2000 - SNS Reaal

Transcription

2000 - SNS Reaal

ANNUAL REPORT
2000
Customers in the picture
www.snsreaalgroup.com
Customers in the picture
Creative, innovative, solution-oriented - three strong points cited by six different customers of SNS Reaal Group.
This annual report quotes them more extensively on the services of SNS bank, Hooge Huys and a few group
subsidiaries. Naturally their stories are all very different as each of them makes use of our services in their own way.
But if there is one thing that stood out in all six of the interviews, then it was the unanimous appreciation for the
service - ‘actively thinking along with us’ was the constantly recurring theme. And for all customers, versatility,
flexibility, quality consciousness, efficiency and speed are all essential parts of the service. The six mini-portraits
portray a modern, ambitious and client-responsive banking and insurance group - SNS Reaal Group.
Annual Report SNS Reaal Group
2000
SNS Reaal Group N.V.
Pettelaarpark 70
P.O. Box 70053
5201 DZ ’s-Hertogenbosch
The Netherlands
Telephone: +31 (0) 73 683 30 90
www.snsreaalgroup.com
Concern Communication
Telephone: +31 (0) 73 683 30 83
Fax: +31 (0) 73 683 27 04
[email protected]
Investor Relations
Telephone: +31 (0) 73 683 30 12
Fax: +31 (0) 73 683 36 30
[email protected]
Registered at the Trade Register of the Chamber of Commerce in ’s-Hertogenbosch under no. 16062627
Annual Report 2000 / SNS Reaal Group
1
SNS Reaal Groep in brief
MISSION
SNS Reaal Group focuses on creating, managing and protecting the financial assets of its private and business
clients by offering a coherent package of banking, investment and insurance products through a variety of distribution channels.
PROFILE
SNS Reaal Group is an innovative and fast-growing Dutch financial services provider with more than 6,000
employees and year-end 2000 assets totalling almost EUR 41 billion. The Group’s head offices are in ’s-Hertogenbosch. SNS Reaal Group serves its private and business clients mainly through SNS bank and Hooge Huys. SNS bank
reaches customers directly through its branch offices and financial advisors, by telephone and via the internet.
Hooge Huys markets its products and services through independent intermediaries. The third business unit, SNS
Reaal Invest, focuses on broadening the financial base and supporting the financial activities of SNS Reaal
Group.
Strong social commitment is a traditional characteristic of SNS Reaal Group, as expressed in its specialised
research, sustainable products, donations and sponsoring activities.
STRATEGIC OBJECTIVES
•
•
•
•
Strengthening the all-finance operations
Expanding multi-channel distribution
Increasing market share
Improving returns
FINANCIAL OBJECTIVES
•
•
•
•
•
Net profit increase of at least 10% per year (2000: 11.2%)
Return on shareholders’ equity of at least 12.5% per year after tax (2000: 11.8%)
Maximum efficiency ratio for bank operations of 65% (2000: 68.4%)
Maximum cost/premium ratio for insurance operations of 27% (2000: 30.8%)
Profit contribution of SNS Reaal Invest at least 20% (2000: 14.2%)
RATINGS
Moody’s
S&P
A3
A-
A2
P1
A
A1
Fitch
SNS Reaal Group
Senior long-term debt
SNS bank
Senior long-term debt
Short-term deposits
2
A+
F1
Contents
GENERAL
Structure
Personal details
Key figures
Foreword chairman of the Group Executive Board
Highlights of 2000
REPORT OF THE SUPERVISORY BOARD
4
5
8
10
11
12
REPORT OF THE GROUP EXECUTIVE BOARD
Strategy and policy
SNS Reaal Group
SNS bank
Hooge Huys
SNS Reaal Invest
Market developments
General
Private market
Business market
Professional market
Result and balance sheet
Net profit
Return on shareholders’ equity
Income
Expenses
Efficiency ratios
Composition and growth of the balance sheet
Capital base
Risk management
Social orientation
Socially responsible entrepreneurship
SNS Reaal Fund
Employees
Prospects
14
14
15
18
19
21
21
22
27
28
31
31
35
36
37
38
38
39
42
44
44
45
48
50
ANNUAL ACCOUNTS 2000
Consolidated balance sheet
Consolidated profit and loss account
Consolidated cash flow statement
General notes
Notes to the consolidated balance sheet
Notes to the consolidated profit and loss account
Consolidated balance sheet banking operations
Consolidated profit and loss account banking operations
Consolidated balance sheet insurance operations
Consolidated profit and loss account insurance operations
Consolidated balance sheet SNS Reaal Invest
Consolidated profit and loss account SNS Reaal Invest
Company balance sheet
Company profit and loss account
Notes to the company balance sheet
List of the most important group companies
List of the most important equity participations
52
53
54
56
63
77
84
85
86
88
92
93
94
95
96
100
101
OTHER INFORMATION
Profit appropriation under the articles of association
Auditor’s report
103
103
Curricula vitae of members of the Supervisory Board
Additional functions of members of the Executive Board
Glossary
105
106
107
3
General
Structure
COMMERCIAL STRUCTURE OF THE SNS REAAL GROUP
SNS Reaal Group
SNS bank
Hooge Huys
SNS Reaal Invest
Regional SNS banks
Reaal Funeral insurance
(sector summary on page 19)
ASN Bank
CVB Bank
BLG Hypotheken (mortgages)
Proteq
Mortgages service centre
Securities service centre
Bank service centre
Business market insurance
Life service centre
Non-life service centre
The Group Executive Board of the SNS Reaal Group. From left to right: prof. J.J.A. Leenaars, chairman; G. van Olphen, chief
financial officer and M.W.J. Hinssen.
4
General
Personal details
as of 14 March 2001
SUPERVISORY BOARD SNS REAAL GROUP1
Prof. J.L. Bouma, chairman
H.M. van de Kar, deputy chairman
J.V.M. van Heeswijk
D. Huisman
Prof. S.C.J.J. Kortmann
H. Muller
J.W.M. Simons
GROUP EXECUTIVE BOARD SNS REAAL GROUP1
Prof. J.J.A. Leenaars, chairman
M.W.J. Hinssen
G. van Olphen, chief financial officer
BOARD OF DIRECTORS SNS BANK NEDERLAND2
M.W.J. Hinssen, chairman
B.A.G. Janssen, deputy chairman
J.A.M. Henneke
A.W.M. Janssen
M. Menkveld
BOARD OF DIRECTORS SNS REAAL VERZEKERINGEN
G. van Olphen, chairman
J.M. Kroon, deputy chairman
J. Boven
N.J. Jongerius
BOARD OF DIRECTORS SNS REAAL INVEST
C.J. Ambachtsheer, chairman
J.B.M. van Roon
CENTRAL EMPLOYEES COUNCIL
F.M.M. van Maasakkers, chairman
H.H. Foppen, deputy chairman
A. Dijkhuizen, secretary
J.B.M. Bekker
R. Bloos
1
A.M.J. Borsboom
P. Brakeboer
A.P. van Campen
G.J.M. Dröge
G.M. ten Heggeler
J.C.T. Hemels
J.J. Kolkman
M.L.M. Nijkamp
W.G. Vredenburg
R. Woudboer
) More information about board members is on pages 105 and 106.
2
) As of 1 February 2001, director controlling and concern affairs A.W.M. Janssen (37) was appointed to the Board of Directors of SNS bank Nederland
responsible for the finance portfolio. Likewise on 1 February 2001, J.A.M. Henneke (52), director of information technology at SNS bank Nederland, was
appointed to the Board of Directors of SNS bank responsible for the operations and information technology portfolio. Mr Henneke succeeds T.G. Wu.
5
‘Transparent and open are two of the keywords. And the mortgage man was not the only one.
The information on investment opportunities was honest and very understandable.’
‘Easy access and great ba
are why I chose the SNS
SNS bank
‘What struck us immediately at
was their great
willingness to be creative with us, to relate to our problems. This ‘thinking-alongwith-you’ has become a bit of a cliché, but their interested and very competent
advisor taught me it can actually mean something.’
‘We have been Internet-banking for some years now. And it’s great. So easy you
enter your code and simply follow instructions. Perfect for people who are often
on the road or who work during the day. In fact we have 24-hour service.’
ck-up
bank’
Christel Duiven is nurse and mother of young son Sil, and was
introduced to the SNS bank when she and her partner were looking
for the best mortgage. ‘After I discovered SNS bank we just stopped
looking any further.’
‘Choosing a bank is like choosing a shop.
If I’m pleased with my grocer, I don’t buy
my vegetables at the supermarket.
That personal service and
dedication is worth a lot.
Choosing my bank is sort of the same
thing; easy access and great back-up are
why I chose the SNS bank.’
General
Key figures
1
2000)
1999)
1998)
1997)
1996
Total assets
40,879)
32,527)
26,529)
23,051)
21,224
Investments
Mortgage loans
Other loans
Shareholders’ equity
Capital base
Technical reserves, insurance operations
Funds entrusted
Debt securities
8,527)
22,909)
4,203)
1,575)
2,575)
7,683)
13,997)
11,072)
8,028)
17,486)
3,662)
1,452)
2,113)
7,032)
13,119)
5,188)
7,207)
13,897)
3,263)
1,197)
1,700)
6,158)
11,956)
2,954)
6,610)
11,629)
2,755)
1,029)
1,533)
5,554)
10,576)
1,326)
6,032
9,989
2,515
851
1,186
4,871
10,424
1,110
Income banking operations
Net interest income
Commission income
Other revenue
391)
89)
69)
348)
63)
57)
291)
59)
54)
272)
54)
40)
258
41
16
Total
549)
468)
404)
366)
315
Income insurance operations
Gross premium income
Investment income
Other revenue
1,410)
547)
22)
1,249)
517)
145)
1,162)
481)
159)
1,120)
433)
82)
997
380
56
Total
1,979)
1,911)
1,802)
1,635)
1,433
Income SNS Reaal Invest
Net interest income
Commission income
Other revenue
31)
3)
41)
27)
2)
32)
15)
3)
19)
9)
1)
15)
5
-12
Total
75)
61)
37)
25)
17
3,639)
3,390)
3,209)
2,978)
2,901)
2,710)
2,626)
2,468)
2,334
2,201
Operating profit before taxation
Banking operations
Insurance operations
SNS Reaal Invest
Group
157)
111)
32)
(51)
140)
102)
24)
(35)
115)
87)
13)
(24)
93)
71)
8)
(14)
73
54
6
--
Total
249)
231)
191)
158)
133
Net profit
179)
161)
138)
117)
97
11.8%
12.2%
12.4%
12.4%
11.8%
Efficiency ratio banking operations
68.4%
68.8%
69.9%
72.5%
72.9%
Cost / premium ratio insurance operations
30.8%
31.7%
32.7%
31.3%
31.0%
Capital ratio
6.3%
6.5%
6.4%
6.7%
5.6%
Average number of employees
5,932
5,603
5,231
4,963
4,714
EUR millions
BALANCE SHEET
PROFIT & LOSS ACCOUNT
Total income
Total expenses
KEY RATIOS
1
8
) The figures for 1996 have been combined pro forma.
General
2000)
1999)
1998)
1997)
1996
Total assets
90,086)
71,678)
58,462)
50,798)
46,770
Investments
Mortgage loans
Other loans
Capital base
Technical reserves, insurance operations
Funds entrusted
Debt securities
18,791)
50,485)
9,261)
3,470)
5,674)
16,932)
30,846)
24,399)
17,691)
38,534)
8,070)
3,199)
4,656)
15,495)
28,909)
11,434)
15,882)
30,625)
7,190)
2,638)
3,747)
13,569)
26,346)
6,510)
14,567)
25,626)
6,072)
2,268)
3,379)
12,240)
23,306)
2,922)
13,292
22,012
5,542
1,875
2,613
10,734
22,971
2,447
862)
196)
151)
767)
139)
125)
642)
129)
119)
599)
118)
89)
568
90
35
Total
1,209)
1,031)
890)
806)
693
Income insurance operations
Investment income
Other revenue
3,108)
1,206)
49)
2,752)
1,133)
320)
2,561)
1,060)
351)
2,468)
954)
180)
2,196
838
123
Total
4,363)
4,205)
3,972)
3,602)
3,157
69)
7)
89)
60)
5)
69)
33)
6)
42)
19)
2)
32)
11
-26
165)
134)
81)
53)
37
8,020)
7,471)
7,072)
6,563)
6,392)
5,972)
5,787)
5,439)
5,144
4,851
347)
245)
70)
(113)
307)
225)
53)
(76)
254)
191)
28)
(53)
204)
157)
17)
(30)
160
119
14
--
Total
549)
509)
420)
348)
293
Net profit
395)
355)
303)
257)
213
11.8%
12.2%
12.4%
12.4%
11.8%
68.4%
68.8%
69.9%
72.5%
72.9%
Cost / premium ratio insurance operations
30.8%
31.7%
32.7%
31.3%
31.0%
Capital ratio
6.3%
6.5%
6.4%
6.7%
5.6%
Average number of employees
5,932
5,603
5,231
4,963
4,714
NLG millions
BALANCE SHEET
PROFIT & LOSS ACCOUNT
Income banking operations
Net interest income
Commission income
Other revenue
Income SNS Reaal Invest
Net interest income
Commission income
Other revenue
Total
Total income
Total expenses
Banking operations
SNS Reaal Invest
Group
KEY RATIOS
9
General
Foreword chairman of the Group Executive Board
‘BE GOOD AND TELL IT ….’
Sharpening Strategy
The financial target of increasing net profit by at least 10% each year was once again achieved in the year under
review. And our goal is to continue this growth over the coming years. With this in mind, in late 2000, we initiated
an exchange of ideas aimed at sharpening our corporate strategy. The reinterpretation of our all-finance/multi-channel concept that resulted from that dialogue calls for more focus on core competencies, more synergy generated
within the organisation, greater distribution power and more rationalisation initiatives. Excellent and innovative products have been introduced by leading brands SNS bank and Hooge Huys and these will be brought to the
market in a broader and more emphatic manner, especially in the form of product packages. In short, we are
focusing on what we are good at from an intensified marketing approach.
Investing in the Internet
SNS Reaal Group succeeded in acquiring a leading position in the banking and insurance operations with regard
to Internet service provision. Bank relations and intermediaries have in various independent analyses expressed
their appreciation of the offer. SNS Reaal Group wants to continue to set the speed of development in the future.
Without affecting the development of other distribution channels, much will be invested in the internet-based service over the coming years.
Sustainable Society
Society is clearly becoming ever more interested in socially sound entrepreneurship and sustainable investment.
SNS Reaal Group believes that this development is of a structural nature. SNS Reaal Group has, for some years,
gained knowledge and experience in these subjects. Analysis and research quality has translated itself into an
excellent investment track record. Also in this field SNS Reaal Group will invest efforts in continuing and reinforcing the trendsetter’s role.
Our People
Staying at the fore is only possible by investing in your people. Our employees are at the heart of all our efforts to
offer better services to clients. In today’s context of continually changing processes, their expertise must remain
up to date and the same applies to the organisation around them. That demands a lot from everyone associated with
us. And here I would like to express my gratitude for their ongoing loyalty and input, also on behalf of my colleagues on the Group Executive Board.
Hans Leenaars
Chairman, Group Executive Board
10
General
Highlights of 2000
STRENGTHENING ALL-FINANCE ACTIVITIES
•
•
•
Innovative saving and investment products are introduced to the market under various brands through
direct and indirect channels (pages 23 and 26)
Hooge Huys introduces SNS investment funds on the market; SNS bank also sells ASN Bank investment
funds (pages 26 and 27)
Synergy is realised through service centres for banking and insurance operations; the mortgage activities of
SNS bank and Hooge Huys are centralised (pages 15 and 18)
EXPANSION OF MULTI-CHANNEL DISTRIBUTION
•
•
•
SNS bank is the first bank to offer the combination of online/real-time banking, saving and investing via the
internet (page 15)
Sales activities in the Randstad are intensified (page 15)
SNS Reaal Group sets up ‘Distribution Partners’, to reinforce its position in the intermediary market (pages 19
and 20)
INCREASING MARKET SHARE
•
•
•
The mortgage loans portfolio of SNS Reaal Group again shows a strong increase, up to EUR 22.9 billion,
partly due to the successful Stable Interest Mortgage (page 22)
Savings, investment and mixed products lead to a market-share increase in their respective markets (page 23
and 26)
In 2000, the ASN Aandelenfonds, the largest sustainable world share fund in the Netherlands, is the only
fund in this domain to record a positive investment return (page 44)
IMPROVEMENT OF RETURN
•
•
•
•
Net profit again increases by more than 11% to reach EUR 179 million in the year under review (page 31)
The efficiency ratio for banking operations (68.4%) and the cost/premium ratio for insurance operations
(30.8%) show further improvement (page 38)
SNS Securities delivers an important contribution to the profits of SNS bank (page 28)
Funding and securitisation programmes are successful; assets worth EUR 7.5 billion are attracted in 2000 via
SNS Financial markets; securitisation amounts to a total of EUR 0.6 billion (page 29)
11
Report of the Supervisory Board
Report of the Supervisory Board
The Supervisory Board met six times in the year under
review. In addition to the general business affairs of
the SNS Reaal Group and the group subsidiary operations, strategic policy was a recurring topic. Risk management and its various connotations were regularly
discussed. The Supervisory Board gave approval for
proposed investments and sales, and for the introduction or increase of the euro medium-term note programmes of SNS Reaal Group and SNS bank. The board
evaluated its own performance at its 7 February 2001
meeting.
ANNUAL ACCOUNTS AND HALF-YEAR REPORT
At its meeting of 14 March 2001, the Supervisory Board
adopted the SNS Reaal Group year-end accounts for
2000. Previous meetings had scrutinised the budget for
2001 and management letters regarding SNS Reaal
Group, banking and insurance operations and SNS
Reaal Invest. In turns, two board members attend the
meeting of the Central Employees Council at which
the budget for the coming year is discussed. The board
also took note of the half-year report for the SNS Reaal
Group.
RE-APPOINTMENTS TO THE SUPERVISORY BOARD
At its 14 March 2001 meeting, the Supervisory Board
re-appointed H. Muller and J.W.M. Simons as members.
Preceding these re-appointments, and in accordance
with the procedure agreed on in 2000, the board chairman first consulted with both commissioners; the
Executive Board and Central Employees Council were
also heard.
APPOINTMENTS TO THE EXECUTIVE BOARD
In parallel to the reorganisation and renewal of the
organisation there has been a clear rejuvenation of the
Executive Board. A completely new board has taken
office in only a few years.
On 1 October 2000, we bade farewell to J.F.T. Vugts,
who, as chairman of the Executive Board of firstly SNS
Group and later SNS Reaal Group, since 1987 headed
up a concern that guided the group through a tenfold
increase in total assets thanks to mergers and
autonomous growth during the period. We express our
gratitude and appreciation to Jan Vugts, leader among
the founding fathers of this bank-insurer, for the way
in which he achieved this. In his long period at the
helm, Jan Vugts was always fully attuned to both the
main line of business as to the human detail.
Succeeding Jan Vugts, J.J.A. Leenaars took up his duties
as chairman of the Executive Board on 1 October 2000,
having been appointed deputy chairman on 1 March
that year.
R.R. Latenstein van Voorst, chief financial officer of
SNS Reaal Group and member of the Board of Directors
of SNS bank Nederland, has notified us of his intention
to continue his career outside the group. The Supervisory Board extends its appreciation to Mr. Latenstein
van Voorst for the way in which he has contributed to
the Group’s development and management in the past
years.
G. van Olphen was appointed chief financial officer of
SNS Reaal Group on 1 February 2001.
CHANGE PROCESS
SNS Reaal Group has always managed to successfully
combine an ongoing internal change process with a
continued growth in profit. The dynamism associated
with these changes seems to be translated with ease by
those involved in the SNS Reaal Group into a constantly growing profit figure. The Supervisory Board
extends its gratitude to the Executive Board and all
staff of SNS Reaal Group for the way in which they also
made the year 2000 into a success story.
