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Healthy financial performance 1H 2017 with pressure on banking net interest income partially compensated by strong performance in the insurance business
20 September 2017
Argenta continues its strategy of supporting families and households in maintaining financially healthy lives resulting in unique client loyalty and a strong brand. At group level the net profit for the first half of 2017 reached 109 million euros, compared to 119 million euros in the first half-year of 2016. Client funds under management (banking and insurance combined) grew by 3 % to 43.6 billion euros.
In the six months to 30 June 2017, the client base of Argenta Spaarbank grew further with client funds under management up to 38.6 billion euros. New lending volumes reached 2.1 billion euros, 14 % more in Belgium than in 1H 2016, 31 % less in the Netherlands, reflecting increased competition.
As expected, the persisting low interest rate environment reduced the interest margin for the bank (to 254 million euros from 290 million euros in 1H 2016), partially offset by strong fee income generation (to 43 million euros from 34 million euros in 1H 2016). Operating expenses increased with continued investment in improving the ICT base platforms, digitalisation and higher bank levies. As a result, net profit for the first half of 2017 was 77 million euros, compared to 97 million euros in 1H 2016. The liquidity position and capital base remains very strong.
Argenta Assuranties posted a net result of 33 million euros, compared to 23 million euros in the first half-year of 2016. A favourable claims evolution and increased production in Branch 23 supported this increase.
Marc Lauwers, CEO: “Clients’ confidence in Argenta remains strong. Client funds under management continued their growth in the first half of the year, with a very strong growth in investment products. Mortgage production reached 2.1 billion euros in Belgium and the Netherlands, a solid performance compared to a record first half of 2016. Underwriting discipline remained strong despite a very competitive environment in the Belgian and Dutch mortgage markets. At the same time, we continue our investments in upgrading our ICT base platforms as a condition precedent for the digitalisation and professionalisation of services.”
Geert Ameloot, CFO: “As expected, and after a strong performance in the first half of 2016, the effects of the persisting low interest rate environment really started to show in the first half of 2017. The net result of the bank of 77 million euros is the result of a drop in net interest income of 36 million euros partially offset by an increase in fee income to 43 million euros and 8.5 million of gains in the investment portfolio. Our excellent solvency and liquidity position are confirmed with a fully-loaded CET1 ratio of 18.8 % and LCR of 167 % at bank level. Finally, S&P maintained our A- / A-2 rating at its rating committee this month.”
For the full press release, we refer to the pdf below.