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Strong 1H 2016 performance in low interest environment
31 August 2016
With a strong first-half performance, Argenta Spaarbank continues to consolidate its strategic position, and to support families and households in maintaining financially healthy lives. In the six months to 30 June 2016, our client base grew further with client funds under management up 3 % to 36.7 billion euros. Lending volumes grew significantly, while maintaining strong lending discipline. The net profit for the first half of 2016 reached 97.0 million euros, compared to 93.7 million euros in 1H 2015, against an economic background of persisting low interest rates, economic and political uncertainty in Europe and intensive regulatory supervision. Our result was driven by stable income from our core retail banking activities, despite accelerated operating investments and high bank levies. Our liquidity position remains strong, with our capital base also strengthened by the successful issuance of a 500 million euros Tier 2 benchmark transaction in the second quarter of 2016.
For the same period the insurance operations of Argenta Assuranties posted a net result of 22.9 million euros, compared to 28.0 million euros in the first half-year of 2015. Next to thunderstorms and floods, the result was impacted by a contribution to the Terrorism Reinsurance and Insurance Pool.
In this way, at group level, Argenta’s result amounts to 119.1 million euros, compared to 120.4 million euros in the first half-year of 2015. Client funds under management (banking and insurance combined) grew by 4 % to 41.3 billion euros.
“In a continuously challenging economic environment, Argenta Spaarbank realised a strong performance in the first half-year of 2016. In a persisting low interest rate environment and with market confidence heavily affected by the outcome of the British referendum on 23 June, Argenta’s clients confirmed their confidence in our organisation. Retail mortgage loan production grew strongly, both in Belgium and the Netherlands. Customer deposits continue to increase despite the record low interest rate environment.” says Jan Cerfontaine, chairman of the board.
“The net result of 97 million euros builds upon a strong core result, with net interest income growing to 290 million euros and fee income reaching 34 million euros. We continue our investments in our omni-channel distribution model and product offering to clients, focussing on digitalisation and professionalisation of services. Our excellent solvency and liquidity position is confirmed with a fully-loaded CET1 ratio of 18.7 % and LCR of 168 % at bank level. Our solvency position was further enhanced by the successful inaugural Tier 2 benchmark transaction of 500 million euros in May 2016. Credit quality remains solid with historically low non-performing loans and low costs of risk.” according to Geert Ameloot, CFO.
For the full press release, we refer to the pdf below.