’s-Hertogenbosch, 14 March 2001
On behalf of the Supervisory Board
J.L. Bouma, chairman
12
Report of the Group Executive Board
13
Strategy and policy
SNS REAAL GROUP
SNS Reaal Group focuses on creating, managing and
protecting the financial assets of its private and business clients by offering a coherent package of banking,
investment and insurance products through a variety
of distribution channels. The Group continues to reinforce and expand its all-finance/multi-channel strategy
in addition to the two other main strategic group objectives namely increasing market share and improving
returns.
The Group achieved a number of financial and commercial objectives in the year under review though in
some areas developments did not progress at a sufficiently high rate. What required adjustment were
expenses in the banking operations, and the results of
sales efforts in the insurance activities. Together with
sharpening of the strategic direction, this is leading to
the accentuating of a number of developmental directions for the coming years. These are described below,
first for the Group, then in more detail for SNS bank
and Hooge Huys.
Greater Focus
Within SNS Reaal Group, the two main brand names of
SNS bank and Hooge Huys will be positioned with
additional emphasis. In the context of customer-oriented service provision, they will increasingly target
further expansion and exploitation of their core competencies. SNS bank will more strongly target innovative product development and the achievement of a
prominent position in mortgages and asset-creating
products. The key to this is seen as ‘packaging’, or
rather, the combining of the various financial products
within the group and offering them as one coherent
whole. The focus of Hooge Huys will be as trend-setter
in supporting intermediaries by offering more and
innovative services. Traditional insurance intermediaries will convert into all-finance providers by the
addition of a broad package of banking services.
Greater Synergy
As a consequence of the internal merger processes, not
only the two main brands but also other brands within
the SNS Reaal Group still had a generous amount of
time at their disposal with their own product pack-
14
ages. In the year under review energetic steps were
taken to create synergy advantages by benefiting more
from each other’s products, and especially to create
combined all-finance products. Intensified cooperation in product development will lead to a flow of new
products that will appeal to clients.
The advent of the new Dutch tax system in 2001 is
leading to increasingly high requirements for (combinations of) banking, investment and insurance products, to enable them to raise their pension coverage
and compensate for any shortfalls in current pension
provisions.
Greater Distributive Capacity
Following on its strategic objective to increase market
share, SNS Reaal Group considers further reinforcement and optimisation of its multi-channel distribution network essential with regard to both direct sales to
clients and indirect sales through intermediaries. The
increasing of distribution capacity will therefore
remain a point of attention for the coming period. SNS
bank will focus in particular on expanding its current
advanced position in the field of e-commerce, in addition to reinforcing sales through its office network.
Hooge Huys will intensify sales through the allfinance intermediaries. As a result of the founding of
‘Distribution Partners’, the growing cooperation
between insurer and intermediary will take place in an
organisational context.
Greater Efficiency
Increasing attention for efficiency and effective working methods will continue to be one of the most
important tasks for the SNS Reaal Group during the
coming period. Substantial progress was made in this
regard in the year under review through the creation
of central service centres (‘multi-label back-offices’) for
banking and insurance operations. This centralised
and uniform processing and management of a number
of core products within the SNS Reaal Group will lead to
considerable savings in the future. Further savings will
accrue from the simplification of the organisational
structure, as well as the evolution of the currently
decentralised management guidance to a more centralised model.
SNS BANK
SNS bank targets her distribution of integrated and
non-integrated banking, investment and insurance
products to private and business customers using a
mix of complementary distribution techniques. Service provision is decentralised through a national
branch network, increasingly supported by the call
centre and the internet.
Focus
SNS bank continues to commercially develop its innovative capabilities, putting the accent on products for
which it has a proven track record. These ‘spearhead’
products include mortgages and asset-creating products. The mortgage loans portfolio is the cornerstone
of SNS Reaal Group as an all-finance institution,
shown by the fact that mortgages comprise more than
half of the Group’s balance sheet and two-thirds of its
banking balance sheet. Mortgages will be expanded
from mono-products to combination products, for
example, by packaging them together with insurance
and/or investment funds, thus laying the foundation
for pre-cross-selling in the future.
The second group of spearhead products concerns
asset generation: savings, investment and life insurance products. In the year under review, SNS bank successfully introduced many innovative products on the
market, often as (indexed) combination products. New
investment funds were also introduced.
Synergy
Combination products – those combining, in whole or
in part, products of the bank and the insurer – ideally
lend themselves to synergy advantages. SNS bank will
increasingly be offering more packaged concepts
through its own sales channels and intermediaries.
This packaging will result in increased efficiency and
good alignment between the various product parts,
thus leading to benefits for the customer.
Distribution
Increasing distribution capacity is growing in importance. In this regard, SNS bank foresees the internet as a
major spearhead of activities. Internet applications
have been developed quickly and successfully during
recent years. In 1999, clients were given the opportu-
nity to place share orders through the internet. Low
cost, access to current share price information and
improved faculties to follow order processing all contributed to a rapid rise in the number of clients and
transactions in the year under review. Independent
research rated the SNS investment website as superior
based on its rates, user-friendliness and the securities
research available.
SNS bank also enables customers to conduct real-time
payment transactions via the internet, with an accompanying overview of recent payments and receipts and
up-to-the-minute account balance information. Balance and transaction alerts can also be transmitted by
SMS message or e-mail, informing clients by mobile
phone or personal computer about relevant (positive
or negative) changes in the account balances.
A savings product has been added to the internet-based
investment and payment functions in the form of SNS
Internetsp@ren (‘internets@ving’), in which the bank
translates its own low transaction costs to a premium
interest rate for the client. SNS bank was the first bank
in the Netherlands to offer a real-time combination of
savings, payments and investment via the Internet. It
was furthermore the first financial organisation to
offer this combination of services without a subscription fee. Now customers can also obtain consumer
credit through the internet. This product range will be
expanded in 2001, adding at first simple insurance
products and mortgages.
Historically, SNS bank has been a minor player in markets in the densely populated western part of the
Netherlands, the ‘Randstad’. Penetrating these markets,
with ten million potential clients, is therefore being
approached with vigour. Modern means of customer
contact are being used, such as the internet, telephone,
the call centre and ‘house calls’ from personal advisors.
SNS bank has offices located in Amsterdam, The Hague
and Utrecht.
SNS bank branch offices have rapidly modified their
function over the past years and now provide integrated advice on banking, insurance and investment
issues. Clients’ changing needs have driven the clustering process into full-service offices. The number of
branch offices is thus expected to drop gradually from
about 300 in early 2000 to some 200 in 2001. In addi-
15
Jaap Harmsen is Managing Director of local pension
specialists ‘Pensioen Perspectief Vorden’. From his offices in
the eastern Netherlands, Jaap and his colleagues advise on
pension matters, and progress operation growth and
national coverage. ‘If you want a clear overview of the
Netherlands, you should work in from the edge.’
‘I consider
Hooge Huys
an excellent
service provider. Why? They adapt fast to market
needs, maintain a completely open cost structure,
and are both versatile and flexible. But if this
sounds like a commercial let me rephrase
things…’
‘The management of pension contracts involves
matters such as salary raises, divorces and
marriages, asset transfers and other such
complexities. To process such changes
Hooge Huys often does not need more than one
week. This means their organisation
is efficient and effective.’
‘Their organisation
is efficient and effective’
‘Changes in pensions legislation often complicate matters for us. And we
naturally have to introduce them properly and on time, and that requires
quite some effort. I must say that, in this respect, Hooge Huys has sorted
out its affairs very well. For consultants like us that is essential to good
business.’
‘Professionally, our company operates at high quality. The publications on
pension legislation of Hooge Huys reflect this keen quality awareness, because
the articles always possess
solid, high relevance content.’
tion to this office clustering, new offices are still opening, in the Randstad for example.
Efficiency
A focus on innovative products requires not only
investments in product development and marketing,
but also accurate and efficient administrative processing
of these products. For this, SNS Reaal Group has created a number of service centres. These fall under one of
the main brands and yet also serve all other brands.
Virtually all mortgages within SNS Reaal Group, for
example, are processed in the mortgages service centre
in Utrecht. There a uniform administration system is
used together with the electronic processing of document flows. This centralisation has led to better service for clients and intermediaries. Other banking service
centres have been reaping the benefits of economies of
scale for quite some time, such as in Banking in Arnhem and Securities in ‘s-Hertogenbosch.
Dutch Savings Banks’ Association
The last independent Dutch savings bank,
Bondsspaarbank Katwijk, joined SNS bank in the
year under review. This brought an end to the
activities of the Dutch Savings Banks’ Association (Nederlandse Spaarbankbond), which, since
its founding in 1907, represented the interests of
Dutch savings banks. SNS bank actually has the
same background as suggested by its name in
bygone days – Samenwerkende Nederlandse
Spaarbanken (Cooperating Dutch Savings
Banks).
HOOGE HUYS
Focus
Hooge Huys targets the sale through intermediaries
(indirect distribution) of insurance, banking and
investment products for the private and business markets. It is renowned for the quality of its product packages and its high level of service. In insurance, Hooge
Huys focuses on life insurance, with non-life insurance
in a supporting or parallel role. In the year under
review , the new Dutch tax system for 2001 and the
Insurance Intermediary Act led Hooge Huys to modify
and expand its product line, to uphold its excellence in
quality.
18
Also in the year under review Hooge Huys began a
publicly oriented advertising campaign with the
theme ‘professional distribution of financial peace of
mind’. The campaign goal was to familiarise potential
customers with the Hooge Huys name before they step
into an intermediary’s office for an independent financial consultation. It is then easier for intermediaries to
suggest one or several Hooge Huys products during a
consultation.
Synergy
Like SNS bank, Hooge Huys attaches great value to
synergy-increasing activities which can be realised
through mutual cooperation. Hooge Huys is also pursuing increased sales through other brands within SNS
Reaal Group, particularly where products are not yet
sold in combination with Hooge Huys insurance products. Through the years, together with SNS Investment
Funds, Hooge Huys has introduced a large number of
investment funds to the market under its own name.
In 2001, Hooge Huys will introduce an integrated
financial services package based on financial planning.
With this banking-oriented product, Hooge Huys is
adapting to consequences and opportunities of the
new 2001 tax system. For example, it is creating supplementary pension products to address the problem
of pension shortfall. For intermediaries, this concept
offers excellent prospects for high-quality consultancy
work. Clients can follow the value growth of their
portfolio on the internet any time they may wish.
Distribution
Hooge Huys has a solid reputation to uphold in the
way it maintains contact with intermediaries. In fact,
independent research has shown that Hooge Huys has
earned a top position with its most important product,
the investment insurance, with respect to quality,
speed and flexibility of processing (policy set-up, claim
processing and the like). Other independent research
has shown that operationally as well, in terms of speed
of policy set-up and the like, Hooge Huys is clearly
positioned above the market average.
Hooge Huys invests substantial effort in communication with intermediaries, and increasingly supports
them using internet techniques. Through its ‘TOP site’
extranet, Hooge Huys services its distribution process
optimally on line, enabling intermediaries to work
more efficiently and offer better service to their customers. Hooge Huys was the first insurer to offer the
‘multi-pricing’ option, meaning that the intermediaries themselves have the opportunity to partly determine the premium.
Consolidation trends are evident among insurers and
intermediaries. Inevitably, insurers and intermediaries
will seek each other out, the former to ensure distribution and appropriate IT investments, and the latter to
find financing. In order to realise this objective, and in
association with SNS Reaal Invest, Hooge Huys
founded ‘Distribution Partners’, a company exclusively
pursuing minority interests. In the future, Hooge Huys
sees a continuing role for the insurance intermediary,
who, as entrepreneur, can maintain flexible working
hours to service customers and will increasingly provide advice on complicated insurance and investment
products. With their lower cost base, intermediaries
can continue to operate in areas where financial institutions have to withdraw. Hooge Huys will assure the
quality of its services by entering into service-level
agreements with its insurance intermediaries.
Efficiency
Hooge Huys continues to target tight control over cost
development and the introduction of increasingly efficient working methods. In anticipation of the new tax
system, the demand for periodic life insurances
declined strongly. While, on one hand, this has
prompted replacement products better attuned to the
2001 tax system, on the other hand, it has led to structural economising. Like SNS bank, Hooge Huys has set
up service centres for life insurance (Alkmaar) and
non-life insurance (Zoetermeer) to support all insurance products of the SNS Reaal Group. Administrative
processes at these centres are handled with the help of
sophisticated computer support. By mid-2001, technology will be in place to enable employees to gain authorised access to complete digital files from the various
insurance companies.
SNS REAAL INVEST
The fast-growing business unit SNS Reaal Invest
expands and supports financial activities within SNS
Reaal Group. For several reasons significant investment took place in this unit: spreading the result,
scouting out potential markets, functioning as incubator
for new activities; and the expectation is that a higher
return on investment can be realised in this sector. In
just five years, SNS Reaal Invest has developed from a
limited size and scope into a group unit contributing a
substantial 14.2% of Group profit. SNS Reaal Invest is
targeting a contribution of 20% to 30% to profits
within three years.
Portfolio Management
Following on a phase of rapid growth and the building
up of a substantial company, the time is now ripe for
SNS Reaal Invest to address a number of specialisations. In the context of portfolio management, SNS
Reaal Invest maintains strategic and non-strategic divisions, a categorisation that depends on whether an
activity is considered essential for the support of the
banking operations or insurance operations. This partition can have consequences for the sustainability of a
relationship and return on equity requirements set.
SNS Reaal Invest has now classified its activities and
participating interests under five sectors: lease, consumer credit, real estate, financial service & distribution and venture capital.
Lease
‘Leasing’ is a specialism outside regular banking activities, yet its goal is nonetheless to support banking
operations. In the year under review, SNS Automotive
and the previously acquired Abfin were integrated to
gain a wider foothold in the lease market. The merger
resulted in better service to clients: dealers, car fleet
managers and small companies. The broader goal is
more cooperation in the car lease market in order to
gain scale benefits. Through the subsidiary SNS
Autolease, bank clients are offered car lease facilities
under the banks’ own brand.
Leaseco and TransNed Lease are active in their own
niche markets, which are heavy equipment and trucks.
Leaseco is furthermore involved in the equipment
lease market, also under the SNS Equipment Lease
label.
Consumer Credit
In the consumer credit sector, PrimeLine has been
growing well for a number of years. PrimeLine works
closely with a number of large retail organisations,
19
which offer their clients credit facilities by means of a
credit card under their own brand. In the consumer
credit area, Ribank operates in its own niche market.
Opportunities are now being sought to intensify consumer credit activities in foreign markets, possibly in
the form of cooperation with a partner abroad.
Real Estate
In real estate, Stienstra is the most important participating interest, contributing substantially to profits of
SNS Reaal Invest. The SNS Reaal Group has also been
able to capitalise on the expertise available in transactions in and management of its own real estate. Its participating interest in Q-Park, manager of parking
garages, increased to 15% in the year under review.
Financial Services & Distribution
The financial services & distribution sector is strengthened by the SNS Reaal Group’s 100% interest in ‘Distribution Partners’, the company set up by SNS Reaal
Invest (51%) and Hooge Huys (49%), to support intermediaries by acquiring minority interests in a network
20
of independent insurance agencies. In the meantime,
acquisitions have been made and interests purchased,
for instance, in Wagner & Partners, a national financial
consultancy and planning firm.
TMF Group, an internationally operating financial
management and trust company in which a 49% interest was acquired in 1999, more than lived up to growth
expectations in the year under review. Xtensive Franchising (100%) and Incasso Vesting (40%), both fastgrowing companies in the field of collection and credit
management, are also part of this portfolio.
Venture Capital
Developments in the venture capital sector, while still at
an early stage, also met expectations. In addition to
small direct participations through the wholly owned
subsidiary Foresta, participation in a fund for medium
sized interests (Parnassus Fund) were taken in a more
indirect way. Increasingly, participation is being
sought in specialised funds and companies targeting
new technologies.
Market developments
GENERAL
Economic growth
The year 2000 will be remembered as a year of strong
economic growth. In the industrial countries, growth
averaged 4.3%, with more than 5% in the United
States, 3.5% in the euro countries and 4% in the
Netherlands. Such growth figures have not been
achieved since 1988. When selling their products, the
various units of SNS Reaal Group succeeded in benefiting from the strong upward trend in family budgets.
The economic situation also kept the bank’s risk profile low, despite steady and strong growth in credit
issuance.
The euro, which dropped in comparison to the dollar,
significantly improved the competitiveness of eurozone countries; exports were a strong force driving
economic growth, along with high home expenditures.
A more troublesome sign was that the reduction in
unemployment figures did not parallel economic
developments. It looks like the euro region passed its
cyclical high point in mid-2000; slowdown also
became visible in the United States. Years of phenomenal productivity growth, owing to investments in
information and communication technologies, levelled off rapidly towards year’s end.
the first time in ten years, declining by more than 5%.
Its performance was worse than Euro Stoxx 300 (–2%)
yet better than the Dow Jones (–7%). Japan’s downturn was even more pronounced (–23%), and those
who placed money in the TMT sector (telecommunications, media, technology) faced a serious setback
(–40%) after years of strong growth. Nonetheless,
2000 was a top year in terms of securities turnover,
both for transactions for private customers and professional trade.
Government policy
The arrival of the new tax system for 2001 was clearly
discernible in the year under review. Severe restrictions on the fiscal deductibility of premiums for life
insurances resulted in a major slump in this market, by
tens of percents. The market is expected to decline further during 2001. The new tax system does offer opportunities, however; the pension ‘gap’ problem has
increased clients’ interest in investment funds and
‘universal life’ products.
In the later months of the year, savers and investors
showed increasing interest in socially responsible
‘green’ investment funds, particularly after it became
clear that the fiscal benefits of green funds were to be
retained under the new tax system. This development
gave the ASN Green Project Fund an extra stimulus.
Interest
In a little over a year, short-term interest rates almost
doubled: the official rate of the European Central Bank
went from 2.50% in November 1999 to 4.75% at yearend 2000. The levelling of the interest curve in the
Netherlands also resulted in a relative decline in the
interest margin for the banking operations. In the year
under review, inflation rose gradually to finally reach
2.6%.
Following its introduction exchange rate of USD 1.18
in 1999, the euro, affected by buoyant growth in America and the uncertainties surrounding policy on the
new currency, dropped to USD 0.82 in late October
2000. It had recovered somewhat by the end of the
year.
Stock exchange
In 2000, the Amsterdam AEX Index was negative for
Basel Capital Agreement
The original 1988 Basel Capital Agreement prescribed a
20% solvency weighting for loans to banks in OECD
countries. In its newest version, the agreement is more
nuanced, allowing loans to banks to be weighed according to the country in question, an external rating or an
internal credit model. On the one hand, the agreement
offers our banking credit providers the possibility of
adopting an internal credit model, for which a realistic
estimate of the creditworthiness of SNS bank will form
the basis for the solvability requirement. On the other
hand, in recent years, an active diversification policy
has been applied with regard to the type of funds
provider, whereby the share of banks in providing the
total funding requirements has significantly declined.
As a consequence the review of the Basel Capital Agreement is not expected to have a major influence on costs
of funding.
21
PRIVATE MARKET
Being a national financial services provider, SNS Reaal
Group pursues a prominent position in private markets for mortgages, savings, investments and insurances. It uses various brands to meet this goal.
Mortgages
In 2000, the Dutch housing market was characterised
by a declining volume of newly concluded mortgages
and continuing strong increases in housing prices. Factors underlying the high house prices are clear: the
low mortgage interest makes buying attractive, the
strong economy makes the future seem rosy, personal
incomes are on the rise and dual-income families are
allowed to count both incomes fully in mortgage
applications. There is also scarcity on the housing
market, with supply falling short of demand in terms
of both quality and quantity. Finally, the mortgage
interest paid remains virtually fully deductible under
the 2001 tax system.
Developments in the housing market prompted the
Nederlandsche Bank to initiate a broad study of mortgage lending in late 1999. The study concluded that
Dutch credit institutions in general do not lend unrealistically in this sector. The high creditworthiness of
the Dutch banking system thus remains intact. Within
SNS Reaal Group, mortgage credit lending is
approached with prudence. Internally, the Group
maintains and monitors set ‘house quota’ standards to
protect the risk profile of these assets.
