Annual Report 2013 - BinckBank · Risk & capital management 60 Introduction 61 Key developments in...

BinckBank N.V.Barbara Strozzilaan 3101083 HN Amsterdam

P.O. Box 750471070 AA Amsterdam

t 020 606 26 66f 020 320 41 76e [email protected] www.binck.nl

Annual Report 2013

2

Ann

ual R

epor

t 20

13

This document is a translation of the Dutch original and is provided as a courtesy only. In the event of any disparity, the Dutch version shall prevail. No rights may be derived from the translated document.

3

Annual Report 2013

Corporate governance 109Introduction 110Developments in 2013 110The Code 112The Banking Code 116Article 10 of the Takeover Directive 117Conclusion 117

Report of the supervisory board 119Message by the chairman of the supervisory board 120Duties of the supervisory board 121Composition of the supervisory board 121Meetings of the supervisory board and subcommittees in 2013 121Summary of the remuneration report 126Loans granted to members of the executive board 129Remuneration of members of the supervisory board and subcommittees in 2013 129Consultation with the works council 130Financial statements and dividend 130Supervisory board members 131

Financial statements 135

Contents

BinckBank overview 5Profile BinckBank 6Key figures 7Key events in 2013 8Chairman’s message 10Vision, mission, core values and strategicobjectives 12Medium-term targets 17Earnings model and SWOT analysis 18BinckBank in a European context 21Information for shareholders 22Financial calendar 2014 28

Report of the executive board 30General information 32Business unit Retail 36Business unit Professional Services 41Developments in legislation and regulation 43Subsidiaries, joint ventures and assosiates 46Human Resources 48Corporate social responsibility 52Events and outlook 2014 55Executive board members 58

Risk & capital management 60Introduction 61Key developments in 2013 65Overview of risk management at BinckBank 67Relevant risks and control measures 75Capital management 91Capital structure 92Capital adequacy and results of stress tests for BinckBank 95

Liquidity management 98Introduction 100Liquidity profile of BinckBank 100Liquidity risk management 104Contingency Funding Plan (CFP) 105Capital requirement for liquidity risk 105

Statement by the executive board 106In-control statement 106

AMBITIOUS,ENTERPRISINGORIENTED. THIS IS WHATBINCK STANDS FOR.AND CUSTOMER-

BinckBank overview

AMBITIOUS,ENTERPRISINGORIENTED. THIS IS WHATBINCK STANDS FOR.AND CUSTOMER-

6

Ann

ual R

epor

t 20

13

Profile BinckBankBinckBank N.V. (hereinafter, ‘BinckBank’), incorporated in 2000, is an online bank for investors. BinckBank’s core business is providing a comprehensive, user-friendly website that allows private investors to invest easily and quickly anywhere in the world at competitive rates. In addition to online brokerage, BinckBank provides asset management services through its Alex Asset Management product. BinckBank is ranked in the top five online brokers in Europe, and has repeatedly received awards as the best online broker in the Netherlands, Belgium and France. BinckBank is listed on NYSE Euronext Amsterdam, and has formed part of the Amsterdam Midkap Index (AMX) since 1 March 2006. At year-end 2013, BinckBank’s market capitalisation stood at € 574 million and the average daily turnover in BinckBank shares in 2013 was 310,976.

BinckBank is the market leader in both the Netherlands and Belgium, and is the second largest online broker in France. BinckBank has also been active in Italy since 2012.

The business unit Retail serves private investors under the brands Alex and Binck. Under the Alex brand, we focus on Dutch private investors looking to achieve more with their capital. In addition to an extensive investment website, Alex offers savings, asset management, and educational courses for investors. Under the Binck brand, BinckBank focuses on active private independent investors in the Netherlands, Belgium, France and Italy with order execution at competitive rates in combination with extensive facilities, including a professional investment website with real-time streaming prices, news, depth of order book, research, recommendations and tools for technical and other analysis.

As a partner for professional parties, Professional Services (“Able”) provides solutions in relation to market investing, fund investing and savings. Since 2012 Professional Services has also been the market leader in the Netherlands in BPO and the supply of licensed software to banks. On 11 November 2013, BinckBank announced that it will concentrate more on its retail core business, and that in the context of a proposed divestment it would study the options available regarding a sale or collaberation for its non-banking operations (BPO and software & licensing businesses). The services provided to independent asset managers and their (retail) customers are not included in the study. The focus on services to independent asset managers has been further intensified since 1 January 2014 giving priority to the further professionalisation and optimisation of the services to independent asset managers.

BinckBank has branch offices in the Netherlands, Belgium, France and Italy and also has a sales office in Spain. BinckBank’s associates include Able B.V. (software supplier, 100%-owned), ThinkCapital (issuer of ETF’s, 60% holding), BeFrank (collective pension accumulation, 50% holding) and TOM (multilateral trading platform & smart order router, 25.7% holding).

7

Annual Report 2013

Key figuresx € 1,000 FY13* FY12* FY11** FY10** FY09**Customer figuresCustomer accounts 551,970 518,771 531,465 433,538 373,574

Brokerage accounts 417,966 401,692 418,426 333,702 288,698 Beleggersgiro accounts 2,219 1,015 2,759 1,340 472 Asset management accounts 36,602 22,473 19,007 14,543 10,891Savings accounts 95,183 93,591 91,273 83,953 73,513

Number of transactions 8,164,978 7,769,681 9,709,795 8,854,215 9,617,181 Brokerage accounts 8,122,356 7,739,629 9,630,122 8,800,013 9,608,830 Beleggersgiro accounts 42,622 30,052 79,673 54,202 8,351

Assets under administration 16,124,263 13,383,874 13,034,188 13,514,633 10,606,639 Brokerage accounts 15,629,461 12,885,976 12,399,748 12,694,824 9,693,466 Beleggersgiro accounts 131,719 73,497 115,509 101,612 38,991 Savings accounts 363,083 424,401 518,931 718,197 874,182

Asset management 2,147,591 1,012,617 689,987 610,034 336,103 Asset management accounts 2,147,591 1,012,617 689,987 610,034 336,103

Income statementNet interest income 27,641 31,921 38,907 43,587 43,825 Net fee and commission income 130,477 109,186 128,447 126,970 129,240 Other income 1,433 1,715 13,322 13,599 9,661 Result from financial instruments 7 47 3,167 620 4,353 Impairment of financial assets 32 (2) (268) 70 (857)Total income from operating activities 159,590 142,867 183,575 184,846 186,222 Employee expenses 36,405 36,211 50,861 45,480 43,185 Depreciation and amortisation 28,763 34,970 35,463 34,798 35,939 Other operating expenses 52,768 36,257 43,800 44,223 43,388 Total operating expenses 117,936 107,438 130,124 124,501 122,512 Result from operating activities 41,654 35,429 53,451 60,345 63,710 Tax (10,790) (8,359) (13,513) (14,837) (15,083)Share in results of associates and joint ventures (2,393) (3,580) (5,848) (1,363) (1,466)Result after tax (continuing activities) 28,471 23,490 - - -Result after tax (discontinued operations) (9,545) (110) - - - Net result 18,926 23,380 34,090 44,145 47,161 Result attributable to non-controlling interests 322 720 120 95 - Net result attributable to shareholders BinckBank 19,248 24,100 34,210 44,240 47,161 IFRS amortisation 21,515 28,196 28,196 28,196 28,196 Fiscal goodwill amortisation 4,407 2,737 2,737 2,792 2,792 Other adjustments to net result 10,047 - Adjusted net result 55,217 55,033 65,143 75,228 78,149 Average number of shares outstanding during the year 70,432,579 72,801,291 74,142,108 74,080,265 74,897,706 Adjusted earnings per share (€) 0.78 0.76 0.88 1.02 1.04

Balance sheet & capital adequacyBalance sheet total 3,209,404 2,997,774 3,351,455 3,216,768 2,930,010 Equity 431,631 455,221 469,523 468,913 480,359 Total available capital (Tier I) 173,427 160,342 160,695 131,257 95,569 BIS ratio 32.0% 31.1% 31.1% 23.9% 18.4%Solvency ratio 26.4% 25.2% 23.1% 15.7% 13.0%

Cost / income ratioCost / income ratio 74% 75% 71% 67% 66%Cost / income ratio excluding IFRS amortisation 60% 55% 56% 52% 51%

* BinckBank has classified the BPO and software & licensing activities as “discontinued”. The comparative figures for the income statement for 2012 have been adjusted in accordance with IFRS 5.

** The comparative figures for 2009, 2010 and 2011 have not been adjusted.

KEYIN 2013EVENTS

23 FEBRUARYThink ETF’s wins ‘Product of the Month’ award from De Telegraaf

10 JUNEAlex Asset Management breaks through the € 1.5 billion AuM barrier

13 MAYThink ETF’s launches the first

sustainable ETF of Dutch origin: the Think Sustainable World UCITS ETF

1 JULYVAT increase for Alex Asset Management

19 JULYTOM introduces own ticker symbols for options based on the AEX Index

26 SEPTEMBERBinckBank

France wins the:‘Label Excellent 2014’ award

12 NOVEMBERAnnouncement: BinckBank to

acquire Fundcoach from SNS Bank

18 OCTOBERBinckBank France wins:

‘Client Service 2014’ award

7 NOVEMBERThink ETF’s wins the

‘Gouden Stier 2013’ award; also chosen as ‘best tracker’

22 NOVEMBERAlex Asset Management

reaches € 2 billion AuM

19 DECEMBERThink Global Equity UCITS ETF

chosen as financial product of the year

JULYAuM for Think ETF’s exceeds € 500 million

28 JUNEShare buy-back programme completed

22 APRILDisappointing

first quarter results

15 DECEMBERMigration of retail Belgium

to European base platform completed

8 JULYLegal proceedings for TOM

11 NOVEMBERStart research for a sale

or collaboration of BPO and software & licensing businesses

10

Ann

ual R

epor

t 20

13

Chairmen’s message

Dear readers,

I am pleased to present our annual report for 2013 to our readers. We value the opportunity to inform you regarding the key events at our company during the past year and to share our view of the future of BinckBank with you.

Last year was a year in which important changes took place. Our core business is offering services in the field of online brokerage. Online brokerage services for private investors in the Netherlands has been the foundation on which BinckBank has been built. Our services have been extended abroad, with an active presence in Belgium, France and Italy. In addition to online brokerage, we invested a lot of time and money in our asset management business last year and we are proud of the results that we have achieved. Assets under management at Alex Asset Management doubled, from € 1 billion to slightly over € 2 billion. Various television commercials were broadcast throughout 2013 that delivered visible results for the Alex Asset Management product.

We have decided that BinckBank should focus even more on the private customer; this means that we will not be extending the business offering to professionals (the BPO and software & licensing activities), and are looking for a buyer who can provide a better environment in which these businesses can flourish.

Competitors have entered the playing field in the Netherlands in recent years and the rates for our brokerage services have been reduced in order to remain competitive. Besides attractive rates, we offer a total package with a broad range of products and an excellent service. Our operating result has declined as a result of the price reductions in recent years, in combination with lower interest income due to the low level of market interest rates. Partly for this reason, growth of the asset management business is essential.

Our major sources of income are the results from the net interest income, commission income from brokerage transactions and the management and performance fees from asset management. The net interest income and the management fees are stable factors; commission income and performance fees, on the contrary, are volatile. This volatility is inherent in our business model and makes it more difficult to forecast our operating result. This makes it even more important that our overall operating expenses are adequately covered by more stable sources of income. This cover will increase as our asset management business grows; higher market interest rates will also benefit BinckBank.

We are the market leader in Belgium and we are doing good business there. Our rates in Belgium are attractive, both for our customers and for us. In France, BinckBank operates in a market with fierce price competition. The low rates charged by BinckBank in France mean that this branch makes a relatively lower contribution to the result. Italy is the largest market for online brokerage in Europe; this market is at the forefront and we have to acknowledge that our product does not yet match the local competition in all respects. We are investing further in the development of our system and in the expansion of our operations in Italy.

Economies of scale are essential for the profitable operation of an online brokerage platform; it is important that we settle as many transactions as possible and manage assets on one platform. Some years ago, we embarked on the development of the European base platform, that was a further development of the Topline system that was part of the acquisition of Alex. Our retail customers in the Netherlands, Belgium and Italy are serviced by this European base platform.

11

Annual Report 2013

Our customers in France still have to migrate to this platform. The Italian market is leading as regards technology, meaning that any new service we develop for Italian investors will also be available to customers in the Netherlands and Belgium. After the sale of the professional business, the service provided to independent asset managers, for which a banking licence is required, will remain at BinckBank. We will also migrate these activities to the European base platform in due course.

Our associates have had a good year in commercial terms. BeFrank performed well, and had more than 15,000 pension scheme members at the end of 2013. The Goudse PPI decided to withdraw from the market and transfer its customers to BeFrank in 2013. Assets under management at Think ETF’s rose from € 137 million at the beginning of 2013 to € 728 million at year end. Besides this excellent result, Think ETF’S was chosen as ‘best index investor’ at the Gouden Stier awards in November 2013 and the Think Global Equity UCITS ETF was chosen as Financial Product of the Year in December 2013. On 19 July 2013, TOM introduced its own ticker symbols for options based on the AEX Index. In summary proceedings, the court ruled that TOM may no longer use the symbols used by Euronext for the designation of options based on the AEX Index. TOM now uses unique symbols for day options, week options and month options.

Legislation and regulation in the financial sector continued to be subject to rapid change and increasing complexity in 2013. Our Compliance and Internal Audit departments have been strengthened accordingly. There has also been significant investment in systems in order to ensure the ethical business operations and controlled conduct of our business. This led to significantly higher operating expenses in 2013.

Many organisations will have to change their audit firm in the near future as a result of forthcoming mandatory rotation of the firm that audits their financial statements. BinckBank has not waited and after an intense tender process in the second half of 2013, we have chosen to engage Deloitte as our auditor. We will propose the appointment of Deloitte to our shareholders during the annual general meeting of shareholders on 22 April 2014.

I would like to express my appreciation for the confidence shown in BinckBank by all its customers and shareholders and the efforts made by our employees during the past year.

Amsterdam, 6 March 2014

Koen Beentjes,Chairman of the BinckBank executive board

Vision, mission, core values and strategic objectivesOur dream for the future (vision)

“BinckBank wants to help people achieve their financial ambitions.”

For this, people look for a reliable partner who provides the resources to retain and further improve their wealth position. In addition to offering financial services and products, BinckBank’s role here is to act as a ‘navigator’ for externally developed products. Our ambition is to assist our customers in achieving financial independence.

Our right to exist (mission)The Europan investor deserves better. Better understanding, better knowledge, better information, better service. And at a low cost. We are therefore highly committed and we push the boundaries where necessary. We want to amaze our customers so that they become our ambassadors, and so we make every effort to identify and meet their needs. A high level of customer satisfaction is a determining factor for our success.

Our core values

SincerityThis is the essence of our right to exist. Sincere interest in our customers, observable in our customer satisfaction. Sincere interest in investing, visible in our investment expertise and in all the products and services we offer. Fair rates, with no hidden costs. And the will to improve, because we can always do better.

Accessible Providing affordable access to markets, this is where it all started. Then we made our investment services accessible to financial intermediaries and introduced a low-threshold alternative for asset management. With expert employees who are approachable for our customers – and for each other – regardless of their position.

ConvenienceInvesting – whether you do it yourself or not – is already difficult enough. Ease of use is therefore very important. Not making things more difficult than they need to be. For instance, a user-friendly platform and expert employees who use understandable language. And by providing extensive information and inspiration, amongst others through various educational programmes, to increase confidence in investing. Transparency We believe in clarity: ‘what you see, is what you get’. In other words a clear fee structure on a single page, no hidden costs and communication without the small print. Also regarding the remuneration of our directors.

AmbitionOur right to exist and our core values provide us with a unique understanding of investors, and assist in improving our response to their needs. This is why we offer separate products and services for various types of investors. This leads to satisfied or even very satisfied customers, and a substantial market share. We continue to innovate in order to outperform our customers’ expectations.Beside the Netherlands, we have successfully rolled out this approach in Belgium, France and, since 2012, Italy. BinckBank is now the market leader in Belgium, and we are number 3 among the online brokers in France. We intend to expand these positions in the coming years by offering more products and services that give people more control of their investments and help them put their financial goals within reach. This will involve the offering of our successful asset management product abroad and a new investment fund service for independent investors taking a longer-term view.

The driving force behind all our initiatives is, and will remain, a high level of customer satisfaction. BinckBank’s ambition is to be the bank with the highest customer satisfaction in all countries.

12

Ann

ual R

epor

t 20

13

Strategic objectives for BinckBank

BinckBank has eight strategic objectives

1. Retain reputation and confidenceBinckBank relies on the confidence of its private and professional customers. The internet as primary distribution channel, its market listing, the large number of customers ,assets under management and administration makes BinckBank sensitive to questions relating to issues of confidence. Maintaining confidence and a good reputation are therefore essential. Since its incorporation, BinckBank has placed the customer’s interest first and has achieved a high level of customer satisfaction.

Situation at the end of 2013BinckBank has a low risk appetite with regard to jeopardizing of its reputation as a reliable and transparent service provider. Over the whole of 2013, our customers gave BinckBank a score of 7.9 (on a scale of 1 to 10) in our customer satisfaction surveys. The score in 2012 was 7.5. BinckBank will strive to achieve a further increase in customer satisfaction in 2014, with a target score of 8. 2. Expansion of online brokerageBinckBank will strive to further increase its online brokerage operations by introducing new products and services within its present geographical footprint (the Netherlands, Belgium, France and Italy). Important parameters are increasing the number of customers and transaction volume. Given the moderate economic outlook, further geographical expansion within Europe does not appear likely in the near future.

Situation at the end of 2013BinckBank achieved a good inflow of new accounts at Retail Netherlands in 2013 (+10,479 brokerage accounts, +4%). In France, the number of new brokerage accounts rose in 2013 (+3,749 brokerage accounts, +9%), and there was growth in Italy as well (+1,445 brokerage accounts, +115%). The number of new accounts for Retail Belgium fell in 2013 relative to 2012 (-1,393 brokerage accounts, -2%), partly due to the closure of 6,039 Fondsbeleggen accounts in the second quarter of 2013 and the transfer of the assets to Zelf Beleggen accounts for the customers concerned. The number of transactions by private customers rose 5% from 7.1 million in 2012 to 7.5 million in 2013, with 5.3 million transactions by our Dutch customers, 0.8 million by our Belgian customers, 1.2 million by our French customers and 0.2 million by our Italian customers.

3. Expansion outside the online brokerage chain: savings & investment management activitiesOne of BinckBank’s objectives is to further expand the services it provides to include savings and asset management activities, whereby the business model will focus on the management and administration of assets. This should lead to a more stable revenue stream in the longer-term.

Situation at the end of 2013In 2012, BinckBank took a strategic decision to allocate more people and resources to expand its savings and investment management activities. Much attention was devoted to the expansion of Alex Asset Management in 2013.Further expansions and improvements to our asset management services are scheduled for 2014.

Assets under management at Alex Asset Management increased by 112% in 2013, from € 1.0 billion to € 2.1 billion. The number of accounts increased by 63%, from 22,473 to 36,602. The net inflow of new funds amounted to € 923 million. BinckBank achieved a performance fee of € 17.2 million in 2013. The annually recurring management fee (which depends on the assets under management) came to € 17.3 million at the end of the fourth quarter of 2013.

4. Optimising operational efficiency and continuity of servicesBinckBank’s strategic objective is to use its existing infrastructure as efficiently as possible by settling as many transactions as possible and administering and/or managing the highest possible volume of assets. This will enable BinckBank to continue to offer competitive rates to its customers. Economies of scale as a result of high volume are necessary in order to be able to remain competitive in the long-term.

13

Annual Report 2013

Volume growth can be achieved in various ways:• growth of the number of accounts in existing markets;• introduction of new products and services;• connecting new countries to the existing infrastructure.

Situation at the end of 2013

Centralised back office and infrastructureBinckBank has its centralised back office and ICT infrastructure in Amsterdam where all transactions are settled, including those executed in Belgium, France and Italy. This central organisation for the settlement of securities transactions and the administration of securities positions is highly efficient, and allows us to achieve low costs per transaction. Further progress was also made in 2013 on the development of the European base platform. This platform enabled Italy to be accessed in 2012 and the time-to-market for the introduction of new products and services to be reduced. Retail Belgium was migrated to the European base platform, leading to additional scale benefits. We expect to transfer the French activities and services to independent asset managers to the European base platform in the period 2014-2016. A feasibility study for this has already been started in 2013. BinckBank plans to have migrated all its business to the European base platform by the end of 2016 in order to make the best possible use of economies of scale.

Foreign branches with low fixed costsBinckBank uses local branches for its foreign operations. These branches have low fixed costs, since the activities they perform are more or less restricted to front office (sales and customer service) and legal and compliance employees. The local branches focus entirely on their customers in the language of the country in question. It is essential that these activities are placed close to the customer, since this enables them to provide the best possible customer service and to tailor the products and services offered to meet the wishes and needs of the private investors in the various markets. The other activities, which mainly concern ICT and back office, are organised centrally in the Netherlands.

Constant focus on cost controlAt BinckBank we are convinced that operational excellence is the key to controlling costs. Continually working on structural improvements to our business methods and processes makes it possible for us to control our costs. BinckBank has been obliged to strengthen various departments within its organisation and invest in internal control systems as a result of changing and increasingly complex legislation and regulation in the financial sector, which increases its operating expenses. Several employees were trained in “Lean Methodology” in 2013 to increase the efficiency of business processes in order to keep costs manageable in the future. BinckBank will also focus on further improving its processes in 2014.

ExpertiseBinckBank employees have accumulated extensive expertise in the settlement and administration of securities transactions over the last few years, which greatly benefits the quality and efficiency of our service.

5. Conservative financial policyBinckBank follows a conservative financial policy and is moreover conservative with regard to investing the funds entrusted to it by its customers. The aim of capital management at BinckBank is to maintain a sound solvency and liquidity position, seeking constantly to strike the right balance between the equity capital it holds, the return it can realise and the risks to which it is exposed.

Situation at the end of 2013As at 31 December 2013, the capital and liquidity position of BinckBank was sound. BinckBank’s total equity at the end of December 2013 stood at € 432 million (FY12: € 455.2 million). The total available Tier 1 capital at year-end 2013 was € 173.4 million, compared to € 160.3 million at the end of 2012. The BIS ratio came to 32.0% and the solvency ratio rose from 25.2% in 2012 to 26.4% in 2013. Both ratios are comfortably higher than the required levels set by the regulators.

14

Ann

ual R

epor

t 20

13

6. Attractive return for shareholdersBinckBank strives to achieve an attractive Total Shareholder Return (TSR) (price appreciation + dividend) for its shareholders.

Situation at the end of 2013At the beginning of 2013, BinckBank’s share price stood at € 6.28. The share closed the year at € 7.71; an increase in the price of € 1.43. The final dividend for 2012 was € 0.28, and the interim dividend for 2013 came to € 0.13. On balance, the return (TSR) on BinckBank’s share in 2013 was € 1.84, or 29.3%.

7. Compliance with changing legislation and regulationBinckBank operates in extensively regulated and supervised markets in which all stakeholders have to receive the correct level of service. BinckBank must continually comply with the rapidly changing legislation and regulation in the financial sector (compliance), which has the effect of increasing costs.

Situation at the end of 2013BinckBank continuously has internal projects running to ensure that it can continue to comply with changing legislation and regulation. BinckBank devoted much attention to this area in 2013. Many of the changes to the internal organisation have now been realised. An important part of this concerns the structure of the organisation and the further formulation of the compliance policy. BinckBank has introduced new systems for Anti Money Laundering and Customer Due Diligence and awareness of compliance has been raised throughout the organisation by means of training courses and presentations. De Nederlandsche Bank has set up a large number of expertise teams. Many of these teams have started their work with audits, baseline measurements etc., and BinckBank is frequently been included in the scope of these audits. This has required an enormous effort by our organisation. The reviews mostly lead to the conclusion that improvements are needed in certain areas. Improvements have to be applied within a short time period.

8. Corporate social responsibilityFor BinckBank, corporate social responsibility (CSR) means achieving and maintaining sustainable confidence in its activities. The fundamental principle in our CSR policy is to place the customer’s interest first. The CSR policy is integrated in BinckBank’s services and is taken into consideration in the decision-making process with regard to product innovation. The position of banks in society as a whole is an issue attracting much attention, and many initiatives and activities are coming under scrutiny. This can be seen from reports in the media, as well as in the increased pressure from politicians and regulators. The preamble to the ban on inducements from 1 January 2014 is greatly affecting the sector. BinckBank endorses the importance of the intended transparency.

Situation at the end of 2013Consistent with its CSR policy, BinckBank also devoted attention in 2013 to promoting investment in sustainable development to its customers, by offering investment funds in sustainable development and giving these funds a prominent place on the website. Despite the fact that BinckBank is an execution-only service provider, meaning that the customers are responsible for their own investment decisions, BinckBank has a vision with regard to its product range. BinckBank accordingly carries an extensive range of funds in sustainable investment, and promotes sustainable investing in cooperation with other market parties in consultation with the Association of Investors in Sustainable Development (the VBDO). Our subsidiary ThinkCapital introduced a sustainable ETF in 2013.

From its execution-only mandate, BinckBank places great value on education. BinckBank enables retail investors to invest using the same tools as those used by professional investors. In addition to these tools, BinckBank’s Alex Academy offers mostly free education to support investors so that they have a better basis on which to make their decisions. With the Beursvloer, BinckBank moreover offers chat possibilities for its active customers. This allows customers to discuss investment constructions and strategies with each other. BinckBank is increasingly using the potential for education online, in the form of webinars and tutorials.

Alex Asset Management formulated and implemented an exclusion policy in 2013. In collaboration with Sustainalytics, Alex screens a universe of the 400 stocks on a quarterly basis in which the model invests. By means of this screening, Alex intends to avoid investing in companies that contravene the principles of the UN Global Compact. Moreover, Alex Asset Management does not invest in companies involved in the arms trade. The Global Compact guidelines are internationally recognised and widely endorsed as a framework for companies in the areas of human rights, labour, the environment and anti-corruption. The result of the screening by Sustainalytics for Alex Asset Management led to two companies being excluded as potential investments.

15

Annual Report 2013

Lastly, BinckBank has made its CSR activities more transparent by giving detailed account of these activities in its annual report (see pages 52-54).

Change to strategic objectives in 2014 Further growth with Professional Services (Able) is no longer one of BinckBank’s strategic objectives in 2014. The objective of further growth with the BPO and software & licensing activities therefore no longer applies with effect from 2014.

BinckBank thoroughly evaluated its business model and the future potential for its business unit Professional Services in 2013. This showed that the BPO (business process outsourcing) and software & licensing activities (carried out under the name of “Able”) would not create sufficient value for BinckBank in the short and medium-term, and that more shareholder value could be created by focusing on the business unit Retail (European online brokerage and asset management services).

The evaluation showed that no new BPO contracts had been concluded in either 2012 or 2013, and that the business unit Professional Services was thus lagging behind meet its medium-term targets of concluding two new BPO contracts each year. Significant costs for customised work have been incurred for the development of new BPO products that could only be recouped by concluding and implementing new BPO contracts in the short-term. BPO sales however involve a lengthy process (lasting between one and two years), as does the implementation of a BPO contract (and therefore, getting to actually providing the service and starting to submit invoices). BPO implementations are complex and depend to a large extent on the BPO customer. The time period from the initial sales contact with a BPO prospect to full recognition of revenue from a concluded BPO contract takes two to four years, meaning that revenue growth from BPO services takes a long time to realise. The potential market for BPO services in the Netherlands is limited (approximately 30 mandates) and the competition is expected to intensify over the next five years with new players entering the market. This means it will be difficult for the business unit Professional Services to retain its market leading position in BPO, let alone increase its market share. Analysis of the French market showed that there is a significant barrier to admission since many BPO mandates have already been granted to French BPO providers by financial institutions, and therefore international growth within BinckBank’s current footprint in France will be difficult. The evaluation also showed that the synergy between the business units Retail and Professional Services is too limited due to the use of different ICT software platforms (European base platform vs. the BPO platform).

On the basis of the results of this evaluation, BinckBank announced on 11 November 2013 that it would concentrate further on its retail business and that it had initiated a study of the possibilities for a sale or collaberation for the BPO (business process outsourcing), software & licensing operations of Able. A potential sale or collaboration with other parties will give Able a better basis for realising its ambitions. The management of Able supports the study and views a take-over or collaboration with other parties in a positive light. In its study, BinckBank will ensure that the interests of all stakeholders, including employees, customers and shareholders are served as far as possible.

16

Ann

ual R

epor

t 20

13

Medium-term targetsBinckBank set its medium-term targets (for 2015) at the beginning of 2012. In view of the positive developments since then, BinckBank has decided to adjust its targets for 2015 at this stage. This is due to the early realisation of two of its targets planned for the end of 2015, namely the assets under administration by Retail brokerage and the assets under management by Alex Asset Management. The target for Retail brokerage transaction volume has been adjusted downwards due to the fact that we operate in mature markets and do not intend to expand autonomously into new markets abroad. BinckBank will continue to focus closely on the growth of asset management in the next two years.

Retail brokerage transaction volume: 9,5 million transactions per yearThe target for Retail brokerage transaction volume has been reduced from 13.5 million to 9.5 million by year-end 2015. Some of the markets in which BinckBank operates have shown little or no volume growth in online brokerage in recent years. The commissions for online brokerage services have moreover been under pressure, making it increasingly difficult for BinckBank, with its traditional profile as a price discounter, to enter new foreign markets. A number of price discounters are already operating in most countries, making it even more difficult to set up a new foreign operation that will be profitable. BinckBank has decided that it will not undertake any further autonomous expansion abroad in the near future. We therefore consider an increase from 7.5 million transactions 9.5 million by the end of 2015 to be more realistic. Acquisitions however remain a possibility.

Assets under administration Retail brokerage: € 12 billionThis target has been raised from € 10 billion to € 12 billion by the end of 2015, now that the planned target of € 10 billion has already been achieved in 2013. This medium-term target will encourage further growth of our brokerage business in the Netherlands and the foreign markets in which we currently operate.

ItalyThe target with respect to profitability in Italy remains unchanged. Our operation in Italy should reach the break-even point by the end of 2015.

Assets under management at Alex Asset Management: € 3.5 billionThe medium-term target for assets under management at Alex Asset Management has been raised significantly by € 2 billion, from € 1.5 billion to € 3.5 billion by year-end 2015. BinckBank reached its target of € 1.5 billion in May 2013, much more quickly than expected. BinckBank sees sufficient growth potential in asset management in the next two years.

Overview of medium-term targets:

New targets for year-end

2015

Previous targets for

year-end 2015

Realisation year-end

2013

Realisation year-end 2013 in %

Realisation year-end

2012

Realisation year-end 2012 in %

Retail brokerage transactions volume

9.5 million 13.5 million 7.5 million 56% 7.1 million 53%

Assets under administration Retail brokerage

€ 12 billion € 10 billion € 10.4 billion 104% € 8.4 billion 84%

Italy Break-even Break-even - - - -

Assets under management at Alex Asset Management

€ 3.5 billion € 1.5 billion € 2.1 billion 140% € 1.0 billion 67%

Number of substantial BPO contracts Professional Services *

* 14 6 43% 6 43%

* This target has lapsed with effect from 11 November 2013 due to the study initiated of the available options for a sale or joint venture for the non-banking businesses (the BPO and software & licensing operations).

17

Annual Report 2013

Interest income

Income and expense drivers 2013 2012 Remarks

Interest on cash:Volume of funds

Money market interest rate

Cash balances are slightly lower due to more funds placed in the investment portfolio.

Money market interest is still historically low, but did not fall significantly further in 2013.

Interest from investment portfolio:Size of portfolio

Capital market interest rate

The size of the investment portfolio increased from € 1.5 billion to € 1.6 billion in 2013.

Capital market interest rates remained extremely low in 2013. The return on the investment portfolio fell from 1.2% to 0.80% in FY12.

Interest from collateralised loans:Size of portfolio

The size of the collateralised loan portfolio rose in 2013 from € 323 million to € 428 million.

Value of underlying financial instruments (= basis for collateralised loans)

Funding percentages/haircuts

Customer risk appetite/investor sentiment

Debit interest rate

The value of underlying financial instruments increased due to the stock market rally in 2013.

No significant changes in policy regarding funding percentages.

Investor sentiment (and therefore risk appetite) improved, mainly during the second half of 2013.

No significant changes in debit interest rate in 2013.

Interest expense

Volume of funds entrusted

Credit interest on cash in securities accounts

Credit interest on cash in savings accounts

Volume of funds entrusted in securities accounts increased by 5.5% in 2013.

As policy, no credit interest paid on securities accounts in 2013.

Credit interest on savings reduced from 1.00% to 0.65% during 2013, interest expense was therefore lower.

Net

inte

rest

inco

me

neutral negativepositive

Earnings model and SWOT analysisBinckBank earns its income from its interest-rate business and its transaction processing and commission business. The earnings models for the interest-rate business and the commission business are shown in the tables below, with details of developments during the 2013 financial year in comparison to 2012.

18

Ann

ual R

epor

t 20

13

Commission income

Income and expense drivers 2013 2012 Remarks

Commission income from securities transactions:Volume of securities transactions

Average income per transaction

The volume of securities transactions rose 5% in 2013.

Average income per transaction was more or less unchanged in 2013, average of € 10 per transaction.

Fees from BPO services: Study of potential sale or joint venture for the BPO and software & licensing operations started in November 2013.

Distribution fees: Receipt of distribution fees is no longer permitted with effect from 1 January 2014. Impact € 7-8 million.

Custody fees: Custody fees were abolished for most customers in 2013.

Asset management fees:Volume of AuM

Asset management fee

Performance fee

Strong increase in assets under management from € 1.0 billion in 2012 to € 2.1 billion at year-end 2013.

Fee percentage changed as of 1 July 2013 (fee 1% per annum incl. VAT).

Performance fee for Alex Asset Management rose to € 17.2 million in 2013 (FY12: € 4.1 million).

Commission expense

Market fees NYSE Euronext

Fees for best execution platform TOM

NYSE Euronext fees unchanged in 2013.

TOM fees unchanged in 2013.

Net

fee

and

com

mis

sion

inco

me

neutral negativepositive

19

Annual Report 2013

Strengths, weaknesses, opportunities and threats (SWOT)BinckBank uses a SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) to identify the main features of the organisation and the environment in which it operates. This analysis forms the basis of BinckBank’s strategy. Strengths and weaknesses show the internal factors. Opportunities and threats show the external developments, events and influences to which BinckBank is exposed. The main internal and external factors are summarised in the figure below.

Strengths Weaknesses

• • Strongbrands(AlexandBinck)thathaveanimage of soundness and reliability;

• • TheAlexAssetManagementproduct;• • MarketleaderintheNetherlandsandBelgium,

strong position in France;• • Soundfinancialpositionandconservativerisk

monitoring;• • CentralisedbackofficeandICTinfrastructure

with extensive expertise and experience in securities transactions;

• • Flathierarchicalstructurewithshortmanagement lines;

• • Independentplayerwithafocusoninvestingin a broad sense;

• • Highlevelofservice.Customersvalueourproactive approach and the speed of service.

• • Heavydependencyonvolatiletransactionincome and a relatively small group of very active customers for online brokerage;

• • Highfixedcostbase(infrastructure);• • Stillnotenoughvolumetomakeoptimaluse

of economies of scale.

Opportunities Threats

• • Lowinterestratesinthemoneyandcapitalmarkets offer opportunities for Alex Asset Management;

• • Privateinvestorsareincreasinglychoosingtomanagetheirownfinancialaffairs;

• • Increasingpopularityofpassiveinvesting(ETF/Trackers), offering additional prospects for our subsidiary ThinkCapital;

• • Potentialforearningadditionalreturnonfunds entrusted by customers when money and capital market interest rates rise;

• • Makinguseofmarketpotentialanddevelopments in online investing technology (trading applications) in Italy.

• • ‘Online’isthenewnorm.Asapioneerinthefield,BinckBankiswellpositionedtotakealeading role.

• • Decliningtradingvolumes,increasingcompetition and price pressure for ‘self-directed investing’;

• • Continuinglowlevelsofinterestratesinthemoney and capital markets;

• • Increasedriskduetomorecomplexlegislationand regulation (costs of internal controls and compliance);

• • Newcompetitorsinsomecaseshaveafastertime-to-market for introducing new services due to less legacy.

20

Ann

ual R

epor

t 20

13

* Among online brokers

BINCKBANK IN A EUROPEAN CONTEXT

Population: 17 million

Number of retail transactions: 10-12 million

Online brokers: Alex, BinckBank, Lynx,Saxo Bank, De Giro

Most traded products: Stocks, options and other derivatives

BinckBank’s market share: Market leader

BinckBank started: 1998Population: 11 million

Number of Retail transactions: 5 million

Online brokers: BinckBank , Keytrade, Bolero, Fortuneo en Lynx

Most traded products: Stocks, options and warrants

BinckBank’s market share: Market leader

BinckBank started: 2006

Population: 65 million


Online brokers: BinckBank, Bourse Direct, Boursorama, Fortuneo, Cortal Consors, Saxo Banque

Most traded products: Stocks (cash and SRD), certificates

BinckBank’s market share: Number 3-position*BinckBank started: 2008 Population: 61 million


Online brokers:

BinckBank, Fineco, IW Bank, Directa, Webank, Sella, Nuovi Investimenti

Most traded products: Stocks and derivatives

BinckBank’s market share: < 1%BinckBank started: Medio 2012

BELGIUM

NETHERLANDS

FRANCE

ITALY

ITALY

FRANCE

BELGIumNE

THERLANDS

21

Annual Report 2013

22

Jaar

vers

lag

2013

Information for shareholdersBinckBank shares are listed on NYSE Euronext Amsterdam and since 1 March 2006 have formed part of the Amsterdam Midkap Index (AMX), with a weight of 1.42% in this index on 31 December 2013 (FY12: 1.55%).

ISIN code: NL0000335578Reuters: BINCK.ASBloomberg: BINCK.NA

Options on BinckBank shares have been traded since 21 March 2006. The average number of shares traded daily in 2013 was 310,976 (2012: 229,041). BinckBank shares are currently followed by seven parties whose recommendations to institutional and private investors regarding BinckBank shares are shown below.

Coverage of BinckBank shares*

Company Analyst Recommendation Price target

ING Albert Ploegh Buy € 9.30

Kempen & Co Arun Rambocus Sell € 6.10

Kepler Capital Markets Benoit Petrarque Sell € 6.70

Petercam Tom van Kempen Hold € 7.70

Rabo Securities Cor Kluis Buy € 9.25

SNS Securities Lemer Salah Hold € 7.20

Theodoor Gilissen Tom Muller Buy € 9.50

* On 6 March 2014

Key figures for BinckBank shares*

2013 2012 2011 2010

Earnings per share € 0.27 € 0.33 € 0.46 € 0.60

Adjusted earnings per share € 0.78 € 0.76 € 0.88 € 1.02

Dividend per share** € 0.39 € 0.45 € 0.44 € 0.51

Dividend yield in % (based on year-end closing quote) 5.1% 7.2% 5.3% 4.4%

Net asset value € 5.79 € 6.11 € 6.31 € 6.30

Year-end share price BinckBank N.V. € 7.71 € 6.22 € 8.33 € 11.60

AMX index 629 534 468 639

P/E ratio 9.88 8.18 9.47 11.37

* As at 31 December 2013

** 2013 figures are subject to approval of the General Meeting of Shareholders and the statement of no objection (“vvgb”) from the Dutch Central Bank (DNB).

22

Ann

ual R

epor

t 20

13

23

Jaarverslag 2013

Share capital

2013 2012 2011 2010

Authorised ordinary shares 100,000,000 100,000,000 100,000,000 100,000,000

Issued shares at previous year-end 74,500,000 74,500,000 74,500,000 76,068,928

Number of shares cancelled during the year - - - 1,568,928

Issued shares at year-end 74,500,000 74,500,000 74,500,000 74,500,000

Treasury shares held at year-end 4,383,380 3,151,213 464,117 381,511

Number of priority shares 50 50 50 50

Average number of shares outstanding during the year

70,432,579 72,801,291 74,142,108 74,080,265

Market capitalisation year-end € 574,395,000 € 463,017,500 € 620,585,000 € 864,200,000

Share price & volumes

Investor sentiment improved significantly in 2013 compared to 2012, which led to higher turnover and higher equity prices. Fears of a further escalation of the European debt crisis or the collapse of the European monetary union receded, and the US economy showed signs of a (sustainable) recovery. The US system of central banks (the Fed) has taken the first steps towards “tapering” its accommodative monetary policy of the US economy. Equity markets in Europe and elsewhere made a weak start in early 2013, but picked up through the year. BinckBank had disappointing results in the first quarter, which negatively affected its share price. However, investor sentiment improved in the course of the year and BinckBank’s share price recovered. The shares closed the year at € 7.71, 24% higher than the closing price in 2012. The dividend on BinckBank shares amounted to € 0.41, bringing the total shareholder return in 2013 to 29.3%.

2013 2012 2011 2010

Opening price € 6.28 € 8.34 € 11.70 € 12.51

Highest price € 8.30 € 8.91 € 13.16 € 13.66

Lowest price € 5.69 € 4.97 € 6.80 € 8.91

Closing price € 7.71 € 6.22 € 8.33 € 11.60

Share turnover 79,298,786 58,634,431 64,973,343 86,610,504

Turnover - high 4,318,415 857,520 924,395 4,844,483

Turnover - low 41,544 23,978 53,902 44,598

Average daily turnover 310,976 229,041 252,815 335,700

23

Annual Report 2013

BinckBank share movements and volumes

BinckBank shares in 2013The AMX Index started the year at 534 points and finished at 629 points. The BinckBank share price at the beginning of 2013 was € 6.23, and it closed the year at € 7.71.

BinckBank vs. AMX

BinckBank AMX

80%

90%

100%

110%

120%

130%

140%

80%

90%

100%

110%

120%

130%

140%

Jan-

13

Apr-

13

Jul-1

3

Oct

-13

Jan-

14

Share buy-back programmeBetween 1 January en 28 June 2013 BinckBank purchased a total of 1,276,753 shares with an average purchase price of € 6.84 and a total value of € 9.1 million. The share buy-back programme was completed according to plan on 28 June 2013.

