ABN AMRO Annual Report 2014

9
10
Our profile
12
Strategic priorities
17
Strategic governance
22
Risk & Capital Report
Key trends
Business Report
In a challenging economic and regulatory environment, our strategy should address
the opportunities and threats presented by our environment. This report highlights
selected trends, our profile, strategic priorities and our achievements so far.
Strategic Report
report
Introduction
strategic
Governance Report
Annual Financial Statements
Other
ABN AMRO Group Annual Report 2014
10
Strategic Report Key trends
key trends
This selection of trends could affect ABN AMRO’s strategy, execution and
business model going forward.
Macroeconomic trends
On a broader level, we will continue to monitor
After having contracted for the previous two years, gross
the following risks (in random order):
domestic product (GDP) in the eurozone inched up in
ÅÅ re-ignition of the euro crisis;
2014. Unlike in 2012 and 2013, growth of the Dutch
ÅÅ risk of deflation in the eurozone;
economy kept pace with the eurozone, growing slightly
ÅÅ interest rate increases in the US;
in 2014. Private consumption and investment in the
ÅÅ hard landing of China’s economy;
Netherlands picked up. The export sector was once
ÅÅ contagion effects from geopolitical developments
again the pacesetter, having benefitted from an upturn
in global trade.
The prospects for the Dutch economy in 2015 look
around Europe, Asia, the Middle East and Russia;
ÅÅ potential effects of the ECB’s Quantitative Easing (QE).
positive. The United States is expected to remain on its
Regulatory and supervisory trends
steady growth path, and emerging economies and the
Under the Single Supervisory Mechanism (SSM)
eurozone could benefit from this. Lower energy prices and
implemented in November 2014, prudential supervision
a depreciated euro are expected to help the Netherlands
over the largest banks established in EU member
achieve higher growth in all market sectors in 2015 than in
states has been transferred to the ECB. The ECB is
2014, as the domestic drags on the economy (housing
expected to dominate the regulatory agenda and to
market, government cutbacks and pension problems)
focus on topics besides capital, liquidity and risk exposure
have clearly weakened.
amounts. Supervision is moving from principles-based to
rules-based standards and is expected to be much more
ABN AMRO is particularly sensitive to the state of the
data driven.
Dutch economy, an open and mature market well
positioned for recovery, though with limited upside in
The complexity and number of regulations is expected to
GDP growth. This underlines the strategic importance
further increase. The evolving regulatory and supervisory
of maintaining our strong capital and liquidity position,
landscape in the European Union (EU) is challenging for
while selectively growing the business outside of
banks and there are concerns that this may lead to an
the Netherlands.
uneven playing field with banks in other regions, such as
the US and Asia.
ABN AMRO strongly focuses on timely implementation
of and compliance with new rules and regulations in
a cost-effective manner.
11
Social trends
Clients increasingly prefer to use digital solutions and
The financial crisis damaged trust in the financial sector.
demand a multi-channel approach. Technological
As a result of this and other factors, society expects
developments in areas such as mobile banking, social
greater transparency in pricing, less complex products and
media, data analytics (‘big data’) and cloud computing
better value. Clients are increasingly seeking products and
create opportunities for banks to respond to changing
services that fit their unique situation and expect a wider
client behaviour and needs.
range of digital solutions and direct channels. There is also
socially responsible solutions.
to the business model of established banks. Leveraging
on new technologies, non-traditional banking players could
Social networks and cooperative platforms, combined
cause disruptions within short time spans. Technology
with a desire to be less reliant on banks, support the
firms, which are not subject to the same regulatory
existence of collaborative finance platforms such as
controls imposed on banks, have already entered parts
crowdfunding, peer-to-peer lending, social savings and
of the banking value chain. In the Dutch mortgage and
social lending.
created increased competition.
