BINCKBANK · from Obvion. With this purchase BinckBank is on track with its objective to invest a...
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BINCKBANK DATE: 25 JULY 2016 SUBJECT: ANALYST & INVESTOR CONFERENCE CALL – 16Q2 RESULTS 1
Transcript of BINCKBANK · from Obvion. With this purchase BinckBank is on track with its objective to invest a...
BINCKBANKDATE: 25 JULY 2016SUBJECT: ANALYST & INVESTOR CONFERENCE CALL – 16Q2 RESULTS
1
Business update
Financialposition
INTRO OUTROHighlights Wrap up and Q&A
2
Highlights 16Q2
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Financials:
• Number of transactions 1.9 million compared to 2.1 million in 16Q1
• Assets under Administration € 20.7 billion compared to € 20.2 billion in 16Q1
• Assets under Management € 1.5 billion compared to € 1.6 billion in 16Q1
• Adjusted net result 16Q2 € 7.7 milllion
• Adjusted net earnings per share € 0.11 for the second quarter 2016
Business:
• Transaction revenues in line with the overall markets and lower trading volumes.
• Increased activity related to the Brexit resulted in higher trading income. June was the best month of 2016.
• Operating expenses under control, while investing in new products and services for the ‘Redesign Binck’
programme
• As of 15th of July BinckBank has acquired a portfolio of Dutch residential mortgages worth €340 millionfrom Obvion. With this purchase BinckBank is on track with its objective to invest a total of €500 million in 2016
• BinckBank won several awards for their service and products in the second quarter:
• Netherlands: IEX Netprofiler survey awarded BinckBank as ‘Best broker overall’
• Netherlands: Think Total Market Neutral ETF awarded as ‘financial product of the month’ by DFT
• Netherlands: BinckBank’s ‘All-in-one portfolio’ chosen as ‘best buy ’
• Italy: at the Le Fonti awards BinckBank was chosen as ‘Best bank in online trading’
Highlights 16Q2
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Other:
• BinckBank received 2 fines from the AFM for issues in the period 2012-2014:
• € 500.000 on 16th of March for late reporting of transactions
• € 750.000 on 1st of July for Alex Vermogensbeheer for unclear and misleading information in commercials.
BinckBank will object to this AFM fine
Highlights 16H1
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Financials:
• Number of transactions 4.0 million compared to 5.0 million in 15H1
• Assets under Administration € 20.7 billion compared to € 20.6 billion in 15H1
• Assets under Management € 1.5 billion compared to € 1.8 billion in 15H1
• Adjusted net result in 16H1 € 16.3 milllion
• Adjusted net earnings per share in 16H1€ 0.23
• Interim dividend at € 0.04 per share (15H1 € 0.14 per share)
Strategy:
• Development of Savingsbroker shows good progress and will be launched in 16Q4
• New Binck asset management proposition for international roll out, planned for launch in 16Q4
• While new propositions and products are being developed, the core of our business –
online brokerage – is strengthened by new partnerships with ProBeleggen & ZoneBourse to make trading
more attractive for our clients
Business update
Financialposition
INTRO OUTROHighlights Wrap up and Q&A
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• Transactions in 16Q2: 1.3 million,–13% compared to 16Q1 (16Q1: 1.6 million)
• Income from operating activities, -5% to €27.3 million (16Q1: € 28.8 million)
• Result from operating activities, -6% to €15.3 million (16Q1: €16.2 million)
• Average net income per transaction € 11.1 (16Q1: € 10.7)
• Business:
• Partnership with ProBeleggen so customers can engage with trading professionals and follow their investments and results
• Solid progress in acquiring new customers. Total accounts in 16Q2 at 355,065 accounts (16Q1: 353,463)
• Several awards for BinckBank:‘Best broker overall’ in the IEX Netprofiler survey & Think TM Neutral ETF product of the month
in May 2016.
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Trading
Netherlands
-
5
10
15
20
25
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Result from Operating Activities
0,0
0,5
1,0
1,5
2,0
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Transactions
-
5
10
15
20
25
30
35
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
sIncome from Operating Activities
Investing
Netherlands - Alex Asset Management
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* Each Alex Asset Management customer gets a personalised portfolio. The client portfolio for Alex Asset Management is compiled based on individual customer data and falls within the bandwidth of the investment profile chosen by the customer. The moment the customer starts investing as well as the size of the invested capital are relevant factors that both affect the composition of the portfolio and hence the return achieved. Therefore, the individual performance of a client portfolio may deviate from the return of the sample portfolio.