Volu

me

0

10,000

20,000

30,000

40,000

50,000

60,000

4.00

6.00

8.00

10.00

12.00

14.00

31-Dec-0828-Feb-09

30-Apr-0930-Jun-09

31-Aug-0931-Oct-09

31-Dec-0928-Feb-10

30-Apr-1030-Jun-10

31-Aug-1031-Oct-10

31-Dec-1028-Feb-11

30-Apr-1130-Jun-11

31-Aug-1131-Oct-11

31-Dec-1129-Feb-12

30-Apr-1230-Jun-12

31-Aug-1231-Oct-12

31-Dec-1228-Feb-13

30-Apr-1330-Jun-13

31-Aug-1331-Oct-13

31-Dec-13

22 April 2013:Disappointing first quarter results

8 May 2013:Takeover speculation rumor in the market puts share price highersh

are

pric

e

Volume Rate BinckBank

29 February 2012:ECB announces LTRO tenderwith 3 years maturity

23 March 2012:First-quarter resultsslightly lower than expected

23 July 2012:Low volumes on the financial markets put Q2 results under pressure

2009:Record year for BinckBank in terms of number of transactions and profit

26 April 2010:First-quarter resultslower than expectedby analysts

May 2010:Financial crisis

25 October 2010:Better than expectedthird-quarter results andtakeover rumours

24

Ann

ual R

epor

t 20

13

Dividend policyBinckBank’s articles of association state that – if and to the extent the profit permits – a sum of six percent of the nominal value of the priority shares will be paid on these shares (50 x € 0.10 x 6%). The Stichting Prioriteit then determines the extent to which the remaining profit will be transferred to reserves. The profit remaining after this addition to the reserves is at the disposal of the General Meeting of Shareholders. This means that the General Meeting may decide with reference to this remaining profit between distribution or addition to the reserves, or a combination of the two. Distribution may, in accordance with the relevant provisions in the articles of association of BinckBank, be made in ordinary shares instead of in cash. In order for profit to be made available to the General Meeting, the company’s solvency position must in the opinion of the Stichting Prioriteit be adequate for this purpose. If taking account of this provision a profit can be put at the disposal of the General Meeting, the Stichting Prioriteit will strive to effect a distribution of 50% of the adjusted net profit.

Dividend proposal for 2013It will be proposed to the shareholders that a total cash dividend of € 0.39 per share should be paid for the 2013 financial year, subject to deduction of 15% dividend tax. An interim cash dividend of € 0.13 per share was already distributed on 30 July 2013, so the final cash dividend proposed will be € 0.26 per share. Subject to prior approval by De Nederlandsche Bank and by the shareholders at the AGM on 22 April 2014, the shares will be quoted ex-dividend on 24 April 2014. Payment of the final dividend will be made on 30 April 2014.

Since the proposed dividend payment for 2013 is higher than the net profit for the 2013 financial year, BinckBank is obliged pursuant to Section 3:96 Wft to apply for a statement of no objection from De Nederlandsche Bank and it must moreover obtain the approval of the General Meeting of Shareholders.

Sustainability of the dividend policy in 2014The current dividend policy is based on the adjusted net profit. BinckBank distributes 50% of its adjusted net profit as dividend.

The adjusted net profit is the net profit attributable to BinckBank shareholders adjusted for IFRS amortisation of the intangible assets (€ 21.5 million) and the difference between the commercial depreciation and the fiscal depreciation (€ 4.4 million) of the intangible assets acquired and the goodwill paid in the acquisitions of Alex. There was an additional non-recurring adjustment of € 10.0 million in FY13 Q4 relating to the impairment under IFRS to the goodwill paid for the acquisition of Able B.V. (formerly Syntel B.V.) in 2006 (which does not involve any cash outflow). The total adjustment in 2013 came to € 25.9 million plus € 10.0 million in goodwill (Able B.V.).

Adjusted net profit is not an official accountancy measure, but is only used for the determination of the amount of the dividend. If the adjusted net profit is less than € 51.8 million (2 x € 25.9 million), the dividend payments under the dividend policy can be higher than the net profit and therefore will entail a withdrawal from the reserves.

The adjusted net profit in 2013 came to € 55.2 million, and the normal dividend for 2013 would therefore be € 27.6 million (50%). If the normal dividend that BinckBank pays for 2013 is compared to the net profit in 2013 (€ 19.2 million), then BinckBank is actually paying 144% (27.6/19.2) of its net profit as dividend, excluding dividend on treasury shares. This entails a withdrawal of € 8.4 million from the free reserves, in the first instance from the other reserves and, to the extent this is not sufficient, subsequently from the share premium reserve. The question this raises is how sustainable will payment of dividend under the current dividend policy be in 2014.

To answer the question of whether under the current dividend policy and with an adjusted net profit of less than € 51.8 million in 2014 a dividend can be paid, one needs to check whether the amount of the other reserves and the share premium reserve would permit payment and whether the banking capital ratios (the BIS and solvency ratios) would not fall below acceptable levels, and whether the profitability of the earnings model (future profitability) still leaves sufficient room for a dividend payment.

The size of the other reserves and the share premium reserve as at 31 December 2013 (€ 59.7 million and € 373.4 million respectively) is adequate to allow a payment of dividend that is higher than the net profit in 2014.

25

Annual Report 2013

As at December 2013 the BIS ratio and solvency ratio stood at 32% and 26.4% respectively. A withdrawal from the free reserves in 2014 as a result of a dividend payment higher than the net profit for 2014 is not therefore expected necessarily to constitute a direct threat to the adequacy of BinckBank’s available Tier I capital (depending on the effect of the stress tests). BinckBank expects its capital buffer to be sufficient to continue its dividend payments for 2014. If profitability in 2014 is not sufficient to pay a dividend in accordance with its dividend policy, BinckBank will be obliged to obtain a statement of no objection from De Nederlandsche Bank pursuant to Section 3:96 Wft in order to make a withdrawal from its reserves, and dividend payments in accordance with policy may in that case become an item of discussion.

BinckBank continually evaluates its dividend policy in the light of BinckBank’s financial performance in combination with developments in its capital position, investment plans, acquisition policy and solvency ratios. In the event of permanent negative developments in BinckBank’s profitability and/or its liquidity and solvency ratios, the executive board may decide to moderate its dividend policy.

ShareholdingsPursuant to the Dutch Financial Supervision Act (Wft), the company is aware of seven shareholders with an interest of more than 3% as at 31 December 2013. These are:• Delta Lloyd N.V. (> 10%) • Boron Investments N.V. (> 5%) • Navitas B.V. (> 5%)• Norges Bank (> 3%)• Delta Deelnemingenfonds N.V. (> 5%)• OppenheimerFunds Inc. (> 5%)• Robeco Institutional Asset Management B.V. (> 3%)

The shareholdings of the members of the executive board of BinckBank at the end of 2013 were as follows:• Koen Beentjes: 42,345 shares• Evert Kooistra: 39,295 shares• Pieter Aartsen: 47,646 shares

26

Ann

ual R

epor

t 20

13

Investor RelationsBinckBank maintains an open information policy for investors and others with a financial or other interest in the company, in order to keep all its stakeholders as fully and promptly informed as possible regarding policy and developments at the company. BinckBank actively seeks a dialogue with its investors. This annual report is one of the means whereby it does this. All other relevant information, such as half-yearly reports, quarterly statements, risk reports and background information is available at www.binck.com.

Members of the executive board and the Investor Relations manager held around 100 meetings during 2013 with (potential) investors from Europe and the United States. Following publication of the first, second and third quarter results and the annual results, BinckBank organises a conference call for analysts and shareholders in which the CEO and the CFRO give an explanation of BinckBank’s results. Other interested parties can follow the conference call via the BinckBank corporate website. The material presented will be published together with the press release on www.binck.com. All the results and key figures are available in spreadsheet form and the transcript of the conference call will be available on the corporate website. BinckBank invites analysts to attend an analysts’ meeting after publication of its half-yearly report. BinckBank moreover gives journalists the opportunity each quarter to receive an explanation of the results by telephone.

Investor RelationsNelleke NederlofTelephone: +31 20 522 0372Mobiel: +31 6 201 98 337E-mail: [email protected]: twitter.com/BinckBank

27

Annual Report 2013

28

Ann

ual R

epor

t 20

13

Financial calendar 2014

Annual General Meeting of Shareholders 2013

First quarter results 2014

Half-year results 2014Half-year report 2014

Third quarter results 2014

MARCH 2014

APRIL 2014

JULY 2014

OCTOBER 2014

10

22

21

2028

24

24

22

30

28

Annual results 2013

FEBRUARY 2014

3

Annual report 2013

Record date dividend

Record date interim dividend

Ex-date dividend

Ex-interim dividend

Payment date dividend

Payment interim dividend

Financial calendar 2014

* Dates subject to change

29

Annual Report 2013

This page was left blank intentionally.

OVERTREFVERBAAS DEKLANT

VERWACHTINGEN

Report of the executive board

General informationChange in management responsibilityThe executive board and the supervisory board discussed the composition of the executive board and the distribution of its responsibilities in 2013. As a result of the departure of the director of Retail at the end of 2012, Mr Koen Beentjes (CEO) also took over responsibility for the management of the business unit Retail in 2013. The chairman of the executive board has thus fulfilled a double function during 2013. Mr Koen Beentjes will transfer responsibility for the business unit Retail to Mr Vincent Germyns with effect from 1 May 2014. Immediately subsequent to the General Meeting of Shareholders on 22 April 2014, Mr Vincent Germyns will be nominated by the supervisory board for appointment as a director of BinckBank under its articles of association. The appointment will be made with effect from the date of the meeting of the supervisory board held immediately after completion of the General Meeting until the end of the Annual General Meeting held in the 2018 calendar year.

Mr Evert-Jan Kooistra transferred his responsibility for the Investor Relations and Legal & Compliance Nederland departments to the chairman Koen Beentjes (CEO) in March 2013. Mr Aartsen will not extend his term of appointment as a director in 2014.

Adjusted net profit in 2013The adjusted net profit for 2013 came to € 55.2 million, which equates to € 0.78 per share. This is virtually unchanged from the same period in the previous year (FY12: € 55.0 million, or € 0.76 per share). The adjusted net profit per share was up € 0.02 due to a lower average number of outstanding shares as a result of the share buy-back programme that was completed on 28 June 2013.

The adjusted net profit is the net result to be allocated to BinckBank shareholders adjusted for IFRS depreciation and amortisation and the tax saving on the difference between the fiscal and commercial amortisation of the intangible assets and goodwill paid as a result of the acquisition of Alex. There was an additional non-recurring adjustment in FY13 Q4 in relation to the impairment under IFRS to the goodwill paid for the acquisition of Able in 2006 (which does not involve any cash outflow). The annual dividend is determined on the basis of the adjusted net profit. As a result of this adjustment, the impairment to the goodwill will not affect the proposed final dividend.

Net interest incomeNet interest income fell in 2013 compared to 2012 by 13% to € 27.6 million (FY12: € 31.9 million). Due to the low level of money and capital markets interest rates, the return on the investment portfolio fell further in 2013, from 1.21% at the end of FY12 to 0.80% at the end of FY13. This lower interest income on the investment portfolio was partially offset because BinckBank further reduced the interest paid on its savings and asset management accounts in 2013. The credit interest payable in 2012 was reduced from 1.75% to 1.00%, and was again reduced in 2013, from 1.00% to 0.65%. In addition, BinckBank received higher interest income from collateralised lending. The collateralised lending to our clients rose 32% in 2013, from € 323 million to € 428 million.

27.6

FY13*

32.0

43.7

38.9

0

5

10

15

20

25

30

35

40

45

50

FY10 FY11 FY12*

in €

mill

ion

Net interest income

428

FY13

323

476

290

0

50

100

150

200

250

300

350

400

450

500

FY10 FY11 FY12

in €

mill

ion

Collateralised lending (at year-end)


32

Annu

al R

epor

t 20

13

Net fee and commission incomeNet fee and commission income came to € 130.5 million in 2013 which is 19% higher than in the previous year (€ 109.2 million). The rise in net fee and commission income was mainly generated by BinckBank’s asset management business. Additional income of € 18.6 million (+172%) was generated from this in 2013 in comparison to 2012 (FY13: € 29.4 million, FY12: € 10.8 million). The increase was partly due to assets under management, which rose 112% in 2013 from € 1.0 billion to € 2.1 billion, and also as a result of a significantly higher performance fee payable by our customers (FY13: € 17.2 million, FY12: € 4.1 million).

Alex Asset Management charges a performance fee if customers achieve a positive return on their portfolio and their year-end balance is higher than that at previous year-ends. Alex Asset Management received a performance fee of € 17.2 million in 2013.

Other incomeOther income declined 16% in 2013, from € 1.7 million to € 1.4 million.

Result from financial instrumentsBinckBank’s result from financial instruments was more or less nil in 2013.

Total operating expensesTotal operating expenses in 2013 came to € 117.9 million. This is an increase of 10% compared to the previous year (FY12: € 107.4 million). Employee expenses were more or less unchanged compared to 2012 (FY13: € 36.4 million, FY12: € 36.2 million). Depreciation and amortisation fell 18% in 2013 to € 28.8 million (FY12: € 35 million). The decline was due to a lower amortisation expense on the identified intangible assets arising from the acquisition of Alex Beleggersbank. The items “Brand” and “Software” were amortised over five years, leading to a carrying amount of nil at year-end 2012. The items “Customer deposits” and “Customer relations” are amortised on a straight-line basis over 10 years, which in practice means that in the coming 4 years (until year-end 2017) a further € 21.5 million will be amortised on the acquisition of Alex Beleggersbank each year (€ 5.4 million per quarter). Other operating expenses rose sharply by 46%, from € 36.3 million in 2012 to € 52.8 million in 2013. The increase was due among other things to higher marketing expenses for the promotion of Alex Asset Management (€ 1.9 million), additional consultancy costs in relation to projects associated with the radically changing and increasingly complex legislation and regulation in the financial sector (€ 2.3 million), additional automation and development costs due to factors including the already mentioned complexity of legislation and regulation and the migration of Retail Belgium to the European base platform (€ 3.2 million), extra non-recurring fees invoiced to BinckBank in connection with the distribution of price information to our clients (€ 3.0 million), additional expenses in connection with provisions raised due to current legal disputes (€ 3.5 million) and finally, the expenses in 2012 were positively affected by a non-recurring VAT benefit of € 2.1 million.

109.2

127.0 128.4

0

30

60

90

120

150

FY10 FY11 FY12*

130.5

FY13*

in €

mill

ion

Net fee and commission income

8.2

FY13*

7.8

8.99.7

0FY10 FY11 FY12*

2

4

6

8

10

12

in m

illio

n

Number of transactions


33

Annual Report 2013

Result after tax – discontinued operations (FY13 Q4: € -9,463)In FY13 Q4 BinckBank N.V. announced that in the context of a proposed divestment it would initiate a study of the available options for a sale or collaboration for its non-banking businesses, the BPO and software & licensing operations which operate collectively under the brand Able.In accordance with IFRS 5, these results will be presented under the item Result after tax (discontinued operations) in the income statement. BinckBank announced that it would restructure its Professional Services activities and software & licensing operations under the new collective name “Able” in early 2013. Since the net sale price cannot be reliably estimated, the recoverable amount is determined on the basis of the value in use of the cash-generating unit, which is calculated on the basis of financial forecasts by the management. Since the recoverable amount has fallen below the carrying amount, in accordance with the provisions of IAS 36 an impairment of the goodwill relating to the activities of Able has been recognised in an amount of € 10.0 million. The impairment has no implications for BinckBank’s solvency, since its Tier I core capital is calculated after deduction of goodwill.

36.4

28.7

52.8

117.9

36.245.5 50.8

34.934.8

35.5

36.3

124.5130.1

107.4

44.243.8

0

20

40

60

80

100

120

140

FY10 FY11 FY12* FY13*

in €

mill

ion

Employee expenses Depreciation & amortisation Other operating expenses

Number of transactions


34

Annu

al R

epor

t 20

13

Review financial resultsx € 1,000 FY13* FY12* Δ

Customer figuresCustomer accounts 551,970 518,771 6%

Brokerage accounts 417,966 401,692 4%

Beleggersgiro accounts 2,219 1,015 119%

Asset management accounts 36,602 22,473 63%

Savings accounts 95,183 93,591 2%Number of transactions 8,164,978 7,769,681 5%

Brokerage accounts 8,122,356 7,739,629 5%

Beleggersgiro accounts 42,622 30,052 42%Assets under administration 16,124,263 13,383,874 20%

Brokerage accounts 15,629,461 12,885,976 21%

Beleggersgiro accounts 131,719 73,497 79%Savings accounts 363,083 424,401 -14%

Asset management 2,147,591 1,012,617 112%

Asset management accounts 2,147,591 1,012,617 112%

Income statement

Net interest income 27,641 31,921 -13%

Net fee and commission income 130,477 109,186 19%

Other income 1,433 1,715 -16%

Result from financial instruments 7 47 -85%

Impairment of financial assets 32 (2) -1700%Total income from operating activities 159,590 142,867 12%

Employee expenses 36,405 36,211 1%

Depreciation and amortisation 28,763 34,970 -18%

Other operating expenses 52,768 36,257 46%Total operating expenses 117,936 107,438 10%Result from operating activities 41,654 35,429 18%

Tax (10,790) (8,359) 29%

Share in results of associates and joint ventures (2,393) (3,580) -33%Result after tax (continuing activities) 28,471 23,490 21%Result after tax (discontinued operations) (9,545) (110) 8577%Net result 18,926 23,380 -19%

Result attributable to non-controlling interests 322 720 -55%Net result attributable to shareholders BinckBank 19,248 24,100 -20%

IFRS amortisation 21,515 28,196 -24%

Fiscal goodwill amortisation 4,407 2,737 61%

Other adjustments to net result 10,047 - 100%Adjusted net result 55,217 55,033 0%Average number of shares outstanding during the year 70,432,579 72,801,291 Adjusted net earnings per share (€ ) 0.78 0.76 Cost / income ratio excluding IFRS amortisation 60% 55%

Balance sheet & capital adequacyBalance sheet total 3,209,404 2,997,774 7%Equity 431,631 455,221 -5%Total available capital 173,427 160,342 8%BIS ratio 32.0% 31.1%Solvency ratio 26.4% 25.2%


35

Annual Report 2013

Business unit RetailThe business unit Retail is subdivided into online brokerage services and savings & investment management (SIM), and serves private investors in the Netherlands, Belgium, France, Italy and Spain. In the Netherlands, services are provided under the brands Alex and Binck. In Belgium, France and Italy, under the Binck brand only. The service provided by the office in Spain consist of the Alex brand, Zelf Beleggen and asset management. Alex Spain focuses mainly on Dutch people living in Spain who speak Dutch. Alex Spain has no customers, since the accounts are held in the Netherlands.

Online brokerageThe business unit Retail offers private investors various different services in the areas of online brokerage and asset accumulation (SIM). Our largest customer group consists of independent investors who use Alex and Binck to execute securities transactions. Since its incorporation, BinckBank has striven to outperform the expectations of investors by providing convenient and affordable access to the financial markets that was formerly available only to professional investors. Our user-friendly website is the result of years of listening to suggestions and complaints from customers and always using the latest technology available. BinckBank now sets the standard for securities services to private investors, with a practical, user-friendly, extensive and fast online trading application at competitive rates and an excellent service. With its related products and services, such as the high-end trading platforms (Pro & 360), mobile applications, online seminars and the Beursvloer chat box, BinckBank adds value for customers in the high-end segment. Beursvloer is a chat box enabling customers to share their experiences and ideas with each other and with professional moderators.

BinckBank continually asks customers to give their opinion of its services. In 2013, BinckBank received a score of 7.9 (2012: 7.5) in our customer satisfaction surveys (on a scale from 1 to 10). BinckBank takes the opinions of its customers very seriously and uses this input to continually improve its services.

Key developments in 2013The ban on inducements, including distribution fees, has changed the retail landscape for private investors in a way that benefits BinckBank. To ensure that their services continue to be profitable, the large banks are retrieving these costs from investors in other ways. The fee structure has thus become much more transparent, meaning that they are now directly comparable with the rates charged by BinckBank. Consumers who until recently took advice from their bank now have to pay explicit costs which in many cases are unpleasantly high. Both customers wishing to take their own investment decisions and those looking for full discretionary investment management are turning to BinckBank because of our low rates and excellent service.

There have been a number of new players entering the online brokerage market in recent years, with mixed success. BinckBank sees that these competitors are increasingly focusing only on lower rates, meaning that less priority is given to the customer’s needs.

The Netherlands

Acquisition of SNS FundcoachBinckBank acquired the investment fund supermarket Fundcoach from SNS in November. Fundcoach was part of SNS Bank. The acquisition of Fundcoach is part of BinckBank’s response to the changes in the investment fund landscape now that distribution fees will no longer be charged with effect from 1 January 2014. The acquisition increases BinckBank’s market share in investment funds and BinckBank will soon have more than € 1 billion in assets under administration in investment funds. BinckBank sees scale as an important precondition for offering a sustainable and varied product range of investment funds and ETF’s.

Fundcoach has more than 30,000 customers and its assets held for customers come to over € 600 million. The intention is to complete the acquisition in the second quarter of 2014. The Binck Fundcoach product will be offered to customers as a separate account.

Product renewalsBinckBank made the necessary changes during the year in order to improve its product offering and its provision of information.

36

Annu

al R

epor

t 20

13

In early 2013 BinckBank was the first in Europe to introduce the Social Media Sentiment for shares. Social Media Sentiment gives customers information on what the crowd knows, in other words the opinion of the investing public regarding a particular share. Customers can use this knowledge as the basis for certain investment decisions.

In response to suggestions from customers, the range of instruments was extended in 2013 to include options on German stock indices and US ETF’s. These products have hugely increased the range of options on offer and make it possible for BinckBank to trade on the most popular markets.

In 2014 BinckBank will introduce a new mobile investment application that has been developed in collaboration with customers. This application features various new functionalities that BinckBank considers to be useful for its customers.A new release of the Binck360 trading platform is also planned.

These product renewals will mean that BinckBank can retain its customers longer, that they will place a larger proportion of their assets with BinckBank and that they will recommend BinckBank to other investors.

Moreover, BinckBank expects to introduce its first leverage products in 2014. The customers of Alex and Binck trade extensively in leverage products. By becoming an issuer, BinckBank will have more control of the process and will be in a better position to ensure continuity. We will enter into a cooperation agreement with an external party for the risk management and the hedging of market risk.

Improved positioningMarket research shows that Alex and Binck are two of the four strongest brands in the Netherlands among banks, brokers and investment firms. From a commercial viewpoint improved results can be achieved by more clearly differentiating the positioning of these two strong brands.

BinckBank sees potential for improvement in customer perception regarding security and transparency. The marketing campaigns in 2014 will build on the campaigns conducted in the second half of 2013, with more emphasis on security, transparency and convenience.

BelgiumSerious efforts were made in 2013 in order to enable the migration to the European base platform prior to 2014. This platform is more user-friendly than the previous version and offers additional trading options for customers. Technical management has also been improved, and from now on it will be possible to benefit from developments rolled out by BinckBank in other countries.

Activities in connection with internal control and compliance have also been further strengthened so that the increasing amount of legislation and regulation can be properly applied.

The effect of the new platform will become clear in 2014 and there will be regular evaluation of how the new possibilities can be optimally used and promoted. A limited price adjustment that was introduced at the end of 2013 and the improved trading options offered by the new platform should lead to higher income in 2014, while synergy benefits should lead to lower costs.

FranceThe economic crisis, the effects of which were also visible in 2012, still had a visible effect in early 2013. The negative market sentiment at that time was further damaged by the transaction tax introduced in August 2012 and the capital gains tax introduced in 2013.

After five years of operation in the French market, BinckBank has achieved a number three position in that country among online brokers measured by transaction volume.

BinckBank won awards on several occasions for its high-quality service and competitive pricing in 2013. In addition to winning the “Label Excellent 2014” awarded by the magazine “Les Dossiers de l’Epargne”, BinckBank won the Client Service 2014 award in the third quarter of 2013. This is an important award in the field of customer service that is given by the French organisation Viséo Conseil.

37

Annual Report 2013

ItalyBinckBank Italy has now completed its first full year of operation. The financial transaction tax was introduced during 2013, for shares on 1 March 2013 and for derivatives on 1 September 2013. Despite the introduction of the FTT, which has reduced the market size for retail investors by around 10%, Italy remains the largest online investment market in Europe.

Competition in Italy between local players is intense. This intense competition, and the transaction volume executed each year (approximately 40 million transactions), have led to this market featuring the best quality service and the widest product offering in Europe. In technological terms, the market in Italy is leading for BinckBank’s product development.

Despite the gap between BinckBank’s product offering and the offerings of the various local players, BinckBank has managed to establish a niche for itself in this competitive market. Various projects are planned for 2014 to close this gap in the product offering. These projects will bring BinckBank’s offering to the same level as that of the competition, which will strengthen our online position in the Italian market.

BinckBank succeeded in attracting a small number of customers in 2013. These customers are far more active than those served by our other branches. The average Italian customer portfolio is € 80,000, and Italian customers execute on average 100 transactions per year.

Like Alex and Binck in the Netherlands, Italy is connected to the European base platform. This means that any new service developed for Italian investors will also be available to customers in the Netherlands and Belgium, and vice versa.

Savings & Investment Management (SIM) Alex Asset Management reached the milestone of € 2 billion in assets under management in 2013, a significant achievement given that its total assets under management stood at € 1 billion at the end of 2012. The 112% growth in assets under management in 2013 was largely due to a net inflow of funds of € 923 million. This led to a large increase in revenue at Alex Asset Management in 2013 and will continue to contribute to revenue in future years.

A start was made on the repositioning of the Alex brand in 2012 and building the Savings & Investment Management department. Progress on various fronts since then, in addition to increased assets under management, has formed a solid base for the further development of this business in the future.

Organisation The SIM team was strengthened in various ways in 2013. An investment management & development team has been formed to optimise and expand the Alex investment management policy and its supporting systems.In addition, the business management & development team has strengthened the project & programme management capacity of SIM. Investments were also made in sales, relationship management & mid-office teams in 2013, both by taking on people with various expertise and skills and offering training to existing staff. All relationship managers have taken the investment adviser training and have attained DSI (Dutch Securities Institute) registration.

Product An important change was made to the algorithm of Alex portfolio management in 2013 in order to use the available liquidity in the market more effectively. Liquidity will continue to be an item of attention in 2014, until the expansion of the investment universe to include US equities is complete. The European equity universe was expanded by more than 10% in 2013 by adding stocks in the markets in which Alex already invests. Lastly, both the customer website and the lead website of Alex Sparen and Asset Management were successfully renewed in 2013.

Customer feedback is very positive, and lead conversion has risen as a result. One of the changes concerns greater transparency of information for leads and customers with respect to the risks of the products.

Compliance A new customer intake tool was successfully implemented in November 2013. Customers of Alex Asset Management will answer a dynamic questionnaire from now on, in which their natural risk tolerance will be established as well as their financial goals and current situation. A new Monte Carlo simulation tool has been implemented to calculate expected portfolio results and ultimately to recommend the right investment plan to each customer.

38

Annu

al R

epor

t 20

13

Investment policy For defensive asset management customers, 50% of their capital is invested in the Think AAA-AA Government Bond UCITS ETF. The accommodative monetary policy of the central banks will keep interest rates at the short end of the yield curve low for the time being; the ECB has announced that it will keep rates low, in any case until 2015. This does not alter the fact that capital market interest rates may well anticipate a tightening of monetary policy. This became clear in June 2013, when the Fed announced its ‘tapering’ of monetary easing and higher rates ensued. Alex Asset Management is however well positioned with its Think AAA-AA Government Bond UCITS ETF, since the duration currently stands at 2.89. A 1% rise in interest rates would lead to a price decline of approximately 3%. Although such a decline is acceptable from a risk perspective, we are studying whether an alternative policy could generate a better return at a risk that is acceptable for defensive profile customers.

BinckBank versus peers in EuropeBinckBank* Bourso-

rama*ComDirect** Swissquote** Avanza** Nordnet** Keytrade** IW Bank** Fineco**

Home market Nether-lands

France Germany Switzerland Sweden Sweden Belgium Italy Italy

Other markets

Belgium, France,Italy

UK, Spain,Germany

NA Dubai,Malta NA

Norway, Denmark and Finland

Luxembourg and Switzerland

France, Spain, Germany, Austria, Belgium, Luxem-bourg, and UK

NA

Market capitalisation € 564.4 € 438 € 1114.2 € 343.91 € 429.5 € 342.6 NA NA NA

Number of accounts 528,711 465,000 806,417 201,582 238,400 444,311 166,771 126,600 661,389

Income from operating activities

€ 159.6 € 201.5 € 313.8 € 97.1 € 64.6 € 111.1 € 48.0 € 74.5 € 409.8

Operating expenses € 117.9 € 137.6 € 236.7 € 64.6 € 40.0 € 75.3 € 24.8 € 55.4 € 186.5

(Adjusted) net profit € 55.2 € 40.2 € 73.0 € 18.8 € 18.4 € 26.1 € 16.9 € 11.6 € 220.5

(Adjusted) net profit per share

€ 0.78 € 0.45 € 0.52 € 1.30 € 0.64 € 0.12 NA NA NA

Cost/income ratio 60% 68% 71% 75% 64% 71% 53% 69% 46%

* Data as of 31 December 2013

** Data as of 31 December 2012

39

Annual Report 2013

Results business unit Retail 2013

x € 1,000 FY13 FY12 ΔCustomer figuresCustomer accounts 528,711 498,710 6%

Brokerage accounts 396,926 382,646 4%The Netherlands 289,668 279,189 4%Belgium 56,721 58,114 -2%France 47,839 44,090 9%Italy 2,698 1,253 115%

Asset management accounts 36,602 22,473 63%Savings accounts 95,183 93,591 2%

Number of transactions 7,484,091 7,149,267 5%The Netherlands 5,261,490 4,940,443 6%Belgium 786,181 806,762 -3%France 1,233,190 1,375,781 -10%Italy 203,230 26,281 673%

Assets under administration 10,809,647 8,778,514 23%Brokerage accounts 10,446,564 8,354,113 25%

The Netherlands 7,913,625 6,366,651 24%Belgium 1,669,331 1,397,047 19%France 626,975 512,117 22%Italy 236,633 78,298 202%

Savings accounts 363,083 424,401 -14%

Asset management 2,147,591 1,012,617 112%Asset management accounts 2,147,591 1,012,617 112%

Income statementNet interest income 24,368 27,701 -12%Net fee and commission income 115,231 97,245 18%

Net fee and commission income (transaction related) 73,982 73,012 1%The Netherlands 59,349 59,195 0%Belgium 7,520 6,708 12%France 6,534 6,972 -6%Italy 579 137 323%

Asset management fees 29,385 10,768 173%Net fee and commission income (other) 11,864 13,465 -12%

Other income 1,072 1,659 -35%Result from financial instruments - - Impairment of financial assets 37 (1) -3800%

Total income from operating activities 140,708 126,604 11%Employee expenses 30,008 32,436 -7%Depreciation and amortisation 26,643 33,824 -21%Other operating expenses 43,114 32,775 32%

Total operating expenses 99,765 99,035 1%Result from operating activities 40,943 27,569 49%

40

Annu

al R

epor

t 20

13

Business unit Professional ServicesBinckBank started providing services to professional parties, alongside its service to private investors, in 2003. As a partner for professional parties, Professional Services provides solutions in relation to market investing, fund investing and savings. Professional Services operates in various market segments, and provides services to investment managers, banks, insurance companies and pension administrators with its Business Process Outsourcing (BPO) service and software development in both the Netherlands and Belgium. Professional Services serves a total of more than 100 independent asset managers, for whom it acts as a broker and a custody bank, and became the market leader in this segment in the Netherlands in 2012. With its six BPO mandates, Professional Services is also the market leader in BPO services in the Netherlands.

On 23 January 2013 Binck combined the forces of Professional Services and its 100%-owned subsidiary Syntel, and these units continued under the name of Able. The activities of software supplier Syntel and the BPO and other activities of Binck Professional Services were to be gradually combined in organisational and legal respects in 2013.

In its press release of 11 November 2013, BinckBank announced that it will concentrate more on its core business, and that in the context of a proposed divestment it had started to study the available options for a sale or collaboration for its non-banking operations (the BPO and software & licensing businesses). With this proposed divestment, BinckBank is prioritising an accelerated realisation of its retail strategy for its (European) online brokerage and asset management services.

Able is the market leader in the Netherlands in these non-banking activities for which additional investment is needed in order to achieve a substantial positive result. A possible sale or collaboration with other parties will provide a better base for Able’s non-banking activities in order to realise the potential that this BinckBank business unit (Professional Services) has created. The management of Able supports the study and views a take-over or joint venture with other parties in a positive light.

The study is proceeding according to plan and BinckBank expects to complete it in 2014.

Services to independent investment managers via BinckBankThe services provided by Professional Services to independent investment managers and their retail and other customers do not form a part of the study. The services provided to independent asset managers will remain at BinckBank and the focus on this business has been further increased. The priority here will be the further professionalisation and optimisation of the services to these independent asset managers. Customers of independent asset managers open a tripartite account with BinckBank and authorise the asset manager to invest for their account. The asset manager manages the portfolio according to the mandate and risk profile agreed with the customer. The asset manager’s customers thus always have full access to their portfolios. A specialist team on the broking desk supports our professional customers in the field of order execution. Customers can trade in securities around the world, as through its custody bank BinckBank uses global brokers.

41

Annual Report 2013

Financial results business unit Professional Services in 2013

x € 1,000 FY13* FY12* ΔCustomer figuresCustomer accounts 23,259 20,061 16%

Brokerage accounts 21,040 19,046 10%Beleggersgiro accounts 2,219 1,015 119%

Number of transactions 680,887 620,414 10%Brokerage accounts 638,265 590,362 8%Beleggersgiro accounts 42,622 30,052 42%

Assets under administration 5,314,616 4,605,360 15%Brokerage accounts 5,182,897 4,531,863 14%Beleggersgiro accounts 131,719 73,497 79%

Income statementNet interest income 3,267 4,220 -23%Net fee and commission income 14,476 11,777 23%Other income 5 14 -64%Result from financial instruments - - Impairment of financial assets (5) (1) 400%Total income from operating activities 17,743 16,010 11%Employee expenses 3,683 3,408 8%Depreciation and amortisation 1,664 1,146 45%Other operating expenses 7,922 4,945 60%Total operating expenses 13,269 9,499 40%Result from operating activities 4,474 6,511 -31%

Transaction volume rose 10% in 2013 compared to 2012, to 680,887 (FY12: 620,414). The total number of accounts increased 16% in 2013 compared to 2012, from 20,061 to 23,259. Assets under administration rose 15% compared to 2012 to € 5.3 billion (FY12: € 4.6 billion).


42

Annu

al R

epor

t 20

13

Developments in legislation and regulationParties in the financial sector are facing a wide range of applicable legislation and regulation. European legislation and regulation will require much attention in the next few years. The European Commission strongly favours maximum harmonisation of European legislation and regulation. This is in the interest of the financial sector, since it contributes to a level playing field for all market parties. A brief overview of national and international developments relevant to BinckBank is given below.

Deposit guarantee scheme (DGS)The Dutch DGS guarantees deposits (including savings and money in current accounts) of private persons and small companies at banks up to a maximum of € 100,000 per depositor per bank. The DGS pays out if the customers can no longer access their funds as a result of a bank’s insolvency. Currently the DGS is funded ex post, or after the fact. Banks only pay when a claim on the system is made, i.e. when it is established that a bank is insolvent. The new DGS will be funded ex ante, with differentiation of risk in the contributions. Banks will periodically pay a risk-differentiated contribution into the fund. The fund will be used when a claim on the DGS is made. If there is a shortfall, further contributions will be required. The new DGS is expected to take effect in July 2015.

Financial Markets (Amendment) Act 2013The Financial Markets (Amendment) Act 2013 contains some substantive amendments as well as technical, non-substantive changes to the Financial Supervision Act (Wft), the Financial Supervision (Funding) Act, the Financial Markets (BES (Bonaire, St. Eustatius and Saba) Islands) Act and certain other Acts. This bill is part of a periodical amendment cycle, and is based on the principle that it will incorporate all national legislation and regulation with regard to the financial markets apart from the implementation of European regulations, which in principle will be implemented in separate processes. Among other things, the Financial Markets (Amendment) Act 2013 introduces the so-called ‘bankers’ oath’ for executive and supervisory directors of financial enterprises. The bankers’ oath is a legal requirement of the suitability test for executive and supervisory directors. In addition, the supervision of independent arbitration institutions in the financial sector will be tightened, and financial enterprises will be prohibited from investing in companies that produce cluster munitions. Most of the Financial Markets (Amendment) Act 2013 took effect on 1 July 2013.

Financial Markets (Amendment) Act 2014The Financial Markets (Amendment) Act 2014 was submitted to the Dutch House of Representatives on 15 May 2013. In addition to tightening the requirements relating to the duty of care, the bill includes a principle of obliging banks to hold capital buffers. This will be an extra layer of capital in addition to the required capital that banks always have to hold. The capital buffer works as a shock absorber that will prevent the bank being directly threatened in stress situations. In this case, additional measures will come into effect, for instance that a bank may not distribute dividends.This capital buffer should reduce the chance of bank failures and a financial crisis.

The bill will also introduce direct statutory supervision of settlement firms. These firms provide settlement services for transactions in financial instruments and giro retail payments. Currently we have voluntary supervision and enforcement measures for the supervisor are lacking.Direct statutory supervision of settlement firms should contribute to increased stability of the financial system.

43

Annual Report 2013

Financial Markets (Amendment) Act 2015The bankers’ oath has applied to executive and supervisory directors of financial enterprises since 1 January 2013. The oath (or pledge) will also apply to employees in contact with customers with effect from 1 January 2015, as well as to employees who can materially affect the risk profile of the financial enterprise, such as securities traders. The Minister of Finance has included this in the Financial Markets (Amendment) Act 2015, which is now subject to consultation. The draft bill also includes provisions for banks to actively inform consumers regarding the Deposit Guarantee Scheme, which reflects an important recommendation by the parliamentary investigative committee De Wit. A further element in the draft bill is the expansion of the suitability and reliability test. Executive and supervisory directors of financial enterprises are currently already vetted by De Nederlandsche Bank. In future this will also apply to employees with responsibility for transactions involving large financial risks. The government contribution to the funding of supervision of the financial markets will also cease. These costs will be paid fully by institutions falling under the supervision of DNB and the AFM as from 1 January 2015.

Ban on inducements in the NetherlandsThe ban on inducements for all investment services will include distribution fees with effect from 1 January 2014.From this date, investment firms may no longer receive fees from ‘product suppliers’ and ‘fund providers’ and will have to charge the costs they incur directly to customers. This puts the priority on the customer and not on the amount of the fee. Providers of investment services are obliged to ensure that they no longer receive fees from fund providers. This means that all banks, investment advisers and investment managers offering investment funds with distribution fees will have to change to funds without distribution fees. Under the transitional arrangement, banks, investment advisers and investment managers may receive fees from funds until 1 January 2015, however they must pass the fee on to their customers in full. The transitional arrangement therefore only applies to the fees from funds (distribution fees). Receipt of return commissions (payments received for the execution of transactions on the stock exchange) is however prohibited from 1 January 2014. The rules applying to referral fees also change with effect from 1 January 2014.

Capital Requirements (CRD IV/CRR)The European Council adopted new capital requirements regulations on 20 June 2013. CRD IV/CRR introduces new European rules for banks and investment firms with respect to prudential requirements and also includes implementation of the Basel III agreement in European legislation and regulation. CRD IV/CRR also sets a bonus cap of 100% of remuneration at credit institutions and investment firms and 200% in the event that the shareholders approve. CRD IV/CRR took effect on 1 January 2014.

European Market Infrastructure Regulation (EMIR) and CSD RegulationThe EMIR regulation and the CSD regulation introduce tighter supervision of trading infrastructure, over-the-counter trading (OTC) and the derivatives markets. There will thus be harmonised supervision of the European market for the settlement of securities transactions. The introduction of EMIR will make the central clearing of standard derivatives contracts compulsory. The post-trading infrastructure will also be strengthened with harmonisation and expansion of the rules for central counterparties (CCPs). Data on transactions in OTC derivatives contracts will also have to be reported to trade repositories. The rules will contribute to transparency regarding risk and reduced interdependence between parties. EMIR came into effect in 2013 in phases.

Harmonisation of supervisory requirements is also a central theme for a regulation dealing with Central Securities Depositories, or CSDs that is expected to take effect in 2015. At that time, the entire chain of trading (MiFID), clearing (EMIR) and settlement (CSD) will be subject to European regulation.

44

Annu

al R

epor

t 20

13

Anti-Money Laundering and Anti-Terrorist Financing ActA number of amendments to the Anti-Money Laundering and Anti-Terrorist Financing Act (the ‘Wwft’) took effect as of 1 January 2013, most of which concern clarification and tightening of the provisions relating to customer screening. One new requirement is that the institution must now check if not only the customer but also the ultimate beneficiary is a politically exposed person, or PEP. A further new requirement is that PEPs living in the Netherlands who are not Dutch nationals must be subjected to more extensive customer screening. The Wwft also now explicitly requires institutions to devote attention to unusual transaction patterns and transactions which by their nature involve higher risk. Furthermore, institutions will have to take measures to mitigate risks associated with the use of new technologies. Finally, the time allowed for the reporting unusual transactions has been changed to ‘immediate’. BinckBank has already made the necessary changes to its customer screening and monitoring systems.

45

Annual Report 2013

Susidiairies, joint ventures and assosiatesBeFrank is a Premium Pension Institution (PPI) and a 50/50 joint venture between BinckBank and Delta Lloyd in the field of collective pensions. A PPI is a pension administrator (in addition to insurance companies and pension funds) that administers pension schemes and accrued pension capital, but does not bear the insurance risk.