The position of SNS Reaal Group on the mortgage market improved in the year under review, especially due
to the large share of the Stable Interest Mortgage in
total turnover. This mortgage type is especially attractive when the money market interest rate is relatively
low compared to the capital market interest rate. The
mortgage loans portfolio (under management)
increased by 26.2% to reach EUR 26.3 billion. Of this
EUR 22.9 billion is ‘on balance’.
Mortgage loans portfolio banking operations
€
millions
20,000
15,000
10,000
5,000
0
1996
1997
1998
1999
2000
With guarantee
Without guarantee
BLG Hypotheken, which sells mortgages through independent intermediaries, saw a strong portfolio
increase, also due to the success of the Varirust Mortgage, a variant of the Stable Interest Mortgage.
Mortgage loans portfolio insurance operations
€
millions
5,000
4,000
3,000
2,000
1,000
The gross production of SNS bank, including the banking brands BLG Hypotheken, CVB Bank and ASN Bank,
amounted to EUR 7.2 billion. As a result, the portfolio
(under management) increased by 33.6% to reach EUR
20.9 billion.
22
0
1996
Off-balance
On-balance
1997
1998
1999
2000
CVB Bank offers a complete package of banking products and services to independent intermediaries.
CVB Bank further facilitates banking activities for
Hooge Huys, enabling this insurer to provide an integrated service package to its own intermediaries. In
the year under review, CVB Bank realised mortgage
growth equal to its top year of 1999. The bank sells
endowment mortgages under its own name linked to
Hooge Huys insurance policies. Investment mortgages
will also be sold in this way.
The mortgage loans portfolio under management of
Hooge Huys and Reaal increased by EUR 227 million to
reach EUR 5.4 billion, of which EUR 2 billion is ‘on balance’ (+9.6%). This proportionally limited increase
was due to the placing of the Reaal financial advisors
at SNS bank, in addition to unusual competitive conditions.
Influenced by the above-mentioned developments, the
market share on balance of all brands within SNS Reaal
Group reached almost 11% in the first six months of
the year, with a gradual decline in the second half.
Average market share for the entire year was considerably higher than in 1999.
Consumer credit
SNS Reaal Group is active on the consumer credit market by providing consumer credit as a part of the SNS
bank product package and outside the banking environment by provision via PrimeLine, part of SNS Reaal
Invest. In total the consumer credits portfolio rose by
nearly 50% to reach EUR 1.1 billion.
The SNS bank portfolio increased by EUR 160 million
to reach EUR 590 million in the year under review.
This strong growth was due to an increase in bridging
loans, associated with the robust market for mortgages. Advances against securities also increased due
to increasing investment. The SNS Reaal Invest portfolio, PrimeLine in particular, increased by EUR 187 million to reach EUR 487 million in the year under
review. This was especially due to sustained high levels of spending in the Netherlands.
Asset Creation
In the context of asset creation for its clients, SNS
Reaal Group is active on the market for savings, invest-
ment and insurance products. Various brands within
SNS Reaal Group introduced a large number of innovative savings and investment products to the market. In
the year under review the revised 2001 tax system provided a significant stimulus for product renewal by
removing the fiscal veil that enshrouded many products such that customers are now better able to compare products on the basis of pure revenue. Interest in
savings again rose, while attention for investments
remained high even though people seem to be more
conscious of possible whimsical developments on the
stock exchange.
- Savings products
SNS bank enjoyed great success with its internet savings account, which translated relatively low costs
into a premium interest payment to the client – first
4.25% and later 4.5%. For small and medium-sized
companies, a special savings account was developed in
late 1999. The ‘SNS Euro Top Account’ offered a high
interest rate for balances starting at EUR 100,000. Total
savings within SNS Reaal Group (including interest
payments) increased by 3.4% to reach EUR 7.5 billion
in the year under review.
- Investment funds
All categories of investment funds within SNS Reaal
Group increased markedly in the year under review.
The total fund value increased by 26.2% to reach
almost EUR 2.0 billion. The increase is the balance of
new investments (EUR 463 million) and stock price
declines (–EUR 56 million).
Invested assets in the SNS Investment Funds increased
by 17.9% to reach EUR 1.4 billion. An important part
of new investments can be ascribed to the conversion
of Reaal’s Multi Facet Plan funds to SNS investment
funds. Hooge Huys investment funds almost doubled,
with invested equity rising from EUR 74 million to
EUR 143 million. Invested equity of the ASN funds
increased by 44.4% from EUR 277 million to EUR 400
million, of which EUR 288 million is in the ASN Share
Fund and EUR 96 million in the ASN Green Project Fund.
In the year under review a twelfth fund was added to
the SNS Investment Funds palette, the SNS Euro Real
Estate Fund, which invests indirectly in business properties, offices, shops and houses. In 2000 Hooge Huys
introduced the Hooge Huys World Share Fund.
23
‘My partner Bouke Bakker and I now operate two wind turbines. It took us 7 years
to get all the permits for one of them and 4 years for the other. And to think that the financing was
completely rapidly with the ASN Bank. You know what the best thing was? Everything was arranged
by fax or telephone. I did not have to visit the ASN Bank in The Hague once, and that saved a lot of time.
At the SNS bank closeby in Sneek I opened a current account with no fuss, which was also pretty handy.’
‘Financing was complet
Peter Dijkstra is a supervisor on
Dutch Railways Betuweroute rail freight
line, and with fellow-villager and dairy
farmer Bouke Bakker, operates two
wind turbines in Friesland’s Boazum.
‘A hobby turned religion.’ In the summer
of 2001 they hope to build the country’s
most advanced manure fermenting
installation. ASN Bank is giving
financial assistance.
‘No nonsense people
ed rapidly’
‘Did you know that one of today’s wind turbines
can provide the equivalent energy needs for over
600 homes? You can be proud of that.
The ASN Bank is environmentally savvy so they know what they are talking about
and can help us accordingly.’
‘Communication lines should be short. I was introduced to the
ASN Bank
SNS bank
by my contact at
and for those complicated wind turbines I only had to deal with
two people. They both knew exactly what I was talking about. And another thing: I appreciate
agreements, if you agree on something, you should stick to it. And I must say those guys from
the ASN Bank were very straight with us.’
- their Yes was always Yes and they kept their promises.’
Investment funds
EUR million
SNS bank
ASN Bank
Hooge Huys
Total
Year-end 2000
Year-end 1999
Change
1,416
1,201
277
74
1,552
215
123
69
407
400
143
1,959
The ASN Novib Fund, a closed fund, was opened to private investors in the year under review. ASN Bank
funds targeting sustainable investment (the ASN Share
Fund and ASN Green Projects Fund) are now also sold
by SNS bank. In addition, SNS bank has its own sustainable fund, the SNS Eco Share Fund. Returns on
investment from the sustainable share funds of ASN
Bank and SNS bank were positive in the year under
review.
The three guilder and euro (bond) growth funds were
withdrawn from listing in the year under review
because they had lost their specific advantages under
the 2001 tax system. Investors were given the opportunity to switch to one of the other investment funds at no
cost.
The pursuit of synergy and cost reductions has led to
the exchange of products within the Group. As a result
some of these products are offered under their original
names and some under other labels. In this fashion,
Hooge Huys and CVB Bank have for quite some time
taken advantage of opportunities offered by SNS
Investment Funds, respectively under their own names
or carrying the SNS brand.
- Mixed products
Besides the ‘pure’ savings and investment products
SNS bank introduced many ‘mixed’ products to the
market, enabling customers to (almost entirely) protect their principal investment while benefiting from
(increasing) share prices. A number of these products
were positioned in other channels as well, for instance
by Hooge Huys and CVB Bank, sometimes under their
own names. Sales of these products generously met
expectations.
- Investment portfolios
Investing via the internet, introduced at the end of
1999, gained popularity during the year. A rapidly
26
%
Investment
17.9
44.4
93.2
26.2
260
127
76
463
Share price
development
(45)
( 4)
( 7)
(56)
growing proportion of orders from private individuals
now come via the internet and are sent on to the securities exchange. Telephone orders are still gaining in
popularity. The number of account holders at SNS
‘Securities Line’ (Effectenlijn) increased by almost
60%, while orders likewise grew by more than 60%.
Commission income doubled compared to 1999.
In addition to this private customers increasingly
required investment advice, which is available via the
branch offices.
- Insurance products
The 2001 tax system cast a shadow on the future market
for periodic life insurances due to limitations on fiscal
deductibility of premiums. New production of traditional, investment and group insurances fell short
compared to the top year 1999. But production did
develop in line with the market. Growth of the life
portfolio amounted to EUR 45 million in the year
under review, resulting in a balance of EUR 600 million at year’s end. The market share of SNS Reaal
Group reached 6.3%. This market is expected to
decline further in 2001.
The private market also exhibited a decline in single
premium insurances, albeit to a lesser degree,
although a slight recovery was evident in the last
months of the year. In 2000, many private individuals
took advantage of their wider fiscal opportunities for
the last time. In view of this, Hooge Huys and SNS
bank introduced a special end-of-year promotion with
the single premium product. In 2000, production
reached EUR 506 million.
- Non-life insurance products
The non-life portfolio showed a slight decrease (–EUR
3 million) compared to the previous year; the balance
at year-end 2000 was EUR 213 million. Sales lagged
especially in the automotive sector. Though premium
income rose. The loss ratio was low (58.9%) despite a
number of storm damage claims and the appalling fireworks disaster in Enschede. Hooge Huys pursues no
direct growth in its non-life insurances; these products
are considered to be supports or ‘parallel’ to the life
insurances. It thus maintains a cautious acceptance
policy. SNS bank sells non-life insurances actively, in
part with a view to generating cross-sales.
- Funeral insurance
In the year under review, activities in the area of
funeral insurance products of Reaal Uitvaartzorg,
Hooge Huys and the former intermediary insurer
PC171, were combined in Reaal Overlijdenszorg, making primary use of intermediaries for distribution.
Overlijdenszorg (or ‘funeral care’) is an advanced form of
service providing guidance and aftercare to families in
addition to the funeral. The product is therefore much
more advice-sensitive than a standard funeral policy.
An autumn campaign among intermediaries proved
successful in this activity; Reaal Overlijdenszorg holds
third place in this market.
Hooge Huys will continue to offer its own-brand
funeral insurance products to maintain its ability to
supply a complete service package to intermediaries.
- Affinity groups
Proteq, the brand for affinity groups, expanded activities in the year under review. The production of legal
aid cover progressed favourably although other nonlife sectors declined against 1999. For life insurances,
the targeted campaign on single premiums proved successful, although periodical life premiums showed a
decline.
Insurance for pets, introduced in 1999 under the ‘Animal & Care’ label, proved an attractive commercial
product in the year under review. Now pet owners can
apply for this insurance using the internet.
tions and business insurance and specialised forms of
service, such as leasing.
SNS bank
SNS bank offers business services including (non-life)
insurances through its regional banks, the insurance
offices of those banks and directly through headquarters.
Business credits involve 16,8% of SNS bank’s balance
sheet total, of which nearly one-third is related to
mortgages. Business clients are mainly small and
medium-sized companies and professionals. The bank
thus regards its target groups as naturally in line with
the retail market, on which SNS bank has focused for a
long time. Many social organisations and semi-statecontrolled institutions belong to its circle of clients, as
do a number of large corporations. The business credit
portfolio (excluding mortgages) increased by 11.7% to
reach EUR 3.3 billion during the year.
ASN Bank
ASN Bank has dealt with the financing of wind turbine
projects for quite some time. In the scope of financing
energy-saving investments for small- and mediumsized businesses, a partnership was recently established with NUON. Upon application, this energy supply
company judges the technical merits of an energy-saving proposal, after which ASN Bank may extend credit in
positive cases.
SNS Reaal Invest
SNS Reaal Invest is active in the lease market via its
brand names SNS Automotive, Leaseco and TransNed
Lease. SNS Automotive activities include dealer
financing, for instance, through Abfin. Leaseco provides for equipment lease, while TransNed Lease
focuses on trucks. A sharpening of acceptance policies
restricted their production to some extent.
Business Market Insurance
BUSINESS MARKET
SNS Reaal Group is active in business service provision
through SNS bank, ASN Bank, Business Market Insurance, Hooge Huys, SNS Automotive, Leaseco and
TransNed Lease. This partly concerns business credit
and accompanying activities, such as payment transac-
Business Market Insurance, created in 1999 as a result
of the merger of Reaal Bedrijven Arbeidsvoorwaarden,
Reaal Bedrijven Schade and Hooge Huys Zakelijke
Markt, has large corporate clients who have placed
their collective insurances (pension contracts) with
this business unit. In the year under review, many
large clients renewed their contracts; and the SNS bank
pension contract was also added to the portfolio.
27
Competition in this market intensified over previous
years, resulting in a narrowing of margins. In addition,
companies are increasingly opting for separate
deposits, whereby the investment income is for own
account and risk, leaving only administrative income
for Business Market Insurance.
Customer service also improved due to the implementation of a ‘Virtual Workshop’, whereby clients can
request information online and enter transactions.
A non-life insurance package was introduced for small
and medium-sized businesses. Following on the 2001
tax reform, an increasing need for personal consultancy on matters of income insurance and supplementary pension saving is evident. Within the scope of
employee benefits, this is an attractive market for the
companies within SNS Reaal Group.
Hooge Huys
Hooge Huys also sells business insurances through its
internally serviced indirect channel. Its current activities, through intermediaries, focus on small and
medium-sized companies. This sector should also see a
growing need for an integral approach to the problem of
pension shortfalls.
Sickness Benefits Portfolio
SNS Reaal Group offers a wide range of employee benefits with pension products as its spearhead. The Group
decided not to carry risks for care and care-related
insurances. In view of this policy Reaal Verzuimverzekeringen (Reaal Work Absence Insurance) was
sold, with the participating interest in Arbodienst
Groep GAK (Employment service administration)
involved in the sale. The sale bore no personnel consequences for SNS Reaal Group.
For employee benefits with care-provision features,
joint ventures with specialised suppliers were chosen.
PROFESSIONAL MARKET
The contacts of SNS Reaal Group with professional
markets, national and international securities, equity,
money and capital markets, are run by a number of
specialist business units at SNS bank: SNS Securities,
SNS Financial Markets and SNS Asset Management.
28
SNS Securities
SNS Securities is among the larger brokers in the
Netherlands, and enjoyed a most successful year. During this period activities in the area of research and
distribution of Dutch and European shares and fixed
interest paper enjoyed strong growth. As a result, SNS
Securities together with SNS bank took third place on
the turnover ranking list of Euronext Amsterdam in
the year 2000. Within these activities, SNS Securities
principally targets domestic and foreign institutional
and professional investors. The growth in turnover in
shares and fixed interest paper related to the expansion of activities resulted in a substantially higher net
profit contribution in the year under review. As a
result of the increased efficiency and the advanced IT
organisation it proved possible to process the rapidly
growing activities without having to recruit new personnel for the back office. During this period staffing
in the front office rose strongly. Services and activities in
the area of asset management and advice for wealthy
individuals showed further growth.
In the year under review SNS Securities bore responsibility for eight introductions on the stock exchange of
Euronext Amsterdam. These introductions primarily
concerned investment funds and structured investment products whose initial investment was fully or
almost fully guaranteed at the end of the period. These
products were introduced at the request of parts of SNS
Reaal Group, as well as for other financial institutions.
In the first half of the year under review the research
activities of SNS bank and SNS Securities were merged
into the research department of SNS Securities in Amsterdam. A recent study ranked SNS Securities as the
third best Dutch research team qualified in the
Benelux region.
SNS Financial Markets
Within SNS bank, SNS Financial Markets is responsible for the treasury and funding activities of the entire
group.
Funding
Funding needs intensified over the year under review,
primarily as a result of strongly rising mortgage credits
in relation to the inflow of savings. Almost EUR 7.5 billion of assets were attracted in 2000. To meet such
funding needs at acceptable rates, the investor base
was spread early on and various funding instruments
were developed. The aim was to bring out liquid
benchmark placements in the case of public transactions. Private placements involving customisation are
also becoming increasingly significant.
The funding policy pursued resulted in good internationalisation and diversification of funding sources, by
which access to financial markets could be optimally
achieved. The issues listed showed stable price development in the secondary market, indicating a wellspread placement with final investors. The name
recognition of SNS bank on the financial markets contributed to a drop in spreads. A slight decline in total
funding needs is expected for 2001.
Securitisation
Ongoing development of ‘Mortgage Backed Securities’
markets, on both the demand and the supply sides,
offers attractive funding opportunities for the robust
mortgage production within SNS Reaal Group. In the
year under review, the second public securitisation
transaction (‘Hermes-II’) was successfully completed.
This involved issuing a total of EUR 0.6 billion. The
policy aim is to further increase the amount on ‘offbalance sheet’ funding operations through mortgage
securitisation.
SNS Asset Management
SNS Asset Management is an asset manager for institu-
SNS bank issue 800 million EUR,
10 year fixed-rate, placement by region
11%
tional investors. Operating as part of SNS bank, it manages the portfolios of many social organisations, pension funds and other institutional investors. SNS Asset
Management also manages the sizeable portfolios of
SNS Reaal Group, especially those of the insurance
companies and investment funds within the Group. At
year-end 2000 the total assets under management
amounted to EUR 8.9 billion.
SNS Asset Management offers institutional clients a
complete package of advanced investment products
and services. This gives sustainable asset management a
unique position. In this way institutional clients have
the opportunity to translate their social commitment
into a sustainable investment strategy, investing in
shares or bonds of prominent, usually multinational
companies on the basis of the so-called ‘triple bottom
line’ of people, planet, and profit. The Sustainability
Analysis department of SNS Asset Management studies sustainable performances of listed companies.
Interest in these activities is on the rise, both nationally and internationally.
The sustainable investment style of SNS Asset Management has yielded excellent revenues and a most
acceptable risk profile, which is well tuned to the obligations of pension funds and other institutional
investors. In the Netherlands, SNS Asset Management
is the leader in the field of sustainable institutional
10 year fixed-rate, placement by investor type
10%
16%
2%
15%
10%
15%
7%
35%
36%
18%
22%
3%
France
Switserland
Insurance companies
Banks
Benelux
Scandinavia
Investment groups
Private
Italy/Spain/Portugal
United Kingdom
Mutual funds
investors
Germany
Pension funds
29
5 year floating-rate, placement by region
5 year floating-rate, placement by investor type
4%
4% 3%
9%
9%
17%
14%
1%
1%
13%
4%
23%
3%
13%
18%
4%
15%
Japan
United Kingdom
Money market funds
Private investors
Asia (excl. Japan)
Scandinavia
Banks
Government
Germany
Switserland
Mutual funds
Investment groups
France
Spain/Portugal
Insurance companies
Benelux
Austria
Corporates
asset management. To this end, it develops innovative
sustainable investment strategies. SNS Asset Management boasts an excellent track record. At year-end
30
45%
2000, invested assets amounted to EUR 893 million on
the basis of strict sustainability criteria.
Result and balance sheet
NET PROFIT
Composition of net profit 2000 (1999)
In the year under review, net profit of SNS Reaal Group
increased by 11.2% to reach EUR 179 million. This
enabled the Group to once again meet its financial
objective of at least 10% net profit growth annually.
The banking operations, insurance operations and SNS
Reaal Invest all contributed to the increase in the net
profit.
Net profit of the banking operations increased by
10.6% to reach EUR 104 million. Echoing the success
of 1999, 2000 also brought an increase of the net interest income, in line with the growth of the mortgage
loans portfolio. The professional market also contributed substantially to profit growth. Costs increased
considerably in the year under review, especially staff
and consultancy costs.
14% (13)
49% (51)
37% (36)
Banking operations
SNS Reaal Invest
The insurance operations yielded a net profit of EUR
78 million in the report year, a 16.4% increase over
1999. Both the life and non-life insurance operations
contributed. The market for periodical life insurance
shrank considerably on the eve of the 2001 tax system.
Reduced premium income was accompanied by a proportional decrease of sales costs and technical
expenses.
The difference between the net profit of SNS Reaal
Group (EUR 179 million) and that of the joint group
units (EUR 212 million) was a result of financing
expenses, costs for strategic projects and costs incurred
in building up the holding organisation.