Rapid technological advances in social media, mobile
banking, data analytics and cloud computing are helping
In a world that is becoming ever more technologically
banks to better serve clients by using personal data to
connected, the increasing risk of cybercrime is driving the
perform individual profiling. As boundaries of privacy and
need for advanced security and detection measures.
data protection are being explored, banks need to be
Business Report
savings markets, these non-traditional players have
Strategic Report
a growing demand for more environmentally friendly and
The accelerating pace of innovation could pose challenges
Introduction
Technological trends
diligent in protecting clients’ privacy and be sensitive to
the evolving public concern and attitude towards sharing
technology in order to grasp opportunities to better serve
of personal data.
clients, create more value and respond to challenges
posed by non-traditional banking players.
Risk & Capital Report
ABN AMRO has decided to increase its investments in
Governance Report
Annual Financial Statements
Other
ABN AMRO Group Annual Report 2014
12
Strategic Report Our profile
our profile
This section presents an overview of who we are, our values and the business
principles which will guide us in achieving our mission and vision. We serve retail,
private and corporate banking clients based on our in-depth financial expertise
and extensive knowledge of numerous industry sectors.
Description of ABN AMRO
ABN AMRO is a full-service bank with a primary focus on
knowledge of numerous industry sectors, we serve retail,
the Netherlands and selective operations internationally,
private and corporate banking clients and offer in-depth
employing 22,215 full-time staff. Based on our extensive
financial expertise.
Operating income
by type of income
(in %)
4
Operating income
by geography
(in %)
7
Operating income
by business segment
(in %)
1
12
21
35
2014
EUR 8,055m
2014
EUR 8,055m
49
2014
EUR 8,055m
75
81
15
Net interest income
Net fee and commission income
Other operating income
Retail Banking
Private Banking
Corporate Banking
Group Functions
The Netherlands
Rest of Europe
Rest of the world
With a long-standing history in banking and roots that
private and corporate banking. Our client base is stable and
go back for centuries, ABN AMRO emerged from the
generates recurring and resilient operating income, of which
financial crisis as a leading Dutch bank. Our business
over 95% consists of interest, fee and commission income.
profile and international footprint have changed while
our historic roots remain. Today, we have a high degree
ABN AMRO targets a moderate risk profile, which is
of focus, operating domestically and in selected
reflected in, among other things, three key elements:
international markets under several strong brand names.
(i) a clean balance sheet, (ii) a clear risk governance
structure and strong risk culture, and (iii) a solid capital
Our deep focus on the Netherlands is complemented by
and liquidity position. This is maintained and strengthened
international operations where we have specific expertise
by strict risk appetite targets, a controlled and focused
and hold leading market positions in selected activities.
growth strategy for selected international activities, and
In the Netherlands, we are a leading player in retail,
disciplined capital allocation.
13
collectively have over twenty years of experience in the
ABN AMRO is organised into three business segments -
Group across business segments or support functions or
Retail Banking, Private Banking and Corporate Banking
both. Their excellent track records are reflected in their
- which are supported by Group Functions. Group
leading the complex integration of ABN AMRO Bank and
Functions includes the support and control functions:
FBN on time and within budget while structurally reducing
TOPS (Technology, Operations & Property Services),
our cost base. Despite the complex integration process
Finance including ALM/Treasury, RM&S (Risk
and the challenging economic environment at the time,
Management & Strategy), PR&I (People, Regulations
ABN AMRO has delivered resilient operating income and
& Identity), Group Audit, and Corporate Office.
created a solid capital and liquidity position with the
support of its professional and highly engaged workforce.