• Total AuM at € 1.49 billion in 16Q2 (16Q1: € 1.59 billion)
• Recurring service fee is 0.83% (excluding VAT) of AuM
• Performance example portfolio for profile Behoedzaam*: -3.7% (benchmark –6.4%) as of 30th June 2016
• During Britain EU referendum the more defensive portfolios were for approximately 50% invested in equity
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200.000
400.000
600.000
800.000
1.000.000
1.200.000
1.400.000
1.600.000
1.800.000
2.000.000
15Q2 15Q3 15Q4 16Q1 16Q2
AuM Alex Vermogensbeheer (in thousands)
241
74
2544
55
106
0
50
100
150
200
250
300
15Q1 15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Outflow Alex VB
1492
106
6 41592
16
1400
1450
1500
1550
1600
1650
AUM31/3/16
Inflow Outflow Performance Other AUM30/6/16
AuM movement 16Q2
Trading
Belgium
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• Transactions in 16Q2: 161,214 -13% compared to 16Q1 (185,103)
• Negative impact of ‘speculation tax’ clearly visible on transaction level and investor behavior
• Total income from operating activities down 2% to € 2.7 million (16Q1: € 2.8 million)
• Total result from operating activities up 60% to € 1.3 million (16Q1: € 0.8million) due to lower marketing cost in 16Q2
• Business:
• Fees for investing in passive funds lowered by BinckBank to stimulate those who want to invest long term
• Criticism around speculation tax increases – showing negative fiscal contribution .
0
50
100
150
200
250
15Q2 15Q3 15Q4 16Q1 16Q2
Tho
usa
nd
s
Transactions
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
4,0
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
sIncome from Operating Activities
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Result from Operating Activities
• Transactions -13% to 229,328 in 16Q2 (16Q1: 263,239)
• Income from operating activities up 5% to € 2.1 million (16Q1: € 2.0 million)
• Result from operating activities 16Q2 down 8% to € 193,000 (16Q1: € 207,000)
• Business:
• Mobile app was launched in France and was well received by our French customers in 16Q2. Furthermore the advisory tools were expanded in collaboration with ZoneBourse
• Completion of migration to European base platform had a positive impact on business and customers
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Trading
France
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15Q2 15Q3 15Q4 16Q1 16Q2
Tho
usa
nd
s
Transactions
0,0
0,5
1,0
1,5
2,0
2,5
3,0
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Income from Operating Activities
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Result from Operating Activities
• Transactions remain high in 16Q2: 120,994 (16Q1: 129,123)
• Total income from operating activities in 16Q2 flat at € 710,000 (16Q1: €719,000)
• Result from operating activities 16Q2 down to €-292,000 (16Q1: €-192,000)
• Business:
• Award for BinckBank Italy: ‘Le Fonti Award’ as ‘Bank of year in online trading‘
• Improved focus on business development with development of specific XTA platform for Italian market
Trading
Italy
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0,0
0,1
0,2
0,3
0,4
0,5
0,6
0,7
0,8
0,9
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
sIncome from Operating Activities
110
112
114
116
118
120
122
124
126
128
130
132
15Q2 15Q3 15Q4 16Q1 16Q2
Tho
usa
nd
s
Transactions
-0,35
-0,30
-0,25
-0,20
-0,15
-0,10
-0,05
0,00
0,05
0,10
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Result from Operating Activities
BinckBank share development 16H1
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• Financials under heavy pressure by general market conditionsE.g. Euro Stoxx 600 banks -26,49% YTD as of 21st of July. Uncercainty caused by Brexit has anextra negative impact on market sentiment on financials
• BinckBank faces a specific difficult market environment with:
1. Extended low volumes caused by market sentiment. This puts pressure on our corebusiness (retail brokerage)
2. Historical low interest rates. Which results in lower yields on our investment portfolio
3. Implementation of our new strategy, and deriving from this strategy our propositions. These are hard to estimate in terms of future earnings. The new propositions and the value thereof based on our international footprint are according to BinckBank notreflected in the current share price.