SNS Reaal Invest showed robust growth in net profit in
the year under review, by 30.4% to reach EUR 30 million. The profit contribution to SNS Reaal Group rose
to 14.2%, in line with its long-term financial objective.
Compared to 1999 (12,2%), the return on shareholders’ equity (RSE) of SNS Reaal Group dropped to 11.8%
in the year under review, which is below the (longterm) financial objective of 12.5%.
RETURN ON SHAREHOLDERS’ EQUITY
Result of SNS Reaal Group
EUR millions
2000
1999
Change
Total income
Total expenses
3,639
3,209
2,978
13.4%
13.8%
7.8%
(5.7%)
3,390
Taxes
249
66
231
70
Group profit
Third party interest
183
161
13.7%
Net profit
179
161
11.2%
4
31
‘I was an account manager at a merchant bank
for many years, so I’m familiar with that kind
of world; firstly it’s about big money and of
course there’s nothing wrong with that.
But I find it very pleasant when the service
includes some social involvement.’
Georgette Eendragt is managing director of
IBSS Consultancy, an international advisory and training
bureau in Amsterdam focusing on higher educated women
and ethnic minorities. Her view - business should reflect society.
Two years ago in London she was voted international black
businesswoman of the year.
‘Clients want conve
‘A capital injection by the SNS bank gave us the opportunity to set up the business. And after that our
relationship just got better and better. Which account managers give you a call when the queen makes
a working visit to successful ethnic entrepreneurs? That was wonderful. Today we also have on-line
contact with SNS bank. It’s easy. We immediately put some insurance business their way.’
nience and friendly contact’
‘I have an excellent relationship with the
SNS bank
account manager. The personal
way in which he works for us is reassuring. He really is interested in the alternative enterprise circuit
in which I am involved and he helps us watch over the ups and downs of business. But he also appreciates
it when we ask him about his work. The financial world is also changing fast. ‘As long as you remain
the bank I feel comfortable with,’ I told him. He said he would pass it on.’
‘Whether you operate as a company or
private person, you are always
important enough for
personal contact. They realise this
only too well at SNS bank.’
Result of banking operations
2000
1999
Change
Net interest income
Commission income
Other income
391
89
69
348
63
57
12.4%
41.3%
21.1%
Total income
549
468
17.3%
Staff costs
Other operating costs
229
147
184
138
24.5%
6.5%
Total operating expenses
Value adjustments to loans and receivables
376
16
322
6
16.8%
166.7%
Total expenses
392
328
19.5%
Taxes
157
49
140
46
12.1%
6.5%
Group profit
108
4
94
14.9%
Net profit
104
94
10.6%
EUR millions
2000
1999
Change
Gross premium income, life insurance
Gross premium income, non-life insurance
1,117
293
941
308
18.7%
(4.9%)
Total premium income
1,410
1,249
12.9%
Investment income
Other income
Total income
547
22
1,979
517
145
1,911
5.8%
(84.8%)
3.6%
Technical expenses
1,448
1,446
0.1%
Staff costs
119
170
120
172
(0.8%)
(1.2%)
Other expenses
289
131
292
71
(1.0%)
84.5%
1,868
1,809
3.3%
111
33
102
35
8.8%
(5.7%)
Group profit
78
--
67
16.4%
Net profit
78
67
16.4%
EUR millions
Result of insurance operations
Total expenses
Taxes
34
Result of SNS Reaal Invest
2000
1999
Change
Net interest income
Commission income
Other income
31
3
41
27
2
32
14,8%
50,0%
28,1%
Total income
75
61
23,0%
Staff costs
21
17
16
14
31,3%
21,4%
Value adjustments to loans and receivables
38
5
30
7
26,7%
(28,6%)
Total expenses
43
37
16,2%
Taxes
32
2
24
1
33,3%
100,0%
Group profit
30
23
30,4%
Net profit
30
23
30,4%
EUR millions
--
The RSE of banking operations in 2000 remained
steady in the year under review at 10.9%, equal to that
in 1999. In insurance operations as well RSE, at 8.8%,
remained unaltered compared to 1999, mainly as a
result of strong capitalisation. SNS Reaal Invest
achieved an RSE of 41.1%, substantially more than the
1999 figure (37.5%).
Net profit and return on shareholders’ equity
of SNS Reaal Group
banking operations
€
%
millions
200
12.5
150
12.0
100
€
%
millions
100
11.0
80
10.0
60
9.0
40
8.0
20
7.0
0
6.0
11.5
50
11.0
0
10.5
1996
Net profit
1997
1998
1999
2000
1996
Net profit
1997
1998
1999
2000
35
insurance operations
SNS Reaal Invest
€
%
€
70
9.5
30
40.0
60
9.0
25
35.0
50
8.5
20
30.0
40
8.0
15
25.0
30
7.5
20
7.0
10
20.0
10
6.5
5
15.0
6.0
0
millions
0
1996
Net profit
1997
1998
1999
2000
INCOME
In 2000, the total income of SNS Reaal Group
increased by 13.4% to reach EUR 3.6 billion (1999:
EUR 3.2 billion). This increase was mainly due to
higher banking interest income, commission income
and gross life premiums. The total income can be categorised as interest income (43%), gross life and nonlife premiums (39%), investment income (12%) and
commission income plus other activities (6%).
The total income of the banking operations increased
by 17.3% to reach EUR 549 million in the year under
review (1999: EUR 468 million). This amount includes
the net interest income as the balance of the greatly
increased interest income (+29.7%) and interest
charges (+37.4%). The net interest income increased
by 12.4% to reach EUR 391 million (1999: Euro 348
million).
Growth in commission income grew strongly, increasing by 41.3% to reach EUR 89 million (1999: EUR 63
million). In particular, the commission on securities
developed positively due to increasing turnover at the
stock exchange and the issue of a number of combined
saving and investment products. Moreover, insurance
commission income increased largely in line with the
advisors’ transition from Reaal Particulier to SNS bank.
36
millions
%
10.0
1996
1997
Net profit
1998
1999
2000
For the insurance operations, total income increased
by 3.6% against 1999 to reach EUR 2.0 billion. Of that
income, 71.2% comprised gross premium income and
27.6% investment and interest income. Gross premiums for the life insurance operations increased by
18.7% to reach EUR 1.1 billion (1999: EUR 941 billion).
The growth was due mainly to single premium insurances, for which premiums increased by 47.1%.
Composition of income 2000 (1999) SNS Reaal Group
6% (6)
39% (39)
43% (37)
12% (18)
Investment income
Interest income
Commission income and other
At SNS Reaal Invest total income increased by 23.0%
to reach EUR 75 million (1999: EUR 61 million). The
net interest income increased by 14.8% to reach EUR
31 million. Other income yielded a 28.1% growth to
EUR 41 million.
Development gross premium income
€
millions
1,400
1,200
EXPENSES
1,000
In the year under review, SNS Reaal Group’s total
expenses increased by 13.8% to reach EUR 3.4 billion.
The increase was primarily due to higher interest
charges and staff costs. These latter costs were especially due to strong activity growth and need for temporary staff. At year-end 2000, SNS Reaal Group
counted 6,049 employees (‘full-time equivalents’, or
FTEs), a 4% increase over year-end 1999.
800
600
400
200
0
1996
1997
1998
1999
2000
Non-life
Life
Total
Of this, EUR 212 million related to a contract with the
pension fund of SNS bank. The periodical life premiums increased by 2.3% to reach EUR 611; this
restricted growth was mainly in anticipation of the
2001 tax system.
Gross premiums for non-life operations decreased
slightly to EUR 293 million (1999: EUR 308 million);
one of the reasons was because premiums were set on
the basis of a profitable portfolio.
In the year under review investment income in the
insurance operations amounted to EUR 547 million, of
which EUR 494 million was for own account and EUR
53 million on behalf of policyholders. The investment
income for own account reached EUR 79 million on
business assets (shares and real estate) and EUR 415
million for fixed interest investments (bonds, private
loans and mortgages). The return in the year under
review amounted to 6.5%, which was slightly lower
than that in 1999 (6.8%). The decrease was mainly due
to reduced returns on the mortgage portfolio. The drop
in other income was related to the declining quotations with regard to investments on behalf of policyholders.
The total expenses of the banking operations increased
by 19.5% to reach EUR 392 million in the year under
review (1999: EUR 328 million). Staff costs rose significantly (+24.5%), both for permanent and temporary
staff. The former was due, in addition to collective
employment agreement effects, to a strong growth of
performance-based salary components, and the latter
was attributable to the tight job market, which made it
difficult to fill vacancies and recruit temporary
employees for temporary projects. Staff costs comprise
more than 58% of total expenses. Consultancy costs
Composition of investments 2000 (1999)
2% (2)
13% (13)
2% (2)
27% (26)
56% (57)
Shares
Real estate
Mortgage loans
Bonds and private loans
Other
37
Cost/premium ratio insurance operations
73%
32%
72%
31%
71%
70%
30%
69%
29%
68%
67%
28%
66%
65%
27%
1996
1997
1998
1999
2000
Efficiency ratio
for projects also increased substantially, in particular
in the field of IT. These costs are included in ‘other
operating costs’.
For the insurance operations, total expenses increased
by 3.3% to reach EUR 1.8 billion. The technical
expenses remained largely unchanged at EUR 1.4 billion, which was consistent with the periodical development at life operations. Staff costs and other business expenses declined slightly in the year under
review.
The expenses of SNS Reaal Invest increased by 16.2%
to reach EUR 43 million. This was partly due to the rise
in staffing (including 100% participations) by which
staff costs increased as a result by 31.3%, to reach EUR
21 million (1999: EUR 16 million).
EFFICIENCY RATIOS
As a result of a positive margin effect, the efficiency
ratio of the banking operations (excluding value
adjustments to receivables) improved from 68.8% to
68.4%. The aim is to reach 65% within a number of
years.
The cost/premium ratio of the insurance operations
improved from 31.7% in 1999 to 30.8% in the year
38
1996
1997
1998
1999
2000
Cost/premium ratio
under review. Here again, cost savings will contribute
to the more rapid realisation of the stated objective of
27%.
COMPOSITION AND GROWTH OF THE
BALANCE SHEET
SNS Reaal Group’s balance sheet total rose 25.7% in
the year under review to EUR 40.9 billion. This figure
expresses in particular the strong growth of the mortgage loans portfolio.
This development was especially evident on the balance sheet of the banking operations. The net growth
of the mortgage loans portfolio by EUR 5.2 billion was
the main driver behind the 34.5% growth of the balance sheet, which reached EUR 30.3 billion at yearend. As funding for this, debt securities and other
funds entrusted on the liabilities side increased by
130% and 10.2% respectively, to reach EUR 10.4 billion and EUR 6.6 billion. Savings increased slightly to
EUR 7.5 billion.
The balance sheet total of the insurance operations
increased by 4.8% to reach EUR 9.8 billion in the year
under review (1999: EUR 9.3 billion). At EUR 9.1 billion, investments make up more than 93% of the balance sheet total. The investments on behalf of policy-
holders, coupled with unit-linked products, made up
EUR 1.8 billion of this. This investment category
increased by 23.2% in the year under review.
The balance sheet total of SNS Reaal Invest increased
by 16.7% to exceed EUR 1.2 billion (1999: EUR 1.1 billion). On the assets side, the credit item increased by
13.8% to reach EUR 1.0 billion, while the participating
interest item increased by 37.9% to reach EUR 160
million. On the liabilities side, other funds entrusted
increased by 23.1% to reach EUR 1.0 billion.
CAPITAL BASE
The capital base of SNS Reaal Group increased by
21.9% to EUR 2.6 billion in the year under review.
Shareholders’ equity increased by EUR 123 million, up
to EUR 1.6 billion, as a result of the addition of the net
profit in 2000 of EUR 179 million, with the difference
primarily attributable to goodwill write-off. The capital ratio, the capital base as a percentage of the balance
sheet total, dropped slightly from 6.5% to 6.3% in
2000.
The capital base for banking operations increased by
attracting subordinated debt for a total of EUR 210
million. Subsequent to the 30.4% increase in the year
under review, the capital base now amounts to EUR 1.8
billion and thus makes up 6% of the balance sheet of
the banking operations (1999: 6.2%). Shareholders’
equity makes up 55.5% of the capital base.
The BIS ratio, the solvency ratio of the banking operations, was 11.2% in the year under review (1999:
11.7%). This ratio, which reflects the level of qualifying capital against risk-based assets, remained at the
same level despite the sharply increased mortgage
credit extension by the addition of the net profit to
shareholders’ equity and attracting subordinated debt.
The securitisation of parts of the mortgage loans portfolio resulted in a decline of risk-based assets. The BIS
ratio complies generously with the legal standard of
8% and also the internal standard of 11%.
The Fonds Algemene Bankrisico’s (Fund for general
banking risks) remained unchanged at EUR 70 million
in the year under review. The quality of the extended
credits and the existing provisions do not suggest any
addition to the fund.
Shareholders’ equity of the insurance operations
amounted to EUR 906 million at year-end 2000, an
increase of 5.2% over year-end 1999 (EUR 861 million). The capital base increased by 7.3% to reach EUR
986 million in the year under review. The solvency of
the insurance life operations was 2.81 times the legal
norm (1999: 2.77) and 4.06 times the norm for non-life
operations (1999: 3.14).
Shareholders’ equity of SNS Reaal Invest increased by
11.6%, from EUR 69 million to EUR 77 million in the
year under review.
Capital base SNS Reaal Group
€
millions
%
2,400
7.0
2,000
6.5
1,600
6.0
1,200
5.5
800
5.0
400
4.5
0
4.0
1996
1997
1998
1999
2000
Capital ratio
Subordinated debt
Fund for general banking risks
39
‘We simply want
treated as a top
Arno Driessen is managing director of Selman Transport.
He is responsible for safe and prompt transport of cut
flowers and plants across the Netherlands and Germany.
‘Every day fifty of our articulated trucks criss-cross the
country and that means most people know us.’
‘I am very proud of our company
which has been on the road since
1946. Perhaps that explains my extra
sensitivity to the way we are treated.
That in turn explains why I prefer
SNS bank to a large operator.’
‘SNS bank works with short lines of communication
which makes it very accessible. This brought me into
personal contact with the manager of my local branch,
and that is why I also met leading management at their HQ.
Their ‘just-act-normal’ approach appeals to me a lot.’
‘In 1998 Selman was threatened with sale. I contacted SNS bank
through our accountant and they introduced me to Foresta, a
subsidiary of SNS Reaal Invest that later proved an excellent
venture capital investor.’
to be
company’
‘SNS Reaal Invest purchased 49% of the shares; I bought
the other 51%. We soon agreed on details and what appealed to
me so much was the fact that we shared the same enthusiasm.
They wanted to buy just as much as I did. I have the impression
that as investor, SNS Reaal Invest works selectively. They study
all material thoroughly; and at shareholders’ meetings I discuss
things with people who really understand our business. Not so
long ago we started doing business with Transned Lease for our
trucks. It’s a subsidiary of SNS Reaal Invest, and shows the same
involvement.’
Risk management
Organisation
Risk management at the strategic level is centrally
embedded in the SNS Reaal Group. Within the Group,
the banking and insurance entities as well as SNS
Reaal Invest hold regular Asset & Liability Management meetings (ALMs), at which proposals are developed for submission to the Executive Board and the
respective Boards of Directors. On the basis of company continuity, the Executive Board determines the
desired overall risk profile. Formulating ‘risk appetite’
means creating a framework for the accepted risks and
risk management in the organisation.
Beyond the centralised coordination of risk management, the Group’s basic approach remains one of decentralised responsibility, with management of risk allocated first to line management because that is where
profit responsibility lies. The line organisation must
therefore have clear insight into the boundaries of the
risks at its disposal, both in advance and after the fact.
ing interest margins, or rather the difference between
the loan rate and the funding plus organisation costs.
Management determines the rates package for the
regional sales organisations of SNS bank, for BLG
Hypotheken and for CVB Bank separately.
Investment mix
The ALM process aims at optimal balancing of the
duration of claims and obligations. Within this framework the insurer’s main concern is determining the
optimal strategic investment mix. Optimisation means
pursuing the combination of the highest possible
expected coverage ratio (market value of investments
compared to technical provisions) with the least
chance of under-coverage. In the form of a stochastic
ALM analysis, whereby series of scenarios are evaluated, the evolution of the coverage level was examined
for the Investment Plan 2001. This led to a further
increase in the share of business assets.
Currency risks
Market risk
Market risk is that which might result from price movements (in shares, interest, currencies, etc.) on the financial markets. The value of a portfolio or equity capital
might fluctuate due to changes in market variables.
‘Value-at-risk’
The system approach improvements in the year under
review were completed; total activity risks were listed
and reported on a daily basis. ‘Value-at-risk’ and stress
limits are defined for all desks. The model-based working method used in market risk management makes it
possible to correlate realised gross and net incomes
with estimated levels of uncertainty.
Credit risk
The credit risk represents the risk of a counterparty
not being able to meet its obligations to (a part of) SNS
Reaal Group.
Interest rate risk
Credit-scoring model
The total interest rate risk in the balance sheet is determined by means of gap-analysis, duration-analysis and
simulation techniques. In addition to the gapping limits,
top management regularly determines the duration
limit for the shareholders’ equity. On the basis of scenario analyses, it then decides whether adjustment is
desirable.
Supervision concerning the banking debt risk lies with
the Credit Committee. Partly in view of the Basel Capital Agreement, it is important that SNS bank be able to
produce quantitatively substantiated evaluations of
credit risks prior to extending credit. In 2001, a creditscoring model will be used to this end, enabling a
diversified pricing policy and a substantially shorter
credit procedure. This is especially valuable for the relatively small business credits often issued by SNS
bank. The capital attachment based on the results of
Price risk
Pricing policy is an important instrument for manag-
42
Since SNS Reaal Group focuses on the Dutch home
market there is hardly a ‘country’ risk worth speaking
of. The currency risk – value adjustments to receivables and/or liabilities due to exchange-rate fluctuations – play a role in the funding operations and
insurer’s investments. In the case of funding, the currency risk is hedged by cross-currency swaps. Investments of the insurance operations are not strategically
hedged.
the credit scoring model is expected to be slightly
below current levels.
In the case of the insurer’s investments, minimum
creditworthiness requirements and maximum limits
as to outstanding credit to a single debtor are carefully
monitored. Naturally, this minimises credit risks as far as
possible. For questions on these matters, the insurer
consults with specialised departments of SNS bank.
Within the framework of credit extension, lease in particular, and consumer credit, SNS Reaal Invest also
uses SNS bank facilities.
Liquidity risk
The liquidity risk mainly concerns the chance that the
organisation might not have enough cash resources to
meet its immediate obligations. The concern here is
therefore the risk of limited access to financial markets. A substantial strengthening of the funding posi-
tion was realised in the year under review. Funding is
raised mainly by SNS bank, which pursues diversification of funding sources in terms of both instruments
and investors. An optimal mix is maintained between
money market funding (interbank deposit market, ECP
programmes, ‘Treuhand’) and capital market funding
(EMTN market, ‘private placements’). The subjects
‘funding’ and ‘securitisation’ are described under SNS
Financial Markets on page 29 of this report.
Operational risk
Operational risks are related to the daily activities
within companies and result from matters like system
errors, improperly described processes and human failure. The frameworks in which the organisation can act
and the instruments that it can use are carefully
defined by the central staff departments. The responsibility for operational risks rests with line management.
43
Social orientation
SOCIALLY RESPONSIBLE ENTREPRENEURSHIP
Business, government and consumers are showing
growing interest for socially responsible entrepreneurship. The way that a company operates now weighs
more heavily than ever in determining the ‘valuation’
of its products or services. Entrepreneurs are therefore
having to give more explicit consideration to the
thinking and expectations of society regarding their
actions. With its roots deep in Dutch society, SNS
Reaal Group is well aware of the importance of wide
social consensus for its activities. In this context, the
SNS Reaal Group considers sustainable development a
desirable and necessary long-term goal. SNS Reaal
Group believes that a business perspective broader
than a purely financial-economic one will benefit the
Group.
‘Green’ Financing
The ASN Green Projects Fund grew substantially also
in 2000. Many projects recognised by the Ministry of
Housing, Spatial Planning and Environment (VROM)
as ‘green’ projects – in sustainable energy, housing, biological agriculture, nature and landscape conservation –
were made possible thanks to financing by the ASN
Green Projects Fund.