Retail Banking
Private Banking
Corporate Banking
Group Functions
Leading position in
TOPS (Technology, Operations
the Netherlands; ranked
the Netherlands
& Property Services)
5,000,000 clients
3rd in France, Germany
70,000 commercial
Finance including
300,000 businesses with up
and in the eurozone;
and international clients
ALM/Treasury
to EUR 1 million turnover
with a solid position in
with annual turnover
RM&S (Risk Management
300 Retail branches, which
selected countries in Asia
exceeding EUR 1 million
& Strategy)
includes Advice & Service
and the Middle East
across 15 defined sectors
PR&I (People, Regulations
Centres, 24/7 internet and
100,000 clients
Operates in selective
& Identity)
mobile banking centres
EUR 191 billion Assets under
markets based on three
Group Audit
Management (AuM)
specialities: Clearing,
Corporate Office
Present in 10 countries with
Energy, Commodities
more than 50 branches
& Transportation, and
Governance Report
Market leader in
position in the Netherlands
Risk & Capital Report
Solid and recognised market
Business Report
ABN AMRO
Strategic Report
Description of our business activities
Introduction
The Managing Board and senior managing directors
asset-based financing
Serving Dutch clients
internationally through
local Dutch Desks and
partner banks
management teams – covering daily banking services,
Retail Banking, Private Banking and Corporate Banking
mortgages and wealth & advisory services – align
work closely together to ensure that clients are served by
products across the organisation and pursue synergies.
the appropriate business segment and to enable efficient
use of resources. Feeder channels arrange for the transfer
Corporate Banking and Retail Banking have a process in
of clients to the appropriate segment.
place to transfer business clients, always in close dialogue
Annual Financial Statements
Cooperation among business segments
with these clients. Retail Banking provides a feeder
channel of business clients to Corporate Banking based
deliver a seamless offering across all wealth categories in
on annual turnover criteria and receives business clients
the Netherlands through institutionalised upstreaming and
who are better served by the retail service proposition.
downstreaming of clients to the right segment. Product
ABN AMRO Group Annual Report 2014
Other
Retail Banking and Private Banking cooperate closely to
14
Strategic Report Our profile
Private Banking and Corporate Banking cooperate mainly
SWOT
by means of referrals. Corporate Banking introduces
The following SWOT summary provides a brief overview
eligible business owners, shareholders and executives
of ABN AMRO’s capabilities and the environment in which
to Private Banking. Conversely, Private Banking refers
it operates.
business owners and executives to Corporate Banking
for their business needs.
This cooperative environment allows for leveraging of
technology and client and product solutions.
Strengths
Weaknesses
Leading player in the Dutch market as a full-service bank
Large exposure to and dependence on the Dutch economy
with strong core and local brands
Growth opportunities in the Dutch home market limited
Low complexity, client-driven business model that
by current leading position
generates resilient operating income
Solid but complex IT landscape following the integration
Strong positions in selected international activities
of ABN AMRO Bank and FBN
Experienced senior management with a proven track
Suboptimal scale of businesses in a few countries
record in executing the integration of ABN AMRO Bank
and FBN, supported by a professional and highly
engaged workforce
Diversified mix of activities combined with a solid liquidity
position, well-capitalised and strong balance sheet
contributing to a moderate risk profile
Opportunities
Threats
Dutch economy well-positioned to benefit from continued
Potential macroeconomic and geopolitical headwind
momentum in the recovery in the global economy and
effects on the Netherlands and the eurozone
the eurozone
Mature market combined with ageing population
New technological developments can be leveraged
resulting in relatively limited GDP growth upside
to respond to changing client behaviour and needs
Regulatory pressure, complexity and volume of regulation
Increasing client desire to be environmentally and
New entrants in (parts of) the banking value chain
socially responsible provides opportunities for new
with potentially disruptive effects from the accelerating
product development
pace of (technological) innovation
Lowered barriers to enter other EU markets as a result
Increased competition from incumbents and
of the European Banking Union
non-traditional players, especially in the mortgage
and savings markets
15
Introduction
Stakeholder management
ABN AMRO strives to put clients’ interests first and to
create long-term, sustainable value for all of our
stakeholders, including clients, investors/shareholders,
employees, the environment and society at large. We take
the interests of these stakeholders seriously and believe it
is our responsibility to manage the impact of our activities.
Strategic Report
In doing so, we focus on systematically balancing the
bank’s interests with those of our stakeholders. Our efforts
are discussed in the Strategic priorities section of this
Strategic Report.