The PPI is designed for the administration of collective defined contribution schemes as the second pillar alongside the state retirement pension (AOW). A characteristic of defined contribution schemes with individual freedom of choice regarding investment is that the future pension benefit partly depends on the result of the investment choices made. The PPI will provide an excellent opportunity for administering pensions on a cross-border basis in the near future. For companies with a presence in several countries, this offers the option of centralising and optimising their pension administration and thus reducing costs.

BeFrank was the first PPI in the Netherlands and combines the online strength of BinckBank with the pension expertise of Delta Lloyd. The result is a fresh, new pension administrator in the Dutch market. BeFrank offers an easy-to-understand pension accrual at low cost. The incorporation of BeFrank is part of BinckBank’s strategy to generate more of its income from asset accumulation and thereby become less dependent on transaction-related income.

BeFrank produced a good commercial performance in 2013. Competition is still intense, since there are now nine active and licensed PPIs. BeFrank acquired the portfolio of the Goudse PPI in 2013. A total of more than 200 employers with collectively more than 25,000 employees have now chosen BeFrank.

BeFrank has again obtained ISAE-3402 type II certification in March 2013. This shows that BeFrank is a capable pension administrator and that its internal processes are of high quality.

Further information on BeFrank is available at www.befrank.nl

TOM is a cooperation between Optiver, IMC, ABN AMRO Clearing Bank, Nasdaq OMX and BinckBank, that came into being on 23 June 2009 after the obtaining of a licence from the AFM. BinckBank’s interest as at 31 December 2013 was 25.7%. TOM Holding N.V. has two subsidiary companies, TOM Broker B.V. that provides a best-execution service to affiliated parties and TOM B.V., which has a licence to operate as a multilateral trading facility (MTF

or market) on which equities, options and futures are traded.

Equity orders from BinckBank’s customers in the Netherlands, Belgium and France have been routed to TOM MTF since 2010. Most of the equity options classes in Amsterdam were moved to TOM MTF in phases in 2012. The remaining equity options classes in Amsterdam and the major Amsterdam index options classes were transferred to TOM MTF in early 2013. The transfer of BinckBank’s trading from the Euronext markets to TOM MTF generates significant savings on exchange fees for BinckBank, while its customers now enjoy best execution for equities and derivatives orders (uniquely in Europe), and BinckBank is compliant with the European MiFID regulation.

TOM is working hard on connecting more banks to its Smart Order Router. It is expected that the second retail bank will be added to TOM in 2014.

Further information on TOM is available at www.tomgroup.eu.

46

Annu

al R

epor

t 20

13

Since 9 November 2010, BinckBank has had a 60% interest in ThinkCapital, a Dutch issuer of Exchange Trusted Funds. The interest in ThinkCapital is part of BinckBank’s strategy to generate more of its income from asset accumulation and thereby become less dependent on transaction-related income.

As a result of new legislation and regulation originating from the European supervisor ESMA and adopted by the AFM, ThinkCapital has had to change the names of its products. The product category of ‘tracker’ has been replaced by ‘UCITS ETF’. The AFM has decided that every tracker fund launched after 18 February 2013 that meets the strictest UCITS requirements must from now on bear the name of “UCITS ETF” (Undertakings for Collective Investment in Transferable Securities Exchange Traded Funds). The structure of the products is not affected.

The increased growth and the associated possibilities for expansion have led to ThinkCapital’s decision to put more emphasis on its product names, under which the products will also be offered by the various banks. This is the reason for deciding to present the products as Think ETF’s instead of under the company name of ThinkCapital.

Interest in passive investing among private investors is growing rapidly, alongside interest from the market regulators and the Dutch Investors’ Association (VEB). The regulators see the benefits for the customer of a more balanced relationship between actively and passively managed investment products. The supervisor and politicians in the Netherlands have reinforced this perception with the ban on inducements introduced on 1 January 2014. This is expected to lead to a level playing field in which passive management will feature much more frequently in the portfolios of retail investors. BinckBank devotes extensive attention to education in order to provide better information to private investors on ETF’s and everything related thereto. This led to the creation of the ETF Academy in 2013.

The VEB, as an independent interest group, has given two awards to Think ETF’s, the Silver VEB Investment Funds Award for the Think AMX UCITS ETF in 2010 and the VEB Investment Funds Award for the Think AEX UCITS ETF in November 2012. In 2011 Think ETF’s won the Gouden Stier award for “Investment product of the year” for its Think Global Equity UCITS ETF. A second Gouden Stier award was also won in October 2013, this time for “Best Index Investor”. The Think Global Equity UCITS ETF was chosen by a professional jury as Financial Product of the Year on 19 December 2013.

Think ETF’s also focus on index investing for the institutional market for passive asset management. The current offering consists of 11 ETF’s designed to suit the Dutch market. One advantage Think ETF’s have over foreign providers of trackers is that Think ETF’s have a Dutch legal structure and qualify for FBI (Fiscal Investment Institution) status. This allows Think ETF’s, unlike the foreign providers, to distribute dividends efficiently to investors. Under the various tax treaties, this tax efficiency can be applied to equities in the various treaty countries and investors from a number of treaty countries can thus also benefit.

Think ETF’s are constructed using physical replication, whereby an index is replicated so that the stocks in the index are held by the fund. Some competitors use synthetic replication, or if they use physical replication, they lend the underlying securities to third parties. These constructions however involve additional risk in the form of counterparty risk. Think ETF’s takes the view that this does not serve the investor’s best interest, as the ETF’s then become vague and complex.

Further information on Think ETF’s is available at www.thinketfs.nl.

47

Annual Report 2013

Human Resources Developments in 2013The Human Resources (HR) department is focusing increasingly on online applications for the supporting units. This will enable further simplification of administrative processes, which fits well with the character of BinckBank and its current and future staff. HR made a start on adjusting its systems in 2013, as well as devoting much attention to remuneration, conduct, culture and ethics within the BinckBank organisation. These elements are important for maintaining an ethical organisation. In the coming years, HR will continue to devote much attention to the development and promotion of talented employees and IT talent in particular, given the rapidly changing motivation of young people and the factors that drive them. Being and continuing to be an attractive employer will become increasingly important in the future because real talent, especially in the field of IT, will become increasingly scarce.

Number of FTE per country

Recruitment and selectionBinckBank hired a total of 182 employees in 2013. The distribution between our offices and business units was as follows: 142 employees at BinckBank Netherlands, 11 employees at BinckBank Belgium, 13 employees at BinckBank France, 4 employees at BinckBank Italy, 9 employees at Able B.V. and 3 employees at ThinkCapital. The “Working at Binck” website is effective, partly due to the improvement in how our vacancies can be found digitally, and ultimately our recruitment effectivity has reached approximately 90%. Further optimisation of our systems and applications enables analysis of where targeted banner actions can be deployed in order to increase the quality of the job applicants. HR took over full responsibility for recruitment for Able in 2013, in addition to recruitment for BinckBank and ThinkCapital. All these businesses and branches now recruit through the ”Working at Binck” website, which features the various logos and languages involved. Recruitment technology is developing rapidly and it is thus essential to continue following developments closely and to adjust our recruitment policy as needed. Recruitment is expected to

Number of FTE per country

565611

502 537

323027 346

4

4

0

100

200

300

400

500

600

700

2010 2011 2013

654

552

4041

417

2012

590

502

3434

416

The Netherlands

Num

ber o

f FTE

s

Belgium France Italy Spain

Number of FTE per age group

4473

18

0

50

100

150

200

250

300

< 24 25-34 35-44 45-54 55 >

2010 2011 2012 2013

4029

41

267281 281271

163176 176

201

95 95 106

19 19 25

Num

ber o

f FTE

s

Number of FTE per department

132

0

50

100

150

200

250

2010 2011 2012 2013

148

131144

66 645859

28 28

72

31

174195 201

172

65 65 6361

100111

129123

Able B.V.ICT Operations Prof. Services Othersupport

Num

ber o

f FTE

s

Retail

Male/female ratio

533

654

489471 505

101

590565611

94106

0

100

200

300

400

500

600

700

2010 2011 2012 2013

Male Female

121

Num

ber o

f FTE

s

48

Annu

al R

epor

t 20

13

become increasingly targeted through the application of new techniques. With the introduction of new assessment techniques in 2013 we have made a start on the thorough testing of the competences, ability, attitude and conduct of job applicants at manager and specialist level. All new employees will be subjected to such an assessment prior to engagement in 2014.

Employee satisfaction survey An employee satisfaction survey was conducted at the end of 2012. Generally, the scores of BinckBank employees were no different to those of employees within the benchmark. In 2013 employees and the departmental managers collaborated in workshops held on the results of the employee satisfaction survey. Many of the recommendations have since been adopted. The employee satisfaction survey will be repeated at the end of 2014.

Training and developmentMore than 400 courses and training programmes (for both groups and individuals) were purchased by HR in 2013, and approximately € 635,000 was spent on employee development. A “BinckBank IT class” was completed in 2013 and two groups of managers and team leaders took an management development course.

After taking the “BinckBank IT class”, six employees were taken on as Junior Testers by the ICT Retail department last year. The “BinckBank ICT class” is an initiative whereby people who want to work in ICT can take a 4-month course, which enables them to obtain a preliminary qualification. After qualification, we offer them an employment contract with the possibility of further training in various areas of ICT. All six participants in 2013 successfully completed the course and were taken on in the follow-up stage.

An online training module called Drillster was purchased in 2013. this module facilitates the transfer of practical knowledge through repetition. Online courses on compliance and security awareness were held in 2013. The content of the courses is provided by the department looking to transfer its practical knowledge.

Blended learning programmes were compiled for development in the areas of compliance, security awareness and ethics in 2013. Blended learning is a combination of online learning and a programme based on direct contact (for example through workshops and games) with employees. This combination of online transfer of practical knowledge and training through direct contact with employees increases awareness and keeps knowledge up to date. The courses are given by members of the executive board in order to emphasise the importance of training in the field of ethics and compliance and to increase involvement. These courses and workshops will be repeated on an annual basis. The results of the courses taken will also be included in the individual employee assessments.

Talent development and traineesEach year an analysis is carried out to identify our most talented employees. The idea is to establish whether there is potential for assigning employees, who are ready to take the next career step or to take on additional duties, to vacancies or projects that could contribute to their further development. A total of 54 employees moved to a new position within BinckBank in 2013.

The advantage of promoting employees to different internal positions for BinckBank is that we can retain talented employees for longer and that their knowledge and experience remains within the company. Employees can further develop and grow in various areas. Two trainees from the 2-year trainee programme started in 2011 moved to a position within the organisation in 2013. No new trainees were taken on in 2013. The programme was no longer satisfactory in terms of content and the quality of the trainees emerging from the programme did not meet the expectations of senior management in all cases.

There was a review in 2013 to establish whether the in-house talent in each department and across the organisation as a whole was adequate to provide for successors to the current management and our specialists in the future. Where this is not the case, action will be taken in the form of recruitment or development. Talented individuals will be involved in the development of a new programme in 2014. Interviews will be held to identify what drivers motivate these talented individuals, what these employees need, what are the reasons for staying at BinckBank and what are the reasons that could make them decide to leave.

The review should establish whether the specific wishes of talented people can be met and whether this information can be used to design a new programme.

49

Annual Report 2013

AbsenteeismAbsenteeism was relatively low at BinckBank in 2013, at 2.82%. This represents a slight improvement compared to 2012 (2.9%).

LegislationLike other financial institutions, BinckBank is subject to the 2011 Regulation for a Controlled Remuneration Policy in the Wft (“the Regulation”). The remuneration policy of BinckBank N.V. was established in accordance with the Regulation in 2012, and the implementation and structure of this policy was completed in the same year. The remuneration committee, consisting of two members of the supervisory board, has been appointed. The remuneration committee advises the supervisory board with respect to its responsibility to supervise the establishment and implementation of the remuneration policy. The remuneration committee receives information and advice from the control staff.These are the manager of Risk Management, the Compliance manager and the HR manager. The remuneration committee met on four occasions in 2013. Preparations for the changes that will take place in 2014 were made in 2013. The remuneration policy will be amended in 2014.

Soft controlsSoft controls were developed in 2013, and will be introduced in January 2014. Soft controls are management and control measures designed to measure desirable and ethical conduct by employees and management and to make improvements if necessary or desirable.

Consultation with the works councilThe executive board had constructive meetings with the BinckBank works council during 2013. The issues discussed during the meetings with the works council included the changes at Able and Professional Services and the results of the employee satisfaction survey. Various requests for approval in relation to changes to the BinckBank conditions of employment were also submitted to the works council.

50

Annu

al R

epor

t 20

13

Corporate social responsibility Integrated approach putting the customer firstThe principle of thinking and acting in the customer’s interest is a basic element in BinckBank’s DNA. Since everything that we are and do depends on our customers, we see our customers as our most important stakeholders. This is shown by the way in which we offer our services to customers, with a low threshold in a comprehensible way and a user-friendly website that provides private investors with the same resources as those available to professional investors. BinckBank also sees significant value in offering financial education to both customers and non-customers, and therefore we offer these educational facilities free of charge. In the first place to our customers by means of webinars, tutorials and knowledge tests in the form of a financial ‘driving licence’. Non-customers can, for example, access YouTube for videos on investing. This is part of how BinckBank fulfils its duty of care. In the longer-term, BinckBank is convinced that education leads to better investment decisions and that this forms a sound basis for a sustainable customer relationship. Drawing attention to socially responsible investing is also a priority. BinckBank promotes this theme and actively strives to reduce the current scepticism among investors with respect to SRI.

Our policy and our activities around the theme of corporate social responsibility (CSR) are not limited to achieving the most sustainable business structure possible. BinckBank especially considers social aspects when developing its products and services and distributing its investment products.

The dimensions of our CSR policy are set out in our policy document, which is available on BinckBank’s corporate website. We have divided the description of our activities in this context in 2013 into the following clusters:

• Financial services, including integration of CSR targets in our products and services and the promotion of SRI;• Social involvement, including involvement in social activities and an orientation towards stakeholders; and• Business conduct, including HR policy and environmental policy.

Financial servicesBinckBank strives to provide a service to private investors that provides them with the same facilities as professional investors. Besides information and tools, education of investors is an important element. BinckBank thus offers investor training courses that are free of charge. This is an active way of fulfilling our duty of care to our customers.

BinckBank believes that sustainable investing is an important area of attention. The activities carried out in this context in 2013 are described below.

• BinckBank carries a wide range of sustainable investment funds. BinckBank supports the Sustainable Investing Week under the direction of the VBDO. In addition to promotion in the form of substantive information in articles and a webinar with Morningstar, BinckBank did not charge any transaction costs for sustainable funds during October 2013.

• Think ETF s introduced a sustainable ETF on 28 May, which raised inflow of € 37.2 million.• Alex Asset Management exclusion policy: In collaboration with Sustainalytics, Alex screens the universe of the 500

stocks in which the model invests on a quarterly basis. By means of this screening, Alex intends to avoid investing in companies that contravene the principles of the UN Global Compact. Moreover, Alex Asset Management does not invest in companies involved in the weapons trade. The result of the screening by Sustainalytics for Alex Asset Management led to two companies being excluded as potential investments. Alex Asset Management moreover did not have positions in these two companies.

Permanent and free education through investment coursesBinckBank provides interactive educational sessions by means of webinars to its customers in the Netherlands, Belgium and France.

These webinars attract around 25,000 participants each year. Video tutorials are also held that are available to all investors, whether they are customers or not. Furthermore, specialist master classes and coaching sessions are organised for smaller groups of investors. The Beursvloer chat box has also been developed for active customers in the Netherlands, enabling customers to discuss investment constructions and strategies with each other. Besides explanations of market developments by these experts, investors can also consult with each other as to whether they have missed certain risks.

52

Annu

al R

epor

t 20

13

Financial driving licenceIn addition to financial education, BinckBank provides a financial driving licence. This is a test customers can use to measure the extent to which their knowledge of investing with their instruments of choice is adequate. There are two variants: one for complex investments and one for simple investment products.If BinckBank has not been able to establish whether an investor has sufficient knowledge, the investor will receive a warning prior to every transaction. Customers can only prevent this message appearing by successfully passing the financial driving test and obtaining the licence. They have no other means of deactivating this function. Customers are informed as to how they can increase their knowledge, for example by following webinars, in order to obtain their financial driving licence.

Dialogue with customers and customer satisfactionBinckBank attaches much value to its continuous dialogue with customers, part of which concerns listening closely to the various needs of investors. This helps BinckBank to classify its customer groups more accurately, so that it can design its products and services with the needs of its various investors in mind. Various channels and sources are used for the substance of this dialogue, including:

• Customer panels and surveys Our employees are regularly involved in discussions with a customer panel. These sessions are held both periodically and on an ad hoc basis. The latter for instance might concern a test panel for new applications, such as the use of the new mobile applications or a new website. The regular surveys cover all aspects of our services , with diverse subjects including user-friendliness, product development, issues affecting investors, customer service but also brand experience.

• Customer satisfaction survey Customer satisfaction surveys are carried out on a quarterly basis, using a different customer group each time. This means that every customer has the opportunity to give us feedback on his experience of our services at least once a year. The findings of these surveys count towards the achievement of the targets for the executive board. The target score is 8. In 2013 the score for customer satisfaction was 7.9 (on a scale of 1 to 10).

Contacts with customer serviceBy far the most customer contacts occur through customer service. The customer service department in the Netherlands deals with 150,000 phone calls and around 75,000 e-mails each year. Response to questions through social media, known as web care, was officially added this year. We have invested in software that monitors sentiment with respect to BinckBank in the social media and also identifies questions and comments, which are passed on to one of our employees to be dealt with. Our customer service employees go through a strict selection procedure and an intensive training and guidance process. Once they join the customer service team, they have the authority to be able to compensate customers. This approach means that our customer service department is able to answer and resolve issues during the first contact in more than 90 per cent of cases and forms the basis for a good customer service. Customers can also easily contact members of the management, since e-mails appear directly in their mailboxes for response.

Social involvementBesides the customer contacts mentioned above, BinckBank is regularly in touch with public consumers and investor groups. By entering into a dialogue with these parties BinckBank focuses on the current and future needs and developments with respect to independent capital accumulation.As part of this social involvement, BinckBank has both regular and unscheduled contacts with the Dutch Investors’ Association (VEB) regarding matters of interest to investors. As a member of the VBDO, BinckBank participates in the organisation of events for the promotion of sustainable investing. We are also regularly in contact with the Consumers’ Association and the NIBUD.

As part of its social activities, BinckBank has reviewed the field of financial education and decided to support the Geldexamen, and is working on the introduction of the Geldexamen in primary schools in Amsterdam in collaboration with the NIBUD and the municipality of Amsterdam.

53

Annual Report 2013

Operational managementBinckBank strives to limit its ecological footprint in the form of CO2 emissions and this is taken into account when making operational management decisions. Green electricity is used, and FSC-certified paper is used as far as possible. The data centre is a major user of electricity. For BinckBank, Equinix’s leading energy programme was an important consideration in the selection as our data centre. Equinix uses green electricity and is also the first data centre in Europe and the first company in the Netherlands with ISO 50001 certification, the new global standard for energy management. Sustainable technologies provide significant energy savings, so that the customers of Equinix can meaningfully limit their CO2 footprint. It is not possible to specify this per business involved. Equinix has previously obtained ISO 14001 certification (for environmental management) in 2011. The ISO 14001 certification establishes the elements companies need to achieve for an effective environmentally-friendly management system.

Reporting and the GRIThe GRI guidelines stand for the Global Reporting Initiative guidelines. The United Nations has issued these guidelines to assist businesses in their reporting in the area of sustainability. BinckBank does not publish a separate sustainability report, as it has decided to give account of its CSR in its annual report. Comparing the two revealed that there is extensive overlap between the annual report and the GRI guidelines relevant to BinckBank, such as the description of strategy, the section on risk and the HR policy. Furthermore, a large number of GRI indicators defined specifically for financial services providers have little or no relevance in BinckBank’s case. For instance, our geographical area of operation concerns countries within the European Union, where human rights, asymmetrical income distribution and other social issues do not arise. BinckBank provides credit to private investors for the purpose of purchasing securities, and thus does not have to deal with ethical or social considerations involved in lending.

54

Annu

al R

epor

t 20

13

Events and outlook for 2014FundcoachOn 12 November 2013, BinckBank reached agreement regarding the acquisition of the SNS Fundcoach business for a price of up to € 3 million by means of an asset and liability transaction. The actual transfer of the assets and liabilities will take place in 2014, after which BinckBank will take control of this business. This will lead to recognition of the assets and liabilities in the consolidated statement of financial position at that time. The assets and liabilities relating to Fundcoach as at 31 December 2013 are not reported. The assets and liabilities to be acquired concern mainly bank balances, domain and brand names, and assets entrusted by clients. Completion of the transaction is subject to obtaining a declaration of no objection from De Nederlandsche Bank.

Alex Asset Management to expand investment universeThe investment universe of Alex Asset Management will be expanded in 2014 to include US equities so that the steady inflow of new funds can continue to be invested.

Leveraged productsFees received for the distribution of leveraged products such as sprinters and turbos will also no longer be permitted as of 1 January 2014. A project designed to create in-house leveraged products is proceeding satisfactorily. We expect BinckBank to look for a cooperation with a partner in order to outsource certain operational processes. We expect to launch these products in the course of 2014, and that they will begin to contribute to the result in 2015.

Professional Services: BPO and software & licensing operations (Able)In its press release of 11 November 2013, BinckBank N.V. announced that it will concentrate more on its core businesses, and that it would study the options available regarding a sale or collaberation for its non-banking businesses (the BPO and software & licensing operations). With this proposed divestment, BinckBank is prioritising an accelerated realisation of its retail strategy for its (European) online brokerage and asset management services. The study is proceeding according to plan, and BinckBank expects to complete it in 2014.

Resolution levy SNSThe Dutch government nationalised SNS Reaal on the basis of the Intervention Act on 1 February 2013. The Minister of Finance announced that a non-recurring resolution levy to be paid into the treasury would be imposed on the banks in an amount of € 1 billion. This levy will not be deductible for the purpose of corporate income tax.

The Minister of Finance submitted a bill to parliament to ratify the resolution levy in June 2013. The proposal is to impose the levy on banks in possession of a banking licence on 1 February 2013, but only if they are still in possession of a banking licence on 1 March 2014, 1 May 2014 and 1 July 2014. In accordance with relevant IFRS guidelines, BinckBank has decided that the expense arising from the resolution levy should only be recognised in the income statement at the time the levy is due. The contribution of the various banks will be related to the total sum of the deposits guaranteed under the deposit guarantee system held with them on 1 February 2013. A contribution of 0.075% of the base amount will be levied in three instalments on the above-mentioned dates. BinckBank estimates its total contribution at € 4 million.

Outlook 2014Our result depends heavily on the activity of our customers in the markets. Market volatility and direction are important factors. The environment in which we are operating is highly complex and subject to changes in legislation, taxation and social perception. These changes will affect BinckBank’s results. It is not possible for us to issue detailed forecasts.

55

Annual Report 2013

Executive board members Koen N. Beentjes, chairman of the executive board (1961 – Dutch nationality)

Koen has been an executive director under BinckBank’s articles of association and was reappointed at the General Meeting of Shareholders on 22 April 2013 for a term of four years. Koen is responsible for Retail Zelf Beleggen, including the foreign offices, Retail Savings & Investment Management, Information Technology, Human Resources, Internal Audit Department (IAD), Legal & Compliance and the Corporate Secretary function. He is also a supervisory director of the associates ThinkCapital and TOM.

Koen is a certified public accountant and had an international career of over 20 years at the ING Group and its predecessors. In the early days of his career he was mainly active in the field of finance and control at subsidiary companies of the ING Group. In 1994 he took on responsibility for the acquisition of foreign retail banks by ING. He became a member of the executive board of Allgemeine Deutsche Direktbank AG in Frankfurt am Main, Germany, in 1998. Following his return to the Netherlands, Koen was appointed as general manager of ING Card at the end of 2002.

Number of BinckBank shares held at year-end 2013: 42,345

Evert-Jan M. Kooistra, executive director and CFRO(1968 – Dutch nationality)

Evert-Jan has been an executive director and chief financial & risk officer (CFRO) of BinckBank since 2008. He was reappointed as a director under the articles of association of BinckBank at the General Meeting of Shareholders on 23 April 2012 for a term of four years.

Evert-Jan is responsible for Finance & Control, Operations, Risk Management and Treasury & ALM. Evert-Jan studied business economics at the Erasmus University in Rotterdam, and is a certified public accountant. He has more than 20 years’ experience in the financial field, including periods of employment at PriceWaterhouseCoopers and Shell. Most recently he was financial director at the US company International Game Technology. Evert-Jan has also been a supervisory director of Exact Holding N.V. since September 2012.


Pieter Aartsen, executive director(1964 – Dutch nationality)

Pieter was reappointed as a director under the articles of association of BinckBank at the General Meeting of Shareholders on 26 April 2010 for a term of four years. He has been an executive director of BinckBank since 2006, with responsibility for the business unit Professional Services, BeFrank and Able.

Pieter studied general economics at the VU University in Amsterdam. From 1990 to 2004 he was employed at KAS Bank, where he held various positions in the Institutional Banking Division. He was appointed Head of Sales and Business Relations Management for the Benelux countries in 1996, and then became head of Sales and Business Relations Management for the UK in 2001. He moved to Deutsche Bank AG in London as Head of European Securities Clearing and Vice President in 2004, with responsibility for product development and sales of the clearing product.


58

Annu

al R

epor

t 20

13


59

Annual Report 2013

Risk & Capital Management

IntroductionAs at 31 December 2013, the capital and liquidity position of BinckBank was sound. BinckBank’s total equity at the end of 2013 stood at € 431.6 million. The total available Tier I capital as at 31 December 2013 was € 173.4 million. BinckBank thus has adequate financial buffers to withstand financial stress.

ScopeIn previous years, BinckBank published a separate Capital Adequacy & Risk Report (Pillar III) in the third quarter of the financial year. For 2013, this information is included in the following sections of the annual report. The purpose of the Pillar III disclosures is to inform current and future stakeholders how BinckBank deals with risk management and capital adequacy.

The Basel II/III frameworkThe European banking directive, or CRD, also known as Basel II, consists of capital requirements for banks. The objective of Basel II is to give guidelines to banks whereby they can establish the minimum amount of capital they must hold to absorb unexpected losses as a result of the financial and operational risks to which they are exposed. The directives are implemented in the European Union by means of the CRD directives. More or less all the EU Member States have integrated this directive in their national legislation. In the Netherlands, the directive is included in the Wft and secondary regulation.

The Basel framework uses the ‘three pillars’ principle. Pillar I describes the minimum capital requirements, Pillar II deals with internal measurement of capital adequacy and the supervision of this, and Pillar III addresses disclosure of capital adequacy and risk management with the aim of encouraging market discipline.

Differences in risk perception between IFRS and Basel IIRisk perception varies depending on the purpose for which the risk exposure is calculated: IFRS-EU or Basel II. IFRS-EU is mainly used for the measurement of financial results and balance sheet positions. Under IFRS-EU, the balance sheet positions are usually shown in order of liquidity at the face value per category of financial product. These statements do not take account of differences in creditworthiness or collateral or security received.

The Basel II regulations and core capital are more suitable for risk measurement, since the purpose of the Basel reporting is to present a risk-weighted view of the bank’s balance sheet and to ensure that adequate capital buffers are maintained for losses, both expected and unexpected. Collateral and other credit enhancements to which the bank has recourse should the counterparty default are fully taken into account.

Regulatory reporting scopeIn the Netherlands, BinckBank is subject to consolidated supervision by De Nederlandsche Bank. Basel II/III therefore applies to BinckBank and all its foreign branches and subsidiary companies. The entities consolidated by BinckBank in accordance with Basel II and IFRS are listed in the table below.

Consolidation scope IFRS Basel II IFRS Basel IIBinckBank N.V. incl. foreign branches yes yesBinck Bewaarbedrijf B.V. yes yesAble Holding B.V. yes yesAble B.V. yes yesFintegration B.V. yes yesThinkCapital Holding B.V. yes yesThinkCapital Asset Management B.V. yes yes

BinckBank establishes its consolidation scope in accordance with IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates, IAS 31 Interests in Joint Ventures, and in accordance with SIC-12 Consolidation – Special Purpose Entities. All companies for which BinckBank directly or indirectly has the power to govern the financial and operating policies so as to obtain benefits from their activities are part of the consolidation scope of BinckBank and are fully consolidated.

61

Annual Report 2013

When establishing the own funds, investments in associates and joint ventures are deducted from equity. In BinckBank’s case, this concerns the associates TOM Holding N.V. and BeFrank B.V.

Introduction of CRR/CRD IV (Basel III)The new Capital Requirements Directive (CRR/CRD IV) was published in the Official Journal of the European Union on 27 June 2013. This publication, also known as Basel III, is a milestone in the development of the supervisory framework after years of discussions, negotiations and preparations.At the same time, it is only a step in a process of changing the supervisory framework. CRD IV is expected to include changes that will affect national legislation and regulation, supervisory policy and the conduct of institutions with the ultimate goal of bringing about a more solid financial system.

Basel III took effect on 1 January 2014. In the European Union, this regulation is implemented through the CRR/CRD IV. The CRR (Capital Requirements Regulation) concerns European regulation that takes effect at national level immediately. It takes precedence over national legislation, which does not have to be amended for it to take effect. The CRD IV (Capital Requirements Directive) gives guidelines that will have to be reflected in national legislation and a certain degree of flexibility has been allowed for national supervisors with respect to implementation.The introduction of CRR/CRD IV is a response to the weaknesses in the banking system identified during the financial crisis (2008-2011). The new regulation is primarily designed to increase the capital buffers of banks, and to improve the quality of these buffers. Moreover, new requirements are introduced to safeguard the liquidity position of banks.

The package of reforms collectively known as Basel III includes requirements with regard to the capital instruments that must be held by banking institutions. Basel III sets conditions for long-term funding and requirements for the amount of cash held by a banking institution. It also includes measures to limit the effects of leverage, and sets stricter requirements for the quality of capital instruments qualifying as Tier I or Tier II capital. Banks will also be obliged to maintain a capital conservation buffer to enable them to resist future periods of stress. Lastly, Basel III introduces a counter-cyclical buffer that allows national supervisors to require banks to hold additional capital during periods of rapid growth in lending.

The timeline for the introduction of the capital requirements is shown below:

3.5% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5%

1.0%

1.5%1.5% 1.5% 1.5% 1.5% 1.5%

3.5%2.5% 2.0% 2.0% 2.0% 2.0% 2.0%

0.625%1.250%

1.875%2.5%

0.625%

1.250%

1.875%

2.5%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2013 2014 2015 2016 2017 2018 From 2019

Core equity Tier 1 Additional Tier 1 Tier 2 Capital conservation buffer Countercyclical buffer

62

Annu

al R

epor

t 20

13

BinckBank already has a sound capital and liquidity position that amply meets the requirements of the new legislation and regulation. The effects of the introduction of CRR/CRD IV on BinckBank’s capital position are:• Under CRR / CRDIV and subject to certain conditions, the deductible item of goodwill can be adjusted by the

deferred tax liabilities relating to the goodwill. For BinckBank, this leads to a reduction in the deductible and therefore an increase in its core capital of € 21.4 million.

• Under CRR/CRD IV the unrealised gains and losses as shown in the fair value reserve will also be included in to calculation of available capital (phased in from 0% to 100% over the period 2014-2018). This fair value reserve can be significantly affected by movements in market interest rates, which can lead to volatility in the calculation of the available equity capital.

• Certain minor changes to the capital requirement for credit risk.• As a final adjustment, there are a number of items for which a different risk weight has been applied due to the application of Basel III. This concerns financial and other associates that will, subject to conditions, no longer be included as a deductible item in the calculation of core capital. On the other hand, this item will be included in the risk-weighted assets with a weight of 250%. This also includes deferred tax claims resulting from temporary differences that will only be realised in the event of future profits.

63

Annual Report 2013

The following table shows BinckBank’s capital position as at 31 December 2013, expressed for both Basel II and Basel III.

Calculation of capital adequacy under Basel II and Basel III

x € 1,000 Basel II31 December 2013

Basel III31 December 2013

Delta31 December 2013

Issued and paid-up capital 7,450 7,450 - Share premium reserve 373,422 373,422 - Treasury shares (30,340) (30,340) - Other reserves 61,844 61,844 - Unappropriated profit 19,248 19,248 - Non-controlling interests 7 7 - Total equity 431,631 431,631 -

Af: goodwill (142,882) (142,882) -

Plus: deferred payment obligations associated with goodwill - 21,432 21,432

Less: other intangible assets (90,118) (90,118) - Less: fair value reserve (2,124) - 2,124 Less: proposed dividend (19,370) (19,370) -

Core capital 177,137 200,693 23,556

Less: equity investments in financial subsidiaries (3,710) - 3,710

Available capital - (A) 173,427 200,693 27,266

Credit risk - Pillar I 22,073 22,098 (25)Market risk (= currency risk) 84 84 - Operational risk 21,160 21,160 - Required capital - Pillar I - Basel II 43,317 43,342 (25)

Adjustments to capital requirement under Basel III* Items which under Basel III have a different risk

weighting - 964 964

Required capital - Pillar I - Basel III - (B) 43,317 44,306 939 Total required capital - Pillar II 9,310 9,310 - Total required capital (C) - Pillar I + II 52,627 53,616 939

BIS-ratio (=A/B * 8%) 32.0% 36.2% 4.2%Solvency ratio (=A/C * 8%) 26.4% 29.9% 3.6%

a u d i t e d

64

Annu

al R

epor

t 20

13

Key developments in 2013Capital adequacyBinckBank’s capital position was adequate throughout the year under review. The BIS ratio rose 0.9% compared to year-end 2012 to 32.0%, and the solvency ratio rose from 25.2% at year-end 2012 to 26.4% on 31 December 2013. With its current Tier I capital of € 173.4 million, BinckBank amply meets the more stringent capital requirements proposed by the Basel Committee on Banking Supervision (BCBS) which have to be fully implemented by 2019.

This paragraph describes the main findings in relation to areas of improvement in the field of administrative organisation and internal control identified by internal reviews of the business units, audits conducted by the internal audit service and/or the external auditor and audits by the regulator. The executive board devoted particular attention to these items of improvement in 2013.

Developments in internal control

Governance structureBinckBank invested heavily in the further improvement of its internal controls in 2013, including documentation of the entire governance framework. Detailed governance documents were also prepared for particular elements, which have strengthened the structure and control of the organisation. Management of the governance framework is the responsibility of the Risk Management department.

Risk Management departmentThe Risk Management department was reorganised in 2013. The appointment of a new senior manager, a market and model risk manager and an operational risk manager completes the transition to a new risk management team. Responsibilities have been reassigned and included in the governance framework, with stricter application of the three lines of defence model for certain elements. For instance, the first-line activities of credit risk management have been transferred to the Operations department.

Risk appetiteBinckBank further developed its risk dashboard in 2013. Quantitative norms have been established, improving the ex-post assessment of whether BinckBank has remained within its risk appetite. Additionally, early warning and other indicators have been formulated to improve the timely monitoring of potential breaches of the established risk appetite. This enables the organisation to make the necessary adjustments when needed. The risk categories BinckBank uses for management have also been redefined.

Business Continuity ManagementBinckBank gave further consideration to the issue of crisis management in 2013, and has formulated a business continuity plan in which various crisis scenarios have been identified. BinckBank has formulated additional plans for each scenario designed to keep the bank operating during a disaster.Like all medium-sized financial institutions in the Netherlands, BinckBank has also formulated a financial recovery plan which describes the measures BinckBank can take to recover from a financial or other crisis on its own initiative.

Information TechnologyBinckBank is aware of the various threats and risks in relation to cyber crime. BinckBank continuously focuses on identifying and mitigating the risks associated with cyber crime. The executive board is continually engaged in assessing the balance between the risks and costs associated with the prevention of cyber crime. The information security policy is divided into three layers: strategic, tactical and operational policy. In 2013 BinckBank further developed the structure of its tactical and operational policy and the elaboration of items included in the risk action plan. Security monitoring has been brought to a higher level and investment has been made in new equipment.

As a result of the redesign of the ICT organisation in 2012, whereby a formal distinction was made between ICT development and ICT exploitation & management, additional attention was paid to the test & change management process during 2013 for ensuring quality is maintained when software changes are made. Improvements were therefore made to the production of test risk analyses, the testing strategy and the testing approach. The translation of test risk analyses into actual test cases still needs improvement.

65

Annual Report 2013

The test management function also needs to be improved in terms of manpower and skills, and the load and performance testing need to be tightened up. At least two contingency tests are conducted each year of the migration of production to the contingency environment. In 2013 these tests have taken place. This involves the technical and operational migration of the entire BinckBank environment, with simulation that the external data centre is not available due to calamities. The tests established that critical systems were successfully migrated within the set standards and timeframe. Compliance functionThe continuous changes to legislation and regulation and more intense supervision have to be adequately anticipated. Last year, BinckBank invested heavily in a more robust compliance function, and the tasks and responsibilities of compliance were organised in the governance framework in more detail. A new group compliance manager was appointed in 2013, which has further strengthened the compliance framework. Additional compliance officers have also been appointed at the branch offices in Belgium and France. The management model for the compliance function at the branch offices was changed in 2013, whereby the compliance function at the foreign branches is now hierarchically managed by the local first-line management, with a functional reporting line to the group compliance manager in the Netherlands. The functional management from the Netherlands will be further developed in 2014, with a focus on clear implementation of roles and responsibilities at the branch offices and a consistent group-wide approach.

Monitoring of cash transactionsOn the basis of its banking licence, BinckBank is responsible for monitoring cash transactions. The aim of this monitoring is to combat money laundering and the funding of terrorism. ACP, the supervisor in France (part of Banque de France), carried out a review at the branch office in France in 2012 of the control measures in place for the prevention of money laundering and the financing of terrorism, and concluded that the measures did not adequately reflect specific requirements of French legislation and regulation. The ACP’s findings focused mainly on further tightening of the control measures for the procedural recording of the customer identification process, the risk classification of customers and the operational monitoring thereof, the ongoing and regular compliance checks and the governance structure between head office and branch. As a result of the 2012 review, the French supervisor issued a “mise en demeure” (similar to an notification) in 2013. A project group was formed to address the issues raised by the ACP and a significant proportion of the findings were dealt with to the French supervisor’s satisfaction in 2013. The remaining items will be addressed in 2014. De Nederlandsche Bank (DNB) carried out a review of the monitoring of cash transactions in 2013, which included BinckBank. This concerned a sector-wide ongoing due diligence investigation of the continuous monitoring of customers and transactions in the context of the Anti-Money Laundering and Anti-Terrorist Financing Act (the Wwft) and the 1977 Sanctions Act (SW). DNB established that Dutch legislation had not been adequately implemented in certain respects and that control of money laundering risks needed to be improved. BinckBank invested heavily in people, systems and processes in 2013. One important improvement concerns the acquisition of a new transaction monitoring system whereby we can more effectively meet the requirements of increasingly strict supervision of compliance with applicable legislation and regulation with respect to the monitoring of cash transactions in all the countries in which BinckBank operates.

Management of foreign branch officesBinckBank has four branch offices abroad, with its offices in Belgium and France accounting for the majority of its foreign activities. Transaction volume at the office in Italy is still limited and the office in Spain focuses only on marketing activities and relationship management. Internal audit functions were introduced at the foreign offices in 2013, thus improving internal controls. The internal audit functions mainly concern Risk Self Assessments (RSA) and the tightening and implementation of key controls. The foreign internal audit functions have a functional reporting line to the corporate internal audit department (part of the Risk Management department) in the Netherlands.

Concentration risk modelBinckBank’s Pillar II solvency ratio declined in early 2013 due to a sharp increase in the capital required for concentration risk. This was due partly to customer activity, and partly due to use of a broad brush model for the calculation of the capital requirement for concentration risk. BinckBank developed a more accurate and realistic model last year that takes better account of the quality of collateral provided for collateralised loans and margin requirements. The model was taken into operation after extensive testing on 31 December 2013. The result is that the capital requirement for concentration risk has fallen from € 5.3 million as at 31 December 2012 to € 1.0 million as at 31 December 2013.

66

Annu

al R

epor

t 20

13

Overview of risk management at BinckBankBinckBank conducts its business on the basis of an appropriate balance between risk and return, and strives to accept risks in a conscious and responsible way. We also strive to achieve a moderate risk profile. BinckBank has a governance risk compliance framework, whereby the risk profile is managed on the basis of previously established risk criteria.

BinckBank’s risk profileBinckBank has a fundamentally different risk profile from that of a traditional Dutch bank. The typical banking operations of BinckBank are relatively simple and concern the provision of loans collateralised by highly liquid securities portfolios (collateralised lending), the provision of payment services to fixed contra-accounts at other banking institutions, automated asset management and the interest-rate business relating to the funds entrusted by our customers. These activities are in general classified as relatively low-risk. BinckBank’s core business, the settlement of securities transactions, is however a complex process. Each year, BinckBank processes millions of transactions for more than 500,000 accounts in a very large number of financial products on several trading platforms through brokers and stock exchange memberships. Together with the high level of dependence on ICT, this forms a relatively high operational risk. BinckBank devotes extensive attention to risk management. Adequate control measures, reporting and information systems form part of the risk management process. The annual establishment of the level of risk appetite, the identification of risks and the introduction and adjustment of relevant control measures are part of a continuous process at BinckBank. Risk management is moreover affected by changing market conditions and the increasing complexity of legislation and regulation (compliance).

BinckBank’s risk appetite Risk appetite is the degree to which BinckBank is prepared to accept risk during the normal conduct of its business in order to achieve its objectives. Risk appetite involves a balance between risk and return, and is a core element of BinckBank’s business. Commercial interests and returns are weighed against the risks involved. For BinckBank, risk appetite is a dynamic process rather than a static measure that continually evolves to meet changing internal and external circumstances.

