average price of € 10.15 and 120,495 shares were sold to the executive board and employees in connection with the settlement of the long-term bonus scheme with an average purchase price of € 8.74.

1,568,928 shares were cancelled on 9 July 2010 at an average purchase price of € 8.74. On 17 July 2009, 1,024,580 shares were cancelled at an average repurchase price of € 5.39. The carrying amount of the treasury shares as at year-end 2010 was measured at the average purchase price of € 8.74. The change in equity in respect of treasury shares reflects the amounts bought and sold. The quoted share price as at year-end 2010 was € 11.60 (2009: € 12.54).

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Revaluation reserve (2,610) 10,616 Situation at opening date 10,616 6,616 Unrealised result on available-for-sale financial assets (18,982) 8,139 Realisation of revaluations through profit and loss 1,252 (2,769)Tax on unrealised gains and losses on available-for-sale financial assets

4,504 (1,370)

Situation at end of financial year (2,610) 10,616

The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets. In the determination of the freely available profit, any negative revaluation reserve is deducted from the reserves available for distribution.

Legal reserves - 3,173

Revaluation reserve for associatesBalance as at 1 January 3,173 2,216 Movement (3,173) 957 Balance as at 31 December - 3,173

The reserve comprises the movements in the fair value of associates to the extent these are due to movements in equity as a result of the revaluation of the available-for-sale financial assets included therein.

Other reserves 49,819 42,921 These comprise:(I) Foreign currency translation reserve - - (II) Other reserves 49,819 42,921

49,819 42,921 (I) Foreign currency translation reserveBalance as at 1 January - 70 Movement - 12 Released to income - (82)Balance as at 31 December - -

The foreign currency translation reserve comprises exchange differences arising on translation of the financial statements of foreign subsidiaries using a reporting currency other than the consolidation reporting currency (€). The liquidation of Hills Independent Traders Ltd. was completed in 2009, whereby the foreign currency translation reserve is released to income.



(II) Other reservesBalance as at 1 January 42,921 41,118 Grant of rights to shares 101 101 Sale of shares to executive board and employees 401 - Payment of final dividend (22,977) (15,773)Payment of interim dividend (17,788) (15,670)Appropriation of profit for previous year 47,161 33,145 Balance as at 31 December 49,819 42,921

For details of the grant of rights to shares, see note 25 to the consolidated financial statements.

Unappropriated result 44,240 47,161 Balance as at 1 January 47,161 33,145 Addition to other reserves (47,161) (33,145)Result for the year 44,240 47,161 Balance as at 31 December 44,240 47,161

t. Note on audit expensesThe following fees were charged to the company, its subsidiaries and other consolidated entities by the audit firm Ernst & Young Accountants LLP and other divisions of Ernst & Young as referred to in Section 2:382a of the Netherlands Civil Code:

Ernst & Young Accountants

Ernst & Young other services

Total

x € 1,000 x € 1,000 x € 1,0002010Audit of the financial statements, including audit of statutory financial statements and other statutory audits of subsidiary companies and consolidated entities

368 - 368

Other audit services 57 - 57 Other non-audit services - 7 7

425 7 432

2009Audit of the financial statements, including audit of statutory financial statements and other statutory audits of subsidiary companies and consolidated entities

368 - 368

Other audit services 113 - 113 Other non-audit services - 8 8

481 8 489

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2010 2009x € 1,000 x € 1,000

u. Off balance sheet commitmentsContingent liabilitiesLiabilities in respect of contracts of suretyship and guarantees 2,816 3,217Liabilities in respect of irrevocable facilities - -

To meet the requirements of its clients, BinckBank offers products such as contracts of suretyship and guarantees in relation to loans. The underlying value of these products is not presented on the face of the balance sheet. The above figure represents the maximum potential credit risk for BinckBank attached to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

With acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the Dutch Shareholders’ Association (the VEB). If BinckBank terminates the VEB agreement, it will be liable to pay an amount equal to the custody fee and dividend commission paid by each client of Alex Bottom-Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each client on exceeding set limits.

