Sustainable savings and lending
Growing impact through sustainable finance
Triodos Bank wants to maintain or establish itself as the leading bank for the sustainable sectors it works in.
Lending continued to grow and, importantly, diversify in most branches during the year. In Belgium gross borrowing passed a milestone of EUR 1 billion, and further diversified. Lending to renewable energy projects was responsible for 48% of the loan book in 2011, but was 40% at the end of 2014 reflecting an increase in lending in other sectors. There was a significant growth in the number of private mortgages, up 43% (2013: +11%) and contributing to the diversification of the loan portfolio. The ratio of loans to deposits in Belgium was 74%, compared to 68% across the bank as a whole.
With a larger team and the benefit of process improvements the German branch’s loan book grew during the year by 3%, or EUR 5 million, reversing a decline of 6% in 2013. New loan commitments amounted to EUR 25 million (2013: EUR 4 million). Growth was primarily in the wind energy sector. Pay out was delayed for some loans during the year and this should impact positively in 2015. The future focus of lending will be on renewable energy, care for the elderly, education and sustainable property.
The UK branch grew its lending to sustainable organisations by 17% (2013: 4%) or EUR 104m, to EUR 722 million, in hydro energy, social housing and faith groups in particular.
In Spain, Triodos Bank has offered strong support to businesses and entrepreneurs continuing to face a difficult economic outlook in their sectors, at the same time as it has diversified its lending portfolio. Despite a stalled renewable energy sector the number of new lending customers increased by 34% (2013: 41%) during the year, and by 6% in volume (2013: 9%) with particular growth in sustainable buildings, organic food and farming and culture.
Dutch sustainable lending, excluding short term loans to municipalities, increased during the year by 10% (2013: 27%), including strong growth in private mortgages for sustainable housing. Diversification of lending included financing more efficient heat energy re(use), for example city heating of the Dutch towns of Dordrecht and Eteck, as well as thermal storage and the transformation of empty offices into apartments.
Overall loan loss provisions decreased from 0.49% of the average loan book in 2013 to 0.28% in 2014 reflecting Triodos Bank’s high quality loan portfolio.
Triodos Bank’s branches have worked to deliver the right balance between deposits and loans, managing growth in the former and focusing on increasing the latter.
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. Savings grew at a balanced rate in all Triodos Bank branches during the year.
With an increase of 23,000 new customers, averaging around 2,000 every month, and an increase in funds entrusted of EUR 141 million, the Dutch branch numbered 247,000 customers at the year’s end.
In Belgium, retail savings (amount on regulated savings accounts) were up by 11%, compared to 3% in the Belgian market as a whole.
The UK branch achieved its savings goals, with 24% (2013: 28%) or EUR 186 million net growth in savings. Just over half of this (EUR 68 million) came from growth in business banking deposits, reflecting a growing interest in banking sustainably from a range of organisations as well as individuals.
New customers in Spain increased by 19% during the year (2013: 41%). Funds entrusted grew by 17%, slightly below expectations in a market of decreasing interest rates. Nevertheless, the number of current accounts and debit cards increased, reflecting how our customers increasingly choose to use Triodos Bank as their first bank.
Funds entrusted grew by 11% in Germany (2013: 55%) and the branch now serves 10,000 customers. A new Head of Retail Banking was also appointed during the year.