Sustainable Investment in Developing Countries
Through the ASN Novib Fund, SNS Reaal Group offers
opportunities, via an investment fund, to link a good
return on investment with sustainable economic
activities of companies in developing countries.
Sustainable investment
Day of Ethical Investment
SNS Reaal Group further increased its leading market
position in the field of sustainable investment, using
both investment funds and institutional portfolios.
Since 1993, the ASN Share Fund has invested worldwide in companies that were selected on the basis of
environmental, socio-ethical and human rights criteria.
In 2000, the ASN Share Fund once again proved that
investing on the basis of sustainable criteria is perfectly
compatible with good returns. The fund grew by some
53% to exceed EUR 288 million at year-end 2000. The
ASN Share Fund is the largest ethical investment world
share fund in the Netherlands. In 2000 it was the only
sustainable world fund in the Netherlands to achieve a
positive return on investment. The SNS Eco Share
Fund, which invests in European companies with the
best environmental performances in their sectors, also
showed positive returns. The fund was the first in the
Netherlands for which companies’ ‘eco-efficiency’ was
mapped by business sector. At year-end 2000, the SNS
Eco Share Fund had reached nearly EUR 30 million.
In association with ASN bank and The Other Investment Fund (Het Andere Beleggingsfonds), SNS Reaal
Group organised its second annual Day of Ethical
Investment. At the event, the latest developments in
ethical and sustainable investment were presented to
public and press. Renowned members of the financial
and enterprise world gave their views on socially
sound entrepreneurship. With this event, SNS Reaal
Group wants to continue to stimulate public debate on
sustainable development, including the role of financial services providers.
Sustainable asset management and
sustainability analysis
SNS Asset Management specialised further in sustainable asset management and analysis. Having a department with specialist sustainability analysts has contributed strongly to its successful positioning. Nationally and internationally, there has been great interest
44
in harvesting this expertise in the field of sustainability analysis (see also page 30 of this report).
Sustainable Accounting
Around the world research is being conducted on
guidelines for sustainable accounting. The need for a
report that reliably reflects companies’ sustainability
performance is growing. Once again, SNS Reaal Group
organised a symposium on the Global Reporting Initiative (GRI), set up by the United Nations Environment Programme. At this busy symposium, sustainability analysts from SNS Asset Management made
specific recommendations to establish even-handed
indicators at the environmental and social levels. In
parallel to the further advancement of the Internal
Environmental Care evaluations, SNS Reaal Group has
taken steps to present its first sustainability report in
the near future using the GRI guidelines as its basic
approach.
Sponsoring and Consultancy
In 2000, a strong appeal was made to SNS Reaal Group
to sponsor national and international congresses on
sustainability and to provide a contribution to content. The central issue is often the so-called ‘triple bottom line’ of people, planet, and profit which targets a
feasible equilibrium between economic, ecological
and social interests. Active participation in many symposia and expert panels has earned SNS Reaal Group a
strong position in the field as well as impressive name
awareness.
ture and monuments. Part of the allocation is still
related to NOG Verzekeringen, which has supported
national projects since 1994 and which was absorbed
into Hooge Huys in 1999. Hooge Huys supports
national educational projects, in which there is a role
for the intermediary.
Reaal Profit Sharing Committee
The Profit Sharing Committee has the objective of
emancipating socially dependent or disadvantaged
groups, and supporting small-scale activities of a similar
nature, as well as the support of activities associated
with social democracy and workers’ movements.
SNS REAAL FUND
SNS Funds
The foundation SNS Reaal Fund was set up after the
merger of SNS Group and Reaal Group in 1997. The
aim of the SNS Reaal Fund is ‘to contribute to the
development of a balanced society in the Netherlands
and assist financially or even initiate (the renewal of)
projects of general social interest with an idealistic or
social component.’ In this context, the fund targets the
subjects of art and culture, the restoration of historical
buildings, health, nature and the environment, sport
and recreation, education, and social activities. The
assessment of applications and the initiative to support have been delegated to a number of committees
and foundations associated with the SNS Reaal Group.
SNS Reaal/Hooge Huys Committee
This committee receives a fixed annual budget to support initiatives in the area of projects in education, cul-
Each of the six regional SNS banks has an SNS Fund
that supports social activities and projects in their own
regions. SNS bank provides for the annual budget. The
board consists of people from the region with a clear
social involvement plus a representative of the bank.
Autonomous Foundations
The savings banks that became part of SNS Reaal
Group have always been closely linked to their local
and regional societies. This involvement is being continued by means of thirteen foundations, connected to
the Group. The foundations, set up in line with the
mergers, are given the resources they need to continue
the social activities of the former savings bank. The
boards of these foundations operate fully
autonomously, even though in the support a relationship with the local SNS bank is often established.
SNS Reaal Fund
SNS Reaal/Hooge Huys
Committee
Reaal Profit Sharing
Committee
Six regional
SNS Funds
Thirteen autonomous foundations
45
‘My daily contact with their account manager
is very pleasant. He’s very good at
the special things, which is very
useful for us. So, for instance, he regularly
introduces us to new software that saves us
time and effort. That sort of thing is great.’
‘At the Pension Desk I am responsible for financial planning,
pension advice and employee benefits such as special pension
‘gap’ coverage, collective sickness cover and surviving dependants
insurance. These are typical Hooge Huys products. The employer
is our contact for the group cover, but for annuity or disability
products, for instance, I literally visit people at their homes.
And then of course you talk about banking services such as savings and investment accounts.’
‘The services of
Hooge Huys mean
real added value’
‘We get creative thinking for
all non-standard cases’
Nancy Rohen is financial planner at the Pensions Desk of
De Mijnstreken (Maastricht) and regularly uses Hooge Huys
insurance products. Nancy is a member of the Dutch Federation of
Financial Planners (FFP); and her ambition is to head a professional
advisory group.
Hooge Huys
‘I was reminded recently that
is a key part of SNS Reaal Group. Not so long ago our account manager came
up with an SNS bank-labelled investment product that some of our clients
liked very much. I would probably not have been able to offer it if Hooge Huys
had not been part of the SNS Reaal Group. So for us this has been a very
good thing.’
Employees
Employees – the company’s human capital – are essential to SNS Reaal Group, especially in view of the high
quality financial services the organisation offers. The
right person must be at the right place with the right
expertise necessary for the function.
Management development
In order to fill key positions in particular, SNS Reaal
Group has introduced a management development
programme, set up to satisfy the professional needs of
three-quarters of the essential positions internally. The
company thus continues to invest careful attention to
the individual career development of a large number
of its staff. In positive discussions agreements are
negotiated and established regarding the paths to be
followed by these ‘potentials’. Current performance
and development are tracked by periodic discussions
on progress. The management development policy
applies across the Group, thereby simplifying and
stimulating exchanges between banking and insurance operations.
The Company Collective Labour Agreement
2000 (CAO)
The creation of a company CAO in the year under
review is a fact to celebrate. It greatly simplified the
exchange of bank and insurance staff, as such
exchanges no longer have to take account of variations
in primary and secondary employment benefits.
Another major advantage of the new CAO is the
greater flexibility it offers with regard to working
hours and remuneration. Besides their fixed salary,
employees are eligible for performance-based remuneration of up to 15%, so responding to steps being
taken in performance management.
Compliance
Freedom of choice and space for personal responsibility on the one hand are accompanied by restrictions
on the other. ‘Freedom is restraint’ means not only that
employees must always act within the framework of
internal instructions. They must also meet strict
norms at a higher level. As a professional financial
services provider, SNS Reaal Group attaches great
value to integrity and reliability. Compliance, part of
the Staff Group on Legal and Fiscal Affairs, Compliance & Security, upholds its own internal integrity
48
policy which includes legally prescribed rules as well
as behaviour codes. Compliance ensures the rules are
observed and raises awareness among employees,
through information sessions, that integrity is a basic
condition of service at SNS Reaal Group. The integrity
policy is based on the compliance statement, which
reads as follows:
Compliance statement
SNS Reaal Group pursues the provision of highquality service. This is only possible if SNS Reaal
Group and its employees act with complete
integrity. This does not only mean acting in
accordance with legal constraints, but also treating clients with respect and maintaining the reputation of SNS Reaal Group as a trusted partner.
Since 1 January 2001, a screening for integrity and
expertise has become part of the application procedure for candidates wishing to work at SNS Reaal
Group. With the candidate’s permission, information
is obtained from previous employers.
Career Centre
In an organisation that is always on the move, jobs
change and disappear constantly. SNS Reaal Group has
always made best efforts to ensure effective personnel
transfers and reappointment. To this end, its Career
Centre serves as an internal employment market,
where staff availability meets staff demand. In the context of professional human resources management
policy, much attention is paid to career development
and employee guidance. As a result, SNS Reaal Group
can present itself as an attractive employer even in
today’s tight job market.
Employee Participation
The Central Employees Council was consulted several
times in the year under review, particularly in discussions on the current reorganisation project. The advice
provided by the council revealed their great expertise
and involvement in the significant changes now
underway within the organisation. In 2001, following
the restructuring within SNS Reaal Group, co-manage-
ment will be streamlined. Let us not ignore the substantial work of the Central Employees Council in harmonising secondary labour conditions within the
Group following the new company CAO. The Execu-
tive Board expresses its appreciation to the council for
the constructive manner it interprets the co-management concept and thus contributes to the success of
the company.
49
Prospects
SNS Reaal Group is optimistic about opportunities
generated by the 2001 tax system. Clients will need
more advice on financial planning – for instance, to
hedge possible pension shortfalls. This can be provided through both direct and indirect sales channels.
Interest in savings and investing, as well as combinations of these, continues to increase, offering opportunities for innovative products in this area. And while
demand for core products such as mortgage credits
will probably level out due to market saturation, it
should nevertheless remain at a high level.
The policy of SNS Reaal Group focuses on benefiting
from sales opportunities in existing and new client
groups. The key brand names SNS bank and Hooge
Huys will be more distinctly profiled; while cooperation between the brands will intensify within the
Group by both the development and make-up of products and product combinations. As regards expenditure, Group policy aims for strict cost control and efficient working processes to enable the efficiency ratio
(bank) and the cost/premium ratio (insurer) to shift
faster in the desired direction.
Although economic prospects are increasingly questionable, SNS Reaal Group expects that in 2001,
excluding unforeseen circumstances, it will again
achieve a rise in net profit that will satisfy the financial objective of at least 10% annual growth.
J.J.A. Leenaars
M.W.J. Hinssen
G. van Olphen
50
Annual Accounts 2000
51
Consolidated balance sheet
31-12-2000
31-12-1999
127
381
8,527
22,909
4,203
2,614
445
970
703
116
306
8,028
17,486
3,662
1,101
389
781
658
40,879
32,527
Shareholders’ equity 10
Third-party interest
1,575
131
1,452
--
Group equity
Subordinated debts 11
Fund for general banking risks 12
1,706
799
70
1,452
591
70
Capital base
2,575
2,113
263
7,683
7,503
6,494
11,072
3,240
909
1,140
304
7,032
7,256
5,863
5,188
2,971
1,006
794
40,879
32,527
after profit appropriation and in EUR millions
ASSETS
Tangible fixed assets 1
Participating interests 2
Investments 3
Mortgage loans 4
Other loans 5
Banks 6
Liquid assets 7
Other assets 8
Prepayments and accrued income 9
TOTAL ASSETS
LIABILITIES
General provisions 13
Technical provisions, insurance operations 14
Savings 15
Other funds entrusted, banking operations 16
Debt certificates 17
Banks 18
Other liabilities 19
Accruals and deferred income 20
TOTAL LIABILITIES
The numbers mentioned with the balance sheet items refer to the notes starting on page 63
52
Consolidated profit and loss account
in EUR millions
2000
1999
1,410
444
1,552
92
141
1,249
587
1,188
65
120
3,639
3,209
1,448
1,092
35
395
342
25
53
1,446
783
33
332
343
17
24
3,390
2,978
249
231
66
70
183
161
4
--
179
161
INCOME
Gross premium income 21
Investment income 22
Interest income, banking operations 23
Commission 24
Other income 25
TOTAL INCOME
EXPENSES
Technical expenses, insurance operations 26
Interest charges, banking operations 27
Other interest charges 28
Staff costs 29
Other operating expenses 30
Value adjustments to loans and advances 31
Other expenses 32
TOTAL EXPENSES
Taxes 33
GROUP PROFIT
NET PROFIT
The numbers with the profit and loss account items refer to the notes starting on page 77
Annual Report 2000 / SNS Reaal Groep
53
Consolidated cash flow statement
in EUR millions
2000
1999
179)
161)
CASH FLOW FROM OPERATING ACTIVITIES
Net profit
Adjustments for:
- Depreciation
- Value adjustments to loans and advances
- Change in general provisions
- Other changes in accrued and deferred items
47)
25)
(41)
16)
Cash flow from business operations
Change in mortgage loans
Change in other loans
Change in banks (not payable on demand)
Change in technical provisions, insurance operations
Change in savings
Change in other funds entrusted, banking operations
Other changes relating to operating activities
TOTAL CASH FLOW FROM OPERATING ACTIVITIES
54
40)
17)
31)
(149)
47)
(61)
226)
100)
(5,423)
(541)
(1,013)
651)
247)
631)
23)
(3,580)
(411)
777)
873)
447)
679)
42)
(5,425)
(1,173)
(5,199)
(1,073)
2000
in EUR millions
1999
CASH FLOW FROM INVESTMENT ACTIVITIES
Investments and purchases:
- Participating interests in group companies
- Other participating interests
- Tangible fixed assets
(2,722)
(526)
(64)
(55)
(2,175)
--)
(135)
(47)
(3,367)
Disinvestments, redemptions and disposals:
- Other participating interests
- Tangible fixed assets
Change in investments on behalf of policyholders
TOTAL CASH FLOW FROM INVESTMENT ACTIVITIES
2,553)
10)
4)
(2,357)
1,763)
--)
4)
2,567)
1,767)
(332)
(385)
(1,132)
(975)
210)
(5)
5,949)
(65)
3)
159)
(5)
2,669)
(435)
4)
6,092)
2,392)
(239)
344)
CASH FLOW FROM FINANCING ACTIVITIES
Income from subordinated loans
Redemptions of subordinated loans
Income from debt certificates
Redemptions of debt certificates
Other changes relating to financing activities
TOTAL CASH FLOW FROM FINANCING ACTIVITIES
CHANGE IN LIQUID ASSETS
55
General notes
INTRODUCTION
SNS Reaal Group is an all-finance, multi-channel banking and insurance group with the typical characteristics of
both a banking and an insurance company. The items in the consolidated balance sheet, profit and loss account and
the consolidated cash flow statement as well as the accounting principles are therefore presented as far as possible in
accordance with the relevant guidelines and practices in these respective sectors.
GROUP STRUCTURE
SNS Reaal Group N.V. holds 100% of the shares in SNS bank Nederland N.V., SNS Reaal Verzekeringen N.V. and
SNS Reaal Invest N.V. which are respectively engaged in banking, insurance and other operations. The summary of
most important group companies shows which companies form part of the banking operations, insurance operations and SNS Reaal Invest, respectively.
CONSOLIDATION PRINCIPLES
The assets, liabilities, income and expenses of SNS Reaal Group and its group companies are consolidated in full.
Third-party interests in the equity and income of group companies are disclosed separately in the consolidated balance sheet and the profit and loss account. Financial relationships and transactions conducted between SNS
Reaal Group, the banking operations, the insurance operations and SNS Reaal Invest within the framework of the
normal business operations and in line with normal commercial practice are not eliminated. All other mutual
financial relationships and transactions are eliminated. This method is designed to provide clear insight into the
development of the business activities.
The notes to the consolidated balance sheet and profit and loss account present information by segment, making
a distinction between banking operations, insurance operations, SNS Reaal Invest and the group. The result of
the insurance operations is divided into the categories life insurance, non-life insurance and other.
The company profit and loss account was prepared in accordance with article 402, Book 2 of the Netherlands
Civil Code.
CHANGES IN PRESENTATION
The reporting currency for the financial years from 2000 onwards is the euro. The comparative figures from
1999 have been converted from guilders into euros at the rate of EUR 1 = NLG 2.20371.
A few further changes were made in the presentation of the consolidated balance sheet, the profit and loss
account and accompanying notes, the consolidated cash flow statement, as well as the company balance sheet
and accompanying notes. The comparative figures for 1999 were adjusted accordingly.
56
VALUATION AND DETERMINATION OF INCOME
General principles
Recognition in accounts
Assets are included in the balance sheet if these can be expected to generate future economic benefits for the
company and if the value of these benefits can be estimated with a fair degree of accuracy. Obligations are
included in the balance sheet if their settlement will lead to an outflow of assets which could generate economic
benefits whose value can be estimated with a fair degree of accuracy.
Income is included in the profit and loss account if an increase in the value of an asset or decrease in the value of
an obligation leads to an increase in the economic potential, the size of which can be estimated with a fair
degree of accuracy. Expenses are recognised in the profit and loss account if a decrease in the value of an asset or
increase in the value of an obligation leads to a reduction in the economic potential, the size of which can be
estimated with a fair degree of accuracy.
Where a transaction results in the transfer to a third party of (almost) all future economic benefits and (almost) all
risks arising from an asset or obligation, said asset or obligation is no longer included in the balance sheet. Furthermore, assets and obligations are omitted from the balance sheet as from the date on which these are no
longer expected to generate future benefits and can no longer be valued with a fair degree of accuracy.
Balancing
A financial asset and a financial obligation are balanced and stated as a net amount in the balance sheet if and insofar as legal or contractual provisions permit the simultaneous settlement and balancing of the asset and obligation
and if there was a prior intention to settle said items in this manner.
Valuation
The assets and liabilities are carried at nominal value unless otherwise stated.
Downward value adjustments
A downward value adjustment is applied where necessary to the (nominal) value of mortgage loans, other loans and
receivables from banks to cover the risk of default. The addition to the bad debt provision, presented in the profit
and loss account as value adjustments to loans and advances, is based on a long-term weighted average of the
actual losses and an assessment of the risks attendant on the receivables. In addition to this, the adequacy of the provision is evaluated statically on an annual basis, taking account of the value of the provided security.
Permanent loss of value is taken into account in the valuation of tangible fixed assets, participating interests and
investments. Any identified loss of value is charged directly to the profit and loss account. Permanent loss of
value in relation to assets stated at real value is charged to the revaluation reserve and is only charged to the
result if and insofar as a negative change in value has occurred on balance.
Foreign currency
Assets and liabilities denominated in foreign currency and forward exchange contracts entered into in relation to
borrowing and lending activities are converted at the spot rate on balance sheet date. Gains and losses resulting
from foreign currency transactions are converted at the rates prevailing on balance sheet date. (Swap) results
arising from forward exchange contracts entered into in relation to borrowing and lending activities are recognised
in the profit and loss account in proportion to the expired part of the term.
57
Hedge accounting
Transactions are treated as hedging instruments if identified as such and if the hedging is highly effective in the
sense that changes in the real value of the hedging instrument largely compensate changes in the real value of the
hedged position. Financial instruments used for hedging purposes are accounted for in accordance with the
accounting principles applicable to the hedged position. If financial instruments are used to hedge risks relating
to specific assets or liabilities which are subsequently sold or terminated, then the instruments are no longer
treated as hedging instruments. Gains and losses resulting from hedging instruments are included in the profit and
loss account concurrently with the gains and losses resulting from the settlement of the hedged position.
Derived financial instruments (derivatives) that are not used to reduce the risks attendant on the company’s own
positions are stated at real value. Value adjustments to these derivatives are accounted for directly in the profit and
loss account as income from financial transactions under other income.
Specific principles
Tangible fixed assets
Tangible fixed assets are carried at cost net of cumulative depreciation. Straight-line depreciation is applied over
the estimated useful lives of the assets.
Participating interests
Participating interests where significant control is exercised over the business and financial policy are carried at net
asset value. The Group’s share in the profits or losses of these participating interests and the gains or losses
realised on their disposal are accounted for in the profit and loss account as income from securities and participating interests under other income. Differences between the cost and the (share in the) real value of the acquired
assets and obligations (goodwill) are credited or charged directly to the shareholders’ equity.