The company’s risk culture and the ‘tone at the top’ are determining factors here. The executive board considers external perceptions as well when determining its level of risk appetite: how does BinckBank wish to be seen by key stakeholders such as customers, shareholders, employees and regulators? What are their expectations with regard to risk profile, risk appetite and return? The executive board of BinckBank has formed an impression of this during its numerous discussions with its stakeholders. Risk appetite is the most important parameter in the BinckBank Enterprise Risk Management System and forms the basic principle for the company’s risk management. The executive board determines the level of risk appetite at least once a year, and adjusts this in the interim in the light of significant changes if necessary. The executive board’s risk appetite is submitted to the supervisory board for approval each year in December. Breaches of the established risk appetite are discussed at meetings of the governance committee. The duties and responsibilities of the various governance committees are described in more detail in the section

“Governance commissions”.

Like other banking institutions, BinckBank is reliant on the confidence of private customers. The absolute size of its equity, its market listing and large number of customers makes BinckBank open to questions relating to issues of confidence. BinckBank is aware of this, and accordingly has adopted a low level of risk appetite (1 on a scale of 1 to 5) with regard to its reputation, capital adequacy (or solvency) and liquidity position.The level of risk appetite for business risk, credit risk, market risk, operational risk, financial reporting risk and legal and compliance risk ranges from 2 to 3.

The following table shows the level of risk appetite per category of risk against the background of the current risk profile of the business activities. The average risk appetite is 2 (on a scale of 1 to 5). This means that our level of risk appetite is relatively low. For certain risk categories, BinckBank’s risk appetite differs from the current risk profile. In cases where the current risk profile is higher than the established risk appetite, the executive board and the managers concerned have taken measures to return the profile to within the desired risk appetite.

67

Annual Report 2013

Riskcategory

Riskappetite

Low Middle High

1 2 3 4 5

Stra

tegi

cris

kCr

edit

risk

Mar

ket

risk

Lega

l &Co

mpl

.ris

k

Solv

. &liq

uidi

tyO

pera

tiona

l risk

Fin.

Rep.

risk

Reputation

Business Risk(Earnings volatility)

Credit risk onInvestments & cash balances

Credit risk oncollateralised loans & margins

Counter-party risk

Interest rate risk

Currency risk

Compliance

Legal

Financial reporting risk

IT-system and information risk

Processes

Staff

Projects & Products

Outsourcingrisk

Liquidity risk

Capitaladequacy

Current risk profileRisk appetite& Tolerance Average appetite BinckBank

Risk appetite and current risk profile per risk category

Quantification of risk categories with KRI and KPIBinckBank further elaborated and quantified its risk appetite in 2013, selecting Key Risk Indicators (KRI) and Key Performance Indicators (KPI) to represent BinckBank’s risk profile as closely as possible. Account is taken of the efficiency of the indicators, so that they can be applied effectively in the departments and units concerned and so that they use existing systems and data sources. Existing experience and knowledge within the organisation is used for this. The selection of the KRIs and KPIs also takes account of the complexity and measurability of the indicators. Where possible, BinckBank has selected simple and measurable indicators. The risk dashboard is continually improved on the basis of new information.

Strategic riskStrategic risk is broken down into reputational risk and business risk. Reputation is important to BinckBank because it represents the total impression of all stakeholders: customers, suppliers, the media, employees and the environment. BinckBank has a good reputation and its differentiating qualities include visibility, transparency, authenticity and consistency. This translates into an extremely low risk appetite (1) for reputational risk.

68

Annu

al R

epor

t 20

13

The executive board considers that the business risk (earnings volatility) is too high, since BinckBank is still too dependent on income from securities transactions. Over the longer-term therefore, BinckBank wishes to create a more stable earnings flow and to become less dependent on transaction-related income. While the earnings model has improved in 2013 as a result of the growth in the asset management business, the desired risk profile has not yet been attained.

Credit riskCredit risk breaks down into risks on investments and cash balances, collateralised loans and margins, and counterparty risk. BinckBank has a middle (2) risk appetite for credit risk in its investment portfolio. This translates into a long-term credit rating of at least single A for new purchases for the investment portfolio and a low capital requirement. BinckBank limits its credit risk by means of adequate diversification of its investments. The risk appetite for collateralised lending and margin risk is also middle (2). BinckBank wishes to avoid unsecured credit exposure to its customers at all times. BinckBank limits the credit risk on these activities by actively managing the collateralised loan portfolio and requiring adequate security for the loans it provides. For BinckBank, counterparty risk concerns the risk incurred with reference to counterparties in financial transactions. This risk exclusively concerns transactions effected by BinckBank for its own account and risk, such as the purchase of bonds for its investment portfolio. If a counterparty defaults after a price has been agreed for the purchase or sale of securities but actual settlement of the transaction has not yet taken place, BinckBank is exposed to the risk that a similar transaction can only be effected on less favourable terms.

Market riskBinckBank’s market risk consists of interest-rate risk and currency risk. BinckBank does not operate a trading portfolio, and takes no active trading positions in foreign currencies. BinckBank is however exposed to fluctuations in interest and exchange rates. Longer fixed-interest periods and maturities of bonds increases the exposure of the investment portfolio to movements in market interest rates. This means a higher market risk for interest-rate movements. On the other hand, interest income is fixed for a longer period, which leads to lower business risk. Longer fixed-interest periods in the investment portfolio have a reverse effect on interest-rate and business risk. BinckBank does not take active trading positions in foreign currencies, but is exposed to exchange-rate movements as a result of its operational activities. The risk appetite for currency risk is set at middle (level 2).

Operational riskDue to the nature of its business, BinckBank has a relatively high inherent operational risk. Operational risk is determined by the large number of complex administrative entries that have to be processed daily, the fact that communication with customers is primarily via internet or telephone, and the fact that software has to be regularly updated due to various circumstances.Many unexpected events may moreover occur in BinckBank’s operational processes which can result in losses or prevent achievement of targets. Processes, systems and people may fail to perform as intended, there may be instances of fraud, and day-to-day processes may be disturbed by accidents or system faults (IT risk). The risk appetite for operational risk is set at middle (3). Within operational risk, the risk profiles of ‘Processes’, ‘IT systems & information risk’ and ‘Outsourcing risk’ fall outside the approved risk appetite.In the case of ‘Processes’ and ‘IT systems’, this is mainly due to actions necessary for the sale and carve-out of the BPO and software & licensing business (Able). In the case of the risk profile for ‘Outsourcing risk’, one of the findings of the business continuity management project was that BinckBank would have to take measures to manage this risk more effectively to bring it within its risk appetite.

Financial reporting riskThe large number and complexity of requirements for reporting to the market, governments and regulators have led to an increase in ‘Financial reporting risk’. By strengthening the Finance & Control department, the current risk profile of middle (3) should be returned to within risk appetite at a level of middle (2) in 2014.

Solvency and liquidity riskBinckBank’s very low risk appetite with respect to solvency and liquidity is reflected in a minimum capital target (under Pillar II) of 12%. As at 31 December 2013, BinckBank had a comfortable capital position of 32.0% under Pillar I and 26.4% under Pillar II. BinckBank does not have a lending business (other than providing collateralised loans), which results in a liquidity surplus. This surplus is placed in liquid and highly-rated bonds which can be used for securities lending transactions. BinckBank thus safeguards its liquidity position in accordance with its risk appetite.

69

Annual Report 2013

Legal and compliance risksThe increasing and extensive changes to legislation and regulation for financial institutions are a challenge for small and medium-sized banks. BinckBank strives to comply with all existing, changing and new legislation in a manner that is commercially responsible. Various actions have been taken to reduce the current risk profile of compliance of middle (3) to within appetite at middle (2): these include professionalisation of the compliance functions, the development of the compliance framework, the implementation of new systems and raising awareness of employees by means of courses and workshops.

Governance risk compliance frameworkBinckBank refined its internal governance structure in 2013. BinckBank uses the ‘three lines of defence’ principle (3LoD), in which the business and support units have primary responsibility for the management of risk. These first-line departments are supported and monitored by second-line specialist departments such as Risk Management, Finance & Control and Legal & Compliance. The Internal Audit Department (IAD) forms the third line of defence. The audit committee, the risk and product development committee, the remuneration committee and the supervisory board, together with the external regulators and the external auditor, form the last link in the governance risk compliance framework.

Organisation of risk management at executive board levelThe responsibilities with respect to risk management at executive board level are established as follows: the chairman (CEO) and the directors responsible for the business units Retail and Professional Services are primarily responsible for risk management within the business units (first line). In the second and third lines, the CEO is responsible for the Legal & Compliance and Internal Audit departments. The chief financial & risk officer (CFRO) is responsible for the Finance & Control and Risk Management departments. Each of these departments has its own charter which defines its duties and responsibilities in relation to risk management.These charters have been coordinated to avoid both duplications and gaps in the risk management mechanisms. The independence of the various functions and departments is also safeguarded by this segregation. In addition to the second and third line departments mentioned above, the CEO is also responsible for management of the support units: Human Resources, ICT Operations and Investor Relations. The CFRO is responsible for management of the following departments: Operations (back office), Treasury & ALM (asset & liability management) and Business Intelligence Competence Centre (BICC).As a result of the departure of the director of Retail at the end of 2012, the CEO took over responsibility for the management of the business unit Retail at the end of 2012. The chairman of the executive board has thus fulfilled a double function during 2013.

Risk management departments and governance committeesBinckBank has an organisational structure in which segregation of duties is safeguarded in the structure of the organisation (based on the three lines of defence principle) and in its ICT systems (user rights). There are also a number of governance committees (executive board subcommittees) whose members include representatives of the executive board and the first and second line who are closely involved in the management of certain risks. The governance committees operate under articles of association that are approved by the executive board and can issue mandates for individual departments. Monitoring of the risk appetite is carried out by the relevant governance committees, the most important of which are described below.

a u d i t e d

70

Annu

al R

epor

t 20

13

Risk & ProductDevelopment

Committee (RPC)

RemunerationCommittee

(RemCo)

Supervisory BoardRe

gula

tors

(DN

B/AF

M +

fore

ign

regu

lato

rs)

Exte

rnal

acc

ount

ant

Risk CommitteeRetail

AccountingCommittee

InvestmentCommittee

Risk CommitteeProfessional Services

Legal & ComplianceCommittee

Netherlands Legal &Compliance

Finance &Control

Belgium

ICT PSICT Retail

3rd line ‘of defence’2nd line ‘of defence’1st line ‘of defence’

Audit Committee (AC)

RetailAlex & Binck

Support Units

ProfessionalServices

Internal AuditDepartment (IAD)

Risk & Control Functions

RiskManagement

SIMOnlineBrokerage

Treasury & ALM

Operations

Investor Relations

Human Resources

ICT Operations

BICC

› Management control› Internal control measures

Audit on 1st and 2nd line

› Owner of risk and reward

Risk

& C

ontr

ol

Mon

itorin

gRi

sk R

epor

ting

Qua

lity

Safe

guar

d

InformationRisk

OperationalRisk

Market Risk

InternalControl

ALCOICT SecurityCommittee

Executive board

71

Annual Report 2013

Governance committees

ALCO (Asset & liability committee)The ALCO monitors all the risks affecting BinckBank’s balance sheet. The ALCO is mainly concerned with the management of liquidity risk, credit risk and market risk (interest-rate risk and currency risk), and also assesses BinckBank’s liquidity and capital adequacy. This committee also sets the investment policy for the interest-rate business. This concerns matters such as allocation of freely available funds across the investment portfolio and determination of the cash position to be held, approval of counterparties and policy in relation to allowed collateral for collateralised lending. Regarding the funds to be held in cash, the items dealt with include the investment in call loans, the ratings to be observed in this respect and the maximum exposure per counterparty and per sector.

Investment committeeThe investment committee assesses the implementation of the investment policy of the Savings & Investment Management department (SIM). It also deals with performance and risk and compliance issues, as well as the management of operational risks associated with the products of SIM. The investment committee assesses changes to the investment policy and approves these where necessary. It also provides advice on the policy to be adopted for BinckBank’s savings business.

Risk committee Retail & risk committee Professional ServicesThe risk committees monitor the operational risks for the business unit in question. They focus on managing risks associated with the structure of the business processes. Principal tasks include decision-making at business unit level on sound and controlled operation, coordinating and stimulating operational risk control and design of the main business processes. The committees also advise the executive board regarding approval of the introduction of new products.

Legal & Compliance committeeThe legal & compliance committee supervises legal and compliance issues affecting BinckBank, with the aim of managing BinckBank’s legal and compliance risks. It discusses matters such as incoming and pending claims, new legislation and regulation and amendments to the terms and conditions, policy documents and relevant changes to the manuals. KRIs in the field of compliance reviews and monitoring are also discussed and the business units are requested to tighten the controls of their processes where necessary.

ICT Security committeeThis body focuses on the management of risks associated with information security and the security of the ICT processes. Its most important tasks consist of taking decisions regarding network security and logical systems access, vulnerability management, back-up processes and improving awareness of risk in the field of information security. The committee also advises the executive board with respect to resolutions relating to strategic and tactical policy in the field of information security.

Accounting committeeFinancial Reporting and Disclosure Risk are monitored by the accounting committee. This body focuses on the management of risks associated with accounting processes, manuals, policies, quarterly figures, provisions and the application of new accounting standards (IFRS). One of its main duties is establishing accounting policies.

a u d i t e d

72

Annu

al R

epor

t 20

13

First line of defense The first line of defence consists of the business units Retail and Professional Services and the support units Operations, ICT Operations, Human Resources, Treasury & ALM, Investor Relations and BICC. The management teams of the business units and the support units have primary responsibility for the implementation of risk management activities that are integrated in the business processes and collectively form the first line of defence. The first line is supported and monitored by second line specialist staff departments. The executive board bears ultimate responsibility for the risk management activities.

Treasury & ALM departmentThe Treasury & ALM department is in the first line of defence. This department supervises credit risk associated with cash balances and investments, reports directly to the CFRO and is accountable to the ALCO. The Treasury & ALM department uses risk models and stress tests in order to estimate the size and impact of risk.

Second line of defense

Risk Management departmentThe Risk Management department is in the second line of defence and monitors the correct application of policy and supervises the existence and operation of the risk control measures. This department includes four different disciplines: information risk, internal control, operational risk and credit and market risk. In the context of the management of operational risk, the Risk Management department carries out regular internal audits of the operational processes and reports its findings to the governance committees. On behalf of the CFRO and the ALCO, it also monitors compliance with the mandates given to Treasury & ALM. Risk Management formulates BinckBank’s information security policy and reports on compliance with this policy to the CFRO and the ICT security committee. The policy for credit risk has been formulated in accordance with the statutory framework. Responsibility for implementation of this policy is placed in the first line, in the Operations department. This policy focuses on collateral funding policy, deficit management, the adequacy of margin requirements, concentrations in outstanding loans, and the monitoring of counterparty risk. The Risk Management department assesses the implementation of policy as well as the models and parameters used, maintains BinckBank’s governance structure and is responsible for the documentation thereof. This department is ultimately the responsibility of the CFRO. This department has its own charter setting out the important areas of attention.

Finance & ControlFinance & Control is responsible for the timely and complete administration and reporting of financial data to internal and external stakeholders. This includes mandatory reporting to national and international regulatory agencies. Finance & Control reports directly to the CFRO. This department has its own charter setting out the important areas of attention.

Legal & ComplianceLegal & Compliance reports to the chairman of the executive board (CEO) and in the context of risk management is responsible for the monitoring of compliance with the relevant codes of conduct and the observance of relevant legislation and regulation. Legal & Compliance is chiefly concerned with the management of integrity risk. BinckBank emphasises values such as integrity and reliability through its code of conduct, insider trading regulations and whistle-blower’s charter. The Legal & Compliance manager performs the role of corporate secretary and can escalate issues directly to the audit committee. Within Legal & Compliance, the activities of compliance concern the following areas: client service levels and duty of care, prevention of market abuse, combating money laundering and the financing of terrorism, prevention of fraud and incidents, preventing conflicts of interest, safeguarding the privacy and integrity of employees, and cultural and conduct issues. These areas of attention are set out in the Legal & Compliance charter.

Third line of defense

Internal audit department (IAD)In line with the definition of Internal Auditing by the Institute of Internal Auditors, the mission of IAD is to provide independent and objective certainty. The purpose of the IAD is to perform assurance tasks in order to add value to and improve the functioning of the internal organisation. The IAD’s activities focus on achieving organisational targets by means of a systematic and disciplined approach to the evaluation and improving the effectiveness of risk management in the first and second lines, control and governance processes.

a u d i t e d

73

Annual Report 2013

The IAD provides additional assurance with respect to:• The effective operation of the control mechanisms in the first and second lines;• The reliability and integrity of the financial and operational information and reporting;• The safeguarding of assets;• Compliance with relevant legislation and regulation.

The investigations by the IAD focus on the design, existence and operation of:• The quality and effectiveness of the operation of the governance framework;• The risk management and control within the organisation and processes;• The automated systems and the control measures surrounding and embedded in these systems.

In addition to scheduled audits, audits may be conducted on the request of management and/or the audit committee. The scope or operating area of the IAD includes all activities carried out under the responsibility of BinckBank. Joint ventures and associates are independent entities with their own licence and fall outside the (direct) area of operation of the IAD. The IAD reports to the executive board of BinckBank; within the executive board, the IAD portfolio is the responsibility of the chairman of the executive board (CEO). Its formal reporting line is directly to the chairman of BinckBank’s audit committee. The IAD’s independence is safeguarded by this double reporting line, and the fact that it is separate from the first and second lines and the daily internal control reporting line. This department has its own charter setting out the important areas of attention.

Supervision of activities

Supervisory boardThe supervisory board discusses the strategy and the risks associated with the business each year, and, on the basis of reports, assesses the structure and operation of the internal risk management and control systems. Supervision of the financial information provided by the company is the responsibility of the supervisory board. The executive board submits the risk appetite to the supervisory board for approval each year. The supervisory board has three sub-committees; the audit committee, the risk and product development committee and the remuneration committee.

Audit committeeThe audit committee is responsible for overseeing the structure and operation of the system of internal control and risk management measures, and monitoring the implementation of the external auditor’s recommendations and the functioning of the internal audit department.

Risk and product development committeeThe risk and product development committee advises the supervisory board on matters including the risk profile and the risk appetite of BinckBank. It also monitors the adequacy of the liquidity and the capital, as well as establishing, testing and analysing new products or changes to existing products and services with regard to the duty of care towards the customer. The risk and product development committee is moreover responsible for identifying, analysing and advising on all the other material risks affecting BinckBank.

Remuneration committeeThe remuneration committee is responsible for preparing resolutions regarding remuneration, including supervisory board decisions that could affect the risks and the risk management of BinckBank. With respect to these resolutions, the remuneration committee considers the long-term interests of the shareholders, investors and all other stakeholders of BinckBank.

a u d i t e d

74

Annu

al R

epor

t 20

13

Relevant risks and control measuresThe risks which are relevant to BinckBank are discussed briefly below. The identification, analysis and assessment of risks, the design and implementation of related control measures and stress testing form a continuous process at BinckBank.

Business riskInternational economic and cyclical factors and the aftermath of the credit crisis influence financial markets around the world, and consequently also affect the operating result of BinckBank. In addition there are various factors, such as loss of customers, falling trading volumes, lower order values and price pressure due to competition, that could result in a fall in income for BinckBank. BinckBank operates in a highly competitive environment in which its competitors, often large financial institutions, have well-established brands and greater financial resources. BinckBank is also seeing competition from smaller online brokers, an increasing number of which are competing aggressively on price. BinckBank makes great efforts and substantial investments in its ICT platform and its products and services in order to attract new customers and retain existing customers. BinckBank’s financial position and result can also be adversely affected by unfortunate business decisions, poor execution of business decisions or inadequate response to changes in the business climate in general or in the markets relevant to the company in particular.

BinckBank saw an improvement in customer sentiment in its home markets in 2013, evidenced by an increase in both the number of its customers and trading volumes. The Dutch market moreover features a relatively high level of income per transaction compared to other European markets, which makes the Dutch market attractive to competitors and price pressure has risen as a result. In order to strengthen its market leading position, BinckBank reduced and simplified its fee structure in 2012. Other forms of commission income such as custody fees and return commissions are also under pressure due to public criticism and changing legislation and regulation. The ban on inducements took effect on 1 January 2014, and will have a negative effect on commission income. In addition, net interest income is also under pressure due to the low level of interest rates in the money and capital markets.

The BinckBank executive board has identified a higher level of business risk for the Dutch retail brokerage business and is therefore investing in expanding its offering to include asset management services, thus orienting the earnings model towards the management and administration of assets. Over time, this should lead to more stable income flows and thus mitigate the increased business risk inherent in the Retail brokerage business. The asset management operations grew substantially in 2013, with assets under management rising from € 1.0 billion to € 2.1 billion over the year. Recurring annual income has thus risen by approximately € 8 million, and this will compensate for the loss of commission income as a result of the ban on inducements.

In order to avoid a situation in which the chosen strategy becomes inappropriate if circumstances change with respect to sustainability, regulation, funding and market developments, the strategy and the underlying principles and assumptions on which it is based are regularly evaluated and updated if appropriate, given BinckBank’s risk appetite. Decisions with regard to strategic objectives or changes thereto are taken by the executive board and approved by the supervisory board.

Reputational riskThe confidence of its customers is essential and BinckBank therefore strives to minimise risks to reputational damage as far as possible. Like other banking institutions, BinckBank depends on the trust of private customers. The absolute size of its equity, its market listing and large number of customers makes BinckBank vulnerable to questions relating to issues of trust. BinckBank is aware of this, and accordingly has adopted a low risk appetite with regard to its reputation.Various customer surveys are carried out each year in order to measure customer satisfaction and brand recognition. Periodical risk analyses are also carried out among the senior management. The results of these analyses are the drivers of our continuing efforts to provide a high-quality service and add value for our customers. BinckBank also follows the development of its share price closely. Large price fluctuations may be an indication of or lead to negative publicity.

In the event of large price fluctuations or negative publicity, an investigation is carried out to establish the cause and, if necessary, a representative is designated to explain the cause or potential cause in a press release in order to pre-empt any damaging speculation.

75

Annual Report 2013

a u d i t e d

Credit riskCredit risk is the risk of a counterparty and/or issuing institution involved in trading in or issuing a financial instrument defaulting on an obligation and thus harming BinckBank financially. Credit risk relates to items included in the balance sheet under cash and balances with central banks, banks, financial assets and loans and receivables. With these balance sheet items, the most important consideration is the creditworthiness of the counterparty (except collateralised lending which covered by securities as collateral).

Credit risk on cash and investmentsBinckBank deals with the funds entrusted to it by its customers prudently. Funds entrusted or customer deposits that are not used for collateralised lending, are partly held in cash with the remainder being invested through the investment portfolio. Lending is conducted in a responsible manner in accordance with the established risk appetite. BinckBank’s objective with its investment portfolio is to place the surplus liquidity in the market in such a way as to optimise the interest margin between the cost of raising the funds and the proceeds of placing them, consistent with the company’s risk appetite. Credit risk on cash and investments is monitored closely by the Treasury department, which reports daily to the CFRO and the Risk Management department and gives account of its activities to the ALCO on a regular basis. Investments are made within a system of counterparty limits set in advance by the ALCO. BinckBank’s credit risk can be subdivided into credit risk on cash and investments, credit risk on outstanding collateralised loans/margin obligations/SRD obligations and counterparty risk. How BinckBank manages these risks is described below. Cash balances surplus is placed in the money market and the capital market with central governments, lower-tier public authorities if guaranteed by central government, central banks and other credit institutions with a credit rating equal to or better than single A (Fitch or equivalent). The money market loans have maturities varying from 1 day to 1 month. The capital market loans have maturities of up to 3 years. The agreements and limits with regard to placing funds in the money and capital markets are established in a limits system established by the ALCO. Lending to counterparties by the Treasury & ALM department is governed by strict rules, in accordance with treasury policy and subject to internally set limits on both the amount and duration of loans to approved counterparties. The resultant credit risk is monitored via regular credit reviews. BinckBank’s relatively low risk appetite with regard to credit risk is demonstrated by our policy of investing only in relatively safe and liquid instruments, most of which are eligible for collateral at the European Central Bank (ECB).

Credit risk on outstanding collateralised loans/margin obligationsBinckBank offers customers loans against securities collateral in various forms. Advances can be used to cover margin requirements or to purchase securities. In both cases, BinckBank is exposed to (potential) credit risk with respect to the customer. Given the nature of the loans and the surplus of the collateral received the credit risk is limited. In the case of lending against securities collateral, the amount of credit advanced depends on the liquidity and price of the security in question. The loan facility for all products that qualify for collateralised lending is determined in accordance with the guidelines set by the ALCO, taking account of the limits set in section 152 of the Market Conduct Supervision (Financial Institutions) Decree [Besluit gedragstoezicht financiële ondernemingen, or ‘Bgfo’]. BinckBank applies a minimum haircut of 30% on equities and 20% on bonds. BinckBank has retained the right towards its customers to adjust the advance against securities collateral at any time without prior notice. Authorised limits can be translated into a maximum available spending limit (ASL). This spending limit is expressed as a cover ratio whereby the minimum requirement reflects a cover ratio of 1. The degree to which the customer exceeds this ratio expresses the relative surplus cover in relation to the minimum requirement. Additional cover can be obtained by providing bank guarantees, collateral in the form of securities or by increasing the cash balance. If the cover ratio falls below 1, the customer enters the deficit procedure. If the cover ratio falls to nil, the customer enters the collection procedure.

Monitoring of credit risk is conducted by the Credit Risk Management department, which is part of Operations. This department uses automated systems to monitor the loans provided on the basis of real-time prices. The credit risk therefore resides in movements in value of the collateral received. Credit Risk Management watches in particular for undesirable concentration within customer portfolios, known as concentration risk. Concentration risk is a form of credit risk, and occurs in relation to customers with collateralised loans and customers with margin requirements on derivatives positions. Concentration risk is higher for customers with an undiversified investment portfolio because there is greater dependence on a limited number of securities. If an issuer were to default, the consequences would be significantly more serious than if the credit had been provided on a more diversified portfolio. The Credit Risk Management department monitors for excessive concentrations in customer portfolios on a daily basis. Measures are taken in line with policy if necessary to limit excessive concentrations. If there is excessive concentration, a decision may be taken to reduce the

76

Annu

al R

epor

t 20

13

loan provided to the customer in question. In addition, the ALCO may decide to limit the concentration risk associated with a specific stock by reducing the advance provided against the stock in question. Collateralised lending has increased 33% since the end of 2012, rising from € 323 million to € 428 million at the end of 2013.

Margin is a financial sum that the writer (or seller) of an unsecured option or future must deposit as security for the risk of his position. Margin is a form of guarantee for potential losses arising as a result of the obligations assumed by the investor. This does not mean that the financial risks are limited to the size of these obligations.There is therefore the risk that the margin maintained by the customer will not be adequate in relation to the obligation he has assumed. The Credit Risk Management department analyses the market movements on a daily basis and updates the margin percentages for all stocks at least once a month, and may adjust this percentage immediately in case of extreme price volatility. The Risk Management department monitors these adjustments.

BinckBank deficit procedureThe credit risk on collateralised lending and margin requirements is monitored by BinckBank’s credit risk systems. Customers with a collateralised lending and/or margin agreement are monitored by the Credit Risk Management (CRM) department with respect to their available spending limit (ASL). The ASL is the balance of the weighted value of the securities received from the customer less the customer’s obligations in the form of collateralised lending and margin requirements. There is a shortfall in the ASL if the securities in the customer’s portfolio no longer provide adequate cover for the customer’s obligations. As soon as a negative ASL is identified, the deficit procedure is initiated automatically. Use of a deficit procedure is a legal requirement.

The deficit procedure used by BinckBank is as follows: BinckBank checks for each customer whether the securities adequately cover the collateralised loans and/or margin requirements (margin and current orders) on a daily basis. Depending on the reason, a customer with a negative ASL must make up the shortfall within one to five business days. If the customer’s ASL is still negative on the last day on which the shortfall must be made up, BinckBank will start to close the customer’s securities positions on its own initiative. Securities positions will be closed until the ASL in the customer’s account is returned to a positive value.

Provisions for non-performing loansProvisions for non-performing loans are determined on an individual basis and there are no collective provisions. The amount of the provision depends on the repayment terms agreed with the customer. The total provision as at 31 December 2013 was € 0.4 million (2012: € 0.4 million). In the event that the Credit Risk Management department is unable to recover the debt, the case is handed to a collection agency.

Counterparty riskThe Treasury & ALM department effects transactions for BinckBank’s account and risk, including the purchase of bonds for the investment portfolio. This involves counterparty risk. The ALCO approves the counterparty limits and the Risk Management department monitors that these limits are observed.

The vast majority of equities transactions effected by BinckBank are for the account and risk of customers (online brokerage), for which BinckBank incurs no counterparty risk. These transactions are mainly effected on regulated or other markets such as NYSE, Euronext and TOM MTF, whereby use is made of a central counterparty (CCP). This means that the counterparty risk for customers is low.

a u d i t e d

77

Annual Report 2013

Maximum credit riskThe table below presents the maximum credit risk associated with the various financial instruments. The maximum credit risk is shown gross, without taking account of the effects of credit risk mitigation provided by set-off agreements and the collateral that has been furnished. The maximum credit risk in derivatives positions for the account and risk of customers is shown by the margin requirement as described above, and is not included in the table below.

x € 1,000 2013 2012

Credit riskCash and balanced with central banks 332,523 365,362 Banks 144,784 144,916 Financial assets held for trading 70 168 Financial assets designated at fair value through profit and loss 19,130 15,876 Available-for-sale financial assets 1,582,146 1,515,549 Loans and receivables 428,180 323,008

2,506,833 2,364,879 Guarantees 2,729 2,558 Total 2,509,562 2,367,437

The quality of the loans and advances and the provision for bad debts are shown inthe tables below:

Past due 428,142 322,985 Overdue 441 459 Total 428,583 323,444 Bad debt provision (403) (436)Net loans and receivables 428,180 323,008

Past due items are residual items remaining after realisation of the collateral (securities and bank guarantees). The provision is formed on a case-by-case basis.

Loans and receivables by percentage covered:Money-market loans - - < 25% of the value of the collateral 80,935 79,856 between 25% and 50% of the value of the collateral 103,252 136,947 between 50% and 75% of the value of the collateral 239,365 97,415 > 75% of the value of the collateral 4,590 8,767 Past due 441 459 Total 428,583 323,444 There are no items in arrears or for which provisions have been recognised in any ofthe other categories of financial assets.

Loans and receivables under renewed contracts

In the case of existing loans and receivables, it is possible for renewed contracts to be concluded with customers. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable.

Loans and receivables under renewed contracts 23 35

a u d i t e d

78

Annu

al R

epor

t 20

13

Risk concentration per economic sector

The following table presents the credit risk by economic sector.

Risk concentration per economic sector as at 31 December 2013

x € 1.000Centralbanks

Financialinstitu-tions

Government/governmentguaranteed

Privateindividuals

Otherprivatesector Total

Cash and balanced with central banks 332,523 - - - - 332,523Banks - 144,784 - - - 144,784Financial assets held for trading - - - - 70 70Financial assets designated at fair value through profit and loss

- - - - 19,130 19,130

Available-for-sale financial assets - 755,335 826,811 - - 1,582,146Loans and receivables - - - 428,180 - 428,180

332,523 900,119 826,811 428,180 19,200 2,506,833Guarantees - - - 2,409 320 2,729Total 332,523 900,119 826,811 430,589 19,520 2,509,562

Risk concentration per economic sector as at 31 December 2012

x € 1.000Centralbanks

Financialinstitu-tions

Government/governmentguaranteed

Privateindividuals

Otherprivatesector Total

Cash and balanced with central banks 365,362 - - - - 365,362Banks - 144,916 - - - 144,916Financial assets held for trading - - - - 168 168Financial assets designated at fair value through profit and loss

- - - - 15,876 15,876

Available-for-sale financial assets - 823,337 692,212 - - 1,515,549Loans and receivables - - - 323,008 - 323,008

365,362 823,337 692,212 323,008 16,044 2,364,879Guarantees - - - 2,304 254 2,558Total 365,362 823,337 692,212 325,312 16,298 2,367,437

a u d i t e d

79

Annual Report 2013

Risk categories of financial assetsAssessment of the creditworthiness of the financial assets and liabilities is based on credit ratings provided by rating agencies. Cash and loans to banks are classified on the basis of the short-term credit ratings of rating agencies. The item Unrated banks concerns the remaining receivable arising from the implementation of the deposit guarantee scheme in relation to DSB. For the investment portfolio, the long-term rating is used. Loans and receivables concern credit provided against securities to private individuals and SME customers. These are not rated by credit rating agencies. Collateralised lending is not assessed on the basis of a rating, but on the quality of the collateral in securities.

Risk categories of financial assets as at 31 December 2013

x € 1,000

Short-term rating Long-term rating

Unrated TotalF1 or

higherF2 or lower AAA

Between AA+ en

AA-

Between A+ en

A- BBB+

Cash and balanced with central banks

332,523 - 332,523

Banks 136,019 639 8,126 144,784 Financial assets heldfor trading

- - - - 70 70

Financial assets designated at fair value through profit and loss

- - - - 19,130 19,130

Available-for-salefinancial assets

847,974 463,247 141,169 25,501 104,255 1,582,146

Loans and receivables 428,180 428,180 Held-to-maturity financialassets

- - - - -

Total 468,542 639 847,974 463,247 141,169 25,501 559,761 2,506,833

Risk categories of financial assets as at 31 December 2012

x € 1,000

Short-term rating Long-term rating

Unrated TotalF1 or

higherF2 or lower AAA

Between AA+ en

AA-

Between A+ en

A- BBB+

Cash and balanced with central banks

365,362 - 365,362

Banks 135,590 - 9,326 144,916 Financial assets heldfor trading

- - - - 168 168


- - - - 15,876 15,876


856,738 354,751 89,973 - 214,087 1,515,549

Loans and receivables 323,008 323,008

Held-to-maturity financialassets

- - - - -

Total 500,952 - 856,738 354,751 89,973 - 562,465 2,364,879

a u d i t e d

80

Annu

al R

epor

t 20

13

Risk concentration per country

The following table presents the credit risk, analysed by country.

Geografical distribution as at 31 December 2013

x € 1,000

Supra-national

Nether-lands

Germany Belgium France Other EU countries

Non-EU countries

Total

Cash and balanced with central banks - 327,618 - 3,352 1,053 500 - 332,523

Banks - 104,129 - 4,535 3,843 22,929 9,348 144,784 Financial assets heldfor trading

- - - - 70 - - 70


- - - - 19,130 - - 19,130


13,530 142,547 1,160,361 52,253 29,007 117,551 66,897 1,582,146

Loans and receivables - 392,024 2,641 4,314 480 8,760 19,961 428,180 Held-to-maturity financialassets

- - - - - - - -

Total 13,530 966,318 1,163,002 64,454 53,583 149,740 96,206 2,506,833 % distribution 1% 38% 46% 3% 2% 6% 4% 100%

Geografical distribution as at 31 December 2012

x € 1,000

Supra-national

Nether-lands

Germany Belgium France Other EU countries

Non-EU countries

Total

Cash and balanced with central banks - 361,680 - 2,635 1,047 - - 365,362

Banks - 117,859 - 3,959 1,494 12,532 9,072 144,916 Financial assets heldfor trading

- - - - 168 - - 168


- - - - 15,876 - - 15,876


- 75,105 1,307,789 11,926 25,819 63,559 31,351 1,515,549

Loans and receivables - 292,003 2,113 5,121 724 2,863 20,184 323,008 Held-to-maturity financialassets

- - - - - - - -

Total - 846,647 1,309,902 23,641 45,128 78,954 60,607 2,364,879 % distribution 0% 36% 55% 1% 2% 3% 3% 100%

a u d i t e d

81

Annual Report 2013

Capital requirement credit risk

Pillar I - Standardised Approach to credit riskThe capital requirement for credit risk under Pillar I is established using the standardised approach. The capital requirement for credit risk under Pillar I rose 11.9% compared to 2012, from € 19.7 million to € 22.1 million.The main reason for this is an increase in credit risk in the investment portfolio, due to the expansion of investments in senior financials as a result of a revised investment policy. Credit risk also rose due to an increase in other receivables in the form of asset management fees still to be settled.

The credit risk according to the standardised approach is shown in the tables below.

Credit risk standardised approach

Credit risk standardised approach as at 31 December 2013

x € 1,000

Risk weight Credit risk mitigation Risk weighted

assets

Capital require-

ment (8%)0% 10% 20% 50% 75% 100%

Substi-tution Collateral

Claims or contingent claims on central governments or central banks

1,258,257 - - 25,735 - - - - 12,868 1,029

Claims or contingent claims on regional governments or local authorities

714 - - - - - - - - -

Claims or contingent claims on international organisations 13,488 - - - - - - - - -

Claims in the form of covered bonds - 472,422 - - - - - - 47,242 3,779

Claims or contingent claims on financial enterprises and financial institutions

24,560 - 286,991 137,741 - - (3,193) - 126,240 10,099

Claims or contingent claims on corporate clients - - - - - - - - - -

Claims or contingent claims on private individuals and SMEs

334,373 - - - 453,834 - (4,932) (432,745) 12,117 970

Overdue items - - - - - - - - - -Other receivables 1,163 - - - - 77,450 - - 77,450 6,196Total 1,632,555 472,422 286,991 163,476 453,834 77,450 (8,125) (432,745) 275,917 22,073

Credit risk standardised approach as at 31 December 2012

x € 1,000

Risk weight Credit risk mitigation Risk weighted

assets

Capital require-

ment (8%)0% 10% 20% 50% 75% 100%

Substi-tution Collateral

Claims or contingent claims on central governments or central banks

1,060,621 - - - - - - - - -

Claims or contingent claims on regional governments or local authorities

6,109 - - - - - - - - -

Claims or contingent claims on international organisations - - - - - - - - - -

Claims in the form of covered bonds - 551,573 - - - - - - 55,157 4,413

Claims or contingent claims on financial enterprises and financial institutions

7,178 - 314,808 91,291 - (1,021) - 110,380 8,830

Claims or contingent claims on corporate clients - - - - - - - - - -

Claims or contingent claims on private individuals and SMEs

254,165 - - - 344,854 - (8,305) (317,311) 12,860 1,029

Overdue items - - - - - - - - - - Other receivables 4,224 - - - - 68,188 - - 68,188 5,455 Total 1,332,297 551,573 314,808 91,291 344,854 68,188 (9,326) (317,311) 246,585 19,727

a u d i t e d

82

Annu

al R

epor

t 20

13

The claims on central governments and central banks consist of investments in central governments, the cash reserve at central banks (the Netherlands, Belgium, France and Italy) and surplus cash held at DNB. The investment in Italian government bonds of € 25.7 million have been risk weighted at 50%.Claims on financial enterprises and financial institutions with a risk weight of 0% concern securities transactions not yet settled for which the settlement date has not yet been reached. The claims with a risk weight of 10% consist of Öffentliche Pfandbriefe which are part of the investment portfolio. The claims with a weight of 20% concern cash for liquidity aspects and bonds of senior financials held in the investment portfolio. Cash balances are held at reputable national and international brokers and banks. BinckBank also provides credit to private customers on the basis of bank guarantees issued by third parties. The 50% and 100% weighting factor category includes loans to these private individuals secured by a bank guarantee.Claims on private individuals and SMEs arise from collateralised lending, derivatives positions and issued guarantees. The risk weight for claims on private individuals does not lead to a capital requirement due to credit risk mitigation in the form of underlying securities. BinckBank also provides limited loans secured by unlisted investment funds, which do not qualify for credit risk mitigation. Under the standardised approach, a capital requirement must be held for these loans to private individuals.

Pillar IIThe capital requirement for credit risk under Pillar II breaks down into risk from margin requirements, concentrations in credit and margin risk and counterparty settlement risk.

Margin riskWith respect to margin risk, BinckBank monthly tests the impact on credit risk for customers on the basis of an immediate 12.5% fall in the financial markets, such as happened on “Black Monday” (Monday 19 October 1987), when the AEX fell 12% in one day. Experience in recent years shows that most customers repay any shortfall within one month, and often the recovery percentage is actually 100%. A new recovery model was developed on the basis of further analyses in 2013 that takes account of the size of an individual shortfall.The margin risk as at 31 December 2013 stood at € 3.4 million.

Concentration riskThe capital requirement for concentration risk under Pillar II takes account of concentrations in outstanding loans and margin requirements. Under the old model, the capital requirement for concentration risk was determined on the basis of an 80% price decline in one stock with the largest outstanding loans and margin requirements, and a recovery ratio of 25% was used. The capital for concentration risk as at 31 December 2012 was € 5.2 million and € 1.0 million as at 31 December 2013.

The old model had several disadvantages. Firstly, there was no differentiation with respect to the quality of the collateral for the collateralised loans. In other words, the same stress factor was applied to all titles.Furthermore, BinckBank considers an 80% price decline in a single trading day to be unlikely. In case of a price decline lasting several days, the Credit Risk Management department, which manages the collateralised loans, has time to react and reduce the funding levels in consultation with the customer. In addition, no account is taken of the chance of successful collection of claims from customers. In BinckBank’s own experience, the recovery rate for small shortfalls was higher than for larger shortfalls.

BinckBank has developed a new model to calculate its concentration risk in 2013 in order to address these shortcomings. The new model takes account of historical volatility and expectations with respect to future price movements. Both positive and negative price movements can affect concentration risk. In determining the recovery rate, account is taken of the size of the shortfall. The new model was implemented with effect from 31 December 2013.

Market riskBinckBank’s market risk consists of interest-rate risk and currency risk. Currency risk is the risk of fluctuations in the value of items denominated in foreign currency as a result of movements in exchange rates and the effect of this on the financial position and/or the result of BinckBank. Interest-rate risk is the risk of movements in interest rates and the effect thereof on the financial position and/or the result of BinckBank.

a u d i t e d

a u d i t e d

83

Annual Report 2013

Interest-rate riskInterest-rate risk is the risk of movements in interest rates and the effect thereof on the financial position and/or the result of BinckBank.