Lease commitments The company has leases on office premises in the Netherlands, Belgium, France and Spain. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined expense relating to office rents and operating lease payments for the vehicle fleet in 2010 was € 4.5 million (2009: € 4.5 million).

2010 2009x € 1,000 x € 1,000

The aged analysis of the outstanding liabilities is as follows: Within one year 1,774 3,395One to five years 2,731 4,232Longer than five years - 147

Legal proceedings BinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or profitability.

Deposit guarantee scheme The deposit guarantee scheme is intended to guarantee certain deposits by account holders if a bank goes bankrupt. The scheme provides security for deposits of up to € 100,000 and applies per account holder per bank, regardless of the number of accounts held. In case of a joint account operated by two persons, the maximum applies per person. More or less all savings accounts, current accounts and term deposits are covered. Equities or bonds are not covered. In case of a subordinated deposit, the principal sum is not covered by the deposit guarantee scheme, although the interest on the principal is covered. If a credit institution finds itself in difficulties and does not have sufficient funds to pay all or part of the guaranteed amounts to its account holders, De Nederlandsche Bank will make up the difference. The total amount paid out by DNB will then be recovered from the banks on a pro rata basis.


Investor compensation scheme Despite the fact that all banks and investment firms in the Netherlands are subject to regulation by DNB and the AFM, a bank or investment firm may encounter problems with payments. In this case, the investors compensation system guarantees a minimum level of protection in the event that the bank or investment firm cannot meet its obligations arising from the investment services it provides to its clients. The investors compensation scheme provides a guarantee of up to € 20,000 per person per institution.

v. Remuneration of the executive board and the supervisory board The information on the remuneration of members of the executive board and members of the supervisory board is given in the consolidated financial statements (page 115).

w. Events after balance sheet date At the beginning of 2011, BinckBank announced it would be opening a branch in Italy in mid 2012. In the context of a legal restructuring, the equity of Binck België N.V. was largely repatriated at the beginning of 2011.

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Other dataTo: the General Meeting of Shareholders of BinckBank N.V.

Independent auditor’s report

Report on the financial statements We have audited the accompanying financial statements 2010 of BinckBank N.V., Amsterdam. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2010, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes, comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise the company balance sheet as at 31 December 2010, company income statement and company statement of changes in equity for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management’s responsibilityManagement is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code, and for the preparation of the management board report in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statements In our opinion, the consolidated financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December, 2010 and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code.

Opinion with respect to the company financial statementsIn our opinion, the company financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December, 2010 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.


Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the management board report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code.


Ernst & Young Accountants LLP

Signed by N.G.D. Warmer

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Provisions of the Articles of Association regarding priority shares (Articles 15 and 21) The rights attached to the priority shares include the right to make non-binding nominations for appointment to the company’s supervisory board and executive board and to take various other actions. The priority shares are held by Stichting Prioriteit Binck, Amsterdam. This foundation’s board, which consists of three members, is appointed by the supervisory board and executive board of the company.

The board members of Stichting Prioriteit Binck are: C.J.M. ScholtesJ.K. BrouwerK.N. Beentjes

Provisions of the Articles of Association in respect of profit appropriation (Article 32) 1. The company may only make distributions to the shareholders if the company’s equity exceeds its issued and paid-up

share capital plus the reserves required to be held by law or by the Articles of Association. 2. Firstly – and only insofar as profits allow – an amount equal to six per cent (6%) of the nominal value of the priority

shares will be distributed on these shares. 3. The foundation will determine the extent to which the remaining profits will be transferred to reserves. Profits

remaining after application of subsection 2 and the first sentence of this subsection will be at the disposal of the General Meeting of Shareholders. Any amounts not distributed will be transferred to the company’s reserves.

4. Withdrawals from distributable reserves may be made pursuant to a resolution by the General Meeting of Shareholders, subject to the prior consent of the foundation.

5. The executive board may resolve to allow the company to make interim distributions, providing it demonstrates in the form of an interim statement of assets and liabilities as referred to Section 105(4) Book 2 of the Netherlands Civil Code that it complies with subsection 1 above and subject to the prior consent of the foundation. The distributions referred to in this subsection may be made in cash, in shares in the company’s equity or in marketable rights thereto.