Other participating interests are carried at cost or lower real value, i.e. the estimated market value.
Investments
Land and buildings in company’s own use
Land and buildings used for banking operations are carried at replacement value, based on continuity and functionality. The replacement value is determined on the basis of regular rotation where all buildings are appraised
at least once every ten years. Value adjustments resulting from these appraisals are credited or charged directly to
the revaluation reserve after deducting deferred taxes. Depreciation is applied on a straight-line basis, taking
account of estimated useful life and residual value. Buildings under construction are valued on the basis of
incurred expenditure.
Land and buildings used for insurance operations are carried at real value, i.e. the estimated proceeds from private
sale in rented state. Appraisals are made on a rotational basis where all land and buildings are appraised at least once
every five years. Value adjustments are credited or charged to the revaluation reserve, after deducting deferred
taxes. No depreciation is applied in relation to land and buildings, with the exception of payments made for the perpetual settlement of ground rent. Profits and losses realised on the sale of land or buildings are added to or withdrawn from the shareholders’ equity, taking account of (deferred) taxes. Buildings under construction (including
land) are valued on the basis of incurred expenditure.
58
Land and buildings not in company’s own use
Land and buildings not used for the group’s own activities are carried at real value, i.e., the estimated proceeds from
private sale in rented state. No depreciation is applied to such land and buildings. At the banking operations, any gains
or losses (including realised value adjustments) made on the sale of land and buildings are taken to the profit and loss
account. At the insurance operations, any gains or losses made on the sale of land or buildings are taken directly to
the shareholders’ equity.
Shares and convertible bonds
Shares and convertible bonds are stated at real value which is the quoted market price on balance sheet date in the
case of listed shares, convertible bonds and related options, and the estimated realisable value in the case of
unlisted securities. Unrealised and realised value movements are accounted for in the revaluation reserve, taking
account of deferred taxes. Insofar as the revaluation reserve relates to life insurance operations, an amount is
released from this reserve to the profit and loss account to supplement the total return on investment. This
amount is computed as the difference between, on the one hand, the average yield on ten-year Dutch government bonds over the previous ten years, applied at the average value of this investment portfolio and, on the
other hand, the dividends actually received.
Participating interests are carried at cost or lower real value, i.e. the estimated market value.
Investments in fixed-interest securities
Investments in fixed-interest securities are carried at redemption value. The difference between the redemption
value and the purchase price is included under prepayments and accrued income or under accruals and deferred
income, as appropriate, and is taken to the profit and loss account as interest income in proportion to the residual
maturity of the related asset. Investments in fixed-income securities which do not pay out annual interest (e.g. zero
coupon bonds) are carried at purchase price plus the part of the difference between purchase price and redemption
value that is attributable to the expired term. Gains or losses on disposals or swaps are stated in the profit and
loss account as interest income on the basis of the weighted average term of the portfolio concerned. Insofar as this
accounting method would, on balance, lead to higher capitalisation of expenses than deferral of income, the surplus is taken directly to the profit and loss account.
Interests in investment pools
At the insurance operations, interests in investment pools are carried at real value. Proceeds from disposals are taken
directly to the profit and loss account.
Investments on behalf of policyholders
Investments made for the account and risk of policyholders are carried at real value, with the exception of the
investments made separately for large group pension contacts. These are valued in accordance with the conditions of the contracts in question.
Loans
This item includes lease contracts, usually carried as operational lease. (Moveable) assets that are rented out are carried at cost after deducting depreciation and any diminuation in value as determined on the basis of the nature of
the assets, the contract period, the estimated useful life and the residual value.
Other assets
At the banking operations, securities (both shares and interest-bearing securities) held in the trading portfolio
are stated at real value, which is usually the market price on balance sheet date. Interest-bearing securities issued
by group companies that have been purchased for resale are valued at cost or lower real value. Realised and unrealised value movements are stated in the profit and loss account as other income.
59
Prepayments and accrued income
At the insurance operations, the accrued acquisition costs exclusively concern the acquisition commissions on life
insurance policies with periodic premiums. The capitalised acquisition costs are written down on a straight-line
basis over five years.
Subordinated debts
At the insurance operations, the final bonus account concerns final bonus commitments in relation to certain
life insurance policies. Entitlement to the final bonus applies only to specific individual policies which become
payable upon expiry of the agreed term or upon the death of the insured party. Entitlement to the final bonus
lapses on surrender of the policy. Entitlement to final bonuses not yet paid out are subordinated to all other
debts. It is also stipulated that entitlement to a final bonus is cancelled if and insofar as the results erode the capital base to such an extent that the statutory solvency requirements can or may no longer be complied with. The
final bonus account is calculated on an actuarial basis using the same principles as applied to calculate the profit
additions, which form part of the technical reserves for insurance provisions, and taking account of the estimated probability of early termination of insurance policies. Part of the final bonus account is converted annually
according to a fixed method into an unconditional right of the policyholder and added to the technical provisions for insurance operations.
The banking operations maintain an open fund for general banking risks. The fund is set aside to make provisions against calamities and is stated for prudential reasons in view of the risks inherent in banking operations.
Additions to and withdrawals from this fund are carried separately to the profit and loss account.
General provisions
Provisions are formed against operations-related commitments and risks which exist as at balance sheet date and
whose size or date of settlement is uncertain.
Deferred tax liabilities
A provision for deferred tax liabilities is stated to cover the differences between the book value according to the
annual accounts and the fiscal value as well as for tax equalisation reserves. The provision for tax liabilities is
based on the actual rate of taxation. Deferred tax assets are stated insofar as it is likely that these can be realised.
Deferred tax assets in relation to the fund for general banking risks are deducted from the fund. For prudential reasons, no value is assigned to deferred tax assets relating to tax loss carry-forwards.
Pensions and early retirement
The provisions for pension and early retirement are computed on the basis of actuarial principles using an actuarial interest rate of 4%.
Technical provisions, insurance operations
Life insurance
The provision for life insurance comprises the actuarial commitments, including profits already allocated under
profit-sharing schemes, less the actuarial value of future premiums. The costs are calculated in accordance with the
net method. For insurance policies whose term exceeds the period for which premiums are paid, a provision is
formed according to actuarial principles to cover costs incurred in the premium-free period. The average actuarial interest rate is 4%. Mortality rates are determined on the basis of the same principles used to calculate the
premiums. Where necessary, adjustments are made in accordance with the latest mortality tables. In the case of
insurance contracts which involve no exposure to investment risks, the actuarial interest rate is based on the
guaranteed return.
60
The provisions are stated net of capitalised interest rate rebates. Depending on the type of insurance contract,
the capitalised interest rate rebate is amortised either on an actuarial basis or over a period of eight years.
Unearned premiums and current risks
The provision for unearned premiums is computed in proportion to the unexpired risk periods. The provision is
equal to the unearned gross premiums net of prepaid reinsurance premiums. Gross premiums are stated net of
the stated commission. The provision for unexpired risks is calculated on the basis of claims and administrative
expenses that may arise after balance sheet date and which are covered by contracts concluded before that date insofar as the amount estimated in this connection exceeds the provision for unearned premiums and the premiums
claimable in relation to these contracts.
Outstanding claims
The provision for reported but unsettled claims is determined per individual item. A provision is also carried for
claims arising from events that have occurred but have not been reported as well as for claims handling
expenses.
Profit share for policyholders
This provision is valued on the basis of actuarial principles and consists of the amounts set aside in relation to
profit-sharing schemes for policyholders or beneficiaries.
Insurance where policyholders bear the investment risk
The technical provisions for insurance policies where policyholders bear the investment risk are generally
stated at the balance sheet value of the related investments.
Gross premium
The premium income from life insurance products is included in the profit and loss account on the date on
which the policyholder’s payment falls due. Other premiums are allocated to the periods to which they relate.
Taxes
Taxes on profit are computed on the basis of operating profits before taxation as shown in the annual accounts,
allowing for tax-exempt profit components. Tax credits arising from tax loss carry-forwards are accounted for in the
profit and loss account at the time of realisation.
CONSOLIDATED CASH FLOW STATEMENT
The cash flow statement is drawn up according to the indirect method, making a distinction between cash flows
from operating, investment and financing activities.
Cash flows in foreign currency are converted at the average exchange rates in the financial year.
With the cash flow from operations, the net profit is adjusted for income and expenses which did not result in
income and expenses in the same financial year and for changes in provisions and accrued and deferred items
(other assets, prepayments and accrued income, other debts and accruals and deferred income).
With investments in consolidated participating interests, the liquid assets available in these participating interests
are deducted from the purchase price.
61
Liquid assets consist of legal payment instruments, demand deposits at De Nederlandsche Bank (Dutch Central
Bank) and demand deposits at other banks.
62
Notes to the consolidated balance sheet
2000
in EUR millions
1999
ASSETS
Banking
2000 1999
Insurance
2000 1999
2000
Invest
1999
2000
Total
1999
1. TANGIBLE FIXED ASSETS
Data processing equipment
Other moveable assets
29
60
28
57
12
15
13
10
5
6
6
2
46
81
47
69
TOTAL
89
85
27
23
11
8
127
116
Balance at 1 January
Investments
Change in group composition
Disinvestments
Depreciation
BALANCE AT 31 DECEMBER
116)
55)
4)
(4)
(44)
110)
47)
--)
(4)
(37)
127)
116)
Accumulated depreciation on the tangible fixed assets as at
31 December 2000 was EUR 184 million (1999: EUR 169 million).
2. PARTICIPATING
Banking
2000 1999
Insurance
2000 1999
2000
Invest
1999
Reclassification
2000 1999
160
30
116
24
160
190
140
160
2000
Total
1999
161
191
190
121
185
161
381
306
INTERESTS
Equity participation
Receivables
TOTAL
2
2
4
4
29
29
1
1
The amount presented as a reclassified item concerns loans extended to
participating interests which are included in the consolidated balance sheet
of the banking operations and the insurance operations under (other) loans
and investments respectively.
63
2000
1999
Participating
interests with
Other
significant
participating
influence
interests
Total
2000
1999
2000
1999
2000
1999
Acquisitions and expansions
Disposals and reductions
Income from participating interests
Dividend received
Change in group composition
Revaluations
117)
47)
(6)
27)
(10)
(19)
4)
42)
27)
--)
21)
(5)
--)
32)
4
4
4
--
20
3
---
121)
51)
(6)
27)
(10)
1)
7)
46)
27)
--)
21)
(5)
--)
32)
160)
117)
31
4
191)
121)
EQUITY PARTICIPATIONS
Other participating interests include a subsidiary which was formerly
treated as a group company and a participating interest about which an
agreement to sell has been reached. Both equity participations are stated at
realisable value.
RECEIVABLES
Extended loans
Redemptions
185)
9)
(4)
77
108
--
190)
185
302)
1,496)
4,917)
40)
10)
1,762)
311
1,064
5,131
81
11
1,430
8,527)
8,028
The receivables from participating interests include a subordinated loan of
EUR 75 million (1999: EUR 75 million).
3. INVESTMENTS
Land and buildings
Fixed-income securities
Interests in investment pools of insurance operations
Deposits at insurers
TOTAL
64
2000
Banking
2000 1999
Insurance
2000 1999
1999
2000
Total
1999
LAND AND BUILDINGS
Wholly or partly in own use
Others
TOTAL
136
6
134
7
61
99
60
110
197
105
194
117
142
141
160
170
302
311
Investments
Disinvestments
Revaluations
Depreciation
311)
12)
(28)
10)
(3)
376)
35)
(101)
4)
(3)
302)
311)
Invest
2000 1999
Total
2000 1999
Banking
2000 1999
Insurance
2000 1999
SHARES AND
CONVERTIBLE BONDS
Listed
Unlisted
TOTAL
Composition of the portfolio by industry:
- Financial institutions
- Trade, industry and services
- Investment funds
- Others
TOTAL
Additions
Disposals
Revaluations
40
489
85
2
858
109
864
107
--
6
898
598
949
115
529
87
967
971
0
6
1,496 1,064
347)
406)
212)
531)
249)
438)
359)
18)
1,496)
1,064)
1,064)
993)
(543)
(18)
778)
262)
(194)
218)
1,496)
1,064)
65
2000
FIXED-INCOME
Banking
2000 1999
Insurance
2000 1999
1,096) 1,101)
1,975) 2,180)
2,086) 2,053)
2000
Group
1999
Elimination
2000 1999
1999
2000
Total
1999
SECURITIES
Bonds and interestbearing securities
Private loans
Deposits at
credit institutions
Other fixed-income
securities
1,096) 1,101)
Bad debt
provision
TOTAL
(11)
(3)
1,085) 1,098)
60)
58)
21)
13)
4,142) 4,304)
(8)
4,134) 4,299)
Composition of the bond portfolio by counterparty:
- The Dutch government or guaranteed by the Dutch government
- Foreign public bodies or guaranteed by foreign public bodies
- Trade and industry
- Other
TOTAL
Composition of the portfolio of private loans by counterparty:
- The Dutch government or guaranteed by the Dutch government
- Other Dutch public bodies or guaranteed by Dutch public bodies
- Trade and industry
- Other
66
39)
39)
39)
(340)
(305)
(1)
--)
(341)
(305)
(5)
Additions and advances
Disposals and redemptions
Other movements
TOTAL
39)
3,071) 3,281)
1,785) 1,787)
60)
58)
20)
13)
4,936) 5,139)
(19)
39)
39)
(341)
(8)
(305)
4,917) 5,131)
5,131)
1,717)
(1,793)
(138)
4,952)
1,707)
(1,468)
(60)
4,917)
5,131)
1,235)
357)
846)
275)
358)
1,293)
397)
960)
290)
341)
3,071)
3,281)
119)
173)
1,406)
23)
64)
150)
208)
1,324)
28)
77)
1,785)
1,787)
2000
1999
887)
853)
22)
707)
698)
25)
1,762)
1,430)
1,430)
675)
(302)
(41)
1,045)
382)
(125)
128)
1,762)
1,430)
Banking
2000 1999
Insurance
2000 1999
Total
2000 1999
Loans with (government) guarantee
Other mortgage loans
3,190) 2,698)
17,682) 12,928)
165) 240)
1,889) 1,634)
3,355) 2,938)
19,571) 14,562)
Bad debt provision
20,872) 15,626)
(6)
(4)
2,054) 1,874)
(11)
(10)
22,926) 17,500)
(17)
(14)
20,866)15,622)
2,043) 1,864)
22,909)17,486)
Investments in fixed-income securities include items of a subordinated
nature up to an amount of EUR 155 million (1999: EUR 155 million).
The balance includes listed securities issued by group companies up to
an amount of EUR 20 million (1999: EUR 21 million) and loans extended
to group companies up to an amount of EUR 232 million
(1999: EUR 196 million).
INVESTMENTS ON BEHALF OF POLICYHOLDERS
Investments on behalf of policyholders include separate deposits for the
account and risk of policyholders, investments for unit linked-insurances
and separate investments for large collective pension contracts.
Bonds and fixed-income securities
Other investments
TOTAL
Additions and advances
Disposals and redemptions
Revaluations
Some investments on behalf of policyholders have not yet been fully
separated from the group’s own investment portfolio and are accounted for
accordingly.
4. MORTGAGE LOANS
TOTAL
67
Breakdown of the portfolio by type of security:
- Residential property in the Netherlands
- Residential property outside the Netherlands
- Other property in the Netherlands
TOTAL
Breakdown by residual maturity:
- Up to one year
- One year to five years
- Over five years
TOTAL
Advances
Repayments
Securitisation
2000
1999
21,654)
73)
1,182)
16,595)
48)
843)
22,909)
17,486)
852)
489)
21,568)
388)
495)
16,603)
22,909)
17,486)
17,486)
7,042)
(970)
(649)
13,907)
5,875)
(1,871)
(425)
22,909)
17,486)
As further security for the mortgage loans of which the legal ownership has
been transferred, a non-possessory lien has been established on mortgages
with a total value of EUR 585 million (1999: EUR 688 million).
5. OTHER LOANS
This item relates to loans and advances to non-banks, other than in the form
of interest-bearing securities.
Banking
2000 1999
Personal loans
Business loans
Lease contracts
Bad debt provision
TOTAL
68
2000
Invest
1999
590) 430)
3,283) 2,938)
487)
153)
362)
300)
201)
383)
3,873) 3,368)
(40)
(40)
1,002)
(15)
3,833) 3,328)
987)
Elimination
and reclassification
2000 1999
2000
Total
1999
1,077) 730)
2,819) 2,603)
362) 383)
(617)
(536)
884)
(14)
(617)
(536)
4,258) 3,716)
(55)
(54)
870)
(617)
(536)
4,203) 3,662)
Breakdown by security:
- Public sector
- Private sector with government guarantee
- Private sector other
TOTAL
Composition by residual maturity:
- Payable on demand
- Not payable on demand: • Up to three months
• Three months to one year
• One year to five years
• Over five years
TOTAL
2000
1999
128
348
3,725
227
366
3,069
4,203
3,662
29
2,260
519
1,011
384
22
1,676
468
1,010
486
4,203
3,662
74
2,242
226
30
42
321
556
135
51
38
2,614
1,101
445
389
The subordinated loans amount to EUR 14 million (1999: EUR 14 million).
Credits include receivables from group companies up to an amount of EUR
90 million (1999: zero).
6. BANKS
The Banks item concerns loans and advances to banks insofar as not in the
form of intrest-bearing securities.
- Payable on demand
• Over five years
TOTAL
A receivable of EUR 5 million (1999: EUR 5 million) was extended in the
form of a subordinated loan.
7. LIQUID ASSETS
Liquid assets also include the demand deposits at De Nederlandsche Bank
and deposits of the insurance operations at other banks. Loans and advances
to banks as part of the banking operations are included in Banks.
69
2000
1999
289
206
250
19
245
35
132
142
16
230
49
138
970
781
338
170
82
113
356
179
78
45
703
658
340
1,235
340
1,112
1,575
1,452
Bond loans
Private loans
555
183
374
159
Final bonus account
738
61
533
58
799
591
8. OTHER ASSETS
Securities trading portfolio
Amounts due from direct insurance
- Policyholders
- Agents
Amounts due from reinsurance
Deferred tax receivables
Other amounts due
TOTAL
The securities trading portfolio contains listed securities issued by group
companies up to an amount of EUR 63 million (1999: EUR 80 million).
9. PREPAYMENTS AND ACCRUED INCOME
Accrued interest
Premiums/ discounts
Accrued acquisition costs
Other prepayments and accrued income
TOTAL
LIABILITIES
10. SHAREHOLDERS’ EQUITY
Share capital
Share premium and reserves
TOTAL
For further details on shareholders’ equity, reference is made to the notes to
the company balance sheet.
11. SUBORDINATED DEBTS
TOTAL
70
2000
1999
113
136
125
50
50
81
113
136
125
----
555
374
11
46
126
11
40
108
183
159
70
70
BOND LOANS
SNS Reaal Groep
SNS bank Nederland
SNS bank Nederland
SNS bank Nederland
SNS bank Nederland
SNS bank Nederland
7,25%
6,25%
5,125%
variable
variable
7,625%
1996/06
1997/09
1999/11
2000/10
2000/10
perpetual
TOTAL
PRIVATE LOANS
- Up to three months
- Over five years
TOTAL
The average interest rate amounts to 6.26 (1999: 6.08).
FINAL BONUS ACCOUNT
The final bonus account is largely of a long-term nature.
12. FUND FOR GENERAL BANKING RISKS
As the fund is deemed to be more than sufficient to absorb adverse effects
resulting from banking risks, no additions were made to the reserve in the
past years.
13. GENERAL
Banking
2000 1999
Insurance
2000 1999
2000
Invest
1999
2000
Group
1999
2000
Total
1999
140
191
PROVISIONS
Deferred
tax liabilities
Pensions and
early retirement
Other general
provisions
TOTAL
5
5
133
184
2
2
41
31
8
12
1
1
2
5
52
49
17
18
38
20
8
8
8
18
71
64
63
54
179
216
11
11
10
23
263
304
71
2000
1999
5,585)
(76)
47)
291)
14)
5,328)
(85)
48)
304)
14)
5,861)
5,609)
1,822)
1,423)
7,683)
7,032)
5,260)
884)
130)
649)
580)
5,518)
608)
60)
650)
420)
7,503)
7,256)
Other general provisions include provisions for information technology,
the introduction of the euro as well as integration and reorganisation.