Duration schedule as at December 2013

x € 1,000

< 1 month > 1 month< 1 year

> 1 year< 2 year

> 2 year< 5 year

> 5 year Non- interest bearing

Total

AssetsCash and balanced with central banks 332,523 - - - - - 332,523 Banks 136,658 - - - - 8,126 144,784 Financial assets held for trading - - - - - 70 70 Financial assets designated at fair value through profit and loss

- - - - - 19,130 19,130

Available-for-sale financial assets 126,045 515,806 444,639 495,656 - - 1,582,146 Loans and receivables 428,180 - - - - - 428,180 Total 1,023,406 515,806 444,639 495,656 - 27,326 2,506,833

LiabilitiesBanks 15,034 - - - - - 15,034 Financial liabilities held for trading - - - - - 486 486 Financial liabilities designated at fair value through profit and loss

- - - - - 704 704

Customer deposits 2,335,640 - - - - - 2,335,640 Total 2,350,674 - - - - 1,190 2,351,864

Duration schedule as at December 2012

x € 1,000

< 1 month > 1 month< 1 year

> 1 year< 2 year

> 2 year< 5 year

> 5 year Non- interest bearing

Total

AssetsCash and balanced with central banks 365,362 - - - - - 365,362 Banks 135,590 - - - - 9,326 144,916 Financial assets held for trading - - - - - 168 168 Financial assets designated at fair value through profit and loss

- - - - - 15,876 15,876

Available-for-sale financial assets 193,954 916,154 207,748 197,693 - - 1,515,549 Loans and receivables 323,008 - - - - - 323,008 Total 1,017,914 916,154 207,748 197,693 - 25,370 2,364,879

LiabilitiesBanks 20,060 - - - - - 20,060 Financial liabilities held for trading - - - - - 65 65 Financial liabilities designated at fair value through profit and loss

- - - - - 1,084 1,084

Customer deposits 2,213,049 - - - - - 2,213,049 Total 2,233,109 - - - - 1,149 2,234,258

BinckBank manages the sensitivity to interest-rate movements on its results and available capital by means of tolerance levels and monthly interest-rate risk reporting to the ALCO. Interest-rate exposure is mainly the result of the composition of BinckBank’s investment portfolio. A distinction is made between the duration schedule and the liquidity schedule. The duration schedule shows the maturity dates of the portfolio over time. This means that the maturity date determines the interest-rate sensitivity of the portfolio.

a u d i t e d

84

Annu

al R

epor

t 20

13

The above shows that the duration schedule is considerably shorter than the liquidity schedule. This is because 26% was invested in variable interest bonds at the end of December 2013. The difference between the duration and liquidity schedules is expressed in the interest-rate sensitivity of the interest income and the movements in value of the investment portfolio respectively. A reduction in duration leads to a lower interest-rate sensitivity of the value of the investment portfolio, but it creates additional interest-rate sensitivity for the interest income. A parallel move in interest rates will have more effect on interest income in the short-term due to the volume of the variable interest bonds than on the value of the investment portfolio.

Interest-rate risk on the resultBinckBank does not operate a trading portfolio, however it is still exposed to movements in interest rates due to the loans and investments it places in the market. Interest-rate risk exists because of the possibility that changes in market interest rates can have a negative effect on future profitability. A gradual movement in market interest rates (the yield curve) has an effect on the future interest income from collateralised lending and the investment portfolio, and on the interest BinckBank pays on savings and brokerage accounts. BinckBank manages this risk in relation to its banking operations by matching the interest-rate maturities of its assets and liabilities within specified limits. The effect of a gradual movement in interest rates on BinckBank’s profitability is determined using an Earnings-at-Risk model. The Earnings-at-Risk model measures the impact of interest-rate risk on the adjusted net result by calculating the effect on expected interest income and expense on the basis of a gradual change in market interest rates of +/- 1% and +/- 2% over a period of one year. This clearly expresses the interest-rate exposure of BinckBank’s result. The Treasury & ALM department reports the results and any breaches of the tolerance level to the ALCO on a monthly basis. The results of the Earnings-at-Risk model are shown in the table below, whereby the impact is based on the result over the 2013 financial year.

Sensitivity analysis of interest-rate result Gradual parallel yield-curve movement in basis points

Effect on the result31 December 2013 31 December 2012

x € 1,000 x € 1,000Over a period of 1 year+200 basis points 3,888 1,956 +100 basis points 1,944 978 -100 basis points (1,437) (762)-200 basis points (1,902) (1,049)

Over a period of 2 years+200 basis points 18,173 14,972 +100 basis points 9,087 7,486 -100 basis points (6,388) (4,023)-200 basis points (7,353) (4,702)

a u d i t e d

3 m 6 m0

100

200

300

400

500

600Eu

r mln

9 m 1 y 2 y 3 y

Liquidity maturity calendar Interest-rate maturity calendar

85

Annual Report 2013

Interest-rate risk on capitalThe interest-rate risk on capital takes account of sudden changes to the yield curve (interest-rate shocks) that could negatively affect the value of the investment portfolio. BinckBank has an investment portfolio consisting of fixed and variable interest securities that is diversified across various maturities. The investment portfolio is held in the banking book and is classified as financial assets available for sale and measured at fair value. This means that movements in value as a result of events such as interest-rate shocks are initially expressed in the revaluation reserve, but these changes only lead to losses in case of a forced liquidation of the investment portfolio due to substantial customer withdrawals associated with an upward interest-rate shock.

The effect on equity of an interest-rate shock of 100 basis points is shown in the table below (before tax):

Sensitivity analysis of interest-rate result Sudden parallel yield-curve movement

Effect on capital31 December 2013 31 December 2012

x € 1,000 x € 1,000+100 basis points (18,511) (10,264)-100 basis points 18,511 10,264

Currency riskCurrency risk is the risk presented by movements in the value of items denominated in foreign currencies due to movements in exchange rates. It is BinckBank’s policy not to take active foreign-exchange trading positions. Currency positions can therefore only arise as a result of the facilitation of brokerage transactions by customers. The policy is to hedge currency positions arising from operating activities on the same day they occur. The Treasury & ALM department hedges currency positions during the day up until 22:00 hours. Currency positions arising after 22:00 hours are hedged on the next subsequent trading day. BinckBank considers this risk on currency positions to be accepted risk.

Capital requirement for market riskThe capital requirement for market risk is expressed under Pillar I (currency risk) and Pillar II (interest-rate risk). At the end of 2013 the capital requirement for currency risk stood at € 0.1 million (2012: € 0.1 million). BinckBank held capital for the interest-rate risk in the investment portfolio at the end of 2013 in an amount of € 4.2 million. The capital requirement has risen due to an increase in the duration of the investment portfolio from 0.67 years as at 31 December 2012 to 1.17 years at the end of 2013.

Operational riskThe risks arising from operational activities are classed as operational risks. Losses due to operational risk are unavoidable. Operational risk is generally the result of deficiencies in the daily processing and settlement of transactions with customers or other parties or in the procedures and measures designed to ensure prompt detection of errors, quantitative or qualitative deficiencies or limitations in human resources, deficient decision-making due to inadequate management information and non-compliance with internal control procedures. BinckBank is insured with third parties for many forms of foreseeable losses as a result of operational risk. BinckBank has a capital reserve for operational risk as prescribed by law as a buffer for uninsured (unforeseeable) losses.

BinckBank uses the standardised approach (SA) to calculate its operational risk under Pillar I. Under the SA, the operating income in the three preceding financial years is divided into various business lines with pre-set capital requirements of between 12% and 18%.

a u d i t e d

a u d i t e d

86

Annu

al R

epor

t 20

13

Standardised Approach as at 31 December 2013

Business Line Operational income Risk weighting Capital requirement2011 2012 2013

Retail brokerage 126,659 99,995 101,723 12% 13,135 Retail banking 38,907 32,024 27,686 12% 3,944 Agency services 12,219 14,742 17,075 15% 2,202 Asset management 5,790 10,951 30,226 12% 1,879 Total 183,575 157,712 176,710 21,160

Standardised Approach as at 31 December 2012

Business Line Operational income Risk weighting Capital requirement2010 2011 2012

Retail brokerage 120,285 126,659 99,995 12% 13,878 Retail banking 43,587 38,907 32,024 12% 4,581 Agency services 12,605 12,219 14,742 15% 1,978 Asset management 8,369 5,790 10,951 12% 1,004 Total 184,846 183,575 157,712 21,441

The following parameters were applied by BinckBank’s management with respect to potential and actual operational losses in 2013. The internal target is for annual losses on normal activities due to operational risks not to exceed 1% of gross fee and commission income.• The financial result of out-trades and reimbursement of customers;• Other direct loss due to faults in ICT systems, automated information processing and operating processes.

In 2013 these losses amounted to 0.54% of total gross fee and commission income, compared to 0.62% in 2012.

Management of operational riskOperational risk at BinckBank is generally the result of deficiencies in the daily processing and settlement of transactions with customers or other parties or in the procedures and actions designed to ensure prompt detection of errors, insufficient investment in and maintenance of the ICT systems, quantitative or qualitative deficiencies or limitations in human resources, deficient decision-making due to inadequate management information and failure to comply correctly with internal control procedures. The assessment and control system for operational risk at BinckBank meets the following conditions:• Establish clearly all allocated responsibilities;• Measure, assess and adjust the current operational risk in the various risk committees;• Maintenance of the loss database and reporting to the various risk committees;• The results of the periodic checks are discussed monthly by the risk committees and additionally an annual risk

assessment is conducted by order of the executive board by the directors of the business units and the heads of the support departments.

Operational risk management is built into the structure of the organisation, which embodies a number of the internal control measures and principles that BinckBank uses to manage operational risk. Ineffective controls with respect to operational risk are assessed on a monthly basis and decisions are taken by the relevant risk committees whether additional measures are needed as appropriate. In addition, a Risk Dashboard is discussed which shows the key indicators providing signals of the development of operational risks over time. These include indicators relating to ICT performance such as system failure during the month (percentage of uptime during market hours, norm = 99.9%) versus the previous period, last successful contingency test, percentage of incidents resolved within two days. These operational risk indicators are quantified in the risk dashboard and are divided into the following areas of interest: people, processes, projects & products, ICT system & information risk and outsourcing risk.

a u d i t e d

87

Annual Report 2013

Important elements for the management of operational risk include:• Locate the responsibility for managing operational risk as close as possible to the processes themselves, i.e. with the

line management;• Record the operating processes, risk management processes and organisational structure and their interrelationship

in writing;• Embed procedures for reporting and escalation to management;• Implement controls within each process chain to ensure accurate information, together with performance and risk

indicators;• Learn from incidents and errors. Where possible, record the details of incidents that resulted (or could have resulted)

in losses and compare the records against the findings of risk assessments;• Automated recording and execution of transactions with associated audit trails. Daily transaction and position

reconciliation, including reporting to management;• Procedures for staff recruitment and mentoring and segregation of duties and job descriptions for all employees

and departments;• Clear reporting lines, recording of required management information and periodic internal consultation; internal

control and internal audit studies, compulsory “dual control” principle for representation and contractual binding of the company;

• Maintain a capital buffer for losses arising from unforeseen (uninsured) events and check the adequacy of the buffer with regular stress testing; and

• Maintain an insurance portfolio including directors’ liability insurance, company liability insurance, professional liability insurance, inventory insurance, buildings insurance and consequential loss insurance policies.

Management of ICT riskSince the business activities of BinckBank depend heavily on ICT, a significant proportion of the operational risk concerns ICT risk. Deficiencies in ICT can constitute a significant threat to the critical business processes and the service provided to customers. ICT risks can therefore indirectly pose a threat to BinckBank’s financial position and result. To reduce this risk, a large number of control measures have been implemented in the following areas: organisation and policy, information risk management, incident and problem management, testing, change & configuration management and continuity.

Organisation and policyThis concerns first, the risk that the ICT policy and ICT organisation inadequately reflects the organisational strategy and second, the risks that the ICT organisation and ICT policy are not (or not adequately) structured and formulated to reflect the business processes and the existing information and data processing so that the processes and the dislcosure of information are not adequately supported.

BinckBank has an ICT Governance model. The ICT Governance is evaluated periodically and updated when necessary. BinckBank has also formulated an information security policy that is actively conveyed throughout the organisation. Policy principles have been formulated for all significant ICT risk control measures such as system availability, incident settlement, problems and system changes which are measured and reported monthly to the various risk committees using Key Performance Indicators.

BinckBank has a compulsory confidentiality, integrity and availability (CIA) classification for all its ICT systems as an element of governance. The ICT department takes measures using the CIA classification to ensure that the desired quality requirements can be met.

Information risk managementAs an Internet bank, BinckBank is by definition exposed to a significant inherent risk of external fraud. The objective of security management is to prevent unauthorised users from accessing information. BinckBank has a variety of measures in place with respect to its infrastructure, systems, applications and data. Information security is seen as a company-wide responsibility. The responsibilities are established in the strategic information security policy (the security governance). Information risk management sets the frameworks in the strategic and tactical information security policy, and monitors that this policy is correctly applied. The first line of defence is responsible for the security of BinckBank’s systems, applications and data, with due observance of the policy frameworks.

a u d i t e d

88

Annu

al R

epor

t 20

13

To further increase the security of its platform, BinckBank has further extended and taken into operation its Security Incident and Event Management system (SIEM) in 2013. SIEM monitors the security of the BinckBank network.

An important element of this policy is a periodical penetration test, in which BinckBank invites a third party to attempt to break into its systems using the latest techniques and methods. The results of this test are discussed by the risk committees, and can lead to a further tightening of policy and/or controls.

Incident and problem managementIncident and problem management focuses on the prevention of the risk of failures as a result of which the service cannot (or cannot sufficiently) be restored, of structural errors in the ICT infrastructure and ensuring that incidents and problems are dealt with correctly, completely and in a timely manner. BinckBank mitigates this risk by means of an incident management procedure that ensures that every ICT incident is analysed and prioritised, and that incidents with a high level of urgency and impact are escalated appropriately. Reports are also prepared on incidents and failures on a monthly basis.

The incident and problem management processes were revised and adjusted where necessary in 2013.

Test, change and configuration managementBinckBank updates its systems and programmes in line with new technological developments, new legislation and regulation, internal information requirements and the needs of its customers. BinckBank is thus exposed to the risks of incorrectly and/or incompletely developed programmes, unauthorised changes to the ICT infrastructure, inadequate provision of information concerning the ICT infrastructure and incorrect or incomplete responses to change requests or failure to deal with change requests in good time.

This is managed by means of an established change management process, which among other things stipulates that only personnel from the ICT Operation and Management department are authorised to implement approved changes to the production processes. BinckBank also has various separate development, testing and acceptance environments at its disposal for the introduction of new software releases. Before changes to production processes can be implemented, the changes concerned must have completed the test procedure and have been approved by the test manager.

Business Continuity ManagementThe availability of the website and the underlying systems is a matter of great importance to BinckBank. The risk that the continuity of the (critical) business processes could be threatened as a result of the unavailability of the ICT infrastructure (including applications and systems) is mitigated as follows:1. BinckBank has prepared a business continuity plan on the basis of a business impact analysis. BinckBank has a

contingency facility and conducts a contingency test at least twice a year.2. To ensure the continuity of the conduct of its business, BinckBank has situated its ICT production systems with an

external data centre that has made provisions against the effects of heat, fire, theft, damage, loss of electrical power and natural disasters. The data centres have obtained all the required certifications.

3. In addition, in order to secure its business-critical data BinckBank uses back-ups and real-time synchronisation of data to a contingency location. A daily check is carried out to establish whether critical back-ups have functioned properly and in the event of failures an assessment is made to determine whether further action is necessary.

4. A report to management and risk committees on the performance and availability of the systems is produced on a monthly basis.

5. Special monitoring software is also used to continually monitor the availability and performance of critical systems.

BinckBank has implemented an adequate business continuity management process to ensure the availability of critical services. Business continuity management (BCM) is part of the overall risk management framework and is positioned as a central function within the business. Binck has two business continuity managers: one for the business unit Retail, and one for the business unit Professional Services. The BCM managers report to the directors of their business units, who in turn are members of the business continuity council (BC council) led by the chairman of the executive board (CEO). The BC council meets at least once per quarter and also acts as a crisis team, in which case it is supplemented with a number of specialists.

A business impact and risk analysis is conducted each year to establish which processes are business-critical, what the recovery targets are and the resources (people, systems, data flows, premises and suppliers) on which these processes

89

Annual Report 2013

depend. In the risk analysis, the process owners establish the feasible threat scenarios and the additional measures that will be needed to mitigate risk to an acceptable level. The BC Council formulates a continuity strategy on the basis of the business impact and risk analysis. This is developed into plans that are implemented under the supervision of the business continuity managers. Existing business continuity plans (BCPs) are amended or new BCPs are formulated on the basis of the new strategy. A generic or a specific plan is developed for each feasible threat scenario. BinckBank tests various scenarios and measures. The BC Council sets the test standards, evaluates these standards and initiates further measures for improvement.

Legal and compliance riskBinckBank places a high priority on integrity and reliability, and emphasizes this by means of its code of conduct, house rules, insider trading regulations and whistle-blower’s charter. Claims and complaints are seen as important indicators that are discussed by the legal and compliance committee. Legal and compliance risk is part of the risk framework.

Within the Legal & Compliance department, Compliance lists and analyses the risks, also on the basis of the applicable rules. Recommendations are then made for the control of these risks by means of internal policy and procedures. Compliance agrees action plans with the management on the basis of the prioritised risks and recommendations. Compliance monitors the progress of the action plans and reports on this. Developments in legislation and regulation, the current control of high risks and action plans form the basis for the annual policy plan and the activities of Compliance. Compliance acts on the basis of defined reporting lines and an escalation procedure. Compliance is responsible for making enquiries among managers and the executive board promptly and accurately in order to ensure that BinckBank’s activities continue to comply with applicable legislation and regulation. BinckBank has procedures in place for whistle-blowers and mandatory reporting of suspicious transactions, and has a Security Officer and a Privacy Officer.

Product-specific risksDifferent measures are currently in place in order to mitigate the risks specific to the business and products of Alex Asset Management. These risks are explained in further detail below.

Risk management at Alex Asset ManagementUnder the Alex label, BinckBank offers asset management and advisory services in its business unit Retail in addition to execution-only services. The asset management business expanded rapidly in 2013, which also increased the level of risk for BinckBank. Assets under management at Alex Asset Management increased by 112% since year-end 2012, from € 1.0 billion to € 2.1 billion at year-end 2013.With Alex Asset Management, BinckBank distinguishes itself from traditional asset managers by operating an active investment policy combined with investment decisions and recommendations based on quantitative analysis. The risk profile of Alex Asset Management is different from that of the normal execution-only business of BinckBank. The potential risks identified can be divided into risks associated with the duty of care, operational risk and reputational risk. The guidelines regarding the duty of care are stricter for asset management than they are for execution-only services, and place an additional responsibility on the asset manager. BinckBank meets these additional requirements by establishing a customer’s investment profile prior to providing service by means of a digital intake procedure and obtaining the approval of the customer in digital form. BinckBank asks its asset management customers to update their investment profile once a year. BinckBank checks daily to establish that the customer’s portfolio is in line with market developments and whether it corresponds to the established investment profile and objectives. Transactions are executed automatically to expand or reduce positions if this is advisable. This process is fully automated, and therefore does not depend on asset management personnel. The operational risks mainly concern heavy reliance on the IT systems, decision models and the accuracy of data used such as prices, traded volumes and corporate actions that affect prices. The controls system is adjusted to reflect this.BinckBank conducts a large number of tests on a daily basis and regularly tests that the decision models are still operating in accordance with the criteria. The reputation of Alex Asset Management and therefore BinckBank could be harmed if customers feel that their interests are not properly protected. This perception could arise if returns are disappointing or as a result of unclear communication and negative publicity.

90

Annu

al R

epor

t 20

13

a u d i t e d

Capital managementThe aim of capital management at BinckBank is to maintain a sound solvency position, seeking to strike the right balance between the equity capital it holds and the risks to which it is exposed. Capital management makes an increasingly important contribution to a systematic analysis of and improvement to the risk and return of BinckBank’s activities. In the design of its capital structure, BinckBank takes account of the thresholds set by DNB, the Wft, the Basel II regulations and its own internal requirements with respect to capital adequacy.

Capital strategy and internal capital targetsBinckBank strives (under Basel II) to achieve a solvency ratio (Pillar II solvency ratio) of at least 12%. Given a lower BIS (Pillar I) ratio, BinckBank will have to take measures to meet its own internal capital target. This can be achieved by either strengthening its capital buffers or reducing its risk. Like all other Dutch financial institutions, BinckBank has formulated a financial recovery plan for this eventuality. The plan describes the measures that BinckBank could take to return to its own internal capital target and the circumstances in which these measures would be applied.

Share buy-back programmeBinckBank reinstated its share buy-back programme on 16 December 2011 with the intention of reducing its capital. The share buy-back programme was completed on 28 June 2013. The total value of shares BinckBank repurchased in 2013 was € 9.1 million, bringing the total value of shares repurchased since 16 December 2011 to € 28.1 million.

Dividend structureWith the acquisition of Alex, BinckBank introduced a dividend structure based on adjusted net profit. The policy is to distribute 50% of the adjusted net result as dividend. To determine the adjusted net result, the net result calculated according to IFRS principles is adjusted for the amortisation of intangible assets and the tax saving on the difference between the amortisation of the goodwill acquired on the acquisition of Alex for tax purposes and the commercial amortisation. There was an additional adjustment in FY13 Q4 in relation to the impairment to the goodwill paid for the acquisition of Able B.V. in 2006.

91

Annual Report 2013

Capital structureBinckBank holds capital to cover the risks it incurs as a result of the conduct of its business. The amount and quality of the capital reserves are determined on the basis of IFRS and the provisions of the applicable European CRD Directives that are included in the Dutch Financial Supervision Act (Wft).

Calculation of equity capital and available Tier 1 capitalBinckBank’s equity capital consists of paid-in and issued share capital, share premium reserve, other reserves, the result in the current financial year, together with the value of the non-controlling interests. Treasury shares are deducted from equity capital. For the calculation of the core capital, the items goodwill, intangible assets, fair value reserve and the proposed dividend not yet paid are deducted from the equity capital. For the calculation of the total available Tier I capital as defined under Basel II, the item equity investments in financial institutions of more than 10% is deducted from the core capital. The analysis of the composition of equity capital and core capital as at 31 December 2013 is shown in the table below.

Calculation of capital requirement (Basel II)

x € 1,000 31 December 2013 31 December 2012Issued share capital 7,450 7,450 Share premium reserve 373,422 373,422 Treasury shares (30,340) (21,539)Other reserves 61,844 71,779 Unappropriated profit 19,248 24,100 Non-controlling interests 7 9 Total equity 431,631 455,221

Less: goodwill (142,882) (152,929)Less: other intangible assets (90,118) (110,213)Less: fair value reserve (2,124) (7,493)Less: proposed dividend (19,370) (20,860)Core capital 177,137 163,726 Less: equity investments in financial subsidiaries (3,710) (3,384)Total available capital - (A) - Tier I 173,427 160,342

BinckBank’s capital position as at 31 December 2013 was sound. BinckBank’s total equity at the end of December 2013 stood at € 431.6 million (year-end 2012: € 455.2 million). The Tier I capital under Basel II is not affected by movements in the fair value reserve, since this is deducted in the calculation of the total available capital (see item: ‘Less: fair value reserve’). The Tier 1 capital rose € 13.1 million, € 10.8 million of which consists of the amortisation of intangible assets and € 2.3 million of which consists of other movements in capital.

Calculation of capital requirement under Pillar I and Pillar IIThe Basel II framework as established in the Wft provides guidelines for the calculation of the minimum Pillar I capital that according to the regulators a bank must hold for credit risk, market risk and operational risk. Basel II permits various approaches for the implementation of the requirements under Pillar I with regard to credit risk, market risk and operational risk. BinckBank uses the standardised approach for credit risk and market risk, in which risk considerations and credit risk mitigation techniques are used as indicated by the regulator. BinckBank also uses the standardised approach for operational risk, whereby it forms a capital reserve based on the average operational income per business line over the preceding three financial years.

a u d i t e d

92

Annu

al R

epor

t 20

13

The second Pillar of the Basel II agreement concerns the process whereby banks assess the adequacy of their equity, known as the internal capital adequacy assessment process (ICAAP). For the determination of its Internal Capital Adequacy Assessment Process (or ICAAP) capital, BinckBank uses the complementary method, whereby capital in addition to the prescribed minimum capital requirement under Pillar I must be retained for complementary risks acknowledged by BinckBank (Pillar II). The ICAAP is used by BinckBank to determine its internal regulatory capital (or ICAAP capital). The relationship between the available capital and the ICAAP capital is shown in the solvency ratio. During 2013 (under Basel II), BinckBank used a minimum capital requirement for the Pillar II solvency ratio of 12%.

Pillar I capital requirementBinckBank has reassessed its capital adequacy as at 31 December 2013. This revealed that the total Pillar I capital requirement had risen 5% as at 31 December 2013 to € 43.3 million, chiefly due to higher risk as a result of asset management payments that are not yet settled.

Pillar II capital requirementThe total capital required under Pillar II fell slightly by 3% in 2013 to € 9.3 million. The capital requirement for interest-rate risk has increased due to a longer duration of the investment portfolio. The duration of the portfolio rose from 0.67 years to 1.17 at year-end 2013. In addition, the size of the portfolio increased from € 1.5 billion to € 1.6 billion at year-end 2013. Concentration risk measures the risks of losses from customers with skewed portfolios that are concentrated in specific stocks (or their associated derivatives). The capital requirement for concentration risk as at 31 December 2013 stood at € 1.0 million, which is € 4.3 million lower than as at 31 December 2012. The decline is due to the implementation of a new and more realistic model for the calculation of concentration risk. The new model does not use one fixed percentage, but rather uses a specific percentage for each stock based on historical volatility. The capital requirement for margin risk arises from the size of the unsecured claims on customers that would ensue after a 12.5% decline in the stock markets. Partly due to large positions held by a number of customers, the margin risk rose from € 2.2 million at year-end 2012 to € 3.4 million at year-end 2013. The capital requirement for counterparty risk remained unchanged at € 0.5 million.

In total, the capital required under Pillars I and II in 2013 rose 3% to € 52.6 million. The solvency ratio increased to 26.4% (FY12: 25.2%) and the BIS ratio rose to 32.0% (FY12: 31.1%).

x € 1.000 31 December 2013 31 December 2012Credit risk - Pillar I 22,073 19,727 Market risk (=currency risk) 84 93 Operational risk 21,160 21,441 Total required capital (B) - Pillar I 43,317 41,261

Interest-rate risk 4,207 1,454 Liquidity risk 240 157 Credit risk - Pillar II 4,863 7,998 Concentration risk 1,000 5,256 Margin risk 3,363 2,242

Counterparty risk 500 500

Total required capital - Pillar II 9,310 9,609 Total required capital (C) - Pillar I + II 52,627 50,870

BIS-ratio (=A/B * 8%) 32.0% 31.1%Solvency ratio (=A/C * 8%) 26.4% 25.2%

a u d i t e d

93

Annual Report 2013

Overview of BinckBank’s capital structure (Basel II)

The above figure illustrates the capital adequacy. Since the capital requirement (ICAAP capital and maximum stress test) as at 31 December 2013 was lower than the available capital, it can be concluded that the capital held by BinckBank is sufficient. The maximum stress scenario shows that BinckBank also holds sufficient capital in extreme stress situations.

x € 1,000

Pillar ICapital

Pillar ICapital

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Dec 2012 Dec 2013 Dec 2012 Dec 2013 Dec 2012 Dec 2013 Dec 2012 Dec 2013

Maximum Stress

scenario

Maximum Stress

scenario

Tier I capital

Tier I capital

Pillar I ICAAP capital Max. Stress Test Available capital

180,000

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Credit Risk Credit Risk

Operationalrisk

Operationalrisk

Credit Risk Credit Risk

Interest-rate riskLiquidity risk Interest-rate risk

Liquidity risk

94

Annu

al R

epor

t 20

13

Capital adequacy and results of stress tests for BinckBankBinckBank conducts regular stress tests to evaluate the scale of the risks involved in extreme events with a change in one or several parameters. Stress testing is integral part of risk management and as such is mandatory under Basel II. The purpose of a stress test is to express the risks of extreme events in terms of potential financial loss. The likelihood and effect of this in the context of the risk appetite will lead to an evaluation of the risks accepted, and whether measures should be taken to mitigate the risk or maintaining additional capital. Under Pillar II, stress testing is mandatory to assess the effect on Tier 1 capital of all types of risk to which the bank is exposed. If the outcome of an extreme but to some extent feasible stress scenario leads to a solvency ratio of less than 12%, BinckBank will no longer meet its own internal capital requirement. In this case BinckBank will have to take appropriate action in the form of risk-mitigating measures such as policy changes or insurance, or by reducing the risk profile of its existing activities.

The stress tests for BinckBank concern the following items in the balance sheet:

Business Line Stress test credit risk Stress test interest-rate

risk

Stress test liquidity

risk

Stress test business riskInvestment

portfolioCustomer portfolios

AssetsCash and balanced with central banks

X X X

Banks X X XLoans and receivables X XBonds and other fixed-income securities

X X X X

Derivatives positions held on behalf of custumers

X X

LiabilitiesCustomer deposits X X X XRevaluation reserve X X X XDerivatives positions held on behalf of custumers

X X

The financial impact resulting from stress tests is defined as the direct negative effect on BinckBank’s core capital. The expected financial effect before tax for each individual stress test is calculated and the effect of this on capital adequacy as expressed by the Pillar I BIS ratio and the Pillar II solvency ratio. If the capital requirement changes as a result of a stress test, this is expressed as a second-round effect. This clearly shows the ultimate effect of a stress test once all factors have been taken into account.

Results of recent stress tests and maximum stress scenarioFor the calculation of the maximum stress scenario, it is important to understand that there is a difference between stress scenarios and stress testing. A stress test is a single test for one particular event and thus a change in one single parameter. A stress scenario is a set of stress tests that together form a scenario. The maximum stress scenario is based on a set of extreme events that could lead to financial losses for BinckBank. Various stress tests have been developed for each risk category to enable management to assess the scale of the risk involved in extreme but realistic situations.

The individual stress tests are not complementary, since not all events can occur simultaneously, so that a stress scenario is compiled for each risk category. The various results of the stress scenarios for each risk category are combined into a maximum stress scenario for the testing of capital adequacy. The following figure on the next page shows the size of the maximum combined scenario spread across the various risk categories.

95

Annual Report 2013

Maximum combined scenario per risk category

Maximum stress scenarioThe most extreme stress scenario calculated by BinckBank for the purpose of capital management (maximum combined stress scenario) is explained in more detail below. The scenario involves the following assumptions: Increasing uncertainty regarding the creditworthiness of European countries leads to a two-step rating downgrade by well-known rating agencies for the bonds BinckBank holds in its investment portfolio. Interest rates rise by 200 basis points due to uncertainty over inflation and the markets come under pressure and fall suddenly by 25%. Confidence in BinckBank is damaged due to a system breakdown on a busy trading day. The competition benefits from this and goes on the attack, leading to immediate withdrawal of 30% of the funds entrusted. BinckBank is forced to sell part of its investment portfolio at a loss. Very active customers will also close their accounts, and both commission income and interest-rate margins come under pressure.

The capital loss under the maximum combined stress scenario comes to € 78 million as at 31 December 2013 (31 December 2012: € 65 million), reducing the amount of available (core) capital to € 95.4 million. The second round effect shows that the effects of the stress scenario affect the capital requirement. In other words, the forced liquidation of part of the investment portfolio would change the capital requirement for credit and interest-rate risk. Credit risk would decline first, as a result of the forced liquidation of the investment portfolio, however it would also increase due to a decline in creditworthiness and lead to a two-step credit downgrade. These two effects offset each other, leading to a situation in which the capital requirement for credit risk under Pillar II would rise marginally from € 22.1 million to € 22.9 million. In the maximum combined scenario, the total available capital would fall and the capital requirement under Pillars I & II would increase slightly from € 43.3 million to € 44.2 million. The table on the next page shows the development of the capital adequacy after the most extreme stress scenario has actually occurred, including the related second-round effects.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

x € 1,000

90,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

Credit riskcombinedscenario

Singlecombinedscenario

Business risk

Operational riskcombinedscenario

Interest-raterisk

Liquidity risk

Maximumcombinedscenario

96

Annu

al R

epor

t 20

13

Solvency ratios under Pillar I & Pillar II

x € 1,000Max. combined

stress31 December

2013Impact

Total available capital 95,427 173,427 -45%

Total required capital Pillar I+II 52,745 52,627 0%

Pillar I required capital 44,173 43,317 2%Credit risk 22,929 22,073 4%Market risk 84 84 0%Operational risk 21,160 21,160 0%

Pillar II required capital 8,572 9,310 -8%Interest-rate risk 3,080 4,207 -27%Liquidity risk 629 240 162%Total credit risk Pillar II 4,863 4,863 0%Concentration risk* 1,000 1,000 0%Margin risk* 3,363 3,363 0%Counterparty risk* 500 500 0%

Excess / insufficient capital (Pillar I) 51,254 130,110 -61%Excess / insufficient capital (Pillar II) 42,682 120,800 -65%

Pilaar I BIS ratio 17.3% 32.0% -46%Pilaar II Solvency ratio 14.5% 26.4% -45%

* Including second-round effects

Capital position in event of maximum stressBased on the second-round effect, BinckBank has established that its capital is also adequate under the maximum stress scenario. The BIS ratio would fall to 17.3% and the solvency ratio of 14.5% would remain comfortably above our own internal standard of 12%, so that no additional or mitigating measures would be necessary. One can therefore conclude that the capital position would also still be adequate under the maximum combined stress scenario, and would meet our own internal standard of at least 12% under Pillar II.

97

Annual Report 2013

Liquidity management

IntroductionBesides solvency, liquidity is also extremely important for a bank. This section is therefore devoted to liquidity management at BinckBank. Liquidity risk is the risk that BinckBank will not be able to meet its payment obligations. BinckBank adopts a prudent policy with regard to liquidity risk that is designed to ensure that demand by its customers for their cash can be met at all times. At year-end 2013 BinckBank had an ample position in immediately callable liquid assets of € 409 million (excluding deposits and cash reserves held at central banks). This represents 18% of the total funds entrusted. There have been no materially significant incidents with regard to liquidity during the 2013 financial year and there have been no reasons to adjust our liquidity policy.

Liquidity profile of BinckBankBinckBank is an online bank for investors. BinckBank’s services focus on the processing of securities orders placed by customers (brokerage), the offering of a savings product and asset management services. Due to the nature of its operations, BinckBank’s business model shows a large liquidity surplus. Customers with an account at BinckBank mostly do not invest 100% of their assets, but always hold part of their assets in cash in their brokerage account or savings account. Because it has no active lending or mortgage business, BinckBank’s business model is not the same as that of most Dutch retail banks. BinckBank does provide loans based on securities as collateral (collateralised lending) and it places its remaining liquidity surplus in the market by means of an investment portfolio. Since historically the size of the customer funds entrusted far exceeds that of the collateralised lending, BinckBank has a natural liquidity surplus and no funding requirement. The absence of (long-term) loans in combination with the liquidity surplus arising from customer funds is the basis of BinckBank’s funding policy. BinckBank has no need to attract other long or short-term funding. The monies held by BinckBank’s customers can be withdrawn at demand. BinckBank does not offer its customers deposits whereby cash is deposited for longer periods.

Limited predictability in the long-term and short-term effects on the liquidity position are features of the securities brokerage business. Most securities transactions are settled within three days of the transaction date. This means that the main focus of liquidity policy is on managing liquidity in the short-term.

BinckBank’s liquidity surplus appears in the balance sheet in two different types of asset: 1. Cash and Banks: 5% to 10% of the funds entrusted (excluding cash reserve requirements) is held in cash at other

reputable banks in order to fund BinckBank’s daily operations. BinckBank can draw these funds on demand. BinckBank can also place cash in the money market for periods of up to one month, subject to established counterparty limits.

2. Financial assets: the majority of the liquidity surplus is invested in the proprietary investment portfolio. BinckBank invests mainly in liquid bonds of high credit quality with a maximum remaining maturity of three years.

Available funding (customer deposits) are also used to finance:3. Loans and receivables: a proportion of the customer funds is used to fund the collateralised loans provided by

BinckBank.4. Financing of settlement and collateral obligations: trading operations by customers means that BinckBank has to

hold cash or bonds with various brokers/custodians in order to cover settlement and margin obligations.

100

Annu

al R

epor

t 20

13

Value of undiscounted liabilities classified by remaining contractual maturity

Remaining contractual maturity of liabilities(undiscounted) as at 31 December 2013x € 1,000

On demand

< 3 months > 3 months< 1 year

> 1 year< 5 year

> 5 years Total

LiabilitiesBanks 15,034 - - - - 15,034 Customer deposits 2,336,696 - - - - 2,336,696 Financial liabilities held for trading - 486 - - - 486 Financial liabilities designated at fair value through profit and loss - 704 - - - 704

Total 2,351,730 1,190 - - - 2,352,920

Remaining contractual maturity of liabilities(undiscounted) as at 31 December 2012x € 1,000

On demand


> 1 year< 5 year

> 5 years Total

LiabilitiesBanks 20,060 - - - - 20,060 Customer deposits 2,215,343 - - - - 2,215,343 Financial liabilities held for trading - 65 - - - 65 Financial liabilities designated at fair value through profit and loss - 1,084 - - - 1,084

Total 2,235,403 1,149 - - - 2,236,552

If customers withdraw their assets en masse or customer assets are used collectively to invest, there is a risk that BinckBank will be unable to meet its obligations to creditors. BinckBank’s liquidity risk policy therefore focuses primarily on managing this aspect of liquidity risk.

It is unusual for banks to achieve complete maturity matching of assets and liabilities because transactions are frequently not predictable and are also extremely diverse in nature. The maturities of assets and liabilities and the scope for replacing interest-bearing liabilities as and when they mature in an economically acceptable manner are important factors in the assessment of the bank’s liquidity and the extent to which the bank is exposed to movements in interest rates and exchange rates.

a u d i t e d

101

Annual Report 2013

a u d i t e d

Fair value of financial assets and liabilities based on expected remaining maturityItems maturing within one week are treated as being available on demand. Customer deposits are treated as available on demand in the table. In practice, a longer maturity can be allocated to these products. The positions as at year end are representative of the positions during the year. In addition, the loan facilities and possibilities for liquidation of the interest-bearing securities are shown. This concerns securities which can be traded in an active market or used as collateral for marginal lending from DNB.

Maturity calendar as at 31 December 2013x € 1,000

On demand


> 1 year< 5 year

> 5 years Total

AssetsCash and balanced with central banks 67,523 265,000 - - - 332,523 Banks 136,658 - - 8,126 - 144,784 Financial assets held for trading - 70 - - - 70 Financial assets designated at fair value through profit and loss

- 19,130 - - - 19,130

Available-for-sale financialassets

- 209,347 429,504 943,295 - 1,582,146

Loans and receivables 428,180 - - - - 428,180 632,361 493,547 429,504 951,421 - 2,506,833

Guarantees - - 738 1,991 2,729 632,361 493,547 429,504 952,159 1,991 2,509,562

LiabilitiesLiabilities 15,034 - - - - 15,034 Financial assets held for trading - 486 - - - 486 Financial liabilities designated at fair value through profit and loss

- 704 - - - 704

Customer deposits 2,335,640 - - - - 2,335,640 2,350,674 1,190 - - - 2,351,864

Liquidity surplus / deficit onbasis of contractual maturities

(1,718,313) 492,357 429,504 952,130 1,991 157,669

Credit, lending facilities andpossibilities for liquidation

1,582,146 (209,347) (429,504) (943,295) - -

Liquidity surplus / deficit takingaccount of credit, lending facilities and possibilities for liquidation

(136,167) 283,010 - 8,835 1,991 157,669

102

Annu

al R

epor

t 20

13

a u d i t e d

Maturity calendar as at 31 December 2012x € 1,000

On demand


> 1 year< 5 year

> 5 years Total

AssetsCash and balanced with central banks 365,362 - - - - 365,362 Banks 135,590 - - 9,326 - 144,916 Financial assets held for trading - 168 - - - 168 Financial assets designated at fair value through profit and loss

- 15,876 - - - 15,876

Available-for-sale financialassets

79,864 109,494 515,046 811,145 - 1,515,549

Loans and receivables 323,008 - - - - 323,008 903,824 125,538 515,046 820,471 - 2,364,879

Guarantees - 455 250 258 1,595 2,558 903,824 125,993 515,296 820,729 1,595 2,367,437

LiabilitiesBanks 20,060 - - - - 20,060 Financial assets held for trading - 65 - - - 65 Financial liabilities designated at fair value through profit and loss

- 1,084 - - - 1,084

Customer deposits 2,213,049 - - - - 2,213,049 2,233,109 1,149 - - - 2,234,258

Liquidity surplus / deficit onbasis of contractual maturities

(1,329,285) 124,844 515,296 820,729 1,595 133,179

Credit, lending facilities andpossibilities for liquidation

1,435,685 (109,494) (515,046) (811,145) - -

Liquidity surplus / deficit takingaccount of credit, lending facilities and possibilities for liquidation

106,400 15,350 250 9,584 1,595 133,179

103

Annual Report 2013

Liquidity risk managementTo avoid a situation in which it faces a liquidity deficit, BinckBank has taken various control measures.

The most important of these are:

OrganisationalThe BinckBank executive board determines the risk appetite with regard to liquidity risk on an annual basis. The risk appetite with regard to liquidity is set by the board at ‘very low’ (1 on a scale of 1 to 5). The board’s very low risk appetite with regard to liquidity risk is based on: a. the liquidity characteristics of the business model, that mainly involves the settlement of securities transactions

and the size of the customer demand deposits;b. the fact that inability to meet its obligations to customers or third parties promptly could seriously damage

confidence in BinckBank and thereby constitute a threat to BinckBank’s continuity; andc. BinckBank needs to avoid a situation in which it is forced to sell its assets at unfavourable market prices and thereby

incurring losses.