4. Doubts about Market share and Price pressure
• Roll-out of ‘Redesign Binck’ growth strategy resulted to date in a shift in shareholderbase. As of now >40% of our shareholderbase is of US origin wheras the historical level was around 10%.
Market position remains strong (1/3)
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Facts and figures
1. Fragmented markets impede benchmarking. However what we can see is:
• Trend in volumes on Euronext & TOM show decreasing volumes on all markets if 2016 is compared to 2015
• Comparison between Amsterdam / Brussels and Paris all provide us with the same results regarding our customer behavior
Our customers in the Netherlands seem to have the same lack of appetite as in France or Belgium
2. Comparison of transaction volumes YTD both in the Derivatives Markets and to Comdirect as a peer:
• Volumes of BinckBank and Comdirect show a similar pattern
• June 2016 best month of the year for BinckBank. Our customers show higher activity compared to Comdirect
*
* Comdirect volumes include CFD’s
Market position remains strong (2/3)
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Facts and figures
3. Price pressure – Average income per trade shows a stable pattern in all countries All operating in very competitive markets
4. Stable and still growing customer base in Brokerage in the Netherlands. Solid foundation for broadening our services and increase our share of wallet
5. Brand awareness for Binck in the Netherlands increases significantly from 54% to 63% among all investor segmentsAnd score reaches even 90% (all time high) when helped. Source TNS Nipo, April 2016
Brand awareness effects on consumer decision making for a common product or services. This outcome is also significant if related to our broadening of our product range with the Savings broker and Investing products.
Brand awareness BinckBank NL compared to market
€ 9,64
€ 10,03
Market position remains strong (3/3)
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Pro-active retention activities BinckBank
• Strict monitoring in database
• Signaling on behavioral change
• Churn behavior segmented to 3 dimensions: Recency/ Frequency/ and Monetary Value
• All activities bundled in one pro-active retention team
And overall:
• Continued focus on customer satisfaction
• Permanent use of customer panels
• Retaining satisfied customers is getting even more important for the success of our new strategy to help customers in our navigator role and increasing our customers’ share of wallet. This by offering services like Save it smarter (Saving) and Track it easy (Investing) propositions next to our Trade it with colour (Trading solutions)
Business update
Financialposition
INTRO OUTROHighlights Wrap up and Q&A
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• Transfer of Obvion mortgages via silent assignment
• Redemptions will be reinvested in new origination via Dynamic Credit
• Characteristics of Obvion portfolio in line with current Dynamic Credit (bijBouwe) origination
• Total Mortgage book charachteristics:
• Approximately € 360 million
• Average Loan to Value: approximately 80%
• 46 NHG guaranteed
• With this purchase BinckBank is on track with its objective to finance a total of € 500 million of Dutch residential mortgages in 2016
Investment in Dutch residential mortgages
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• Total mortgage book: € 360 million
• Average Yield: 1.82%
• Estimated interest income in 2016: € 3.0 million
• Estimated annual interest income: € 6.5 million
• Average Risk Weight: 27%
• Total Capital Ratio declines from 36% to 32% (-4%)
• Liquidity Coverage Ratio declines from 1475% to 1201% (-247%)
• Leverage Ratio remains unchanged: 6.8%
• No interest rate hedging required
Investment in Dutch residential mortgages
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Consolidated Key figures
19* Based on new presentation of adjusted net result
Net interest income
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• Net interest income at € 5.8 million in 16Q2 (16Q1: € 6.4 million)
• Collateralised loans 16Q2 € 480 million (16Q1 €453 million)
• Average return investment portfolio end 16Q2 0.42% (16Q1 0.45%)
• Investment portofolio € 1.8 billion (16Q1 € 1.9 billion)
Investment portfolio issuer credit rating
Cash
Deposits
AAA
AA+
AA
AA-
A+
A
A-
NR
BBB+
BBB
Coll Lending
Yield on cash balances
-
500
1.000
1.500
2.000
2.500
3.000
3.500
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Interest revenue drivers
Mortgages
CollateralisedlendingMM loans
Inv. Portfolio
Banks
464 445502
453 480
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100
200
300
400
500
600