The general provisions are largely of a long-term nature.
14. TECHNICAL PROVISIONS, INSURANCE OPERATIONS
Provision for life insurance obligations
Unamortised interest rate rebates
Provision for unearned premiums and accrued risks
Provision for payable claims
Provision for profit-sharing and rebates
Technical provisions for insurances
where policyholders bear the investment risk
TOTAL
The technical provision for life insurance includes an amount of
EUR 515 million (1999: EUR 247 million) for pension liabilities to staff
and former staff.
The technical provisions for insurance operations are largely of a longterm nature.
15. SAVINGS
The Savings item comprises balances of savings accounts, savings deposits and
term deposits of private customers. This item also includes interest payable on
savings, insofar as the contract terms stipulate that this interest is to be added
to the savings account.
- Payable on demand
• Over five years
TOTAL
This includes debts to group companies up to an amount of EUR 232 million
(1999: EUR 196 million)
72
2000
1999
2,056
1,051
2,924
463
2,065
1,151
2,313
334
6,494
5,863
2,921
1,319
236
943
1,075
2,311
1,174
383
973
1,022
6,494
5,863
2,571
5,408
3,093
65
3,861
1,262
11,072
5,188
16. OTHER FUNDS ENTRUSTED, BANKING OPERATIONS
Other funds entrusted concern non-subordinated debts to non-banks other
than in the form of debt securities.
Breakdown by category:
- Private loans
- Business deposits
- Credit balances of accountholders
- Mortgage deposits
TOTAL
- Payable on demand
• Over five years
TOTAL
Other funds entrusted, banking operations also include debts to group
companies up to an amount of EUR 91 million (1999: EUR 51 million).
17. DEBT CERTIFICATES
Debt certificates concern bonds and other debt certificates with a fixed or
variable interest rate insofar as not subordinated.
- Up to one year
- Over five years
TOTAL
73
2000
1999
143
1,245
231
813
808
95
1,618
139
512
607
3,240
2,971
168
123
4
132
111
371
178
199
6
123
109
391
909
1,006
610
11
288
705
-301
909
1,006
461
318
361
317
348
129
1,140
794
18. BANKS
The Banks item concerns non-subordinated debts to domestic and foreign
banks, other than in the form of debt securities.
- Payable on demand
• Over five years
TOTAL
Banks includes debts to group companies up to an amount of EUR 84 million
(1999: zero).
19. OTHER LIABILITIES
Loans and other long-term debts
Debts in relation to direct insurance
Debts in relation to reinsurance
Deposits of reinsurers
Taxes and social security costs
Other liabilities
TOTAL
- Up to three months
- Over five years
TOTAL
The non-subordinated bond loans, private loans and deposits held by the
banking operations are included in other funds entrusted, banking
operations, debt certificates and banks.
20. ACCRUALS AND DEFERRED INCOME
Accrued interest
Premiums / discounts
Other accruals and deferred income
TOTAL
74
2000
1999
110
664
118
1,014
CONTINGENT LIABILITIES
Commitments regarding sureties and guarantees issued
Commitments arising from irrevocable facilities
The Tax Collector/Large Corporations Utrecht has lodged a claim for several
tens of millions of euros against a group of associated companies (hereinafter:
defendant) which traded in the 1980s and early 1990s in companies with a fiscal replacement reserve. The Collector holds the defendant liable for tax on the
replacement reserves that was not paid by buyers of the traded companies. The
Collector alleges that SNS bank Nederland N.V., as the legal successor of Bank
der Bondsspaarbanken N.V. which acted as financier in the sale of the traded
companies, is liable for the amount which cannot be recovered from the defendant. Legal proceedings have not been initiated against SNS bank Nederland
N.V. The latter disputes the claim.
CURRENCY POSITION
Of the Total assets and the Total obligations, the equivalent of EUR 2,152 million (1999: EUR 797 million) and EUR 4,251 million (1999: EUR 2,828 million)
respectively is denominated in a currency other than the euro. The balance
sheet positions in foreign currency are generally covered by offsetting positions in the same currency or by off-balance sheet currency contracts (derivatives).
DERIVATIVES
Derived financial instruments or derivatives are financial instruments embodied in contracts whose value depends on one or more underlying primary
financial instruments. Derivatives contain rights and obligations as a result of
which one or more of the financial risks attendant on the underlying primary
financial instruments are transferred between parties. They do not lead to the
transfer of the underlying primary financial instrument when the agreement
is entered into, nor need any transfer take place on the expiry of the agreement.
Examples of derivatives are forwards, options, swaps and futures. The underlying primary financial instrument can be an interest rate product, a currency
product, a share product or a combination of these products. The transferred
financial risks are interest rate risks, currency risks, market risks or a combination of these risks.
Derivatives are omitted from (or netted in) the balance sheet as they concern
rights and obligations under a single contract whose principal sums serve
exclusively as a unit of account.
75
SNS Reaal Group, and notably the banking operations, concludes transactions
in derivatives principally to hedge interest rate risks and to a lesser extent currency risks. The main instruments used for hedging interest rate risks are
interest rate swaps and forward rate agreements. Currency risks are primarily
covered by means of forward exchange transactions and currency swaps. A
smaller share of the derivatives transactions is effected for arbitrage and trading purposes. The interest and currency derivatives are generally over-thecounter contracts.
The contracted amounts (notional amounts) shown in the statement (including the breakdown by residual maturity) reflect the extent to which SNS Reaal
Group is active in the various markets. However, the amounts give no indication of the size of the cash flows or the price and credit risks attendant on the
transactions.
Notional amounts
Interest rate contracts
- Swaps and FRAs
- Futures
Valutacontracten
- Swaps
- Forwards
TOTAL
Total
1 year
1 – 5 year
5 year
Positive
real value
89,594
1,262
77,398
1,262
3,321
--
8,875
--
1
--
2,163
6,383
-6,362
462
21
1,701
--
1
--
99,402
85,022
3,804
10,576
2
The unweighted credit equivalent amounts to a total of EUR 335 million
and the weighted credit equivalent to a total of EUR 78 million.
76
Notes to the consolidated profit and loss account
in EUR millions
PROFIT AND LOSS ACCOUNT
Banking
2000 1999
Insurance
2000 1999
Investment income
74
84
Interest income,
banking operations
1,394 1,048
Commission
89
63
Other income
69
57
1,410 1,249
381 518
1,626 1,252
Invest
2000 1999
Group
2000 1999
Elimination
2000 1999
Total
2000 1999
INCOME
TOTAL INCOME
125
122
31
3)
3)
(14)
(18)
1,410 1,249
444 587
55
2
32
65)
69)
(108) (106)
31
76
3
41
212)
183)
(212) (183)
1,552 1,188
92
65
141 120
1,947 1,920
120
89
280)
255)
(334) (307)
3,639 3,209
EXPENSES
Technical expenses,
Interest charges,
banking operations
1,077
Other interest charges
Staff costs
229
Other operating expenses 147
Value adjustments to
loans and advances
16
Other expenses
TOTAL EXPENSES
Result
before taxation
Taxes
GROUP PROFIT
NET PROFIT
1,448 1,446
784
184
138
6
1,469 1,112
1,448 1,446
45
28
21
17
16
14
7
83)
3)
26)
(1)
84)
3)
12)
7)
8)
--)
(113) (113)
(9) (10)
41
119
179
40
120
184
4
45
4
24
5
1,836 1,818
88
65
119)
106)
(122) (123)
(212) (184)
157
140
111
102
32
24
161)
149)
49
46
33
35
2
1
(18)
(12)
108
94
78
67
30
23
179)
161)
4
--
104
94
78
67
30
23
179)
161)
(212) (184)
(212) (184)
1,092
35
395
342
783
33
332
343
25
53
17
24
3,390 2,978
249
231
66
70
183
161
4
--
179
161
77
2000
1999
611
506
597
344
1,117
293
941
308
1,410
1,249
INCOME
21. GROSS PREMIUM INCOME
Gross premium income concerns the insurance premiums before deduction of
reinsurance premiums.
Life insurance
- Periodic premiums
- Single premiums
Non-life insurance
TOTAL
The gross premium over 2000 includes a single premium of EUR 212 million
in relation to a new pension contract with the pension fund of SNS bank
Nederland. This contract was formerly arranged through a different life
insurance company.
22. INVESTMENT INCOME
This includes interest income, rental income, dividends and part of the realised
value movements of shares. In addition, these include income from investments
made on behalf of the policyholders.
Banking
2000 1999
Land and buildings
- Dividend, interest, etc.
- Released value movements
Bonds and interest-bearing securities
Private loans
Other investments
12)
74
74
84
84
- Interest, dividend, etc.
- Value movements
TOTAL
78
Insurance
2000 1999
74
84
Group
2000 1999
Elimination
2000 1999
Total
2000 1999
12)
12)
12)
18) 16)
49) 39)
128) 123)
147) 144)
15) 17)
16)
39)
207)
130)
16)
3
3
(13)
(1)
(17)
(1)
18)
49)
202)
137)
14)
3
3
(14)
(18)
432)
420)
53) 43)
(41) 124)
53)
(41)
43)
124)
12) 167)
12)
167)
444)
587)
369) 351)
381) 518)
3
3
(14)
(18)
23. INTEREST INCOME, BANKING OPERATIONS
Interest income includes income arising from lending activities and related
transactions as well as related commissions and other income of an interestrelated nature. This also includes results from derivatives insofar as these serve
to reduce the interest rate risks.
Banking
2000 1999
Mortgage loans
Other loans
Other
TOTAL
1,103
209
82
Insurance
2000 1999
844
155
49
125
1,394 1,048
125
Invest
2000 1999
Group
2000 1999
122
122
Elimination
2000 1999
--)
(89)
(19)
(6)
(91)
(9)
Total
2000 1999
1,228
250
74
960
183
45
75
1
52
3
55
10
67
2
76
55
65
69
(108) (106)
1,552 1,188
Banking
2000 1999
Invest
2000 1999
Total
2000 1999
24. COMMISSION
Commission includes fees for services rendered insofar as these are not of an
interest-related nature.
Payment services
Securities business
Insurance business
Other activities
TOTAL
13
28
33
15
10
18
21
14
89
63
3
2
3
2
13
28
36
15
10
18
23
14
92
65
25. OTHER INCOME
This includes income from securities and participating interests, results
from securities trading, price differences in relation to securities belonging
to the trading portfolio, results from currency dealing, exchange rate
differences and results from derivatives not used for hedging purposes.
In addition, this includes all income that cannot be accounted for under
other headings.
79
2000
Banking
2000 1999
Income from securities and part. interests
Result on securities business
Result on currency business
Result on other financial transactions
Result on sale of business activities
Management fees
Other income
TOTAL
(2)
32)
9)
8)
3)
18)
19)
1)
Insurance
2000 1999
1999
Invest
2000 1999
8
--
27
21
10
5
16
14
31
41
17)
5)
13)
3)
4
5
14
69)
57)
31
Total
2000 1999
11
33
32
9
8
4
22
33
24
18
19
1
10
18
30
32
141
120
EXPENSES
26. TECHNICAL EXPENSES, INSURANCE OPERATIONS
Insurance expenses include reinsurance premiums, additions to insurance
provisions, pay-outs, surrender of policies, claims and claims handling costs.
Profit-sharing and rebates are also included.
Life insurance expenses
- Payments for own account
- Change in technical provisions for own account
- Profit-sharing and rebates
- Reinsurance premiums
Non-life insurance expenses
- Claims for own account
- Change in provision for unearned premiums
- Change in provision for payable claims
- Profit-sharing and rebates
- Reinsurance premiums
TOTAL
27. INTEREST CHARGES, BANKING OPERATIONS
Interest charges include costs arising from the borrowing of funds and
related transactions, as well as other costs of an interest-related nature.
80
516)
645)
69)
18)
459)
670)
84)
20)
1,248)
1,233)
163)
--)
(11)
--)
48)
127)
(3)
38)
8)
43)
200)
213)
1,448)
1,446)
2000
Banking
2000 1999
Funds entrusted
Debt certificates
Other
TOTAL
Invest
2000 1999
512
417
148
524
151
109
34
21
11
1,077
784
45
Group
2000 1999
1999
Elimination
2000 1999
14
67
3
(92) (103)
7
15
55
13
28
83
84
Total
2000 1999
(10)
469
472
151
456
218
109
(113) (113)
1,092
783
(21)
35
28. OTHER INTEREST CHARGES
33
These include interest charges related to non-banking activities.
Banking
2000 1999
Insurance
2000 1999
Invest
2000 1999
Group
2000 1999
Total
2000 1999
29. STAFF COSTS
Salaries
Pension and early retirement costs
Social costs
Other staff costs
TOTAL
152
24
17
36
121
17
15
31
62
13
9
35
66
13
8
33
13
1
1
6
10
1
1
4
10
10
1
5
5
4
-3
237
48
28
82
202
35
24
71
229
184
119
120
21
16
26
12
395
332
EMPLOYEES
The average number of staff calculated on the basis of full-time equivalents:
- Banking operations
- Insurance operations
- SNS Reaal Invest
- Group
TOTAL
3,685
1,748
370
129
3,369
1,874
292
68
5,932
5,603
81
2000
1999
EXECUTIVE BOARD AND SUPERVISORY BOARD
The remuneration of the members and former members of the Executive
Board jointly, including pension contributions, amounted to EUR 3.3 million
(1999: EUR 5.0 million). This includes additions to provisions for payments
to former board members. The remuneration of the members of the
Supervisory Board amounted to EUR 0.2 million (1999: EUR 0.2 million).
Loans and advances have been made to members of the Executive and
Supervisory Boards of which EUR 1.6 million (1999: EUR 1.1 million) was
still outstanding as at 31 December 2000.
Banking
2000 1999
Insurance
2000 1999
Invest
2000 1999
Group
2000 1999
Total
2000 1999
30. OTHER OPERATING EXPENSES
Acquisition costs
- Life insurance
- Non-life insurance
Accommodation costs
Automation costs
Marketing and public relations costs
External consultancy costs
Other expenses
Group transfer pricing
TOTAL
35
28
18
20
41
5
34
30
19
15
40
--
68
42
14
13
10
4
24
4
147
138
179
75
32
16
19
17
8
17
-184
2
4
4
2
5
1
4
4
1
4
17
14
2)
1
1)
4)
1)
(9)
-4
2
--
(1)
7
68
42
53
45
33
30
71
75
32
52
53
40
28
63
342
343
Acquisition costs include depreciation on capitalised acquisition costs up to
an amount of EUR 36 million (1999: EUR 32 million). Automation and
accommodation costs include depreciation on tangible fixed assets totalling
EUR 47 million (1999: EUR 40 million).
31. VALUE ADJUSTMENTS TO LOANS AND ADVANCES
These include value adjustments for bad debts.
82
25
17
2000
1999
32. OTHER EXPENSES
Other expenses include all charges that cannot be presented under other
headings.
Insurance
2000 1999
Reorganisation costs
Other costs
TOTAL
Group
2000 1999
Total
2000 1999
42
3
19
5
8
--
50
3
19
5
45
24
8
0
53
24
33. TAXES
66
70
The tax charge works out at 26.5% as opposed to 30.3% last year. The tax
charge is lower than would be expected on the grounds of the nominal tax
rate of 35%. This is due to results falling within the participation exemption
and realised tax loss carry-forwards. The decline in the tax charge is
primarily caused by higher results falling within the fiscal participation
exemption.