BinckBank’s risk appetite regarding liquidity risk is demonstrated by the high liquidity position of its balance sheet. BinckBank has no need for external funding and places its liquidity surplus in liquid assets.BinckBank funds its assets with funds entrusted by customers, which is a stable source of funding. The risk appetite regarding liquidity is also a major factor in BinckBank’s policy with respect to its investment portfolio. The investments must be of high credit quality, liquid and eligible as collateral with the central bank and/or other banks. The Treasury & ALM department does not operate as a commercial department, in the sense that there is no direct link between the financial results of the Treasury & ALM department and the remuneration of its employees.The number of officers involved in liquidity management at BinckBank is relatively low, and they are all at senior level. Communication lines are short, and decisions can be taken extremely quickly. The main officers involved are: the CFRO, the manager of Risk Management, the manager of Treasury & ALM, the cash manager and the group controller. The senior officers concerned have extensive knowledge of the liquidity aspects of BinckBank’s business model, liquidity drivers and the liquidity aspects of the available assets and liabilities. BinckBank’s liquidity risk policy corresponds to the risk appetite with regard to liquidity risk in relation to the liquidity aspects of the business model. Clear mandates are in place with regard to the management of cash, placements in the money market and the management of the investment portfolio. The frameworks within which the Treasury & ALM department may invest are established in mandates. The Risk Management department and the ALCO monitor that none of the mandates are exceeded. The liquidity value of the assets is monitored on the basis of established criteria. The securities in the investment portfolio and the criteria for the liquidity value of the assets are discussed by the ALCO on a monthly basis.

Intraday monitoringOutgoing payments traffic is continuously monitored; for individual transfers in excess of € 500,000 the Customer Relations department places a follow up call to the customer and inquires for the reason for the transfer. The Treasury & ALM department is also notified regarding these transfers. The Treasury & ALM department is notified of the status of incoming and outgoing payments three times a day. In stress situations, transfers can be monitored on an hourly basis. The Treasury & ALM department receives a summary of the securities transactions effected for customers four times a day, and the liquidity forecast is adjusted on this basis. The liquidity position is determined daily and a projection is made for the next three days (T+3), which is then tested against the internal liquidity target.Liquidity reports are sent to the executive board and the members of the ALCO.Treasury & ALM monitors the cash inflow and outflow. In case of heavy cash outflow, an escalation procedure to the executive board (CFRO) is applied and action is taken.

Long-term monitoringLoans are provided on the condition that BinckBank at all times has the right to unilaterally cancel the credit agreementand recall the funds. BinckBank receives liquid financial assets as collateral for the loans it provides.

Early warning indicators and escalation proceduresThere are clear escalation procedures that are applied if there is a threat that the lower limit of the internal liquidity target will be breached. Escalation is applied using what is known as a traffic-lights model. This is a system of warning signals that lead to an increased level of vigilance with respect to the liquidity position.

a u d i t e d

104

Annu

al R

epor

t 20

13

Code green exists when none of the escalation criteria have been triggered. This can be escalated to code yellow, orange and ultimately code red. Code red would apply in a situation of negative publicity regarding BinckBank’s reputation and/or heavy cash outflow in combination with a limited cash balance.

Stress testing and contingency fundingStress tests are conducted to test whether BinckBank is still meeting its internal liquidity target. BinckBank has formulated a number of its own stress scenarios for this purpose. There are two additional scenarios specified by the regulator. The operation of the bank’s alternative sources of liquidity (the Contingency Funding Plan) is tested at least once a year.

Contingency Funding Plan (CFP)BinckBank has various alternative sources of liquidity at its disposal to cope with liquidity stress. These are:• Repo agreements;• Multi-currency credit facility (with securities as collateral);• Liquidation of the investment portfolio;• Reserve requirement at the central bank; and• Marginal lending facility at DNB.

Capital requirement for liquidity riskThe capital requirement for liquidity risk is determined by use of a scenario in which 25% of the deposits held by customers with a cash balance in excess of the amount covered by the deposit guarantee system and 12.5% of the deposits held by customers with balances covered by the deposit guarantee system are withdrawn.

Under this scenario, BinckBank would have to make money available from the investment portfolio.The liquidity surcharge involved in the immediate liquidation of the investment portfolio is estimated at 0.27%. This surcharge is based on the liquidity spread that arose during the sale of a substantial part of the investment portfolio during the crisis in 2008. The liquidity spread concerns the additional costs that would be involved in an immediate forced sale of a substantial part of the portfolio within one trading day.

Based on the above scenario, a sum of € 429 million would be liquidated in the investment portfolio under this ‘liquidity crisis’ scenario. Allowing for a liquidity surcharge of 0.27%, the capital requirement for liquidity risk is set at € 0.6 million.

105

Annual Report 2013

Statement by the executive board

In-control statement A detailed account of our risks and our risk management framework, in addition to a description of the responsibilities of the executive board, is given in the sections on Risk and Capital Management and Liquidity Management on pages 60 to 105 of the annual report.

In accordance with the best practice provisions as stated in the Corporate Governance Code and with due observance of the limitations stated below, we confirm that our risk management and control systems provide a reasonable level of security and that we are aware:

a. of the extent to which BinckBank’s strategic and operational targets are achieved;b. that BinckBank is in compliance with the applicable legislation and regulation; andc. that our financial reporting is free from material misstatements.We moreover declare that these risk management and control systems have performed satisfactorily in 2013.

Our internal risk management and control systems cannot however provide absolute certainty that our strategic, operational and financial targets will be achieved or that legislation and regulation will be complied with at all times. Furthermore, risk management and control systems cannot prevent all human errors or errors of assessment and mistakes. Also, these systems are not proof against situations in which employees collude with each other and in which the integrity and reliability of employees cannot be ensured. The acceptance of risk and implementation of control measures is always subject to cost/benefit considerations, and is an inherent part of entrepreneurial activity. We continue to strive to further improve and optimise our internal risk management and control procedures.

Without prejudice to our statement, we would like to refer to the weaknesses and threats as described in the SWOT analysis on page 20 of the annual report.

Statement by the executive boardIn accordance with Section 5:25c of the Financial Supervision Act (Wft) we state that according to the best of our knowledge:A. The financial statements present a true and fair view of the assets, the liabilities, the financial position and the

result of BinckBank N.V. and the companies included in the consolidation; andB. The annual report provides a true and fair view of the position as at the balance sheet date, the state of affairs

during the financial year of BinckBank N.V. and its affiliated companies, whose data have been included in its financial statements, and that the annual report describes the essential risks faced by BinckBank N.V.


The executive boardKoen Beentjes, chairmanEvert Kooistra, executive director and CFROPieter Aartsen, executive director

106

Annu

al R

epor

t 20

13

This page is left blank intentionally.

107

Annual Report 2013

AS A MODERN ANDINNOVATIVE COMPANY,BINCKBANK ENDORSESTHE CORPORATE GOVERNANCECODE AND THE BANKING CODE.

AS A MODERN ANDINNOVATIVE COMPANY,BINCKBANK ENDORSESTHE CORPORATE GOVERNANCECODE AND THE BANKING CODE.

Corporate Governance

IntroductionThe Dutch Corporate Governance Code (hereinafter, ‘the Code’) is an important code for good business conduct for Dutch listed companies. The Code is self-regulatory in nature, and is based on the principle known as ‘apply or explain’. The duty of the Corporate Governance Code Monitoring Committee is to encourage the topicality and practicality of the Code, as well as to monitor compliance with the Code by Dutch listed companies. The Monitoring Committee produced a concluding document on completion of the last four years of monitoring on 1 October 2013. Among other things, the report gives an overview of the actual developments in corporate governance over the last 10 years and attention is devoted to a number of issues relating to the substance of the Code.

The Banking Code is an important code for good business conduct for banks in the Netherlands. Since its formation, the Corporate Governance Code Monitoring Committee has produced four reports in which it has stated its findings with respect to implementation of the Banking Code and compliance with its principles. The Committee’s three-year mandate expired on 24 March 2013. As part of its mandate, the Committee issued a report of its views on the future of the Banking Code on 22 March 2013. The Committee concludes that the Banking Code and the independent monitoring of compliance with the Code has made an important contribution. At the same time, developments in recent years have shown that there is every reason to make renewed efforts to restore confidence. According to the Committee, this requires not only amendment to the Code, but most of all a different and more open attitude by the banks. In the Committee’s view, self-regulation can only continue to contribute to renewal and stability of the financial system if the necessity of this is felt, believed in and subsequently also expressed. Amendment to the Code therefore needs to be initiated and formulated by the banks themselves. In the Committee’s opinion, the emphasis of self-regulation should be on ‘self’ rather than ‘regulation’. Testing whether the banks are complying with the Code can, according to the Committee, then continue to be subject to independent monitoring.

BinckBank is a listed bank in the Netherlands, and thus is subject to both the Dutch Corporate Governance Code and the Banking Code.

Developments in 2013A number of developments in the field of corporate legislation and regulation are outlined below.

Right to institute an inquiryThe Right to Institute an Inquiry (Amendment) Act (Wet wijzigingen enquêterecht) took effect on 1 January 2013. Among other things, the new rules change the threshold values for shareholders to initiate an inquiry procedure at large companies.

Management and Supervision ActThe Management and Supervision Act (Wet bestuur en toezicht) takes effect at the same time as the Remedial Act (in which a number of regulations in the former Act are clarified) on 1 January 2013, and among other things provides the legal basis for a one-tier board, a limit to the number of supervisory directorships a person may hold, a new regulation on conflicts of interest, target figures for diversity (between men and women) in the executive board and the supervisory board, and a change in the legal position of directors of listed companies.

The Corporate Governance Act (‘the Frijns Act’)The Corporate Governance Act (Wet corporate governance) took effect on 1 July 2013, and is designed to contribute to strengthening the system of good corporate governance in the Netherlands. It is also intended to maintain or even increase the attractiveness of the Dutch corporate governance system in an international context.

110

Annu

al R

epor

t 20

13

The ‘Claw Back’ ActThe Claw Back Act came into force on 1 January 2014. Briefly, it contains:• the possibility of adjusting the amount of bonus awarded to an executive director if payment is unacceptable in the

circumstances;• the possibility of reclaiming an executive director’s bonus that has already been paid if it emerges that payment was

effected on the basis of incorrect information; and• the obligation to withhold an increase in value of shares and options held by executive directors of listed companies

in the event of an acquisition.The Act strengthens the position of the supervisory board with respect to the remuneration of executive directors. The intention of the bill is to enable the supervisory board to ensure that the remuneration of executive directors contributes to the interests of the company in the long-term.

Financial Markets (Amendment) Act 2013The Financial Markets (Amendment) Act 2013 contains some substantive amendments as well as technical, non-substantive changes to the Financial Supervision Act (Wft), the Financial Supervision (Funding) Act, the Financial Markets (BES Islands) Act and certain other Acts. This Act is part of the annual amendment cycle and based on the principle that it will incorporate all national legislation and regulation with regard to the financial markets. The bill also includes the motion put forward by Huizing/Blanksma, which calls on the government to legally embed the moral-ethical declaration that policy-makers have to provide under the Banking Code (also known as the bankers’ oath) in the reliability and suitability test for executive directors. Most of the provisions of the Financial Markets (Amendment) Act 2013 took effect on 1 July 2013.

Financial Markets (Amendment) Act 2014The Financial Markets (Amendment) Act 2014 is part of the annual amendment cycle of national legislation with regard to the financial markets. This Act is scheduled to take effect on 1 January 2014. It contains changes to the Wft and other legislation, and a number of important changes in the area of financial reporting, in particular with respect to transparency obligations. For instance, listed companies will have to make information regarding facts and circumstances occurring after preparation of the annual financial reporting publicly available without delay. In addition, listed companies will have to make a statement publicly available without delay if the adopted annual financial reporting differs from the prepared financial reporting. Other changes relate to enforcement by the AFM in its supervision of the financial reporting by listed companies.

The following piece addresses the recommendations in the Code and the Banking Code.

111

Annual Report 2013

Shares, issue of shares, voting rights and shareholder structure

SharesBinckBank’s authorised share capital consists of 74,500,000 ordinary listed shares and 50 priority shares, each with a nominal value of € 0.10. The priority shares represent 0.00007% of the issued capital, are unlisted registered shares and are held by Stichting Prioriteit Binck (hereinafter, ‘the Foundation’).

BinckBank N.V.

TOMHolding N.V.

Stichting Prioriteit

Stichting Continuïteit

BPO

TOMBroker B.V.

ThinkCapitalHolding B.V.

BewaarbedrijfBinckBank B.V.

BinckBank N.V.Belgium Branch

BinckBank N.V.France Branch

AbleHolding B.V.

FintegrationB.V.

Able B.V.

BeFrankPPI N.V.

ThinkCapitalAsset Mgt B.V.TOM B.V.

BeFrank N.V.

BinckBank N.V.Italy Branch

BinckBank N.V.Spain Branch

25,7% 50% 60% 100% 100%

100%

100%

100% 100%100%

100%

The CodeThe Code has a legal basis in the sense that a listed company has to include a statement in its annual report regarding its compliance with the principles and best practice provisions of the Code that relate to the company’s executive board or supervisory board.

BinckBank generally endorses the principles stated and broadly supported in the Code.

According to best practice provision I.1 of the Code, the broad outlines of the company’s corporate governance structure must be explained each year in a separate section of the annual report, partly by reference to the principles of the Code. This section must also expressly state the extent to which the best practice provisions in the Code are being observed, and where this is not the case, why and to what extent the provisions are no applied. The principle of ‘apply or explain’ has a legal basis.

This section will fulfil the requirements of this best practice provision I.1 of the Code, The provision in this section and the statements regarding the key features of the company’s management and control systems in relation to financial reporting as included in the management’s in control statement can also be described as the corporate governance statement referred to in Section 2:391(5) BW.

Legal structure

GeneralBinckBank is a public limited company listed on NYSE Euronext Amsterdam. BinckBank had a two-tier board structure in 2012. An amendment was accordingly made to the articles of association in 2012. BinckBank has a number of Dutch subsidiaries and associates. BinckBank has branches in Belgium, France, Italy and Spain.

At 31 December 2013

112

Annu

al R

epor

t 20

13

Special control rights are attached to the priority shares as specified in the company’s articles of association, which are available on the website www.binck.com. Further details regarding the position of Stichting Prioriteit are given below in this section. No depositary receipts are issued for BinckBank shares.

Issuance of sharesThe General Meeting (GM) adopts resolutions with regard to the issuance of shares and may grant this authority to another company body for a period of up to five years. On the issuance of ordinary shares, each shareholder has a preference right in the amount of his or her total number of shares held, subject to legal provisions. No preferential rights exist on shares issued; a) to employees of the company or a group company; or b) against payment other than in cash.

The preferential rights may be limited or excluded by resolution of the GM. The preferential rights may also be limited or excluded by the above-mentioned other company bodies if these have been granted the authority to limit or exclude the preferential rights by resolution of the GM for a period of up to five years. A resolution by the GM to limit or exclude the preferential rights or to grant or withdraw the authority to take such action requires a majority of at least two-thirds of the votes cast if less than half of the issued capital is represented at the GM. Such resolutions may only be adopted by the GM if proposed by the Foundation. Resolutions by the executive board regarding the issuance of shares are subject to approval by the supervisory board.

Voting rightsEach BinckBank share entitles its holder to cast one vote. Resolutions are passed by simple majority of the votes cast, to the extent that a larger majority is not required by law or the articles of association. BinckBank uses a registration date in accordance with the Shareholders’ Rights Act (Wet aandeelhoudersrechten).

Shareholder structureThe shareholders who have made a notification in relation to their interest in BinckBank pursuant to Section 5.3 Wft are named on page 26 of this annual report. No shareholder agreements have been concluded between BinckBank and the major shareholders concerned.

Anti-takeover defencesThe Foundation has a role in many important resolutions pursuant to the articles of association. The Foundation holds 50 BinckBank priority shares. The authorities of the Foundation consist of the initiation of specific resolutions of the GM and the granting of prior approval to the resolutions described below. The Foundation also has direct powers, including setting the number of executive and supervisory directors.

In short, the objective of the Foundation is to protect the management and the course of events at BinckBank from influences which might negatively affect the independence of the company and its affiliated companies, and to promote a positive course of events in management.

The board of the Foundation has three members. Member A is appointed by the supervisory board of BinckBank, member B is appointed by the executive board of BinckBank and member C is appointed by members A and B together. Messrs C.J.M. Scholtes (chairman of the supervisory board), K.N. Beentjes (chairman of the executive board) and J.K. Brouwer (supervisory director) currently act as members A, B and C of the board of the Foundation respectively.The supervisory board and the executive board see no reason to initiate any limitation and/or removal of the powers of the Foundation. The supervisory board and the executive board believe that maintaining the position of the Foundation is beneficial to the continuity of BinckBank and that the policies pursued by the bank in the short and long-term, subject to careful consideration of the interests of those involved in the company. The powers of the Foundation form an integral part of the articles of association of the company. Strictly speaking therefore, there is no question of a potential or actual anti-takeover measure as referred to in best practice provision IV.3.11 of the Code. With due observance of its objectives under the articles of association, the Foundation is obliged when exercising its powers to protect the interests of the company and its affiliated companies, and in doing so to consider the legitimate interests of those involved in the company. The manner in which the Foundation exercises its powers will depend on the actual facts and circumstances of the case in question.

113

Annual Report 2013

Executive boardBinckBank has a two-tier board system, meaning that management and supervision are assigned respectively to the BinckBank executive board and supervisory board. BinckBank believes that this structure promotes a system of adequate checks and balances, in which the executive board is responsible for the day-to-day management of the company and the realisation of the company’s short-term and medium-term targets, while the supervisory board supervises the executive board and has an advisory role.

Personal unionBinckBank and a number of its Dutch subsidiaries are subject to a personal union at board level in the sense that a majority of the executive directors of BinckBank also act as directors of the subsidiary companies under the articles of association. The personal union promotes uniformity in company policy and strategy.

Duty of the executive boardSubject to the limitations stated in the articles of association, the executive board is charged with the management of the company.

Regulations for the appointment, suspension and dismissal of executive board membersThe executive directors of BinckBank are appointed by the supervisory board in accordance with the provisions of the articles of association on the basis of a non-binding nomination by the Foundation. An executive director is appointed or reappointed for a term commencing on the date of their (re)appointment and ending at the end of the AGM held in the fourth calendar year after the calendar year in which they were (re)appointed, or at such time as is determined at the time of their (re)appointment, if earlier. Executive directors may be suspended or dismissed by the supervisory board at any time. The supervisory board shall not dismiss a member of the executive board without taking advice from the GM regarding the dismissal.

Supervisory boardThe supervisory board is charged with the supervision of the policy of the executive board and the general developments at the company and its affiliated companies. The supervisory board highly values close involvement with the company’s development. In the exercise of its duties, the supervisory board focuses on the interests of the company and its affiliated companies, taking the interests of those involved in the company into consideration and also taking into account the social aspects of business operation relevant to the company. The supervisory board advises the executive board, and is moreover charged with all duties assigned to it by law and under the articles of association. Certain key resolutions are subject to the approval of the supervisory board.

Other than under the provision of Article 21 sub 7 of the articles of association, the supervisory directors of BinckBank are appointed by the General Meeting of Shareholders on the basis of nomination of the supervisory board and a non-binding nomination by the Foundation. The General Meeting of Shareholders and the works council may recommend candidates to the supervisory board for nomination as a supervisory director. For one-third of the number of supervisory directors, the supervisory board will nominate a person recommended by the works council, unless the supervisory board objects to the recommendation on the grounds that it does not consider the recommended candidate to be suitable to act as a supervisory director, or that the composition of the supervisory board would not be appropriate if the recommendation were to be adopted.

A supervisory director may be suspended by the supervisory board. The Enterprise Division of the Amsterdam Court of Appeal may dismiss a supervisory director on the conditions stated in the articles of association. The General Meeting of Shareholders can withdraw its confidence in the supervisory board. A resolution of no confidence by the general meeting will result in the immediate dismissal of all members of the supervisory board.A supervisory director is appointed or reappointed for a term commencing on the date of their (re)appointment and ending at the end of the AGM held in the fourth calendar year after the calendar year in which they were (re)appointed, or at such time as is determined at the time of their (re)appointment, if earlier.

114

Annu

al R

epor

t 20

13

General Meeting (GM)The general meeting has the powers vested in it by law and under the articles of association. The Foundation has an important role with reference to the powers of the General Meeting in many cases. A General Meeting is held at least once a year. The most important powers of the General Meeting concern the adoption of the financial statements, the establishment of dividend and other distributions, the granting of discharge of responsibility to the executive board for its policy and to the supervisory board for its supervision, the setting of the remuneration of the executive board and the remuneration of the supervisory directors, amendments to the articles of association and all the other powers vested in it by law and the company’s articles of association.

Compliance with the CodeIn the section on corporate governance in its annual report, BinckBank has to state the extent to which it observes the best practice provisions included in the Code, listing the reasons and the extent of non-compliance if it does not (the ‘apply or explain’ principle). BinckBank complies with the best practice provisions included in the Code, including best practice provisions II.3.2 – II.3.4 and III.6.1 – III.6.4, with the exception of the best practice provisions described below.

Remuneration of the executive boardA new remuneration policy (Remuneration Policy 2012) was established at the Annual General Meeting in 2012 in order to comply with the Regulation for a Controlled Remuneration Policy in the Wft 2011 (hereinafter, ‘the Regulation’). The Regulation is a supervisory measure that is based on the powers of De Nederlandsche Bank (DNB) to set rules with respect to executive pay.

The main provisions of the Regulation concern:• The way in which policy with respect to remuneration at financial enterprises is formulated and established or

approved, implemented, evaluated and amended;• The way in which remuneration elements and structures are formulated and how the risks associated with the

policy and its application are managed; and• The content and method of publication of the policy regarding remuneration and its application.

The basic principle of the Regulation is that the remuneration policy should be consistent with and contribute to proper and effective risk management, and should not encourage the taking of risks that are not acceptable to BinckBank.

According to best practice provision II.2.13 of the Code, the overview of the remuneration policy for the next financial year and subsequent financial years to be provided by the supervisory board has to include certain information. BinckBank applies best practice provision II.2.13 of the Code, if and to the extent that publication does not concern commercially sensitive information, in other words, financial and commercial targets. The executive board and supervisory board of BinckBank take the view that providing such information is not in the interests of the company and its stakeholders. The same applies to the main elements of the contract between a director and the company, which according to best practice provision II.2.14 of the Code should be published without delay after the contract is concluded, to the extent that these elements concern market-sensitive information. Moreover, specific information mentioned in the applicable remuneration policy is published afterwards. The supervisory board therefore gives account to the General Meeting with regard to its assessment of the performance of the executive board.

According to best practice provision II.2.5 of the Code, shares granted to executive directors without financial consideration must be retained for a period of at least five years in each case or at least until the end of the employment relationship, if this is shorter. BinckBank complies with best practice provision II.2.5 of the Code to the extent that calculated from the date the shares are awarded unconditionally, BinckBank shares have to be retained for a period of two years (instead of five years). With this shorter retention period of two years instead of five years, BinckBank complies with the regulations for a variable remuneration as specified in the Regulation for a Controlled Remuneration Policy in the Wft 2011. In BinckBank’s opinion, the conditional allocation of a material part of a variable remuneration (as stated in the Regulation for a Controlled Remuneration Policy in the Wft 2011) in combination with the stated retention period of two years is sufficient to meet the objective of a long-term commitment to the company and its related business.

115

Annual Report 2013

The Banking CodeGeneralOn 9 September 2009, the Dutch Bankers’ Association (NVB) drafted the Banking Code in reply to the Restoring Trust (Naar herstel van vertrouwen) report issued by the advisory committee on the Future of Banks (‘the Maas Committee’). The Banking Code can be seen as a measure of self-regulation and applies to all banks with a banking licence granted under the Financial Supervision Act. The Banking Code aims to enhance governance within banks, improve their risk management and auditing and promote the implementation of a sound remuneration policy. The Banking Code came into force on 1 January 2010 and is enshrined in the law. In their annual reports and in the same manner as applicable to compliance with the Code, banks are obliged to disclose the extent to which they adhere to the Banking Code.

Permanent educationBinckBank has a permanent education programme for its executive directors, and thereby complies with principles 3.1.3 and 3.1.4 of the Banking Code. The permanent education programme consists of the following of various training programmes and courses intended to maintain the level of expertise of executive directors and improve this where necessary. Koen Beentjes and Evert-Jan Kooistra are both public certified accountants. Since 1 January 2007, a permanent education scheme has applied for members of the Dutch Association of Registered Controllers (the ‘VRC’) and accountants in business of the Netherlands Institute of Chartered Accountants, or ‘NBA’. In this context Koen Beentjes took the KPN Mastercourse and other courses in 2013, including the mandatory theme of professional ethics. Evert-Jan Kooistra took the shorter version of the Governance Risk Compliance (Euroform) course. Pieter Aartsen did not participate in the permanent education programme for directors in 2013.

DeviationsAccording to Article 6.3.4 of the Banking Code, shares allocated to executive directors without financial consideration must be retained for a period of at least five years in each case or at least until the end of the employment relationship, if this is shorter. Article 6.3.4 of the Banking Code corresponds to best practice provision II.2.5 of the Code mentioned above. As regards the deviation from Article 6.3.4. of the Banking Code and the reasons for doing so, see the statement with regard to best practice provision II.2.5 of the Code.

BinckBank complies with Article 6.3.4 to the extent that calculated from the date of unconditional allocation, BinckBank shares only have to be retained for a period of two years (instead of five years). With this shorter retention period of two years instead of five years, BinckBank complies with the regulations for a variable remuneration as specified in the Regulation for a Controlled Remuneration Policy in the Wft 2011. In BinckBank’s opinion, the conditional allocation of a substantial part of a variable performance fee (as stated in the Regulation for a Controlled Remuneration Policy in the Wft 2011) in combination with a retention period of two years is sufficient to meet the objective of a long-term commitment to the company and its related business.

Article 3.2.3 of the Banking Code states that all executive directors must sign a moral and ethical conduct declaration, the text of which must be made generally available and published on the website of BinckBank. It should constitute a guide for the actions of BinckBank employees. The notes to the Banking Code include a model declaration that each bank can supplement as it sees fit.

BinckBank has made use of this. Since its incorporation in the banking sector, BinckBank has distinguished itself by pursuing an independent and self-determined course, that features a strong customer orientation and a high degree of transparency, in combination with sound business practice. The executive directors of BinckBank have amended the model moral and ethical declaration so as to more closely reflect the specific nature and profile of BinckBank and the relevant legislation and regulation. The text of the declaration can be viewed at www.binck.com.

116

Annu

al R

epor

t 20

13

The Management and Supervision (Public and Private Companies) ActThe Management and Supervision (Public and Private Companies) Act introduced on 1 January 2013 includes a non-binding guideline for a balance between men and women on the executive and supervisory boards of large companies. An executive or supervisory board of a large company has a balanced composition if at least 30% of the members are female and at least 30% are male. The boards at BinckBank do not currently meet the criteria for balanced composition as stated in the Management and Supervision Act, since a search for possibilities has not so far led to our finding a suitable candidate. This matter will be returned to the agenda in the near future. With external assistance, we will study whether compliance with the balanced composition criterion in the Management and Supervision Act is feasible in view of the applicable profile description.

Article 10 of the Takeover DirectiveUnder Article 10 of the Takeover Directive, BinckBank is obliged to include the following information in its annual report:a. An overview of the company’s capital structure is included on pages 112 and 113 of this annual report. This explains

the various types of shares and the rights attached thereto (including special control rights), the obligations and the percentage of issued capital represented by each type of share;

b. The company has not imposed any restrictions on the transfer of shares;c. Shareholdings in the company which have to be reported pursuant to Section 5.3 Wft are listed on page 26 of this

annual report;d. Special control rights attached to shares held by the Foundation are stated on pages 112 and 113 of the annual report;e. Control of the scheme whereby rights are allocated to employees to take or receive shares in the capital of the

company or a subsidiary company is exercised by the IAD and the Compliance department;f. No restrictions apply to the voting rights attached to the company’s shares. No depositary receipts for shares have

been issued;g. The company is only aware of a restriction regarding the transfer of BinckBank shares that arises as a result of the

remuneration policy in force and similar restrictions applying to other employees of BinckBank;h. The procedures for appointing and dismissing supervisory and executive directors and the regulations applying to

amendments to the articles of association are established in the company’s articles of association and are described in general terms on page 114 of the annual report. For the full text of the articles of association, see www.binck.com;

i. The powers of the executive board with particular reference to the issuance of the company’s shares and the repurchase of shares by the company are described on pages 112 and 113 of the annual report. For further information, see the company’s articles of association and the minutes of the General Meeting at www.binck.com;

j. The service agreement concluded with Friesland Bank N.V. in 2006 states that the agreement can be terminated with immediate effect in the event of a specifically described change of control at BinckBank. The joint venture agreement with Delta Lloyd Levensverzekering N.V. with respect to BeFrank concluded on 6 July 2010 includes a change of control clause that entitles the other party to terminate the agreement in this event. The service agreement concluded with SNS Bank N.V. on 30 September 2010 states that the agreement can be terminated with immediate effect in the event of a specifically described change of control at BinckBank;

k. Information on severance arrangements with executive directors (insofar as applicable) is provided in the Remuneration Report for 2013.

ConclusionBinckBank complies with virtually all the provisions of the Code and the Banking Code. Any deviations have been properly explained and substantiated.

117

Annual Report 2013

From left to right: Mr Leo Deuzeman, Mr Hans Brouwer, Mr Kees Scholtes and Mr Fons van Westerloo

Report of the supervisory board

Message by the chairman of the supervisory board Dear readers,

We hereby present the report of the supervisory board for 2013. The financial statements have been audited by Ernst & Young Accountants LLP (‘EY’) and have been furnished with an unqualified audit opinion, the text of which is included on pages 216 and 217.

BinckBank was able to benefit from the improvement in market sentiment in 2013, which led to a slight increase in transaction volume and brokerage income. Growth at Alex Asset Management continued unabated. Alex Asset Management is strategically important for BinckBank, partly because the income from this type of service is less volatile than brokerage income. A decision was made to increase the focus on the retail business. The proposal to divest the BPO and software & licensing operations of the Able brand is partly due to this decision. With offices in the Netherlands, Belgium, France and Italy, the European footprint for online brokerage has been established and forms a good base for achieving sufficient economies of scale.

At executive board level, Mr Beentjes (CEO) was reappointed in 2013. Mr Aartsen will not extend his term of appointment as a director in 2014. At board level, he is the director with primary responsibility for the above-mentioned BPO and software & licensing activities of the Able brand. Mr Aartsen and the other members of the Able management team are positive regarding the opportunities for realising the potential they have created in a new environment. After the departure of Mr Aartsen, a new director will be appointed to the executive board as soon as possible.Mr Brouwer was reappointed as a supervisory director in 2013. He has exchanged his role as chairman of the audit committee with that of Mr Deuzeman as chairman of the risk and product development committee (RPC). Mr Van Westerloo will not extend his term as a supervisory director in 2014. He will be replaced by a new supervisory director.

BinckBank has a banking licence and is therefore subject to supervision by De Nederlandsche Bank. Despite the increasing density of national and European legislation and regulation and the intensification of supervision, and the associated increase in the costs of compliance and other costs, BinckBank values the role of its supervisory agency as this contributes to the ethical and controlled conduct of its business. One example of this is the ban on the receipt of distribution fees in the Netherlands effective from 1 January 2014. The acquisition of Fundcoach and the project relating to the issuance of leverage products are designed as far as possible to compensate for the loss of income due to this national legislation. The issuance of immediately effective regulations by the European legislature to ensure a level playing field in Europe for financial enterprises is a positive development. Local deviations will become less frequent as a result of this. This will be reinforced by the increasing centralisation of supervision at European level. The main objectives for 2013 were realised, as a result of both the leadership of the executive board and the other managers and the commitment, expertise and dedication of all our employees.

We wish to express our appreciation to the executive board, the employees and the works council for the commitment and involvement they have demonstrated throughout the year.


C.J.M. Scholtes (chairman of the supervisory board)

120

Annu

al R

epor

t 20

13

Duties of the supervisory boardSupervisionThe supervisory board is charged with the supervision of the policy of the executive board and the general developments at the company and its affiliated companies.

In the exercise of its duties, the supervisory board focuses on the interests of the company and its affiliated companies, taking the interests of those involved in the company into consideration. The supervisory board is also involved in the social aspects of business operation relevant to the Company.

AdviceThe supervisory board also advises the executive board.

OtherThe supervisory board is moreover charged with all duties assigned to it by law and under the articles of association. Certain key resolutions by the executive board are subject to the approval of the supervisory board.

Composition of the supervisory boardCompositionThe composition of supervisory board is currently as follows:

C.J.M. Scholtes (chairman)J.K. Brouwer (vice-chairman)L. DeuzemanA.M. van Westerloo

The information on the supervisory directors referred to in best practice provision III.1.3 and elsewhere in the Code is provided on pages 129 and 130.

IndependenceThe composition of the supervisory board is such that the supervisory directors can operate independently within the framework of the profile description of the supervisory board, both in relation to each other, the executive board or any other particular interest. The supervisory board meets the independence criteria stated in best practice provision III.2.1 of the Code.

Meetings of the supervisory board and sub committees in 2013Meetings of the supervisory board

FrequencyThe supervisory board held its regular combined meetings with the executive board in attendance on eight occasions in 2013. The meetings took place in January, March, April, June, July, October, November and December. In addition, the chairman, and on certain occasions an individual supervisory director, held informal discussions with the executive directors. The supervisory board moreover held separate meetings on four occasions in 2013. The number of meetings illustrates the close involvement of the supervisory board with the company. A similar meeting schedule will be used by the supervisory board in 2014.

121

Annual Report 2013

AttendanceThe supervisory directors attended virtually all the meetings. Failure to attend is only acceptable in case of force majeure. The availability of the supervisory directors and the executive board for interim consultation was satisfactory.

Agenda items

GeneralThe agendas for the meetings of the supervisory board covered virtually all aspects of the company’s business. In each case, the agenda was drawn up by the chairman of the supervisory board in consultation with the chairman of the executive board. The items discussed at the meetings included the following: the strategy, the interests of the various stakeholders, the principal risks associated with the company, potential and actual acquisitions, the results of the executive board’s evaluation of the design and operation of the internal risk management and control systems, as well as significant changes thereto. Attention was also devoted to matters such as the budget, and internal and external financial quarterly, half-yearly and annual reports. Recurring and mandatory items such as the regular progress reports and the discussion of reports by the auditor (with the external auditor in attendance) were also dealt with at the meetings of the supervisory board.

Specific itemsThe specific items of attention in 2013 were as follows:

• StrategyTogether with the executive board, the supervisory board considered BinckBank’s strategic positioning and the risks associated with its business activities. A decision was made to increase the focus on achieving the objectives of the business unit Retail. Asset management should provide more stable income in this field. The BPO and software & licensing operations of Able are no longer seen as core businesses, and the intention is to divest these activities. Due to the choices made, BinckBank cannot provide sufficient synergy to realise the potential of these activities.

• Compliance and legislation and regulationFinancial institutions have had to deal with increasing density of legislation and regulation during the past period. The degree of supervision exercised by the regulators has also intensified. BinckBank has invested in its Compliance department and compliance with legislation and regulation, by embedding this function in its organisation in the broadest sense (in accordance with the three lines of defence model). Detection systems have also been acquired, and a framework formulated for the timely implementation of legislation and regulation. The staffing of the Compliance department has been significantly strengthened. • Earnings modelThe receipt of distribution fees is no longer permitted in the Netherlands with effect from 1 January 2014. The damaging effect of this on BinckBank’s earnings model has been evaluated, which led to the acquisition of Fundcoach and the initiation of the project whereby BinckBank will issue its own leverage products. This is intended to compensate for the loss of income as a result of this local regulation. We expect to launch these products in the course of 2014.

• Executive board targets in 2014The supervisory board fulfilled its responsibility for determining the remuneration of the executive board. The targets for the executive board were established with care. The supervisory board considers it important that measurable targets are established as far as possible. The supervisory board has moreover held discussions with the individual executive directors regarding their ambitions for the future. • Composition of the executive boardMr Aartsen will not extend his term of appointment as a director in 2014. The composition of the executive board was an item of discussion, due also to the fact that Mr Beentjes is fulfilling the role of CEO as well as director with primary responsibility for Retail. A new director of Retail will be recruited, after which Mr Beentjes will continue exclusively as CEO.

122

Annu

al R

epor

t 20

13

• Composition of the supervisory boardMr Van Westerloo will not extend his term as a supervisory director in 2014. This led to discussion of the composition of the supervisory board. A new supervisory director will be recruited with comparable knowledge and experience to that of Mr Van Westerloo. Given similar suitability, we would prefer to appoint a female supervisory director to fill this vacancy for reasons of diversity. The job profile for this position is available on the corporate website.

• Selection process for executive and supervisory directorsIt is of essential importance for BinckBank that competent executive and supervisory directors are attracted who can fulfil their duties appropriately. These officers are indeed co-determining factors for the company’s success and therefore must possess the required ambition, experience, expertise and competences. Executive and supervisory directors must be able to adequately fulfil the responsibilities they bear.

In the formulation of the job profile and the recruitment and selection of suitable candidates for the position of executive or supervisory director, the initial consideration is the general requirements set by applicable legislation and regulation and relevant codes, now including the Banking Code, the 2012 Policy Rule on Suitability and the Dutch Corporate Governance Code.

Besides these general requirements, specific requirements apply on the basis of the nature of the company, its phase of development and the actual duties of the position the officer has to fulfil. BinckBank is a relatively young niche player for which ICT constitutes a significant element. The company’s effectiveness lies mostly in customer orientation, innovative capability and focus in combination with sound discipline with respect to costs.

The retirement rota for the supervisory board should also ensure the continuity of the board’s composition. One of the objectives of the annual evaluation of the performance of the executive and supervisory boards is to continually update the profile of these bodies.

Recruitment and selection of candidates for the position of executive or supervisory director occurs on the basis of market research and includes potential analysis and/or recommendations by specialist agencies. There may also be an internal selection process based on various discussions with potential internal candidates and related analysis of strengths and weaknesses.

• Operation of the executive board and supervisory boardWithout the presence of the executive board, the supervisory board has discussed the operation of the supervisory board as a whole and of its individual members and its committees, the effectiveness of the permanent education referred to in Article 2.1.8 of the Banking Code and any conclusions that should be drawn from the above. Also in consideration of the above, the assessment took place in full session in the context of the profile, composition and competence of the supervisory board and of the individual supervisory directors. Such an assessment clearly has to be made with the necessary prudence. Also in the absence of the executive board, the supervisory board discussed both the performance of the executive board as a whole and of the individual executive directors. The supervisory board’s assessment included the consideration of whether the executive directors were able to continue to meet the expertise requirements of DNB. This assessment was also made with all supervisory directors present. The supervisory board concluded unanimously that the executive board and the individual executive directors performed well last year. The executive board operates as a well-attuned team in which the individual members performed extremely well, continuing to pay attention to the specific areas of expertise assigned to them and operating from a broad, communal platform of responsibility. Within this context, the exchange of specific information regarding these areas of expertise between the individual executive directors as well as between the executive board and the supervisory board, has been both timely and of high quality, enabling those involved to properly perform their duties. Since the executive directors, each operating from their own specific background, have pro-actively and intensively exchanged information and experience, they have succeeded in implementing the principles of collective management.

123

Annual Report 2013

• Shareholder relationsRelations with existing and potential shareholders took the form of regular road shows and conferences in 2013, at which presentations were given based on public information. In addition, the Annual General Meeting of Shareholders of course also took place.

• Social aspects of the company’s businessAttention to the social aspects of the company’s business in 2013 is given to, among other things, the development of the collateralised lending and the role that customer education should play in this. Public discussions were also noted during the launch of new products. The supervisors are increasingly taking a more prominent role in this process. BinckBank consults regularly with the supervisors and takes account of social changes in the conduct of its business. One example is the ban on distribution fees as of 1 January 2014, which was strongly promoted by the supervisors and which BinckBank supported. For an account of other social issues, see the section on corporate social responsibility on pages 52 to 54.

Meetings of the audit committee in 2013The supervisory board has appointed an audit committee from among its number, consisting of Messrs L. Deuzeman (chairman with effect from 19 September 2013), C.J.M. Scholtes and J.K. Brouwer. The meetings of the committee are attended by Messrs K.N. Beentjes (chairman of the executive board), E.J.M. Kooistra (CFRO), the IAD manager and the Compliance manager. The audit committee meets the applicable independence requirements and has sufficient members with the required financial expertise. The audit committee met on four occasions in 2013, in February, June, September and November.

The audit committee is responsible for overseeing the design, existence and operation of the system of internal control and risk management measures, for acting in accordance to implementation of the external auditor’s recommendations and for the functioning of the IAD. Supervision of the provision of financial information by the company is the responsibility of the supervisory board, based on relevant recommendations by the audit committee. Almost all meetings were attended by the chairman of the executive board and the CFRO of BinckBank.

The main items discussed by the audit committee concerned the audits conducted by the IAD and the associated findings and recommendations. On the basis of the IAD reviews, the EY management letter and other information, the audit committee has assessed the design, existence and operation of the internal control measures with respect to the risk areas reviewed as generally adequate. In addition to the regular items of attention such as the management letter and audit plan from EY, particular attention was devoted to following up the management letter with regard to the branch offices, legislation and regulation (including anti-money laundering legislation), contract management and business continuity management. EY has reviewed the control and the implications for the financial statements. The audit committee carries out preparatory work in order to facilitate the supervision by the supervisory board. The minutes of the audit committee are discussed by the supervisory board.

Many organisations will have to change their audit firm in the near future as a result of forthcoming mandatory rotation of the firm that audits their financial statements. BinckBank’s supervisory board has decided to bring this rotation forward and has invited three large firms to tender for the audit engagement from 2014. For this purpose a tender team was assembled under the leadership of the chairman of the audit committee.

BinckBank started the tender process in September, and invited the three firms to quote. BinckBank drafted a Request for Proposal stating various criteria for awarding the engagement relating to the action plan, expertise, oral presentation and price. The criteria have been assigned weight coefficients, with quality (action plan, expertise and oral presentation) being the most important criterion with a weight of 60%. Price is assigned a weight of 40%. BinckBank created a data room in September and has held interviews. The first proposals were received in early October and presentations were given by the audit firms. The last two firms gave a presentation to the audit committee in November, after which a choice was made on the basis of the award criteria. This choice was submitted to and ratified by the supervisory board. BinckBank has decided to appoint Deloitte as its new external auditor.