15Q2 15Q3 15Q4 16Q1 16Q2
x€
mill
ion
Collateralised lending
Net fee and commission income
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• Net fee and commission income in 16Q2 down 3% to €26.9 million (16Q1: € 27.8 million)
• Total income from operating activities down 3% to € 35.5 million (16Q1: € 36.7 million)
0,0
0,5
1,0
1,5
2,0
2,5
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Transactions
Transactions IT
Transactions FR
Transactions BE
Transactions NL
34%
66%
Diversification of commission & fee income
Recurring fee income
Commission & other feeincome
24,3 23,520,3 20,5 18,6
4,0 3,87,1
3,63,4
3,4 3,4 3,23,7
4,9
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10
15
20
25
30
35
40
15Q2 15Q3 15Q4 16Q1 16Q2
Mill
ion
s
Net Fee & Commission income
Transaction based Asset management fee Other fees and commissions
31.730.7 30.6
27.8 26.9
Adjusted operating expenses
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• Total adjusted operating expenses 16Q2 stable at € 27.8 million (16Q1: € 28.4 million)
• Employee expenses 16Q2 down to € 12.5 million (16Q1: € 13.5 million)
• Adjusted depreciation €1.2 million (16Q1: €1.3 million)
• Other operating expenses up to € 14.1 million (15Q2: € 13.6 million)
13,3 13,0 12,7 13,5 12,5
1,4 1,4 1,6 1,3 1,2
12,3 11,0 12,5 13,6 14,1
0
5
10
15
20
25
30
FY15 Q2 FY15 Q3 FY15 Q4 FY16 Q1 FY16 Q2
€m
illio
n
Total adjusted operational expenses
Employee expenses Depreciation Other operating expenses
26,8 27,828,425,4
27,0
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Financial position
4,00%
4,50%
5,00%
5,50%
6,00%
6,50%
7,00%
7,50%
15Q1 15Q2 15Q3 15Q4 16Q1 16Q2
34,00%
35,00%
36,00%
37,00%
38,00%
39,00%
40,00%
41,00%
Capital & Leverage ratio
Total Capital Ratio (Pilar 1) Leverage Ratio (LR)
Start sharebuy backprogram
• Solid core Tier 1 position end 16Q2: €240 million (16Q1: €233 million)
• Capital ratio 16Q2 remains strong at 36.3% (16Q1: 36.7%)
• Leverage ratio 16Q2 strong at 6.8% (16Q1: 6.4%)
• In the period from 19th of February 2016 up untill 30th of June 2016 a total of € 18.2 million worth ofshares were bought back. This means the buy-back programme is completed for 73%.
0
50.000
100.000
150.000
200.000
250.000
300.000
15Q2 15Q3 15Q4 16Q1 16Q2
Available and required capital
Available capital LR3% LR4% LR5%
Business update
Financialposition
INTRO OUTROHighlights Wrap up and Q&A
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WRAP UP OF OUR STORY GROW YOUR CAPITAL, TRUST YOURSELF, COUNT ON BINCK
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• Fast and thorough execution of our new propositions is essential.
• BinckBank well on track and delivery is expected according to schedule:
1. Migration of BinckBank france to European base platform successfully completed
2. With the investment in Obvion & bijBouwe Binckbank is well on track with its objective
to finance a total of € 500 million of Dutch residential mortgages in 2016
3. Launch of Savings broker on track in16Q4 (‘Save it smarter’)
4. International outroll of new Binck Asset Management proposition on track,
scheduled 16Q4 (‘Track it easy’)
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Q&A
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Investor Relations
Harmen van der Schoor (acting)
+31 (0)20 522 0372
+31 (0)6 10 11 73 63
www.binck.com
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Cautionary Statement regarding Forward-Looking Statements
This presentation may contain forward-looking statements. Forward-looking statements are statements that are not historical facts, including statements about our beliefs and expectations. Any statement in this document that expresses or implies our intentions, beliefs, expectations, forecasts, estimates or predictions (and the assumptions underlying them) is a forward-looking statement. These statements are based on plans, estimates and projections, as they are currently available to the management of BinckBank N.V. Forward-looking statements therefore speak only as of the date they are made, and we take no obligation to update publicly any of them in light of new information or future events.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could therefore cause actual future results to differ materially from those expressed or implied in any forward-looking statement. Such factors include, without limitation, the conditions in the financial markets, the reliability of our risk management policies, procedures, systems and methods.
The forward-looking statements contained in this announcement are made as of the date hereof, and we assume no obligation to update any of the forward-looking statements contained in this document.