6. The General Meeting of Shareholders may resolve to declare that distributions on shares other than interim distributions as referred in subsection 5 of this Article (whether at the shareholders’ discretion or otherwise) may, instead of being made in cash, be made fully or partly (whether at the shareholders’ discretion or otherwise) in:

a. ordinary shares (which will, if desired and possible, be charged to the share premium reserve) or marketable rights to ordinary shares, or

b. equity instruments of the company or marketable rights thereto. A resolution as referred to in the previous sentence may only be passed after being proposed by the executive board and approved by the supervisory board. A proposal to pass a resolution as referred to in b will be submitted only after consultation with Euronext Amsterdam N.V.

7. No distribution will be made to the company in respect of shares it holds in its own capital or on shares for which the company holds depositary receipts.

8. The calculation of the profit distributable on shares will disregard shares that are not eligible, pursuant to subsection 7, for such distribution.

9. Once a resolution to make a distribution has been passed, the amount will be declared payable within fourteen days. An entitlement to receive a distribution will lapse five years after the date on which the amount is declared payable, and the said amount will then revert to the company.

Proposal for appropriation of the result On the proposal of the Foundation, € 24,030,000 will be transferred to the reserves. An interim dividend of € 0.24 per share has already been paid in respect of 2010. The remainder is at the disposal of the general meeting of shareholders. It is proposed to distribute this in the form of a final dividend of € 0.27 per ordinary share.

The profit appropriation will then be as follows: x € 1,000Profit in 2010 44,145Less: Transferred to other reserves (6,242)Less: Interim dividend paid for 2009 (17,788)At shareholders’ disposal 20,115This proposal is not reflected in the balance sheet.


Principal subsidiaries

Bewaarbedrijf BinckBank B.V.Barbara Strozzilaan 3101083 HN AmsterdamTelephone (020) 522 03 30

Syntel Beheer B.V.Reeuwijkse Poort 1142811MX ReeuwijkTelephone (0182) 398 888www.syntel.nl

Executive Board:H. KrijgsmanK.N. Beentjes

ThinkCapital Holding B.V.Barbara Strozzilaan 3101083 HN AmsterdamTelephone (020) 314 96 70www.thinkcapital.nl

Executive Board:M. RozemullerG. Koning

Binck België N.V.De Keyserlei 582018 AntwerpenBelgiëTelephone +32 3 303 3133www.binck.com/be/corporate/

Executive Board:V. GermynsG. MichailidisK.N. BeentjesN. Bortot

Foreign offices

BinckBank BelgiumDe Keyserlei 582018 AntwerpenBelgiumTelephone +32 3 303 3133www.binck.be

BinckBank France102-106, rue Victor Hugo92300-Levallois-Perret CEDEXFranceTelephone +33 170 36 70 62www.binck.fr

BinckBank SpainTrading name : Alex Beleggersbank SpanjeUrbanizacion Marbella Real, local 15Carretera de Cadiz, km 178,729602 MarbellaMalagaSpainTelephone +34 952 92 4011

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BinckBank N.V.Brbara Strozzilaan 3101083 HN AmsterdamThe Netherlands

Correspondence addressP.O. Box 750471070 NA AmsterdamThe Netherlands

Tel: +31 (0)20 522 03 30Fax: +31 (0)20 320 41 76

Internet: www.binck.com

BinckBank N.V., established in Amsterdam and entered in the Trade Register of the Amsterdam Chamber of Commerce under no. 33 16 22 23.

Investor RelationsTel: +31 (0)20 522 03 72Email: [email protected]

ColophonPhotographyEdith Paol, Amsterdam

PrintStyle Mathôt, Amsterdam

BinckBank N.V.Barbara Strozzilaan 3101083 HN AmsterdamThe Netherlands

P.O. Box 750471001 NA AmsterdamThe Netherlands

T +31 20 522 0330F +31 20 522 0340E [email protected] www.binck.com

Jaarverslag 2010BinckBank N

.V.

Annual report 2010 - BinckBank

Documents

Transcript of Annual report 2010 - BinckBank