The BinckBank tender team comprised the chairman of the audit committee, the chairman of the executive board, the Group Controller and the IAD manager. The tender team submitted its preferred option from the proposals and presentations to the audit committee. At the upcoming shareholders’ meeting on 22 April, the supervisory board will propose that the new auditor should be appointed for a term of three years. The auditor is appointed for the purpose of auditing the financial statements of BinckBank N.V. In accordance with the current rules on independence of the NBA, BinckBank’s external auditor only carries out the audit, and does not provide any advisory services.

124

Annu

al R

epor

t 20

13

Meetings of the risk and product development committee in 2013The risk and product development committee (RPC), as referred to in the Banking Code, consists of the supervisory directors J.K. Brouwer (chairman of the RPC, with effect from 19 September 2013), L. Deuzeman and A.M. van Westerloo. Two executive directors, Messrs K.N. Beentjes and E.J.M. Kooistra, also chair the risk and product development committee, as does the manager of Risk Management (S.J. Clausing). The duties of the RPC include advising the supervisory board with regard the company’s risk profile and risk appetite. Almost all meetings were attended by the chairman of the executive board and the CFRO of BinckBank.

In 2013 the RPC met on four occasions in March, June, September and November, devoting particular attention to the risk governance & risk management organisation, risk appetite, new and existing product approvals and projects, business continuity, recovery plan, risk overviews including information risks and insurance. The RPC supervises the management of all relevant risks, including the interests of and the duty of care towards the customer. The RPC moreover oversees the risk appetite, risk profile and assesses the adequacy of the company’s capital and liquidity. The committee is furthermore regularly informed with respect to the current solvency and liquidity and the effects thereof in times of stress. In addition, the RPC monitors the composition of the investment portfolio and the development of BinckBank’s Key Risk Indicators over time. This enables it to promptly identify any changes to the bank’s risk profile.

Remuneration committee in 2013The remuneration committee is responsible for preparing for resolutions regarding remuneration, including those affecting the risks and the risk management of BinckBank that the supervisory board has to take. With respect to these resolutions, the remuneration committee considers the long-term interests of the shareholders, investors and all other stakeholders of BinckBank. The remuneration committee currently consists of Mr Van Westerloo (as chairman) and Mr Scholtes. The remuneration committee met on three occasions in 2013, with the chairman of the executive board in attendance. 125

Annual Report 2013

Summary of the remuneration reportGeneralBest practice provision II.2.12 of the Code stipulates that information must be included in the remuneration report as to the manner in which the remuneration policy of the preceding year has been implemented. In addition, it must contain a remuneration policy overview for the following and subsequent years as envisaged by the supervisory board. The remuneration report for calendar year 2013 (Remuneration Report 2013) is available at www.binck.com.

A new remuneration policy for the executive board (BinckBank Remuneration Policy) was adopted at the annual general meeting in 2012 that is in line with the Regulation for a controlled remuneration policy in the Wft 2011 (the ‘Regulation’). The Regulation is a supervisory measure that is based on the powers of De Nederlandsche Bank (DNB) to set rules with respect to executive pay. The important changes are that the remuneration policy will apply to the entire organisation and that a substantial part of the variable remuneration will be awarded on a conditional basis. A variable remuneration will become fully or partially unconditional on the basis of a reassessment that must be made on the basis of the applicable performance criteria after a certain period has elapsed. No dividend may be paid on shares that have been conditionally awarded. A risk adjustment may be required in the assessment of whether the applicable performance criteria have been met.

In consideration of the above, the following report describes the manner in which the remuneration of the executive board in 2013 was established by the supervisory board – in accordance with the provisions of the BinckBank Remuneration Policy - and gives a summary of the remuneration policy for the next and subsequent years as envisaged by the supervisory board.

BinckBank Remuneration Policy

IntroductionThe BinckBank Remuneration Policy is the framework used by the supervisory board to establish the remuneration of the executive directors of BinckBank N.V. (‘the executive directors’) for the 2013 calendar year.

Remuneration elementsThe BinckBank Remuneration Policy comprises the following remuneration components:a. fixed gross annual salary;b. variable remuneration;c. pension scheme and WIA insurance;d. car lease scheme and reimbursement of mobile telephone charges.

A description of each element in the BinckBank Remuneration Policy and the way in which it was implemented by the supervisory board during the calendar year 2013 is given below.

a. Fixed gross annual salary

BinckBank Remuneration PolicyThe fixed gross annual salary is established by the supervisory board within a framework indicated in the BinckBank Remuneration Policy. A distinction is made between the tasks and responsibilities of the chairman and of the other executive directors.

ImplementationThe fixed gross annual salary for Mr K.N. Beentjes was increased on his reappointment as of 1 May 2013, from € 375,000 to € 400,000. The fixed gross annual salary for Mr E.J.M. Kooistra was increased with effect from 1 May 2013 from € 325,000 to € 360,000. The increase was due to factors including the increased emphasis on risk management and the higher responsibility associated with this. Mr Kooistra has responsibility for risk management as part of his portfolio as an executive director.

K.N. Beentjes € 400,000E.J.M. Kooistra € 360,000P. Aartsen € 325,000

126

Annu

al R

epor

t 20

13

b. Variable remuneration

BinckBank Remuneration PolicyA variable remuneration consists of 50% in BinckBank shares and 50% of cash. A variable remuneration may not exceed the fixed gross annual salary. The period in which a variable remuneration is earned is one year; this is known as the performance period. A number of performance criteria are established for this period, in the form of a considered package of qualitative and quantitative financial and non-financial criteria focused on both the short-term and the long-term. After the performance period has elapsed, an evaluation is made to determine whether, and if so to what extent, the performance criteria have been realised. This evaluation may involve an adjustment for risk.

50% of the total variable remuneration awarded is allocated unconditionally. The other 50% is allocated conditionally over a period of three years on a pro rata basis. A reassessment is made on the basis of the initial performance criteria at the end of each year (within the three-year period). Depending on the result of the reassessment, the part of the variable performance fee allocated for the year in question pro rata becomes fully or partially unconditional.

BinckBank shares awarded unconditionally must be held by the executive director in question for a lock-up period of at least two years.

Implementation

Financial targets (40%)The total score on the financial targets was 99%.

The budgeted financial target for 2013 of an adjusted net profit of € 0.59 per share was comfortably achieved. The adjusted net profit came to € 0.78 per share. The condition that the adjusted net profit per share should exceed 90% of the target level was also met.

The financial target for 2013 that operational losses should amount to less than 1% of sales was realised (0.63%), but will not be honoured due to the additional costs associated with the distribution of price information.

Collective qualitative and quantitative targets (20%)The collective qualitative and quantitative targets for 2013 were realised to an extent of 30% overall.

The target for the customer satisfaction score was not achieved (actual 7.9 versus a target score of 8). The target for systems availability of at least 99.9% was not achieved. Actual availability was 99.7%. The targets of two successful contingency tests was realised. The target for the implementation of a CDD/AML system and documentation of governance was achieved. BinckBank implemented an anti-money laundering system and documented its entire governance structure in 2013.

The target of timely resolution (within six months) of high-risk findings of DNB, EY or IAD was not realised. The scheduled employee satisfaction survey was unsuccessful, as it was not carried out in 2013.

Targets per business unit (20%)The targets for each business unit were achieved to an extent of 42.5%.

The targets for online brokerage were:introduction of a leverage product (not realised), growth of the number of active customers in the Netherlands (realised), growth of transaction volume in France and Italy in line with the business plan (not realised), completion of the migration of Belgium to the European base platform (realised) and formulation of a road map for rebuilding the European base platform (realised).

The target for Savings & Investment Management (net new assets of € 200 million) was achieved. The introduction of the savings broker has not received priority.

The targets for Professional Services: completion of the combination of Syntel B.V. and Professional Services, growth in BPO sales and the road map for the new-build of Europort were not realised.

127

Annual Report 2013

The other targets: redesign of the Credit Risk Management department (realised). Development of a plan for efficiency improvement on the asset side of the bank (not realised) and all option orders on TOM (realised).

Qualitative and quantitative targets in the medium-term (20%)The quantitative targets in relation to the medium-term development are among others retail brokerage transaction volume, assets under administration at retail brokerage, assets under management for the asset management product, the number of BPO agreements and the development of earnings towards break-even in Italy in 2015 were achieved to an extent of 50%.

Conclusion:In view of the above, the overall targets were realised to a degree of 64.1%. The supervisory board has established that the above figures are correct and used them as the basis for the calculation of performance-related remuneration. There are no grounds for differentiation between the individual directors.

c. Pension scheme and WIA insurance

BinckBank Remuneration Policy and its implementationExecutive directors participate in a pension scheme in which 20% of the gross annual salary is paid by the company each year as pension contribution for a defined contribution scheme. BinckBank pays 50% of the premium for WIA insurance, which entitles the insured person to receive a maximum of 70% of their last-earned salary. The premium is 2.36% of the insured sum per year. Executive directors participated in this scheme in 2013.

d. Car lease scheme and mobile telephone reimbursement

BinckBank Remuneration Policy and its implementationExecutive directors participate in the relevant BinckBank car lease scheme and are reimbursed for mobile telephone costs. Executive directors participated in this scheme in 2013.

Remuneration of the executive board

Remuneration of the executive board in 2013

Fixed gross annual salary

Pensioncontri-bution

20%

Performance related

rewards 2013

Totalremuneration

(fixed +variable)****

Variable asa % offixed

remunera-tion

SharesBinckBank

held atyear-end

2013

of whichshares inlock-upperiod

Shares still to be received in relation to

previous financial years***

K.N. Beentjes * € 391,667 € 78,333 € 251,058 € 721,058 64.1% 42,345 28,270 6,852

E.J.M. Kooistra** € 348,333 € 69,667 € 223,282 € 641,282 64.1% 39,295 22,716 5,582

P. Aartsen € 325,000 € 65,000 € 208,325 € 598,325 64.1% 47,646 18,221 5,939

Total € 1,065,000 € 213,000 € 682,665 € 1,960,665 129,286 69,207 18,373

* The fixed salary for K.N. Beentjes is increased by resolution of the supervisory board from € 375,000,- to € 400,000,- as of 1 May 2013.** The fixed salary for E.J.M. Kooistra is increased by resolution of the supervisory board from € 325,000,- to € 360,000,- as of 1 May 2013.*** Shares still to be received in relation to previous financial years are subject to a reassessment of the performance delivered in the performance year

in question.**** Excluding social security and crisis levy.

128

Annu

al R

epor

t 20

13

Remuneration of the executive board in 2012

Fixed gross annual salary

Pensioncontri-bution

20%

Severance payment

**

Performance related

rewards 2012

Totalremuneration

(fixed +variable)***

Variable asa % offixed

remunera-tion

SharesBinckBank

held atyear-end

2012

of whichshares inlock-upperiod

Shares still to be received in relation to

previous financial years***

K.N. Beentjes € 375,000 € 75,000 € 56,250 € 506,250 15% 37,787 23,712 6,885

P. Aartsen € 325,000 € 65,000 € 48,750 € 438,750 15% 45,750 16,325 5,508

E.J.M. Kooistra* € 316,667 € 63,333 € 47,500 € 427,500 15% 35,548 18,696 5,967

N. Bortot € 300,000 € 60,000 € 300,000 € 45,000 € 705,000 15% 60,191 16,104 5,508

Total € 1,316,667 € 263,333 € 300,000 € 197,500 € 2,077,500 179,276 75,110 23,868

* The fixed salary for E.J.M. Kooistra is increased by resolution of the supervisory board from € 300,000 to € 325,000 as of 1 May 2012.** The severance payment will be paid in early 2013.*** Shares still to be received in relation to previous financial years are subject to a reassessment of the performance delivered in the performance year in

question.**** Excluding social security and crisis levy.

Loans granted to members of the executive board No loans have been granted to executive directors. Executive directors may take out a collateralised lending facility on the conditions applying to all employees. None of the executive directors made use of this facility in 2013.

Remuneration of members of the supervisory board and subcommittees in 2013The annual general meetings of shareholders in 2010 and 2011 decided to apply the following remuneration for members of the supervisory board and its subcommittees:

Supervisory boardAnnual remuneration:• Chairman of the supervisory board € 40,000 gross• Supervisory directors € 26,000 gross

CommitteesAnnual remuneration for committee members:• Chairman of the audit committee € 8,000 gross• Members of the audit committee € 6,000 gross• Chairman of the risk and product development committee € 8,000 gross• Members of the risk and product development committee € 6,000 gross • Chairman of the remuneration committee € 8,000 gross• Members of the remuneration committee € 6,000 gross

The remuneration awarded to supervisory directors was in accordance with the above. The tables below give an overview of the remuneration of the supervisory board, the audit committee, the risk and product development committee and the remuneration committee. An overview of the remaining terms of appointment for the individual supervisory directors is also presented.

129

Annual Report 2013

Overview of remuneration of supervisory directors

Remuneration of thesupervisory board 2013

Fixed remuneration

member of RVC

Fixedremunerationmember of AC

Fixedremuneration

member of RPC

Fixedremuneration

member of REMCO

Total

C.J.M. Scholtes € 40,000 € 6,000 - € 6,000 € 52,000

J.K. Brouwer € 26,000 € 6,000 € 8,000 - € 40,000

A.M. Van Westerloo € 26,000 - € 6,000 € 8,000 € 40,000

L. Deuzeman € 26,000 € 8,000 € 6,000 - € 40,000

Total € 118,000 € 20,000 € 20,000 € 14,000 € 172,000

Remuneration of thesupervisory board 2012

Fixed remuneration

member of RVC

Fixedremunerationmember of AC

Fixedremuneration

member of RPC

Fixedremuneration

member of REMCO

Total

C.J.M. Scholtes € 40,000 € 6,000 - € 6,000 € 52,000

J.K. Brouwer € 26,000 € 8,000 € 6,000 - € 40,000

A.M. Van Westerloo € 26,000 - € 6,000 € 8,000 € 40,000

L. Deuzeman € 26,000 € 6,000 € 8,000 - € 40,000

Total € 118,000 € 20,000 € 20,000 € 14,000 € 172,000

Overview of the terms of appointment of supervisory directors

Overview of terms of appointmentSB members

Dateof (re)appointment

Date ofcontract expiry

C.J.M. Scholtes 26-4-2011 AGM 2015

J.K. Brouwer 22-4-2013 AGM 2015

A.M. Van Westerloo 26-4-2010 AGM 2014

L. Deuzeman 26-4-2011 AGM 2015

Consultation with the works councilThe supervisory board attended one consultation meeting with the works council in 2013. Mr A.M. Van Westerloo also consulted with the Works Council during normal works council meetings on a regular basis in 2013. Mr A.M. Van Westerloo had an open relationship with the Works Council. The supervisory board highly values its relationship with the works council, and has found its contact with its members to be constructive and valuable.

Financial statements and dividendThe 2013 financial statements were discussed and adopted by the supervisory board during its meeting on 6 March 2014 with the executive board and EY (the external auditor). EY has issued an unqualified audit opinion. The financial statements will be submitted to the General Meeting for adoption on 22 April 2014. The proposed dividend for 2013 is € 0.39 per ordinary share. Taking account of the interim dividend of € 0.13 already paid, the final dividend proposed amounts to € 0.26 per ordinary share, subject to deduction of 15% dividend tax, to be made payable on 30 April 2014. Since the proposed dividend payment for 2013 is higher than the net profit for the 2013 financial year, BinckBank is obliged pursuant to Section 3:96 Wft to obtain a statement of no objection from De Nederlandsche Bank.

130

Annu

al R

epor

t 20

13

Supervisory board membersKees J.M. Scholtes, chairman(1945 – Dutch nationality)

Mr Scholtes has been a supervisory director of BinckBank since 2004 and was reappointed at the GM of 26 April 2011 for a term of four years. The supervisory board has appointed Mr Scholtes as chairman of its board.

Mr Scholtes is a former executive director of Postbank N.V., NMB Postbank N.V. and ING Bank N.V., a former member of the executive committee of ING Asset Management B.V. and a former supervisory director of various investment funds at Postbank N.V., NMB Postbank N.V. and ING Bank N.V. In addition, Mr Scholtes is a former supervisory director for Parcom N.V., Barings Private Equity Holding, Euroclear Nederland (predecessors in title Niec and Necigef) and RBC Dexia Securities Services N.V. (former CDC Labouchere Securities Services N.V.) and a former member of the board of the Amsterdam Stock and Options Exchange (now NYSE Euronext). Mr Scholtes was also project manager during the formation of the Dutch Securities Institute and the Financial Services Foundation. Mr Scholtes has now ceased his activities at IBUS and Kunst en Cultuur.

Mr Scholtes is currently a director of the financing company Colonade B.V. He is also a non-executive director of Harbour Antibodies B.V. of Rotterdam. He is also regularly involved as a member of investigation committees of the Enterprise Chamber of the Amsterdam Court of Appeal. Mr Scholtes was involved in the investigations of Fortis and Van der Moolen, among other cases.

Number of BinckBank shares held at year-end 2013: 0

Johannes K. Brouwer(1944 – Dutch nationality)

Mr Brouwer has been a member of the supervisory board of BinckBank since 2004 and was reappointed at the General Meeting of 28 April 2009 for a term of four years. Mr J.K. Brouwer was reappointed by the supervisory board as a supervisory director with effect from the date of the General Meeting of 22 April 2013 until the end of the General Meeting to be held in 2015.

In 1981, following a military career as cavalry officer, Mr Brouwer took up employment with the ABN Bank, during which time he was involved in various activities including the reorganisation of senior management recruitment and training, the reorganisation of lending operations and foreign office development in regions such as Europe, the Middle East and the Far East. In 1998, Mr Brouwer was appointed board member of the Amsterdam Stock Exchange Association (VvdE), where he was responsible for regulations, trade supervision and – as a special project – restructuring the entire Amsterdam Stock Exchange Association organisation. Following the successful restructuring of the organisation, Mr Brouwer was appointed General Director of the Amsterdam Stock Exchange Association in 1991. After the successful merger between the Amsterdam Stock Exchange and EOE Options Exchange into Amsterdam Exchanges (AEX) on 1 January 1997, he was appointed director of Amsterdam Exchanges N.V. and general manager of AEX Effectenbeurs N.V.

Shortly before the merger with the Paris and Brussels stock exchanges (2002) – Euronext – Mr Brouwer withdrew from his position at Euronext and has since held a number of supervisory directorships at Van Meijel, Ewals Cargo Care, Vital Innovators, Holland Clearing House and BinckBank. He is also a member of the supervisory board of Vita Valley. He holds directorships at the Amindho Foundation (economic and cultural relations between the Netherlands and Indonesia) and the Jazz Orchestra Foundation of the Concertgebouw. At the request of, among others, the World Bank, Mr Brouwer and a team of stock exchange specialists accompanied the set-up and further expansion of stock exchanges in various countries. A similar project was also completed in Baku, Azerbaijan.


131

Annual Report 2013

Leo Deuzeman(1952 – Dutch nationality)

Mr Deuzeman was reappointed for a period of four years as a member of the supervisory board of BinckBank during the annual General Meeting of Shareholders on 26 April 2011.

Mr Deuzeman is a business economist and was employed by Deloitte as a chartered accountant from 1979 to 1986. In the period 1976-1979, he was connected to the University of Groningen as a scientific member of staff with the Financial Department of the Faculty of Economic Sciences. From 1990 to 1998 and from April 2003 to April 2007, he held the position of CFO at Kempen & Co N.V., at which bank he fulfilled the role of director of finances and administration from 1986 to 1990. In addition, Mr Deuzeman was a managing partner of Greenfield Capital Partners N.V. from 1998 to 2003 and held positions as a member of the board with Publifisque B.V., Managementmij Tolsteeg B.V., Kempen Management B.V., Asmey B.V., Arceba B.V., Kempen Finance B.V., Global Property Research B.V., Kempen Deelnemingen B.V., Greenpart B.V., Greenfield Management Services B.V. and Nethave Management N.V. He was also a supervisory director for Trustus Capital Management B.V., Engage B.V., Cegeka N.V. and Kempen Custody Services N.V. Mr Deuzeman is currently a supervisory director of Blue Sky Group and chairman of the supervisory board of Intereffekt Investment Funds. He is a supervisory director and member of the advisory board of the investment fund Monolith Fund in Amsterdam and a supervisory director of Capital Guards in Rotterdam.


Fons M. Van Westerloo(1946 – Dutch nationality)

Mr van Westerloo has been a member of BinckBank’s supervisory board since 2004. He was reappointed for a term of four years during the General Meeting on 26 April 2010.

Mr van Westerloo formerly held positions as a member of the Operational Management Committee for RTL Group S.A., CEO of RTL Nederland B.V., CEO of SBS Broadcasting B.V., director of RTL 5 and deputy manager of broadcasting organisation AVRO.

Mr van Westerloo currently holds supervisory directorships at Inshared, a subsidiary of Eureko/Achmea, the Lotto, on behalf of NOC/NSF, chairman of the supervisory board at Independer.nl and supervisory director of Persgroep Nederland. He is a member of the Board of Supervision of the advertising agency DDB and a member of the Advisory Board of 3stone commercial real estate agents. He is chairman of the Nationale Stichting Thuiswinkel Awards. He is an executive director of the Royal Concertgebouw Orchestra and the Friends of the Concertgebouw and the Concertgebouw Orchestra Association. He is a supervisory director of Radio Netherlands Worldwide and of the public broadcaster WNL. He is also an ambassador for the Royal Dutch Opera and a member of the Advisory Board of Right to Play. Mr Westerloo is Officer in the Order of Orange-Nassau.



Supervisory boardC.J.M. Scholtes (chairman)J.K. BrouwerL. DeuzemanA.M. Van Westerloo

132

Annu

al R

epor

t 20

13


133

Annual Report 2013

FINANCIAL STATEMENTS2013

136

Ann

ual R

epor

t 20

13

Consolidated financial statementsConsolidated statement of financial position • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •138Consolidated income statement • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 139Consolidated statement of comprehensive income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 140Consolidated statement of cash flows • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 141Consolidated statement of changes in equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •143

Notes to the consolidated financial statements 1 Company information • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 144 2 General accounting principles• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 144 3 Accounting principles used for consolidation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 149 4 Related party disclosures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 149 5 Accounting principles for recognition, measurement and result • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 149 6 Assets and liabilities held for sale • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 160

Notes to the consolidated statement of financial position 7 Cash and balances with central banks• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 162 8 Banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 162 9 Financial assets and liabilities at fair value through profit or loss • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 163 10 Available-for-sale financial assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 164 11 Loans and receivables • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 164 12 Investment in associates and joint ventures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 165 13 Intangible assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 167 14 Property, plant and equipment • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 171 15 Current tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •172 16 Deferred tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •173 17 Other assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 174 18 Prepayments and accrued income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 174 19 Derivatives positions held on behalf of customers • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 174 20 Customer deposits • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 174 21 Provisions • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 174 22 Other liabilities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 176 23 Accruals and deferred income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 176 24 Equity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •177

Notes to the consolidated income statement 25 Net interest income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 179 26 Net fee and commission income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 179 27 Other income• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 180 28 Result from financial instruments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 180 29 Impairment of financial assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 180 30 Employee expenses • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •181 31 Depreciation and amortisation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 186 32 Other operating expenses • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 186 33 Earnings per share • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 187

Financial statements 2013 BinckBank N.V.

137

Annual Report 2013

Other notes to the consolidated financial statements 34 Dividend distributed and proposed • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 188 35 Fair value of financial instruments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 188 36 Classification of assets en liabilities by expected maturity • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 190 37 Related parties • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 192 38 Off balance sheet commitments • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 193 39 Segment information• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 195 40 Offsetting financial assets and liabilities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 197 41 Transferred financial assets and financial assets pledged or received as collateral • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 198 42 Events after balance sheet date • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 198

Company financial statementsCompany balance sheet • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 199Company income statement • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 199Company statement of changes in equity• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •200

Notes to the company financial statements a General • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 201 b Accounting principles • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 201

Notes to the company balance sheet c Cash and balances with central banks• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 202 d Banks • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 202 e Loans and receivables• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 202 f Bonds and other fixed-income securities • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 203 g Equities and other non-fixed-income securities• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 203 h Investment in associates and joint ventures • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 204 i Intangible assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 205 j Property, plant and equipment• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 206 k Current tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 207 l Deferred tax • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 207 m Other assets • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 207 n Prepayments and accrued income • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 207 o Customer deposits• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 208 p Other liabilities• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 208 q Accruals and deferred income• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 208 r Provisions • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 209 s Equity• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 210

Other notes to the company financial statements t Employee data •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• •• 212 u Fees of group auditor• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 212 v Off balance sheet commitments• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 213

Other informationEvents after balance sheet date • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • •215Independent auditor’s report • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 216Provisions of the articles of association regarding priority shares (articles 15 and 21) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 218Provisions of the articles of association regarding profit appropriation (article 32) • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 218Proposal for profit appropriation • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 218

138

Ann

ual R

epor

t 20

13

Note 31 December 2013 31 December 2012x € 1,000 x € 1,000

AssetsCash and balances with central banks 7 332,523 365,362Banks 8 144,784 144,916Financial assets held for trading 9 70 168 Financial assets designated at fair value through profit or loss 9 19,130 15,876Available-for-sale financial assets 10 1,582,146 1,515,549Loans and receivables 11 428,180 323,008Investment in associates and joint ventures 12 3,710 3,384Intangible assets 13 232,634 263,142Property, plant and equipment 14 38,835 43,684Current tax 15 707 6,023Other assets 17 30,590 20,818Prepayments and accrued income 18 53,179 41,679Derivative positions held on behalf of customers 19 334,373 254,165Assets held for sale 6 8,543 -Total assets 3,209,404 2,997,774

LiabilitiesBanks 8 15,034 20,060Financial liabilities held for trading 9 486 65 Financial liabilities designated at fair value through profit and loss

9 704 1,084

Customer deposits 20 2,335,640 2,213,049Provisions 21 4,532 2,400Current tax 15 197 141 Deferred tax 16 20,322 19,919Other liabilities 22 53,032 20,163Accruals and deferred income 23 9,488 11,507Derivative positions held on behalf of customers 19 334,373 254,165Liabilities held for sale 6 3,965 -Total liabilities 2,777,773 2,542,553

Equity attributable to:Owners of the parent 24 431,624 455,212Non-controlling interests 24 7 9 Total equity 431,631 455,221

Total equity and liabilities 3,209,404 2,997,774

Consolidated statement of financial position

139

Annual Report 2013

Note 2013 2012x € 1,000 x € 1,000

IncomeInterest income 33,045 42,620 Interest expense (5,404) (10,699)Net interest income 25 27,641 31,921

Fees and commission income 158,914 140,153 Fees and commission expense (28,437) (30,967)Net fee and commission income 26 130,477 109,186

Other income 27 1,433 1,715 Result from financial instruments 28 7 47

Impairment of financial assets 29 32 (2)Total income from operating activities 159,590 142,867

Expenses

Employee expenses 30 36,405 36,211 Depreciation and amortisation 31 28,763 34,970 Other operating expenses 32 52,768 36,257 Total operating expenses 117,936 107,438 Result from business operations 41,654 35,429

Share in results of associates and joint ventures 12 (2,393) (3,580)Result before tax 39,261 31,849

Tax 15 (10,790) (8,359)Result after tax (continuing operations) 28,471 23,490 Result after tax (discontinued operations) (9,545) (110)Net result 18,926 23,380

Result attributable to:Owners of the parent 24 19,248 24,100 Non-controlling interests 24 (322) (720)Net result 18,926 23,380

Earnings per share (EPS) 33EPS from continuing operations (in €) 0.41 0.33 EPS from discontinued operations (in €) (0.14) 0.00 Basic and diluted earnings per share (in €) 0.27 0.33

Consolidated income statement

140

Ann

ual R

epor

t 20

13

Note 2013 2012x € 1,000 x € 1,000

Net result from income statement 18,926 23,380

Other comprehensive income recognised on realisation through profit and lossNet (loss)/gain on available-for-sale financial assets

24 (7,159) 11,289

Tax on results through equity 24 1,790 (2,823)Other comprehensive income, net of tax (5,369) 8,466

Total comprehensive income, net of tax 13,557 31,846

Total comprehensive income, net of tax, divided into: ••continuing•operations 23,102 31,956 ••discontinued•operations (9,545) (110)Total comprehensive income, net of tax 13,557 31,846

Result attributable to:Owners of the parent 13,879 32,566Non-controlling interests 24 (322) (720)Total comprehensive income, net of tax 13,557 31,846

Consolidated statement of comprehensive income

141

Annual Report 2013

Note 2013 2012x € 1,000 x € 1,000

Cash flow from operating activitiesNet result for the year 18,926 23,380

Adjustments for:Amortisation of intangible assets and depreciation of property, plant and equipment

13,14 29,107 35,231

Provisions 21 2,132 (540) Amortisation premiums and discounts on available-for-sale financial assets

10 18,500 18,642

Impairment losses on loans and receivables 11 (33) 12Movements in deferred tax 16 2,193 463Share in undistributed results of associates and joint ventures

12 2,393 3,580

Impairments of intangible assets 13 10,047 -Other non-cash movements 1,007 2,017

Movements in operating assets and liabilities:Banks (assets) 8 1,200 132Financial assets and liabilities held for trading 9 519 (139) Financial assets at fair value through profit and loss

9 (3,634) (211)

Loans and receivables 11 (105,139) 1,077Taxes, other assets and prepayments and accrued income

15,17,18 (21,374) 8,376

Banks (liabilities) 8 (5,026) (8,101)Customer deposits 20 122,591 (279,454)Tax liabilities, other liabilities, accruals and deferred income

15,22,23 34,871 2,566

Net cash flow from operating activities 108,280 (192,969)

Cash flow from investing activitiesAvailable-for-sale financial assets 10 605,930 674,260 Divestments and repayments of available-for-sale financial assets

10 (698,186) (514,710)

Investments in associates and joint ventures 12 (2,719) (3,745)Investments in intangible assets 13 (2,689) (390)Investments in property, plant and equipment 14 (2,167) (3,040)Net cash flow from investing activities (99,831) 152,375

Consolidated statement of cash flows

142

Ann

ual R

epor

t 20

13

Note 2013 2012x € 1,000 x € 1,000

Cash flow from financing activitiesCapital injection non-controlling interests 24 320 722 Buy-back of own shares 24 (9,111) (18,005)Other non-cash movements 24 5 -Dividends paid:• ••Final•dividend•preceding•year 34 (19,775) (17,605)• ••Interim•dividend•current•year 34 (9,115) (12,365)Net cash flow from financing activities (37,676) (47,253)Net cash flow (29,227) (87,847)

Opening balance of cash and cash equivalents 500,952 589,711 Net cash flow (29,227) (87,847)Effect of exchange rate changes on cash and cash equivalents

(478) (912)

Closing balance of cash and cash equivalents 471,247 500,952

The cash and cash equivalents presented in the consolidated cash flow statement are included in the consolidated balance sheet under the following headings at the amounts stated below:Cash 7 332,523 365,362Banks 8 144,784 144,916Banks – non-cash equivalents 8 (8,126) (9,326)Cash and cash equivalents in assets held for sale

6 2,066 -

Total cash equivalents 471,247 500,952

Cash flow from operating activities includes the following items:• ••Tax•paid (5,650) (10,718)• ••Interest•received 34,040 45,191• ••Interest•paid (6,642) (12,742)• ••Commission•received 151,526 140,140• ••Commission•paid (28,325) (30,940)

Consolidated statement of cash flows (continued)

143

Annual Report 2013

Note Issued share

capital

Share premiumreserve

Treasuryshares

Fair value

reserve

Other reserves

Unappro-priated profit

Non-control-

linginterests

Totalequityx € 1.000

1 January 2013 7,450 373,422 (21,539) 7,493 64,286 24,100 9 455,221

Net result for the year - - - - - 19,248 (322) 18,926

Other comprehensive income - - - (5,369) - - - (5,369)

Total comprehensive income - - - (5,369) - 19,248 (322) 13,557

Payment of final dividend FY12

34 - - - - - (19,775) - (19,775)

Payment of interim dividend FY13

34 - - - - (9,115) - - (9,115)

Grant of rights to shares 24 - - - - 529 - - 529

Issue of shares to executive board and employees

24 - - 310 - (310) - - -

Buy-back of shares 24 - - (9,111) - - - - (9,111)

Capital injection non-controlling interests

24 - - - - - - 320 320

Transfer of retained earnings to other reserves

24 - - - - 4,325 (4,325) - -

Other movements 24 - - - - 5 - - 5

31 December 2013 7,450 373,422 (30,340) 2,124 59,720 19,248 7 431,631

Note Issued share

capital


Treasuryshares

Fair value

reserve

Other reserves

Unappro-priated profit

Non-control-

linginterests

Totalequityx € 1.000

1 January 2012 7,450 373,422 (3,954) (973) 59,361 34,210 7 469,523

Net result for the year - - - - - 24,100 (720) 23,380

Other comprehensive income - - - 8,466 - - - 8,466

Total comprehensive income - - - 8,466 - 24,100 (720) 31,846

Payment of final dividend FY11

33 - - - - - (17,605) - (17,605)

Payment of interim dividend FY12

33 - - - - (12,365) - - (12,365)

Grant of rights to shares 23 1,105 1,105


23 - - 420 - (420) - - -

Buy-back of shares 23 - - (18,005) - - - - (18,005)

Capital injection non-controlling interests

23 - - - - - - 722 722

Transfer of retained earnings to other reserves

23 - - - - 16,605 (16,605) - -

31 December 2012 7,450 373,422 (21,539) 7,493 64,286 24,100 9 455,221

Consolidated statement of changes in equity

144

Ann

ual R

epor

t 20

13

1. Company information

Company informationBinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law, whose shares are publicly traded. BinckBank N.V. is officially domiciled at Barbara Strozzilaan 310, 1083 HN Amsterdam. BinckBank N.V. provides conventional and internet brokerage services in securities and derivatives transactions for private and professional investors. In this document, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

The consolidated financial statements for BinckBank for the period ending on 31 December 2013 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 6 March 2014.

Executive board: Supervisory board:K.N. Beentjes (chairman) C.J.M. Scholtes (chairman)E.J.M. Kooistra (CFO) J.K. BrouwerP. Aartsen L. Deuzeman A.M. van Westerloo

2. General accounting principles

Presentation of the financial statementsThe consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union (EU), hereinafter referred to as ‘IFRS-EU’.

The consolidated financial statements have been prepared on the basis of historical cost convention, apart from the financial assets and liabilities held for trading, financial assets and liabilities recognised at fair value through profit and loss and derivatives positions, all of which are recognised at fair value.

Unless otherwise stated, the consolidated financial statements are presented in euros, with all amounts rounded to the nearest thousand. The figures stated in the tables are based on amounts that have not been rounded, and therefore rounding differences may occur.

The provision of disclosures on the basis of IFRS 7, ‘Financial instruments: disclosures’, concerning the nature and scale of risks arising from financial instruments is incorporated in the consolidated financial statements on the basis of the audited sections of the Report of the executive board under the headings Risk and Capital Management and Liquidity Management (see pages 60 to 105). The relevant passages are marked as audited.

As BinckBank’s income statement for 2013 is included in the consolidated financial statements, a summary profit and loss account is sufficient in accordance with Section 402 of Book 2 of the Dutch Civil Code (Burgerlijk Wetboek).

Changes in accounting principlesThe accounting principles with regard to valuation and result are consistent with those applied in the previous year, with the exception of any changes as a result of the implications of new, amended or improved IFRS standards as described below.

Notes to the consolidated financial statements

145

Annual Report 2013

Implications of new and amended standardsIn the current year, BinckBank has applied a number of new or amended IFRS standards and IFRIC interpretations effective for financial years commencing on or after 1 January 2013. New or amended standards take effect on the date as stated by IFRS and after ratification by the EU, whereby earlier application is permitted in some cases. This concerns the following standards:

Effective from New or amended standard Significant amendments

1 July 2012 IAS 1 - Presentation of financial statements

Relates mainly to the presentation of comprehensive income grouped into items that should be reclassified to profit and loss and items that will never be reclassified to profit and loss.

1 January 2013 IAS 19 – Employee benefits Relates mainly to changes to the reporting of defined benefit pension plans.

IFRS 1 – Government loans Concerns a less stringent regime for the administration and disclosure of government loans for first-time adopters of IFRS.

IFRS 7 - Financial instruments: disclosures

Relates mainly to amendment of the standard for offsetting items.

IFRS 13 – Fair value measurement Provides guidelines for measurement of fair value, with no change to the items for when fair value is required or permitted under IFRS.

•• IAS 1 Presentation of the financial statements – effective for financial years commencing on or after 1 July 2012, concerning the presentation of the overall result. BinckBank has applied the standard in the current financial year, and has made a distinction between items that are or are not recognised on realisation through profit and loss in the statement of comprehensive income. BinckBank has moreover decided to present the statement of comprehensive income separately from the income statement. The amendment to the standard has had no significant impact on the financial position and results.

•• IAS 19 Employee benefits (revised) – effective for financial years commencing on or after 1 January 2013, intended to increase the transparency of financial reporting with regard to employee benefits, and in particular pensions. The amendments to this standard mainly concern the reporting of defined benefit pension plans. The effects of this standard are limited, since BinckBank has a defined contribution plans and does not operate a defined benefit pension plan. BinckBank has applied the standard in the current financial year. The standard has had no significant impact on the financial position and the results.

•• IFRS 1 Government loans – effective for financial years commencing on or after 1 January 2013, concerns a less stringent regime for the administration and disclosure of government loans for first-time adopters of IFRS. Since BinckBank is not a first-time adopter of IFRS, the revised standard does not apply to BinckBank.

•• IFRS 7 Financial instruments: disclosures (revised) – effective for financial years commencing on or after 1 January 2013, concerning the offsetting of financial assets and financial liabilities. BinckBank has applied the standard in its accounting principles. As a result of the standard, additional information is provided in the notes regarding arrangements with parties which permit offsetting of financial assets and financial liabilities. The amendment to the standard has not led to changes in the offsetting of items in BinckBank’s financial statements.

•• FRS 13 Fair value measurement – effective for financial years commencing on or after 1 January 2013, provides guidelines for measurement of fair value but does not change the situations in which fair value is required or permitted under IFRS. BinckBank has applied the standard in the current financial year. The standard has had no significant impact on the financial position, the results or the notes.

•• A collection of minor changes to a number of IFRS standards was published in May 2012, all of which are effective for financial years commencing on or after 1 January 2013. BinckBank has evaluated these changes and concluded that they have no effect on its financial position and results.

146

Ann

ual R

epor

t 20

13

The following standards, amendments of standards and interpretations that have not yet taken effect or have not yet been ratified by the European Union have not yet been applied by BinckBank:


1 January 2014 IAS 27 – Separate financial statements

Mainly concerns the accounting and disclosure requirements for separate financial statements prepared by a parent, an investor in a joint venture or an associate, whereby the investment is accounted for at cost or in accordance with IAS 39: Financial instruments. Since this situation does not apply to BinckBank’s financial statements, the amendment to the standard will not affect the financial position and the results.

IAS 28 – Investments in associates and joint arrangements

Concerns additional guidelines for the measurement of associates and joint arrangements at net asset value. BinckBank has evaluated the impact of this standard, and apart from certain additional disclosures, the standard will not affect the financial position and results.

IAS 32 – Financial Instruments: Offsetting of financial assets and financial liabilities

Concerns the offsetting of financial assets and financial liabilities.BinckBank expects no material impact on its financial position and result at this time.

IAS 36 – Recoverable amount disclosures for non-financial assets (revised)

Sets additional disclosure requirements for the measurement of the recoverable amount of non-financial assets. Apart from possible additional disclosures, BinckBank does not expect this standard to affect its financial position and results.

IAS 39 – Financial instruments (revised)

This amendment states that there is no need to discontinue a hedge relationship in the event that a derivatives transaction is re-established with a new counterparty on new conditions. Since BinckBank does not use hedge accounting, the revision to this standard does not apply.

IFRS 10 – Consolidated financial statements

Concerns a new description of control that must be used to assess whether consolidation is required. BinckBank has evaluated the revised standard and does not expect the revision to have any significant impact on its consolidation, financial position and results.

IFRS 11 – Joint arrangements Describes the accounting of joint arrangements with joint control, and prohibits proportional consolidation for joint arrangements. BinckBank has evaluated the standard and does not expect it to have any significant impact on its financial position and results.

147

Annual Report 2013


1 January 2014 (continued)

IFRS 12 – Disclosure of interests in other entities

Contains all the required disclosures for subsidiaries, joint arrangements, associates and ‘structured entities’. BinckBank has evaluated the standard and does not expect it to have any significant impact on its financial position and results. However additional and more detailed disclosures will have to be provided.

Revision of IFRS 10, 12 and IAS 27 – Investment entities

This amendment describes specific options for investment entities for measurement of associates without consolidation. Since BinckBank does not fall under the definition of an investment entity, the revision will have no effect on BinckBank.

IFRIC 21 – Levies by governments IFRIC 21 clarifies that an entity should only recognise a liability for a government levy when the activity that triggers payment, as described in the relevant legislation, occurs. BinckBank does not expect IFRIC 21 to have a material financial impact on its future financial statements.

Unknown (delayed)

IFRS 9 – Financial instruments, classification and measurement

This regulation is part of a revision of IAS 39 Financial instruments. BinckBank expects this standard to have consequences for the classification and measurement of its financial assets and liabilities, however the full effect will only become clear once all phases of this IASB project are completed.

Significant accounting judgements and estimatesThe preparation of the financial statements involves estimates and assumptions based on subjective presumptions and estimates. Situations are assessed on the basis of available financial data and information. These estimates may materially affect the size of the reported assets and liabilities and the contingent assets and liabilities on the date of the consolidated financial statements and the income and expenses reported for the period under review. While the management strives to make these estimates to the best of its ability, actual results may vary from these estimates.

The estimates and underlying assumptions are regularly reviewed. Revisions are recognised in the period in which the estimate is revised, or in the period of revision and future periods, if the revision affects both the current and future reporting periods. The most significant assumptions for the future and other key sources of estimation uncertainty at balance sheet date that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are:

Going concernManagement of BinckBank has evaluated the bank’s ability to continue to operate as a going concern and is satisfied that the bank has adequate resources to continue its activities in the foreseeable future. Moreover, management is not aware of any material uncertainties that may cast doubt upon BinckBank’s ability to continue as a going concern. Therefore the financial statements are prepared on a going concern basis.

