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Sustainable savings and lending

Change-makers: Lending for sustainable growth

Triodos Bank wants to reinforce its position as the leading bank for the sectors it works in.

Lending continued to grow and, more importantly, diversify in most branches during the year. In Belgium borrowing increasing by 15% most notably in energy and climate, care for the elderly and social sectors. Schools and hospitals were also a key area of focus.

In the UK the introduction of a new, small lending unit serving all the sectors that Triodos Bank is active in supported the diversification of the loan portfolio. Lending increased in the UK by 4% below ambitious targets. This was due, in part, to loans to housing associations being drawn down more slowly than anticipated.

Diversification in Spain took place across the loan portfolio in sectors, size and geography with priority given to increasing the number of borrowers, being the first bank for its customers and cross-selling to existing customers in sustainable sectors. The branch was most active in cultural and social sectors, particularly in cinema and social integration responding to a growing local need. Uncertainty in the Spanish renewable energy sector, and slower than planned opening of new commercial offices, affected overall lending growth in 2013, which was below expectations.

Recruitment of well qualified co-workers was a focus for the German branch’s business banking department, including a new Head of the team to position it for positive development in the future. Internal process inefficiencies and intensive management of doubtful loans restricted loan growth in Germany in 2013. These issues will be addressed in 2014. Relatively high provisions on some of the loans made in the branch’s first years had a negative impact on its financial performance.

Dutch lending increased during the year by 7%, including an innovative guarantee fund benefiting children with disabilities and partnering with a well-respected charity. While the branch continued to deal with loan losses, addition to provisions declined by around 40% overall during the year.

Overall loan loss provisions decreased from 0.67% of the average loan book in 2012 to 0.49% in 2013 reflecting Triodos Bank’s high quality loan portfolio.

Sustainable Savings

Despite low interest rates continuing to have a profound impact on the European savings market, growth in savings was marked in all Triodos Bank branches.

Increasingly people are attracted to the idea of using their money consciously and are, therefore, willing to open a new account with Triodos Bank. This awareness is thanks largely to the strength of the Triodos Bank brand and its solid reputation in all countries.

With 28,000 customers and an increase in funds of EUR 310 million in total, the Dutch branch now numbers 246,000 customers, with another 148,000 in Spain alone.

In Belgium, savings were up by EUR 177 million or 16%. Improved processes enabled the UK branch to significantly increase deposits, including contributions from business customers by 28%, from EUR 618 million in 2012 to EUR 789 million in 2013.

The Spanish branch has paid particular attention to raising gift money in recent years, and in 2013 provided all savings and current account customers with the opportunity to donate interest to charities. This resulted in a 30% increase in people donating and a 25% increase in the amount donated.