Business Report
Clients
Environment
Investors/
Shareholders
Risk & Capital Report
Society
ABN AMRO
Employees
Governance Report
Regularly engaging in a dialogue helps us to identify
important areas for our stakeholders. We apply the
materiality principle when discussing sustainability topics.
This means that we focus on the issues that are most
important to our key stakeholders and to our business,
where we are actually in a position to influence
the outcomes.
Annual Financial Statements
Other
ABN AMRO Group Annual Report 2014
16
Strategic Report Our profile
Our core values, mission, vision
and business principles
Our core values are embedded in the company culture
and reflect our identity. We want to be trusted by our
stakeholders and be professional in everything we do,
and we have the ambition to continuously improve.
Trusted
Professional
Ambitious
At ABN AMRO we believe trust is all
At ABN AMRO we understand
At ABN AMRO we are always
about establishing and maintaining
banking. As true professionals,
stretching ourselves and striving
lasting relationships. We take the time
we have a thorough grasp of the
to achieve more for our clients.
to get to know our clients by listening
banking industry and the discipline
We always strive to improve
to their specific needs and aspirations.
to achieve results.
ourselves.
Our goal is to find the products and
We genuinely believe in our profession and
We make it our business to know what
services that are right for our clients.
take responsibility by saying ‘no’ if saying
is going on in the market and to respond
When we make a promise, we always live
‘yes’ would not do right by our clients.
proactively, and we do everything possible
up to it; when we communicate with our
to understand what clients really need
clients, we are always straightforward
We create solutions that are simple,
and never have hidden agendas.
understandable and workable, and we
and to design innovative solutions.
strive to improve ourselves every day by
Our optimism about the future drives
Our commitment to responsible banking
working together and learning from one
our ambition to offer our clients more.
means we carefully weigh risks and returns
another – and from our clients.
At ABN AMRO, we are not afraid to
so that our clients know their money is in
venture outside our comfort zone to put
good hands at all times.
our ambition to work for our clients.
Our mission is:
Our business principles translate our core values, mission
ÅÅ to be successful through the success of our clients;
and vision into our day-to-day actions.
ÅÅ to strongly commit ourselves to and be positively
recognised for our position on sustainability and
transparency;
ÅÅ to be an organisation that has the best talent and
where people grow both professionally and personally.
Our vision is to be a professional, full-service bank with
a leadership role in the Dutch market. Internationally, we
aim to be a capability-led bank in selected businesses and
geographies. Our ambition is to be a top class employer.
I aim to provide my
clients with the best
solutions
I build relationships
through
collaboration
I take
responsibility
I am a passionate
professional
I only take risks
I understand
I am committed
to sustainable
business practices
17
priorities
Business Report
Enhance
client
centricity
Risk & Capital Report
Improve
profitability
strategic
Pursue
selective
international
growth
Invest in
our future
Targets 2017
Results 2014
Return on equity
9% - 12%
10.9%
Cost/income ratio
56% - 60%
60%
CET1 ratio (fully-loaded)
11.5% - 12.5%
14.1%
Other
Strategic targets
Annual Financial Statements
Strongly
commit
to a moderate
risk profile
Governance Report
priorities
Strategic Report
Our strategy is based on five priorities with targets set for 2017. The following
section briefly describes each of the strategic priorities, including an overview
of our achievements in 2014.
Introduction
strategic
ABN AMRO Group Annual Report 2014
18
Strategic Report Strategic priorities
Five strategic priorities
Enhance client centricity
Quality and relevance of advice
Using technology to better serve our clients
Continue Customer Excellence
Invest in our future
Re-engineer IT landscape & optimising processes
Positively recognised on sustainability and transparency
Recognised as top class employer
Strongly commit to a moderate risk profile
Optimise balance sheet
Further diversification
Good capital and liquidity position
Pursue selective international growth
Capability-led
Fitting moderate risk profile
Fitting efficiency focus
Improve profitability
Improve top-line revenues
Continuous focus on costs
Manage on the basis of risk-adjusted return
Enhance client centricity
We have introduced environmental, social and governance
ABN AMRO aims to stand out from other banks based
(ESG) criteria in our investment processes, developed
on the quality and relevance of our advice and services.
a sustainability indicator to help private banking clients
We intend to further distinguish ourselves by enhancing
make informed investment decisions and launched socially
our need-based client segmentation and providing
responsible products. solutions that suit our clients’ unique situations.