83
Consolidated balance sheet banking operations
31-12-2000
31-12-1999
317
2,595
353
1,098
ASSETS
Cash
Banks
Loans and advances to the public sector
Loans and advances to the private sector
128
24,571
Loans and advances
Interest-bearing securities
Shares
Property and equipment
Other assets
TOTAL ASSETS
224
18,725
24,699
1,290
613
2
231
103
495
18,949
1,246
145
4
226
66
467
30,345
22,554
3,156
2,971
LIABILITIES
Banks
Savings
Other funds entrusted
7,503
6,568
Funds entrusted
Debt certificates
Other debts
Accruals and deferred income
Provisions
Subordinated debts
14,071
10,410
183
646
63
13,215
4,526
83
312
54
28,529
21,161
70
627
70
417
1,007
112
906
--
Group equity
1,119
906
Capital base
1,816
1,393
30,345
22,554
TOTAL LIABILITIES
84
7,256
5,959
Consolidated profit and loss account banking operations
2000
in EUR millions
1999
INCOME
Interest income
Interest charges
Net intrest income
Income from securities and participating interests
Commission income
Commission charges
1,468
1,077
1,132
784
391)
(2)
100
11
Commission
Result from financial transactions
Other income
TOTAL INCOME
348
3
72
9
89)
49)
22)
63
38
16
549)
468
EXPENSES
Staff costs
Other administrative expenses
Staff and other administrative expenses
Depreciation
Value adjustments to loans and advances
TOTAL EXPENSES
Taxes
GROUP PROFIT
NET PROFIT
229
118
184
109
347)
29)
16)
293
29
6
392)
328
157)
140
49)
46
108)
94
4)
--
104)
94
85
Consolidated balance sheet insurance operations
31-12-2000
31-12-1999
Investments
7,383
7,397
1,762
1,430
ASSETS
Receivables
Receivables from direct insurance
Receivables from reinsurance
Receivables from group companies
Other receivables
267
8
2
70
156
14
9
107
347
Other assets
Tangible fixed assets
Liquid assets
27
128
286
23
42
155
Accrued interest
Other prepayments and accrued income
TOTAL ASSETS
86
119
28
65
137
26
147
163
9,794
9,341
31-12-2000
31-12-1999
LIABILITIES
906
19
861
--
Group equity
Subordinated debts
925
61
861
58
Capital base
Technical provisions
Gross
Reinsurance component
986
5,837
237
919
5,588
216
5,600
5,372
1,764
1,366
Deposits of reinsurers
179
216
Depots van herverzekeraars
132
123
Technical provisions for insurances
where policyholders bear the investment risk
Debts
Debts from direct insurance
Debts from reinsurance
Debts to credit institutions
Debts to group companies
Other debts
TOTAL LIABILITIES
121
4
32
154
359
199
6
64
199
428
670
896
463
449
9,794
9,341
87
Consolidated profit and loss account insurance operations
2000
in EUR millions
1999
TECHNICAL ACCOUNT, LIFE INSURANCE
Premiums, net of reinsurance
Gross premiums
Outgoing reinsurance premiums
1,117)
18)
941)
20)
1,099)
Investment income
Investments for own account
Investment on behalf of policyholders
464)
53)
921)
444)
43)
517)
Benefits, net of reinsurance
Gross
Reinsurers’ share
(530)
14)
487)
(479))
20)
(516)
Change in provision for life insurance
Gross
Reinsurers’ share
(684)
14)
(645)
(670)
(69)
(84)
Operating expenses
(182)
(190)
Investment expenses
(34)
(35)
Value movements of investments
on behalf of policyholders
(41)
124)
129)
94)
Profit-sharing and rebates
TECHNICAL ACCOUNT, LIFE INSURANCE
88
(656)
11)
(459)
2000
1999
TECHNICAL ACCOUNT, NON-LIFE INSURANCE
Earned premiums, net of reinsurance
Gross premiums
Outgoing reinsurance premiums
293)
48)
308)
43)
245)
Change in technical provision for
unearned premiums and accrued risks
Gross
Reinsurers’ share
--)
--)
265)
4)
1)
0)
3)
245)
268)
26)
27)
Investment income
Claims, net of reinsurance
Gross
Reinsurers’ share
(166)
3)
(148)
21)
(163)
Change in provision for payable claims
Gross
Reinsurers’ share
Profit-sharing and rebates
Operating expenses
Investment costs
TECHNICAL ACCOUNT, NON-LIFE INSURANCE
(22)
33)
(127)
(44)
6)
11)
(38)
(152)
(165)
--)
(8)
(103)
(102)
(1)
(4)
15)
16)
89
2000
1999
129)
15)
94)
16)
144)
110)
Investment income
Other income
Other interest charges
Operating expenses
Other expenses
4)
22)
(6)
(4)
(49)
3)
21)
(4)
--)
(28)
111)
102)
33)
35)
78)
67)
NON-TECHNICAL ACCOUNT
Technical account, life insurance
Technical account, non-life insurance
TOTAL TECHNICAL RESULT
Taxes
NET PROFIT
90
Life insurance where
policyholders bear
the investment risk
Life insurance where
insurer bears
the investment risk
ANALYSIS OF LIFE
INSURANCE PREMIUMS
2000
1999
2000
1999
Individual
- Without profit-sharing
- With profit-sharing
244
91
245
116
202
--
176
--
Collective with profit-sharing
335
38
361
45
202
36
176
15
373
406
238
191
29
69
34
68
112
--
157
--
98
269
102
54
112
27
157
31
TOTAL
367
156
139
188
TOTAL PREMIUMS, LIFE INSURANCE
740
562
377
379
PERIODIC PREMIUMS
TOTAL
SINGLE PREMIUMS
Individual
- Without profit-sharing
- With profit-sharing
Collective with profit-sharing
ANALYSIS OF TECHNICAL
RESULT
NON-LIFE INSURANCE
Total
2000 1999
Fire
2000 1999
Accident and
health
2000 1999
Motor
2000 1999
Other
categories
2000 1999
Booked gross premiums
293)
308)
80)
80)
73)
91)
109)
108)
31)
29)
Earned gross premiums
Gross claims
293)
155)
311)
186)
80)
40)
81)
37)
73)
20)
91)
52)
109)
79)
110)
79)
31)
16)
29)
18)
Reinsurance balance
138)
(45)
125)
(22)
40)
(6)
44)
(5)
53)
(37)
39)
(16)
30)
--)
31)
1)
15)
(2)
11)
(2)
93) 103)
(103) (110)
34)
(32)
39)
(34)
16)
(15)
23)
(17)
30)
(45)
32)
(48)
13)
(11)
9)
(11)
Operating expenses and profit-sharing
OPERATING RESULT
Investment income
TECHNICAL RESULT
(10)
(7)
2)
5)
1)
6)
(15)
(16)
2)
(2)
25)
23)
3)
4)
11)
7)
9)
8)
2)
4)
15)
16)
5)
9)
12)
13)
(6)
(8)
4)
2)
91
Consolidated balance sheet SNS Reaal Invest
31-12-2000
31-12-1999
15
21
ASSETS
Banks
Loans and advances to the public sector
Loans and advances to the private sector
1
1,016
Loans and advances
Shares
Property and equipment
Other assets
TOTAL ASSETS
2
892
1,017
-160
11
21
22
894
6
116
8
13
10
1,246
1,068
32
1,045
46
34
11
48
849
63
28
11
LIABILITIES
Banks
Funds entrusted
Other liabilities
Provisions
1,168
Group equity
TOTAL LIABILITIES
92
77
1
999
69
--
78
69
1,246
1,068
Consolidated profit and loss account SNS Reaal Invest
2000
in EUR millions
1999
INCOME
Interest income
Interest charges
Net intrest income
Income from securities and participating interests
Commission income
Commission charges
76
45
55
28
31
27
7
4
Commission
Other income
TOTAL INCOME
27
21
5
3
3
14
2
11
75
61
EXPENSES
Staff costs
Other administrative expenses
Staff costs and other administrative expenses
Depreciation
Value adjustments to loans and advances
TOTAL EXPENSES
Operating result before taxation
Taxes
NET PROFIT
21
14
16
12
35
3
5
28
2
7
43
37
32
24
2
1
30
23
93
Company balance sheet
31-12-2000
31-12-1999
2,001
1,092
39
1,845
913
39
3,132
2,797
28
62
3,160
2,859
340
15
356
40
824
340
15
379
32
686
Subordinated debts 6
1,575
254
1,452
229
Capital base
Provisions
Long-term debts 7
Short-term debts 8
1,829
10
832
489
1,681
23
826
329
3,160
2,859
ASSETS
Fixed assets
Participating interests in group companies 1
Receivables from group companies 2
Other receivables 3
Current assets
Receivables 4
TOTAL
LIABILITIES
Shareholders’ equity 5
Issued capital
Share premium
Revaluation reserve
Participating interests reserve
Other reserves
TOTAL
The numbers mentioned with the balance sheet items refer to the notes starting on page 96
94
Company profit and loss account
in EUR millions
2000
1999
Result on group companies after taxation
Other results after taxation
212)
(33)
183)
(22)
179)
161)
NET PROFIT
95
Notes to the company balance sheet
in EUR millions
2000
1999
1,007)
906)
77)
11)
906)
861)
69)
9)
2,001)
1,845)
1,845)
--)
(33)
15)
(38)
212)
--)
1,531)
39)
(79)
196)
(26)
183)
1)
2,001)
1,845)
1,092)
913)
39)
39)
3)
3)
22)
34)
7)
21)
28)
62)
GENERAL
For further details on the accounting policies, reference is made to the general
notes on page 56 and following.
Receivables from and debts to group companies on account of banking
services are stated as short-term receivables or short-term debts.
ASSETS
1. PARTICIPATING INTERESTS IN GROUP COMPANIES
Banking operations
SNS Reaal Invest
Other
TOTAL
Capital contribution
Goodwill
Revaluations
Released revaluations
Result
Other movements
2. RECEIVABLES FROM GROUP COMPANIES
This item includes the long-term receivables from group companies.
3. OTHER RECEIVABLES
This item includes a subordinated private loan.
4. SHORT-TERM RECEIVABLES
Receivables from group companies
Other receivables
TOTAL
96
2000
1999
LIABILITIES
Issued
share
capital
Share
premium
account
Revaluation
reserve
Part.
Interests
reserve
Balance at 1 January last year
Goodwill
Revaluations
Net profit 1999
Other movements
340
15
209)
Balance at 31 December last year
Goodwill
Revaluations
Net profit 2000
Other movements
340
340
Other
reserves
Total
assets
25)
608)
(79)
7)
154)
3)
1,197)
(79)
196)
(26)
161)
3)
32)
686)
(33)
10)
(2)
169)
2)
1,452)
(33)
15)
(38)
179)
--)
40)
824)
1,575)
5. SHAREHOLDERS’ EQUITY
196)
(26)
15
379)
15)
(38)
15
356)
The issued share capital consists of 750,007 shares of NLG 1,000 nominal.
All shares issued are held by Stichting Beheer SNS Reaal via Stichting
Administratiekantoor SNS Reaal. The Board of the Stichting Beheer SNS Reaal
comprises the members of the Supervisory Board and the Executive Board of
SNS Reaal Groep N.V.
6. SUBORDINATED DEBTS
This concerns debts that are subordinated to the other obligations.
Bond loan 7,25%
Private loans
Other liabilities
1996/06
TOTAL
113
30
111
113
-116
254
229
Group companies have subordinated bonds to the value of EUR 2 million
The private loans have an average percentage of 7.11. The term is longer than
five years.
97
2000
1999
662
125
45
662
125
39
832
826
113
113
159
227
50
113
113
159
227
50
662
662
390
31
5
63
210
36
5
78
489
329
The other liabilities include the present value (based on an actuarial interest
rate of 6%) of a long-term non-interest bearing debt of NLG 350 million
nominal or EUR 159 million (1999: EUR 170 million). The remaining term
is 14 years.
7. LONG-TERM LIABILITIES
Bond loans
Private loans
TOTAL
Bond loans
7,0% 1993/03
6,5% 1994/01
7,75% 1995/02
6,75% 1995/04
6,5% 1996/03
TOTAL
Group companies hold bonds up to an amount of EUR 59 million
The debts to group companies are subject to an interest rate of 5.85
(1999: 5.85) and a term longer than five years.
The private loans are subject to an average interest rate of 6.29 (1999: 6.4) and
have terms shorter than five years.
8. CURRENT LIABILITIES
Taxes
Other liabilities
Accruals and deferred payments
TOTAL
GUARANTEES
Guarantees in the sense of Section 403, Book 2 of the Netherlands Civil Code
have been issued for most of the wholly owned subsidiaries of the banking
operations and SNS Reaal Invest. Barring a few exceptions, no such guarantees
have been issued for the subsidiaries belonging to the insurance operations.
98
In addition, SNS Reaal Groep N.V. is guarantor of the obligations of Hooge
Huys Schadeverzekeringen N.V. in relation to certain insurance agreements
concluded after 1 September 2000.
99
List of the most important group companies
The most important group companies are listed below, broken down by banking operations, insurance operations
and SNS Reaal Invest. The participation percentage is 100, unless stated otherwise.
BANKING OPERATIONS
SNS bank Nederland N.V.
SNS bank Brabant/Rivierenland N.V.
SNS bank Gelderland N.V.
SNS bank Groningen-Friesland-Drenthe N.V.
SNS bank Limburg N.V.
SNS bank Overijssel N.V.
SNS bank Randstad N.V.
SNS bank Zeeland N.V.
Algemene Spaarbank voor Nederland ASN N.V.
CVB Bank N.V.
BLG Hypotheekbank N.V.
SNS Securities N.V.
’s-Hertogenbosch
’s-Hertogenbosch
Arnhem
Groningen
Maastricht
Zwolle
Amersfoort
Zierikzee
’s-Gravenhage
’s-Hertogenbosch
Geleen
Amsterdam
INSURANCE OPERATIONS
SNS Reaal Verzekeringen N.V.
Reaal Levensverzekering N.V.
Reaal Schadeverzekering N.V.
Reaal Overlijdenszorgverzekering N.V.
Reaal Reassurantie S.A.
Proteq Levensverzekeringen N.V.
Proteq Schadeverzekeringen N.V.
Hooge Huys Levensverzekeringen N.V.
Hooge Huys Schadeverzekeringen N.V.
N.V. Levensverzekering Maatschappij NOG
N.V. Schadeverzekering Maatschappij NOG
Utrecht
Utrecht
Utrecht
Utrecht
Luxemburg
Alkmaar
Alkmaar
Amsterdam
Amsterdam
Amsterdam
Amsterdam
SNS REAAL INVEST
SNS Reaal Invest N.V.
Leaseco Nederland B.V.
SNS Automotive N.V.
Abfin B.V.
TransNed Lease B.V.
PrimeLine services B.V.
TMF Group Holding B.V. (49%)
Xtensive Franchising B.V.
Foresta Investerings Maatschappij N.V.
DIN Adviesgroep B.V.
100
’s-Hertogenbosch
’s-Hertogenbosch
Culemborg
Sassenheim
Eindhoven
’s-Hertogenbosch
Amsterdam
Hilversum
Amersfoort
Baarn
List of the most important equity participations
The most important equity participations are listed below. These are participating interests of
SNS Reaal Invest.
APM Business Partners N.V.
Incasso Vesting Nederland B.V.
Infra Holding B.V.
NeSBIC CTE Fund B.V.
NeSBIC CTE Fund II B.V.
Parnassus Participatiefonds B.V.
Ribank N.V.
Skala Home Electronics B.V.
Stienstra Holding B.V.
Q-Park N.V.
Wanu Beheer B.V.
(25%)
(40%)
(43,7%)
(13,5%)
(10%)
(40,5%)
(40%)
(40%)
(45%)
(15%)
(20%)
Arnhem
Naarden
Naarden
Utrecht
Utrecht
Amsterdam
Nieuwegein
’s-Hertogenbosch
Heerlen
Maastricht
Rotterdam
The overview in the sense of Sections 379 and 414, Book 2 of the Netherlands Civil Code has been filed with the
trade register of the Chamber of Commerce at ’s-Hertogenbosch.
THE SUPERVISORY BOARD
THE EXECUTIVE BOARD
J.L. Bouma
H.M. van de Kar
J.V.M. van Heeswijk
D. Huisman
S.C.J.J. Kortmann
H. Muller
J.W.M. Simons
J.J.A. Leenaars
M.W.J. Hinssen
G. van Olphen
101
Other information
102
Other information
Profit appropriation under the articles of association
Article 36:
1. Subject to the approval of the Supervisory Board,
the Executive Board may reserve as much of the
profit as it deems fit. Any profits not reserved pursuant to the preceding sentence are at the disposal of
the general meeting for full or partial distribution
to the shareholders in proportion to their shareholdings.
3. Distribution of profits may only take place following
the adoption of the annual accounts in which such
distribution is approved.
PROFIT 2000
2. The company may only make payments to the
shareholders and others entitled to the distributable profits insofar as its shareholders’ equity
exceeds the total amount of issued share capital
plus the statutory reserves.
EUR millions
The profit has been recognised in
the annual accounts as follows:
Addition to the reserves
179
Auditor’s report
Introduction
We have audited the annual accounts 2000 of SNS
Reaal Groep N.V., ’s-Hertogenbosch. These annual
accounts are the responsibility of the company’s management. Our responsibility is to express an opinion
on these annual accounts based on our audit.
accounts. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the annual accounts. We believe that our
audit provides a reasonable basis for our opinion.
Opinion
Scope
We conducted our audit in accordance with auditing
standards generally accepted in the Netherlands.
Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether
the annual accounts are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the annual
In our opinion, the annual accounts give a true and
fair view of the financial position of the company at 31
December 2000 and of the result for the year then
ended, in accordance with accounting principles generally accepted in the Netherlands and comply with
the financial reporting requirements included in Part
9, Book 2 of the Netherlands Civil Code.
Amstelveen, 14 March 2001
KPMG Accountants N.V.
103
104
Curricula vitae of members of the Supervisory Board
The Supervisory Board of SNS Reaal Group has seven members, all of Dutch nationality. The overview below
gives a selection of former and current functions of these members.
Together with the Executive Board, the Supervisory Board forms the board of the Foundation (Stichting Beheer)
holding all the shares of SNS Reaal Groep N.V. The Supervisory Board is also the board of the Stichting Administratiekantoor, holder of the share certificates of SNS Reaal Groep N.V. The Executive Board forms the management of the Stichting Administratiekantoor. SNS Reaal Groep N.V. is 100% owner of SNS bank Nederland N.V.,
SNS Reaal Verzekeringen N.V. and SNS Reaal Invest N.V.
Prof. J.L. Bouma (66), chairman
Emeritus professor in business economics at the Rijksuniversiteit in Groningen; member of the Royal Dutch Academy
of Sciences; chairman of the supervisory boards of Albron Catering, Claessens, Eriks Group, Intereffekt, Kumij, O. de
Leeuw Holding and Raab Karcher Nederland; deputy chairman of the board of the Association of Aegon.
H.M. van de Kar (57), deputy chairman
University lecturer at the fiscal-economics faculty at Leiden University; member of the supervisory board of ITA;
chairman of the board of the International Institution for Social History; chairman of the Pension Fund for the
Dutch Theatre; treasurer of the International Institute of Public Finance; dean of Crisis and Disaster Management
training; chairman of the Sports Fund Foundation Leo van de Kar.
J.V.M. van Heeswijk (62)
Chairman of the supervisory board of Sligro Beheer; member of the supervisory boards of Tref, Showquest Entertainment, Mammoet Holding; former general managing director of Geveke; former chairman of the supervisory
boards of Calpam International Petroleum Company, SSM Coal, Merrem & La Porte.
D. Huisman (65)
Chairman of the supervisory council MCL/Zorggroep Noorderbreedte; chairman of the supervisory board of
Ophtec; former chairman of the board of Friesland Chamber of Commerce; former deputy chairman of the Verbond
van Verzekeraars; former deputy chairman of the executive board of Avéro-Centraal Beheergroep.
Prof. S.C.J.J. Kortmann (50)
Professor in civil law at Nijmegen Catholic University; deputy judge Courts of Arnhem and ‘s-Hertogenbosch;
chairman of the supervisory board of GDK Holding; member of the supervisory boards of Kropman, Dela Coöperatie, Canisius-Wilhelmina Hospital Nijmegen; chairman or member of various boards of trust offices or antitakeover foundations of listed companies.
H. Muller (58)
Federation board member and treasurer of the FNV; member of the Social Economic Council, employees’ chairman
Pensioencommissie Star, employees’ chairman Fonds Voorheffing Pensioenverzekering and chairman of the
supervisory board of ABF, Het Andere Beleggingsfonds Webefo.
J.W.M. Simons (66)
Chairman of the supervisory boards of Huybregts and Boldrik Construction and Real Estate Group, Orange
Global Property Fund, MAB Groep; member of the supervisory boards of Vesteda Management, Copaco, M.J. de
Nijs and Zonen Holding; chairman of Stichting Administratiekantoor ING Groep, chairman of College Sluitend
Stelsel Ministerie van Volkshuisvesting, chairman of the European Beirat Depfa Gruppe; former chairman of the
executive board of Bouwfonds Nederlandse Gemeenten.
105
Additional functions of members of the Executive Board
Prof. J.J.A. Leenaars (48), chairman
Part-time professor of administrative information provision Amsterdam University; member of the supervisory
council of TBS Clinique ‘De Kijvelanden’; member of the supervisory council of Delta Psychiatrisch Ziekenhuis;
member of the supervisory board of Chassé Theater.
M.W.J. Hinssen (44)
Member of the supervisory board of Brabantse Ontwikkelingsmaatschappij, Tilburg; member of the supervisory
board of Interpay Nederland; member of the supervisory board of Easychip; member of the board of the Employers’ Association for Banking Institutions.
G. van Olphen (38)
Board member of the Foundation Vangnet HBO institutions; board member of the Verbond van Verzekeraars;
board member of the Vakbondsmuseum; member of the supervisory board of Trustinstelling Hoevelaken; member
of the supervisory council of Maatschappij Zandbergen.
Ages as of 14 March 2001.
106
Definitions
Affinity insurer
Insurer who markets products and services under
third-party brands, including health insurance
providers and employee associations. This allows
associations and organisations to offer members
attractive discounts on insurances, with the
insurer providing product development, administration and marketing support.
Employee Benefits
Range of employee insurances, including pensions
and disability insurance (WAO).
Indirect distribution
Sales through (independent) intermediaries.
Interest dependence banking operations
Interest margin as a percentage of total income.
All-finance
An integrated range of banking, investment and
insurance products and services.
Interest dependence SNS Reaal Group
Bank-related interest income and insurance-related
investment income as a percentage of total income.
Asset & Liability Management
Balance sheet management.
Multi-channel distribution
Distribution via various sales channels.
Asset management
Professional management of securities portfolios
for private and institutional investors.
BIS ratio
Solvency ratio of banking operations (Dutch central bank standard: 8%).
Capital ratio
The capital base as percentage of the balance sheet
total.
Compliance
The fulfilment of internal and external regulations
and legislation related to the quality and reliability
of the organisation and all its activities.
Net profit per employee
The net profit per employee is expressed in thousands of euros/guilders. The basis is the average
number of employees in the financial year.
Off-balance sheet mortgages
Mortgages under management placed with third
parties.
On-balance sheet mortgages
Mortgages under management included in the
balance sheet.
Net profit as percentage of average shareholders’
equity.
Cost/premium ratio insurance operations
The operating costs (excluding reinsurance commission income received) as a percentage of the
gross premium income, with 12.5% of single premium policies included and single premium profit
policies excluded.
Securitisation
Making credits tradeable in the form of securities.
Treasury
Activities in the field of money and currency trading.
Direct distribution
Direct sales to clients.
Universal Life/Unit Linked insurance
Insurance linked to an investment product.
Efficiency ratio of banking operations
Operating costs as a percentage of income according to the banking model.
107
COLOFON
Concept & design
Nuyten & Associates, Amsterdam
Illustrations
Hummel Fotografie, Amsterdam
Existing material was also used
Typesetting
Melis Graphic Services, Helmond
Paper
This annual report is printed on environmentally friendly paper
Printing
vanGrinsven drukkers bv, Venlo
Publication
SNS Reaal Group
Pettelaarpark 70
PO. Box 70053
The Netherlands
108
SNS Reaal Group
Pettelaarpark 70
P.O. Box 70053
The Netherlands
Telephone: +31 (0)73 - 683 30 90
ANNUAL REPORT SNS REAAL GROUP 2000

2000 - SNS Reaal

Transcription

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