We continued to raise financial awareness through
In response to changing client needs in the Netherlands,
our Carefree Living (Zorgeloos Wonen) programme,
we have implemented changes in our retail branch opening
by reaching out to an additional 25,000 clients facing
hours across the country, introducing evening and weekend
potential arrears in 2014.
hours. We have also extended our webcam advisory
services to offer our clients greater flexibility and
A strategic review was conducted for Capital Markets
convenience. The digital Retail Banking platform is also
Solutions, resulting in the winding down of our Equity
used for the Private Banking website and app design in the
derivatives activities and a shift within Sales & Trading from
Netherlands. Outside the Netherlands, we are developing
a product-oriented focus to a more client-oriented focus.
an ambitious digital offering consisting of a blend of
omni-channel services combined with personal interaction.
19
the 15 sectors, benefiting from the pooling of knowledge
ABN AMRO aspires to achieve a positively recognised
and specialised services.
position on sustainability and transparency.
Introduction
Banking to ensure that each client is assigned to one of
Positively recognised position on sustainability
and transparency
We enhanced our sector-based approach in Corporate
Our sustainability strategy supports this commitment
and is based on four aspirations:
Excellence (CE). Combining customer focus with
ÅÅ We pursue sustainable business operations;
operational excellence, this was applied across products
ÅÅ We put our clients’ interests centre stage and build
and businesses in several countries. sustainable relationships;
ÅÅ We use our financial expertise for the benefit of society;
We continuously take bank-wide initiatives to put our
ÅÅ We finance and invest for clients in a sustainable manner.
clients’ interests centre stage in everything we do. In the
An inspired and engaged workforce is vital to the success
centricity rose from 52% to 53%, while client satisfaction
of our strategy. To this end, we promote sustainability
remained stable compared with 2013, with 50% of clients
internally and encourage our staff to get involved.
rating our services favourably at scores of 8 and above.
Our efforts are clearly paying off: the score for sustainability
Our ambition is to build on our client-centric approach
in the Employee Engagement Survey for 2014 rose to
and make our clients promoters by giving them the best
61% from 45% in 2013.
experience. In line with our ambition, we intend to
implement the Net Promoter Score (NPS) methodology
In 2014, we translated our sustainability aspirations into
in most of our business segments in 2015.
specific focus areas by implementing performance metrics
Business Report
annual client satisfaction survey, the score for client
Strategic Report
Throughout the year, we continued to focus on Customer
and targets to support our sustainability strategy in
in an increasingly concrete and transparent manner.
For example, we started developing the Sustainability
Risk Management policy for investments, with a focus
The TOPS 2020 programme was launched in 2013 and
To further broaden the scope to include all of our
aims to upgrade and simplify our IT landscape based on
investments, we aim to set a threshold for investments
three aspirations: easiest to do business with, creating
in line with the principles of the UN Global Compact.
on environmental, social and governance (ESG) criteria.
value through innovation and providing best-in-class
productivity.
We believe that value creation and sustainability go hand
in hand, and we support entrepreneurs that share our
In 2014, we finalised the blueprint for the new IT
vision. For example, our Social Impact Fund, which invests
landscape, which will be delivered in stages until 2020.
in social enterprises, was positively received. ABN AMRO
This will simplify our IT landscape, increase our agility and
Informal Investor Services brings together Private Banking
reduce our cost base.
clients and SMEs. Private Banking clients invest in these
the new agreement, IBM intends to, among other things,
In recent years, we have been focusing increasingly on tax
implement and manage an on-premise cloud environment
matters, which is supported by the materiality analysis we
for ABN AMRO. The dedicated on-premise cloud will help
performed in 2014. The prime issue here is whether or not
us to improve our standard of service, achieve greater
internationally operating businesses pay their fair share of
operational efficiencies and provide innovative products
tax. To address this issue, we have increased transparency
to our clients.
by publishing our tax principles on our website and
Annual Financial Statements
social enterprises and often offer advice as well.
We extended our partnership with IBM in 2014. Under
Governance Report
Re-engineering the IT landscape
and optimising processes
Risk & Capital Report
Invest in our future
practice. This will enable us to report on our progress
providing country-by-country reporting on various income
items. More information can be found in the Annual
environment in 2015. We also expect to implement a new
Financial Statements section in this report.
security concept designed to protect our employees’ and
clients’ digital information.
More details are provided in our Sustainability Report 2014.
ABN AMRO Group Annual Report 2014
Other
We expect to migrate the first applications to this cloud
20
Strategic Report Strategic priorities
Top Class Employer
Strongly commit to a moderate risk profile
Making a difference to our customers now and in the
ABN AMRO is committed to maintaining a moderate risk
future requires a talented, committed workforce more
profile, which is reflected in, among other things, three
than ever. Our Top Class Employer strategy aims to inspire
key elements: (i) a clean balance sheet, (ii) a clear risk
employees to develop continuously and to make their
governance structure and strong risk culture, and (iii) a
own, unique contribution to the bank’s sustainable growth.
solid capital and liquidity position. Internationally, we focus
Employees who take ownership of these goals are our
on capabilities and geographies where we have a proven
most valuable asset. They are at the heart of our ability to
track record and a right to win.
build long-lasting relationships with our clients. We have
drawn up a roadmap with three aims:
We are pleased that our prudent risk management
ÅÅ Defining our meaningful corporate identity;
approach resulted in our comfortably passing the ECB’s
ÅÅ Developing a culture of excellence;
comprehensive assessment, which consisted of the Asset
ÅÅ Creating the best place to work.
Quality Review and a stress test. This was carried out in
preparation of the ECB taking over the supervisory role
Managers at every level of the company play a pivotal role
from DNB in November 2014.
in motivating employees to realise ABN AMRO’s goals
based on our corporate identity. They are the catalysts for
We continued to optimise the sector-based risk approach
change. Our leadership programmes help managers
throughout the Risk Management organisation based on
execute the strategy and develop an inspiring leadership
improved risk knowledge and awareness. This has helped
style. ABN AMRO introduced the Leadership Qualities to
us to better monitor and manage portfolio intake and
clarify what is expected of our managers.
sector concentrations. This approach, together with the
recovery of the Dutch economy, resulted in a decrease of
But simply possessing talent is not enough: it is every
loan impairments, primarily in our mortgage and business
employee’s responsibility to use their talent. Equally, it is
banking within Commercial Clients.
the bank’s responsibility to support every employee’s
professional development. We intend to introduce the
Bank-wide operational risk awareness was strengthened
Talent Identification Tool in 2015, a method to facilitate
through rigorous training and e-learning programmes.
open dialogue between managers and staff.
This resulted from implementation of the Advanced
Measurement Approach (AMA) for calculating operational
To ensure that employees are given the opportunity to
risk exposure for internal purposes. The application for
continuously improve their expertise and skills in a culture
AMA status will be submitted to the regulators in 2015.
of excellence, we now offer talent development
programmes to staff bank-wide rather than exclusively
In late 2014, we formally applied to use the Internal Model
to a small group.
Approach (IMA) for market risk in the trading book. While
regulatory approval is pending, the approach is being
A new collective labour agreement was concluded with
applied for internal risk management purposes and for
the trade unions to give employees the autonomy to
economic capital computations.
personalise their working conditions, allowing them to
create their best place to work.
We review our risk appetite annually and continue to focus
on actively managing it based on capital, liquidity and
We have evaluated our Top Class Employer strategy and
interest rate risks. We increasingly manage our bank
are proud to report that we have improved on key metrics.
based on risk-adjusted return on risk-adjusted capital
Employee engagement scores rose further to 76% in
(RARORAC) to ensure that our capital is employed in
2014. In terms of gender diversity, we increased the
the most efficient way.
percentage of women in senior and upper middlemanagement positions. Our efforts are reflected in the
With the fourth profitable year in a row, we further
annual Dutch Intermediair Image Survey, as our position
improved our capital buffer. ABN AMRO had a fully loaded
as a Top Class Employer in the Netherlands further
CET1 ratio of 14.1% at year-end 2014, which is above our
improved in 2014.
target range of 11.5-12.5%.
21
Improve profitability
ABN AMRO intends to grow in businesses where we
The underlying cost/income ratio improved by four
have a strong and proven track record (capability-led
percentage points, from 64% in 2013 to 60% in 2014,
growth) and that fit into our moderate risk profile. We
which is at the upper end of the targeted range of 56-60%
intend to build upon the ABN AMRO brand awareness and
we set for 2017. This result was achieved thanks mainly to
aim to match our local assets and liabilities over time.
our re-pricing efforts, leading to margin improvements on
Introduction
Pursue selective international growth
products across most segments. Growth of net interest
income more than offset the modest cost increase,
banking activities of Credit Suisse into Bethmann Bank,
leading to the improvement in the cost/income ratio.
our private bank in Germany. Bethmann Bank is now the
third largest private bank in Germany. We also entered into
Underlying ROE improved from 5.5% in 2013 to 10.9%
a strategic global agreement with IndusInd Bank Limited,
in 2014, which is within the 9-12% target range for 2017.
a new generation Indian bank, to support our Asian private
The full-year underlying net profit doubled to
banking business.
EUR 1,551 million, on the back of higher net interest
Strategic Report
In 2014, we completed the integration of the private
income and lower loan impairments. The decrease in the
level of loan impairments is the result of the initial
online savings platform.
recovery of the Dutch economy. In addition, we further
strengthened our credit management, increased the level
Clearing established a local clearing unit in Brazil to
of early warning monitoring and improved our
conduct clearing activities for existing clients and
understanding of sector-specific risk by conducting
expanded further in the US by servicing existing and
extensive research and tightening credit requirements for
acquiring new clients.
new clients. These initiatives, together with the recovery
ECT Clients further expanded in the US and Asia.
improvement of net profit and ROE.
We set up new Leasing branches in the United Kingdom
and Germany, employing local staff with a track record in
these markets.
Risk & Capital Report
of the Dutch economy, largely contributed to the
Business Report
In Austria, we introduced MoneYou, our retail banking
Governance Report
Annual Financial Statements
Other
ABN AMRO Group Annual Report 2014
22
Strategic Report Strategic governance
strategic
governance
Below is an overview of the steps we take to assess, review and monitor
the execution of our strategy.
We review the long-term strategy annually in the Yearly
Strategy Review (YSR) to assess its validity and relevance.
External
Internal
The Managing Board bases its discussions on external
developments (macroeconomic trends, competitive
analysis and country landscape) and internal developments.
During the yearly review, the most notable developments
are discussed in terms of their impact on the long-term
strategy and whether corrective actions are required.
In the 2014 Yearly Strategic Review, the Managing Board
Quarterly
Execution
Monitoring
Fact base
concluded that the bank’s long-term strategy is still
substantially in line with external and internal
developments.
Monitoring
The Managing Board monitors execution of the long-term
strategy throughout the year by means of Quarterly
Execution Monitoring (QEM). The QEM process consists
Yearly
Strategic
Review
of three building blocks:
ÅÅ high-level monitoring of selected initiatives;
ÅÅ performance reviews;
ÅÅ in-depth dialogue sessions.
Assessment
The results of both the YSR and QEM are discussed and
reviewed by the Supervisory Board as part of the
corporate governance process. The Employee Council
also receives updates on these results.
Dialogue