Consolidation of associates and joint venturesThe consolidated financial statements are prepared on the basis of the consolidation of BinckBank and its associates and joint ventures. In the determination of whether associates and joint ventures should be consolidated, management has assessed whether there is de facto control as a result of decisive control, entitlement and risk to the results of the entity or influence over the appropriation of the results of the entity, on the basis of current circumstances and insights.

148

Ann

ual R

epor

t 20

13

Fair value of financial instrumentsWhere the fair value of financial assets and financial liabilities cannot be obtained from active markets, it is determined using valuation methods, including cash flow models or other valuation models. Observable market data is used as the input to these models wherever possible, but where this is not possible, judgements are required in determining fair values. These judgements involve consideration of input factors including liquidity risk, credit risk and volatility.Changes in assumptions regarding these factors can affect the fair value of financial instruments. The valuation of financial instruments is explained in detail in Note 35.

Impairment of loans and receivablesAn impairment provision is formed for loans and receivables if there are objective indications that BinckBank will not be able to collect all amounts under the original contractual conditions of the loan. With regard to collateralised loans provided, the fair value of the securities provided as collateral is determined and compared with the collateralised loan on a daily basis. When the collateral provided by the securities portfolio is not sufficient to cover the collaterised loans, this is an initial indication that an impairment loss has occurred. BinckBank makes individual estimates of the recoverable amount of the loan, being the value of the future cash flows, the proceeds from liquidating the collateral net of transaction costs, and the costs of collecting the receivables. The provision is formed in an amount equal to the difference between the carrying amount and the recoverable amount.

Impairment of goodwillBinckBank performs an impairment test on the carrying amount of goodwill at least once a year. This involves estimating the value in use of the cash-generating units to which the goodwill is attributed. In order to estimate the value in use, BinckBank makes an estimate of the expected future cash flows from the cash-generating unit and also determines a suitable discount rate for calculating the net present value of those cash flows.

Fair value of identified intangible assets acquired with acquisitionsBinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty percentage. An impairment test is performed on each balance sheet date.

Economic life of intangible assets and property, plant and equipmentBinckBank applies standard amortisation and depreciation periods for various groups of assets. BinckBank assesses each individual asset periodically to establish whether the standard amortisation or depreciation period still corresponds to the expected useful life of the asset concerned. Circumstances may occur during the use of the asset which may lead to a situation in which the standard period no longer corresponds to the actual useful life. As soon as a deviation is identified, the remaining carrying amount of the asset is written off over the revised remaining economic life on a straight-line basis.

Deferred tax assetsDeferred tax assets are recognised if it is probable that future taxable profits will be generated to allow the tax loss carryforwards to be utilised.

Expected period of sale of non-current assets and related liabilities held for saleWhen determining the classification of operations to be discontinued, BinckBank uses assumptions regarding the phase of the process of disposal. If according to BinckBank’s estimation disposal will occur within a period of one year after the end of the financial year, the non-current assets and related liabilities held for sale are presented separately. With respect to the proposed sale of the BPO and software & licensing activities, on the basis of the current plan and status of the process BinckBank expects the sale to take place within one year after the end of the financial year.

Provisions and off balance sheet liabilitiesThe determination of provisions and off balance sheet liabilities is based on available information and management estimates. The actual results may differ from these estimates.

149

Annual Report 2013

3. Accounting principles for consolidationThe consolidated financial statements include the assets and liabilities and the income and expense items of the company and its subsidiaries. Subsidiaries are entities over which BinckBank has de facto control. De facto control is deemed to exist if BinckBank is able, either directly or indirectly, to govern the financial and operating policies of the company so that variable gains are generated from its activities, or if BinckBank has control over the appropriation of the company’s result.

Subsidiaries are fully consolidated as soon as BinckBank obtains de facto control. If BinckBank ceases at any point to exercise de facto control over a subsidiary, the subsidiary is deconsolidated immediately.

The accounting principles of the subsidiaries and their reporting periods are the same as those of BinckBank.

4. Related party disclosuresUnrealised gains on transactions with associates are eliminated in proportion to BinckBank’s interests in the companies concerned.

There were transactions between BinckBank and its subsidiaries during the year. These intercompany transactions have been fully eliminated in the consolidated financial statements.

5. Accounting principles for recognition, measurement and result

Foreign currency translationThe consolidated financial statements are presented in euros, this being BinckBank’s functional as well as presentation currency. Items recognised in the financial statements of each entity are measured on the basis of the relevant entity’s functional currency. Transactions in foreign currencies are translated on initial recognition at the functional currency’s exchange rate on the transaction date.Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on the balance sheet date. Differences relating to movements in exchange rates are recognised in the income statement. Non-monetary items in foreign currencies measured against fair value are translated at the exchange rate at the moment the fair value is determined. Currency translation differences on non-monetary items carried at fair value through profit and loss are likewise recognised in the income statement. The results of financial transactions and costs are translated into euros at the exchange rate prevailing on the transaction date in the income statement.

At the reporting date, the assets and liabilities of foreign associates are translated into BinckBank’s functional currency at the exchange rate prevailing on the balance sheet date, while the income statement is translated at the weighted average exchange rate for the year. Translation differences are recognised directly in a separate component of equity. If a foreign currency entity is sold, the deferred cumulative amount included in equity for the relevant entity is recognised in the income statement. Financial assets and liabilities

Initial recognition of financial assets and liabilities in the balance sheetFinancial assets and liabilities bought and sold in accordance with standard market conventions are recognised at the transaction date of the relevant purchase or sale. Other financial assets and liabilities are recognised in the balance sheet at the time of acquisition.

On initial recognition, financial instruments may be assigned to a specific category, their accounting treatment being decided at that time. Initial recognition of financial assets and liabilities is at fair value, including directly attributable transaction costs, except for the category which is carried at fair value through profit and loss, where the transaction costs are expensed.

150

Ann

ual R

epor

t 20

13

Derecognition of financial assets and liabilitiesA financial asset (or, when applicable, a component of a financial asset or part of a group of similar financial assets) is no longer recognised in the balance sheet if: •• BinckBank ceases to have a right to the cash flows from the asset; or •• •BinckBank retains the right to receive the cash flows from the asset but has entered into an obligation to pay them to a

third party in their entirety and without significant delay under the terms of a specific contract; or •• •BinckBank has transferred its rights to receive the cash flows from the asset and has either (a) largely transferred all

risks and rewards of ownership of the asset or (b) not largely transferred all risks and rewards of ownership of the asset or retained them fully, but has transferred control of the asset.

If BinckBank has transferred its rights to receive the cash flows from an asset but has not largely transferred all risks and rewards of ownership of the asset or retained them fully and has not transferred control of the asset, that asset continues to be recognised for as long as BinckBank remains involved with the asset. Financial liabilities cease to be shown in the balance sheet as soon as the performance relating to the obligation has been completed or the obligation has been removed or has expired.

Loans and receivables and the related impairment losses are written off if there is no longer any real possibility of being able to recover the outstanding debt following foreclosure of the collateral.

Determination of fair valueIFRS defines fair value as the price that would be received for the sale of an asset or that would have to be paid for the transfer of a liability in an orderly transaction between market parties. BinckBank has classified its financial instruments that are measured in the balance sheet at fair value in a hierarchy of three levels based on the priority of the measurement input. The fair value hierarchy assigns the highest priority to published quotations in an active market for similar assets and liabilities and the lowest priority for measurement techniques based on input not based on an observable market. The best evidence of fair value is a price quotation in an active market (level 1). In the event that the market for a financial instrument is not sufficiently active, or the reported prices are not available, a valuation method is used. In these cases, fair value is estimated on the basis of observable data for similar financial instruments, or on the basis of financial models. Level 2 of the hierarchy relates to instruments for which the valuation input is based mainly on observable market data. Level 3 is used for instruments that are measured using a valuation method that includes one or more significant non-observable inputs. Non-observable input may include factors such as volatility, correlation, distribution of discounting percentages, default rates, realisation percentages, early redemption percentages and certain credit spreads. Valuation techniques that depend to a larger extent on non-observable inputs involve a greater contribution from management to determine the fair value. Where valuation techniques or models are used to determine fair value, they are periodically reviewed and validated by qualified staff who are independent of those who have developed the said techniques or models. Models are calibrated in order to ensure that the results reflect actual data and comparable market prices and use observable data where available in order to minimise the use of non-observable inputs. Valuation methods are inherently subjective. Measuring the fair value of certain financial assets and liabilities is accordingly largely dependent on estimates. The use of other valuation methods and assumptions might produce estimates of fair values that are materially different.

Offsetting of financial assets and liabilitiesFinancial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when there is a legally enforceable right to set off the amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Generally, this does not apply to master netting agreements, and the assets and liabilities concerned are therefore presented on a gross basis in the balance sheet.

151

Annual Report 2013

Accounting treatment after initial recognitionThe accounting treatment after initial recognition depends on the categories described below.

Financial assets or financial liabilities at fair value through profit and lossAn instrument is classified as carried at fair value through profit and loss if it is held for trading purposes or if it was designated as such on initial recognition for one of the following reasons: •• •It eliminates or substantially reduces inconsistencies in measurement and recognition which would otherwise arise

on the measurement of assets or of income and expenses on a different basis. •• •The performance of the financial asset concerned is assessed on the basis of its fair value in accordance with a

documented risk management or investment strategy. Reporting to management is on the basis of fair value. •• •The host contract of the financial instruments contains one or more embedded derivatives and the entire contract is

recognised at fair value through profit and loss. This is only permissible provided the embedded derivative has a significant impact on the contractually agreed cash flows, or it is evident on initial recognition of the financial instrument that separation of the embedded derivative is not permissible (e.g. option of premature settlement at amortised cost).

Derivatives not held on behalf of customers are regarded as being held for trading purposes.Derivatives are financial instruments requiring only a limited net initial investment or none at all, with future settlement dependent on the underlying notional amount of the contract and movements in certain rates or prices (e.g. an interest rate or the price of a financial instrument). These financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement under Result from financial instruments.

Loans and receivablesLoans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. In BinckBank’s case, these items mainly concern current account loans collateralised by securities and short-term money-market loans. After initial recognition the items are valued at amortised cost, using the effective interest method. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired.

Held-to-maturity financial assetsFinancial assets with fixed or determinable payments and a fixed maturity date are designated as investments to be held to maturity if BinckBank specifically intends to hold them until maturity and is in a position to do so. Held-to-maturity investments are recognised at amortised cost, measured using the effective interest method, less any impairment losses.

Available-for-sale financial assetsAvailable-for-sale financial assets are those financial assets that are designated as being available for sale or are not included in one of the above categories. After initial recognition, available-for-sale financial assets are measured at fair value. Any gain or loss is shown, net of tax, as an unrealised result in the fair value reserve until the investment is derecognised or determined to be impaired. In that case the cumulative gain or loss previously shown in equity is recognised in the income statement in the result from financial instruments.

Impairment of financial assetsOn a regular basis and at each balance sheet date, BinckBank assesses whether there is objective evidence, provided by one or more events, of impairment of financial assets individually or groups of financial assets collectively. Impairment losses are only recognised when there is an adverse effect on the future cash flows. If impairment is indicated, the amount of any impairment loss is determined as follows for available-for-sale financial assets, loans and receivables and held-to-maturity financial assets.

152

Ann

ual R

epor

t 20

13

Loans and receivablesBinckBank assesses whether there is objective evidence of impairment of the lending portfolio (including any related margin facilities and guarantees). In the case of loans collateralised by securities, there is an objective indication if the fair value of the collateral is lower than the carrying amount of the loan or receivable. Evidence that a loan or receivable is impaired is obtained via the group’s lending assessment process. This involves assessment of customers’ creditworthiness as well as assessment of the nature of customers’ investment transactions and monitoring of customer transactions and balances.

The amount of any impairment loss is measured as the difference between the loan’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the loan. The loss is presented in the income statement in Impairment of financial assets. In computing the present value of the estimated future cash flows from a financial asset for which collateral security has been provided, it is considered whether the cash flows which will probably arise on realisation of the collateral security less the costs which will necessarily be incurred in obtaining and selling the collateral security.

In the event of impairment, the impairment provision is increased by the amount of the impairment.The affected loans are only written down when all the necessary procedures have been completed and the amount of the loss has been determined. If, in a subsequent period, the amount of an impairment decreases and the decrease can be objectively related to an event occurring after the initial write-down, the previously recognised impairment is reversed. Reversal of an impairment is recognised in the provision and in the income statement. Amounts subsequently collected after having been written off are credited to the income statement in Impairments.

The methodology and the assumptions used in estimating future cash flows are regularly evaluated in order to reduce variances between estimated and actual losses.

Held-to-maturity financial assetsHeld-to-maturity investments are individually assessed and the amount of any impairment is measured using the same method as has been explained for loans and receivables.

BinckBank does not regard possible future events as objective indicators and such forecasts are accordingly not used as evidence of impairment of a financial asset or a portfolio of financial assets. Losses based on future events are not recognised, regardless of probability.

Available-for-sale financial assetsAn investment in equities is considered to have been impaired if there is a significant or prolonged fall in the fair value to below cost. The words ‘significant’ and ‘prolonged’ are interpreted individually for each investment in equities, however the general criterion used is a decline in value of 25% and a time period of six months. An increase in value in the period after an impairment is reported in equity as a revaluation.

Investments in interest-bearing securities are assessed for impairment if there are objective indications of financial problems at the issuer or borrower, there is no longer an active market, or there are other such indications. If there are such indications, the cumulative net loss previously recognised directly in equity is transferred from equity to the income statement in impairments. Reversals of impairments in subsequent years relating to interest-bearing securities are reversed through the income statement if the increase in the fair value of the instrument can be objectively related to an event occurring after the previous impairment was recognised in the income statement.

Loans and receivables under renewed contractsIn the case of existing loans and receivables, it is possible for renewed contracts to be concluded with customers. These loans are no longer treated as overdue. The new contracts are, however, periodically assessed for compliance and to determine whether future payment is probable. These loans and receivables are periodically tested for impairment on an individual basis, using the initial effective interest rate.

153

Annual Report 2013

Acquisitions and goodwillAll acquisitions are accounted for using the acquisition method. The identifiable assets, equity and liabilities of the acquired company or activities are recognised at fair value.

BinckBank measures the value of the identifiable intangible assets acquired with the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and for determining the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty percentage.

Earn-out arrangements may be agreed as part of business acquisitions. BinckBank makes an estimate of the earn-out payments on the basis of the expected future results of the acquired companies. These earn-out payments form part of the price paid for the acquired company. An annual assessment is made to determine whether the earn-out obligation should be adjusted in the light of any changes to the development of the results.Adjustments to the earn-out calculations after completion of the acquisition are recognised directly in the income statement.

On initial recognition, goodwill acquired in a business combination is measured as the difference between the acquisition price of the business combination and BinckBank’s share of the net fair value of the acquired company’s identifiable assets, liabilities and contingent liabilities, if positive. Subsequently, goodwill is carried at cost less any cumulative impairments. A negative difference between the acquisition price and fair value is expensed immediately.

The valuation of a third-party interest in the acquired company is made at either the fair value on the acquisition date or the proportional share in the identifiable assets and liabilities of the acquired company.

Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. For this impairment test, goodwill acquired in a business combination is allocated from the acquisition date to BinckBank’s cash-generating units or groups of cash-generating units that are expected to benefit from the synergy of the business combination.

An impairment is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. If the recoverable amount is lower than the carrying amount, an impairment is recognised. Impairment of goodwill is not reversed.

Necessary adjustments to the fair value of acquired assets, equity and liabilities measured at the time of acquisition that are identified before the end of the first reporting period after the business combination result in an adjustment of the goodwill. Necessary adjustments identified at a later date are recognised in the income statement through profit or loss. Gains and losses on the disposal of a company or activity are measured as the difference between the proceeds from disposal and the carrying amount of the company or activity, including goodwill and currency translation reserve.

Transaction costs associated with an acquisition are recognised directly in the income statement.

154

Ann

ual R

epor

t 20

13

Cash and cash equivalentsThe item Cash and cash equivalents in the statement of financial position consists of cash, balances with central and other banks and short-term deposits (call money) with original maturities of three months or less that are readily convertible into known amounts of cash and on which there is a negligible impairment risk.

Associates and joint ventures

AssociatesAssociates are entities in which BinckBank generally holds between 20% and 50% of the voting rights or in which BinckBank is able to exercise significant influence in some other way but over which BinckBank does not have control. Investments in associates are accounted for using the equity method.The item includes goodwill paid on acquisition, less any cumulative impairment losses. Under the equity method, BinckBank’s share in the results of the associate is reported in BinckBank’s income statement as share in results of associates and joint ventures. BinckBank’s share in changes in an associate’s reserves is recognised directly in BinckBank’s equity. The carrying amount of the investment is adjusted for the reported results and changes in reserves. If the carrying amount of the investment in an associate falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate. Where necessary, the accounting principles of associates are adjusted in order to ensure consistency with those of BinckBank.

Joint venturesJoint ventures are entities over which BinckBank exercises joint control. This control is established in an agreement and strategic decisions regarding financial and operating policy are taken by unanimous vote. Joint ventures are reported using the equity method from the date on which BinckBank has joint control for the first time until the date on which this control ceases. Under the equity method, BinckBank’s share in the results of the joint venture is reported in BinckBank’s income statement as share in profits of associates and joint ventures. BinckBank’s share of changes in a joint venture’s reserves is recognised directly in BinckBank’s equity. The carrying value of the joint venture is adjusted for these results and movements in reserves. If the carrying amount of the investment in a joint venture falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the joint venture concerned or has already made payments on behalf of the joint venture. Where necessary, the accounting principles of joint ventures are adjusted in order to ensure consistency with those of BinckBank.

Intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less cumulative amortisation and any cumulative impairments.

Intangible assets are determined as having either a definite or an indefinite useful life. Intangible assets with a definite useful life are amortised over the useful life and tested for impairment if there are indications that an asset may be impaired. The useful lives of the intangible assets are assessed annually and adjusted if there has been a change. Amortisation of intangible assets with a definite useful life is presented in the income statement in depreciation and amortisation.

Intangible assets with an indefinite useful life are subjected to an annual impairment test, either individually or at the level of the cash-generating unit. These intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reassessed annually, including an assessment of whether the indefinite useful life is still justifiable. The activities relating to research and development of software are recognised and measured as follows:

155

Annual Report 2013

Costs of research are recognised in the income statement when they occur.An intangible asset arising from development costs incurred in an individual project is only recognised if BinckBank can demonstrate that: • completion of this intangible asset is technically feasible, so that it will be available for use or for sale; • it is BinckBank’s intention to complete the intangible asset and use or sell it; • BinckBank is capable of using or selling the intangible asset; • future economic benefits are achievable; • adequate technical, financial and other resources are available to complete the development of the intangible asset

and for its use or sale; and • it is possible to measure the costs incurred during development reliably.

After initial recognition of the development costs, the asset is carried at cost less any cumulative amortisation and cumulative impairments. Any such capitalised costs are amortised over the period in which the expected future economic benefits from the project concerned are to be realised. The carrying amount of the development costs is tested for impairment annually if the asset is not yet in use or if there are indications of impairment during the financial year.

Property, plant and equipmentReal estate for own use is carried at historical cost less cumulative depreciation and impairments. All other assets recognised in the balance sheet as equipment are carried at historical cost less cumulative depreciation and any impairments.

Property, plant and equipment are subject to straight-line depreciation on the basis of useful life, taking into account the residual value. The expected useful life is:

Real estate (own use) 50 yearsComputer hardware 5 yearsFixtures, fittings and equipment 5-10 yearsOther fixed assets 5 years

If an asset consists of various ‘components’ with different useful lives and/or different residual values, the asset is divided into these components and depreciation is applied separately. Useful life and residual value are assessed annually. If it emerges that the estimated values differ from previous estimates, the values are adjusted. If the carrying amount of an asset is higher than the estimated recoverable amount, an impairment is recognised and charged to the income statement. Results on the sale of property, plant and equipment, being the difference between the sale proceeds and the carrying amount, are recognised in the income statement in the period in which the sale occurred. Repair and maintenance costs are charged to the income statement in the period to which they relate. The costs of significant renovations are capitalised if it is likely that additional future benefits will be realised from the existing asset. Significant renovations are written off on the basis of the remaining useful life of the asset concerned. Leasehold prepayments (operating lease) are recognised in investments in real estate. Amortisation of the leasehold is applied on a linear basis over the remaining life to maturity.

Tax

Current taxThis item concerns immediately payable and offsettable tax assets and liabilities for current and prior years, carried at the amount expected to be claimed from or paid to the tax authorities. The tax amount is computed on the basis of enacted tax rates and applicable tax law.

Deferred taxDeferred tax liabilities are recognised, based on the temporary differences at the balance sheet date between the tax base of assets and liabilities and the carrying amount in these financial statements.

156

Ann

ual R

epor

t 20

13

Deferred tax liabilities are recognised for all taxable temporary differences except: • where the deferred tax liability arises on the initial recognition of goodwill or the initial recognition of an asset or a

liability in a transaction that is not a business combination and does not affect the operating profit before tax or the taxable profit;

• in the case of taxable temporary differences connected with investments in subsidiaries and associates, where BinckBank is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, unused tax facilities and unused tax loss carryforwards when it is probable that taxable profits will be available against which the deferred tax asset can be utilised, enabling the deductible temporary differences, unused tax facilities and unused tax loss carryforwards to be used.

The carrying amount of the deferred tax assets is assessed at the balance sheet date and reduced if it is not probable that sufficient taxable profits will be available against which some or all of the deferred tax asset can be utilised. Unrecognised deferred tax assets are reassessed at the balance sheet date and recognised to the extent that it is probable that taxable profits will be available in the future against which the deferred tax asset can be utilised. Deferred tax assets and liabilities are carried at amounts measured at the tax rates expected to be applicable to the period in which the asset is realised or the liability is settled, based on enacted tax rates and applicable tax law. The tax on items recognised directly in equity is accounted for directly in equity instead of in the income statement. Deferred tax assets and liabilities are presented as a net amount if there is a legally enforceable right to set off deferred tax assets against deferred tax liabilities and the deferred tax is related to the same taxable entity and the same tax authority.

Work in progressWork in progress relates exclusively to the external activities of the subsidiary Able.Work in progress is carried at the cost of the work performed, plus a proportion of the expected final results based on progress and less invoiced instalments, prepayments and provisions. For anticipated losses on work in progress, provisions are recognised as soon as such losses are identified and are deducted from the cost, any already recognised profits also being reversed. The cost comprises the direct project costs, made up of direct wage costs, materials, costs of subcontracted work, other direct costs and charges for the hire and maintenance of the equipment used. The progress of the project is measured on the basis of the cost of the work performed in relation to the expected cost of the project as a whole. Profits are not recognised on work in progress before it is possible to make a reliable estimate of the final result. For each project, the balance of the value of the work in progress less invoiced instalments and prepayments is measured. In the case of projects on which the invoiced instalments and prepayments exceed the value of the work, this balance is included in other liabilities instead of other assets.

Assets and liabilities held for saleThe item assets held for sale includes the assets relating to an operation for sale, if the operation in question is available for immediate sale and a sale is highly probable. Sale is highly probable if at the balance sheet day the management has committed to detailed sale plans and is actively looking for a buyer at a reasonable sale price. Also, the sale is expected to be recognised as a completed sale within one year after the date of initial classification and the actions necessary to complete the plan must indicate that significant changes to the plan or withdrawal of the plan are unlikely. The liabilities associated with these assets are classified under the item liabilities held for sale. No further depreciation is applied to fixed assets from the date on which they are classified under this heading. Measurement of assets and liabilities held for sale is at the carrying amount or fair value if lower, after deduction of selling costs. Any impairments are charged to the result.Assets and liabilities held for sale are shown separately in the balance sheet.

157

Annual Report 2013

Related assets and liabilities held for sale are shown as discontinued operations if: • the assets and liabilities or components thereof concern a cash-generating unit or group of cash-generating units; • they represent a separate major line of business or geographical area of operations; • they form part of one single coordinated plan to dispose a separate major line of business or geographical area of

operations; or • they concern a subsidiary that is acquired exclusively with a view to resale.

The proceeds of discontinued operations are presented in the income statement as a single amount consisting of the net profit and/or net loss of the discontinued operations net of tax and the result realised on sale.The comparative figures in the income statement are adjusted if a business line is designated as to be discontinued and is suitable for separate presentation.

Impairments of non-financial assetsThe carrying amount of BinckBank’s assets is tested at each balance sheet date in order to determine whether there are indications of impairment. If so, the recoverable amount of the asset is estimated. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. An impairment is recognised if the carrying amount of an asset or cash-generating unit exceeds the recoverable amount.

Derivatives positions held on behalf of customersBinckBank executes derivatives transactions on behalf of its customers and holds the resultant positions in its own name but for the customer’s account and at the customer’s risk. The positions are recognised at fair value, measured according to the quoted price at the balance sheet date. Financial settlement with the customers concerned in respect of such transactions and positions is effected immediately. The customers have lodged adequate collateral with BinckBank in the form of cash balances, bank guarantees and securities to cover the risks arising out of the derivatives positions held.

Customer depositsCustomer deposits comprise the balances on savings accounts held by customers. Savings are measured at fair value on initial recognition, including transaction costs incurred. Savings are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of the accounts concerned.

Demand deposits relate to non-subordinated liabilities to non-banks that are not embodied in debt securities. These liabilities are measured at fair value on initial recognition, including transaction costs incurred. They are subsequently carried at amortised cost. Any difference between the net amount deposited and the amount repayable, calculated using the effective interest method, is recognised in the income statement under the heading of interest expense over the term to maturity of these liabilities to customers.

ProvisionsA provision is recognised if (I) BinckBank has a present obligation (legal or constructive) as a result of a past event; (II) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and (III) a reliable estimate can be made of the amount of the obligation. If BinckBank expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset only when reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, provisions are discounted at a rate, before tax, that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

PensionsBinckBank operates a pension plan for its executive board and employees based on a defined contribution scheme. In a defined contribution scheme, a percentage of the employee’s fixed salary is paid as contribution to a pension insurer. The percentage payable is age-related.The pension contributions are recognised in the year to which they relate.

158

Ann

ual R

epor

t 20

13

EquityThe costs associated with the issue of new shares are charged to the share premium account.

Treasury sharesEquity instruments which are reacquired (treasury shares) are deducted from equity at the acquisition price including transaction costs. Gains or losses on the purchase, sale, issue or withdrawal of BinckBank’s own equity instruments are not recognised in the income statement.

Employee benefitsAn amended remuneration policy in accordance with the Regulation for a Controlled Remuneration Policy in the Wft 2011 of DNB was approved by the General Meeting of Shareholders held on 23 April 2012. The amended remuneration policy took effect with retroactive effect as of 1 January 2011.

The variable performance pay scheme distinguishes between three target groups: • Identified staff: including the executive board, senior management, managers in control positions and those in

positions that can affect the risk profile; • Key Staff: employees who as part of the exercise of their duties play an important part in the conduct of BinckBank’s

business, for whom a supplementary incentive programme has been agreed. These employees receive a conditional allocation in cash;

• Other staff: other staff have a performance-related pay scheme for which the total size is based on BinckBank’s result, but in which awards are made on the basis of the individual performance of the employee concerned.

The performance period for all the targets of all the above groups is one year. The one-year performance targets are set in a balanced way at group, business unit and individual level and are both financial and non-financial. Payment depends on the realisation of the previously set performance targets during the performance period.

The allocation of the variable performance pay for the Identified Staff is determined on the basis of scores obtained on financial, non-financial, quantitative and qualitative performance indicators. A variable performance pay for Identified Staff consists of 50% in BinckBank N.V. shares and 50% in cash. This proportion applies to every payment of a variable performance pay. Part of the total allocated variable performance remuneration is paid unconditionally, and part is awarded subject to conditions pro rata over a period of three years. A reassessment is made on the basis of the initial performance criteria linked to this variable payment at the end of each year (within the 3-year period). Subject to the result of this reassessment, the part of the variable performance pay allocated pro rata for the year in question becomes (fully or partially) unconditional. The employment of Identified Staff during the deferral period is not a requirement for a deferred variable performance pay to be made unconditional and thus does not form part of the amended remuneration policy.

BinckBank shares that have been unconditionally allocated have to be held in a blocked account for a lock-up period. The lock-up period for Identified Staff after the shares have been made unconditional is one year, with the exception of the executive board, for whom the lock-up period is two years.

The measurement of the shares conditionally allocated to Identified Staff is based on the following principles: • IFRS 2 states that the services provided by an employee must be allocated as a cost item to the performance year. • The fair value of the services provided that relate to the payment of the bonus is estimated as the fair value of the

shares that the employee receives.

The fair value of shares in the future is equal to the fair value at the time of measurement. This fair value is adjusted for: • ‘Missed’ dividends, by discounting the value of the shares by a dividend yield. • The lock-up period, by adjusting the value for the value of an American call option, calculated using a binomial tree.

50% of the payment of the variable performance pay in cash to Identified Staff is made after expiry of the remuneration year and 50% in equal parts in the three succeeding years and is broken down into a current liability and a non-current cash liability.The accrual for the current liability and the non-current cash liability is formed for the estimated liabilities accumulated for performances delivered until the balance sheet date. The non-current liability is interest-bearing and is therefore recognised at nominal value including accrued interest.

159

Annual Report 2013

A claw-back clause applies for a period of five years after vesting, during which time any variable performance pay can be reclaimed if an employee has acted unethically and/or in contravention of BinckBank policy.

Off balance sheet commitmentsContingent liabilities are liabilities that are not recognised in the balance sheet because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within BinckBank’s control. The maximum potential credit risk associated with these contingent liabilities faced by BinckBank is disclosed in the notes. In estimating the maximum potential credit risk, it is assumed that all counterparties default on their contractual obligations and all assets provided by way of collateral security are worthless.

LeasingLease contracts whereby the risks and benefits relating to the right of ownership are held to a significant extent by the lessor are designated as operating leases. Lease payments made in the capacity of lessee in relation to operating leases are applied to the result during the lease period, after deduction of any premiums received from the lessor. BinckBank is only involved in operational lease contracts as a lessee.

BinckBank has not entered into any financial lease contracts of material significance, either as lessor or as lessee.

General principle for recognition and measurement of income and expenses

Income and expense items are recognised in the period to which they relate, having due regard to the above accounting principles. Revenues are recognised if it is probable that their economic benefits will flow to BinckBank and the revenue can be reliably measured.

Interest incomeInterest income consists of the interest on monetary financial assets attributable to the period. Interest on financial assets is measured using the effective interest method based on the actual acquisition price. The effective interest method is based on the expected flow of cash receipts, taking into account the risk of premature redemption of the underlying financial instrument and the direct costs and revenues, such as the transaction costs charged and any discount or premium. If the risk of early redemption cannot be sufficiently reliably measured, BinckBank assumes the cash flows during the entire term to maturity of the financial instruments. Interest income on financial assets subject to impairment which have been written down to the estimated recoverable value or fair value are subsequently recognised on the basis of the interest rate used to measure the recoverable value by discounting the future cash flows.

Interest expenseThis item includes the interest expense on all financial obligations and is measured on the basis of the effective interest method.

Net fee and commission incomeCommission income and expense comprises payments, excluding interest, received or receivable from third parties and paid or payable to third parties, respectively, whether on a non-recurring or more regular basis, in respect of services provided.

Other incomeOther income comprises amounts charged to third parties during the year in respect of goods and services supplied relating to hardware and software after deduction of sales expenses, together with all other income not classified under other income items.

Work in progress on contracts for third partiesBinckBank uses the percentage of completion method to measure the revenue generated by each contract on the balance sheet date. The percentage of completion is determined by comparing the total estimated costs for a project with the actual costs up to the balance sheet date. BinckBank recognises the positive or negative balance of the revenue less invoiced instalments for each project in other assets or other liabilities, respectively.

160

Ann

ual R

epor

t 20

13

Licence sales that are linked to an obligation to deliver customised work that is essential for the delivered software to function are assumed to form part of the total project. Revenue in relation to licences as part of the total project amount are recognised pro rata to the progress of the project achieved in the reporting year, i.e. the percentage of completion.

Share in results of associates and joint venturesThis concerns BinckBank’s share in the results of its associates and joint ventures. If the carrying amount of the investment in an associate or joint venture falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate or joint venture concerned or has already made payments on behalf of the associate or joint venture.

TaxTax is recognised in the income statement unless the tax relates to items recognised directly in equity, in which case it is recognised in the unrealised results and directly in equity respectively.

Earnings per ordinary shareThe earnings per ordinary share are calculated on the basis of the weighted average number of outstanding ordinary shares. The following considerations are taken into account in the calculation of the weighted average number of outstanding ordinary shares: • The total number of ordinary shares issued is reduced by the treasury shares held by group companies; • The calculation is based on daily averages.

The diluted earnings per ordinary share is calculated by adjusting the weighted average number of shares during the period for potential dilution as a result of outstanding option entitlements, for instance. The conditionally allocated shares arising from share-based payments are not entitled to dividend and are only included in the calculation of the earnings per share at such time as they become unconditional.

Statement of cash flowsThe statement of cash flows has been prepared using the indirect method, in which cash flows are analysed according to operating, investing and financing activities. In the cash flow from operating activities, the net result is adjusted for income and expenses that have not resulted in receipts and expenditures in the same financial year and for changes in provisions and suspense items. Cash includes the cash in hand together with freely available balances on deposit with central banks and other financial instruments with maturities of less than three months from the date of acquisition. Cash flows in foreign currency are converted to the functional currency at the exchange rate prevailing on the date the cash flow occurs. 6. Assets and liabilities held for sale

In November 2013, BinckBank announced that in the context of a proposed divestment it would initiate a study of the available options for a sale or collaboration for its non-banking businesses, the BPO and software & licensing operations. The software and licensing operations are conducted by Able B.V., a separate unit of BinckBank N.V. The BPO services are provided by BinckBank N.V. from the business unit Professional Services. These two units operate collectively in the market under the name “Able”. A consultant has been engaged in relation to the sale, a plan has been formulated and potential buyers have been identified. Under the plan, potential buyers will be given access to the data room and the initial offers are expected to be made in the first quarter of 2014. BinckBank and potential buyers may have to take account of the application for a declaration of no objection from the regulator. BinckBank expects to complete the divestment of the BPO and software & licensing operations by the end of 2014.

161

Annual Report 2013

The items in the statement of financial position presented as assets and liabilities held for sale are as follows:

31 December 2013 x € 1,000

Assets Banks 2,066Intangible assets 366Property, plant and equipment 692Other assets 3,245Prepayments and accrued income 2,174Total assets 8,543

Current tax 644Other liabilities 1,513Accruals and deferred income 1,808Total liabilities 3,965

The assets and liabilities have been classified and measured according to the provisions of IFRS 5.

Goodwill impairment test In the determination of the carrying amount of the operations prior to reclassification to assets and liabilities held for sale, an impairment has been recognised for the entire amount of reported goodwill. For further information on the impairment, see note 13.

The associated assets and liabilities held for sale have been assessed by BinckBank on the basis of the provisions of IFRS 5 and will be classified as discontinued operations. The results, attributable to the shareholders of BinckBank, presented in the income statement under the item discontinued operations are as follows:

31 December 2013 31 December 2012 x € 1,000 x € 1,000

Income Net interest income 45 103Net fee and commission income 7,459 4,477Other income 9,616 10,265Total income 17,120 14,845

ExpensesEmployee expenses 15,151 13,846Depreciation and amortisation 344 261Other operating expenses 947 882Total expenses 16,442 14,989

Impairment of goodwill (10,047) -Result on discontinued operations (before tax) (9,369) (144)Tax (176) 34

Result on discontinued operations (after tax) (9,545) (110)

Ordinary earnings per share from discontinued operations (0.14) (0,00)

162

Ann

ual R

epor

t 20

13


7. Cash and Cash balances with central banks 332,523 365,362This item includes all cash and any credit balances available on demand from the central banks in countries where BinckBank has offices and the European Central Bank.

8. BanksDue from banks 144,784 144,916 This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:Credit balances available on demand 136,647 135,561 Call money 11 29Receivable from DNB in relation to the Deposit Guarantee Schemefor DSB Bank

8,126 9,326

144,784 144,916 The call money receivables have original maturities of less then three months. Interest is received on these balances at a variable rate based on market interest rates.

The development of the receivable from DNB in relation to DGSDSB Bank is as follows:Balance as at 1 January 9,326 9,458 Total contribution to DNB (1,875) (623)Movements in provision 668 445Revaluation 7 46Balance as at 31 December 8,126 9,326

Since 19 October 2009, DNB has been managing the deposit guarantee scheme (DGS) in relation to DSB Bank N.V. A total of approximately € 3.6 billion has been paid to the account holders at DSB Bank. This amount has been attributed by DNB across all the banks participating in the DGS. The liquidators of DSB Bank have apportioned the assets of DNB Bank in the period from 2011 to 2013. The loss expected as a result of the bankruptcy of DSB at year-end 2013 is estimated by the NVB (the Dutch Banking Association) at € 500 million (2012: € 650 million). BinckBank’s share amounts to € 2.2 million and is deducted from the account receivable, which is measured at the cash value of the estimated future cash flows. Revaluations are recognised directly in the income statement under result from financial instruments.

Notes to the consolidated statement of financial position

163

Annual Report 2013


Due to banks 15,034 20,060

BinckBank has sweeping arrangements with various banks whereby the debit and credit balances in a large number of bank accounts are regulated with a fixed treasury contra-account. This is only visible on the statement for the next business day; BinckBank accordingly may have a liability to a single bank account for a very short period.

9. Financial assets and liabilities at fair value with changes in fair value through profit or loss

Financial assets held for trading 70 168 This item comprises: SRD derivative receivables

Financial assets designated at fair value through profit and loss 19,130 15,876 This item comprises: Equity positions in relation to SRD receivables

Financial liabilities held for trading 486 65 This item comprises: SRD derivative payables

Financial liabilities designated at fair value through profit and loss

704 1,084

Equity positions in relation to SRD payables

BinckBank offers SRD (Service de Règlement Différé) contracts in France. An SRD contract is a transaction in a selected number of equities listed on Euronext Paris whereby payment for shares purchased or delivery of shares sold may be deferred until the last trading day of the month. The corresponding equity transaction in the cash market is executed by BinckBank in order to cover the price risk. In fact what happens is that BinckBank finances the transaction sum for the customer. Under IFRS, SRD receivables and payables are classified as a derivative and are recognised as financial assets and liabilities held for trading purposes. Financial instruments are recognised at fair value. Both unrealised and realised gains and losses are recognised directly in the income statement as result from financial instruments. The corresponding positions in equities are classified as financial assets and liabilities designated at fair value through profit and loss, because otherwise the treatment would not be consistent with the associated derivatives. Both unrealised and realised gains and losses are recognised directly in the income statement as result from financial instruments. Since BinckBank takes a position in equities which exactly offsets the SRD derivatives position held by the customer, there is a natural hedge of the price risk.

164

Ann

ual R

epor

t 20

13


10. Available-for-sale financial assets 1,582,146 1,515,549 This item comprises:Government bonds / government-guaranteed bonds 813,281 693,400 Other bonds 768,865 822,149

1,582,146 1,515,549

Movements in available-for-sale financial assets were:Balance as at 1 January 1,505,558 1,683,750 Redemptions (698,186) (514,710)Sales - - Purchases 792,482 355,160 Conversion of foreign currency (2,040) - Amortisation of premiums and discounts (18,500) (18,642)Balance as at 31 December 1,579,314 1,505,558 Revaluation as at 31 December 2,832 9,991 Balance as at 31 December 1,582,146 1,515,549

11. Loans and receivables 428,180 323,008 This item comprises receivables from private sector customers, including overnight loans and overdrafts that are collateralised by securities and bank guarantees (collateralised loans).

The analysis is as follows:Receivables collateralised by securities 423,209 319,139 Receivables collateralised by bank guarantees 4,933 3,846 Other receivables 441 459 Loans and receivables, gross 428,583 323,444 Less: impairment provision (403) (436)

428,180 323,008

The interest rate is based on EURIBOR or EONIA. Other receivables refers to remaining amounts receivable after foreclosure of collateral (securities and bank guarantees).

The changes in impairment provisions were as follows:Balance as at 1 January 436 424 Added 118 47 Recovered (150) (30)Write-offs (1) (5)Balance as at 31 December 403 436

The impairment provision is calculated on a specific basis.

165

Annual Report 2013


12. Associates and joint ventures 3,710 3,384 This item comprises:TOM Holding N.V. 2,277 1,093 BeFrank N.V. 1,433 2,291

3,710 3,384

The development of this item was as follows:Balance as at 1 January 3,384 3,219 Capital increases and acquisitions 2,719 3,745 Dilution result 2,300 550 Result on associates and joint ventures (4,693) (4,130)Balance as at 31 December 3,710 3,384

For disclosure of the investments and acquisitions and the dilution result, see note 37.

The associate TOM Holding N.V. has two subsidiary companies, TOM Broker B.V. that provides a best-execution service to affiliated parties and TOM B.V., which has a licence to operate as a multilateral trading facility (MTF market), on which equities and options are traded that are listed and traded on other markets. The shares of TOM Holding N.V. are not listed. BinckBank’s share in TOM Holding N.V. is recognised using the equity method.

Aggregate financial information of the associate is shown in the table below:

Country Interest Share in equity

Share in result

Assets Liabilities excl.

equityAssociates 2013TOM Holding N.V. NL 25.7% 2,277 (1,835) 11,905 3,037 Total 2,277 (1,835) 11,905 3,037

Associates 2012TOM Holding N.V. NL 34.2% 1,093 (2,212) 5,093 1,901 Total 1,093 (2,212) 5,093 1,901

The associate had no off balance sheet or investment commitments as at 31 December 2013 and 31 December 2012.

166

Ann

ual R

epor

t 20

13

BeFrank is a Premium Pension Institution (PPI) and a 50/50 joint venture between BinckBank and Delta Lloyd in the field of collective pensions. A PPI is a pension administrator (in addition to insurance companies and pension funds) that administers pension schemes and accrued pension capital, but does not bear the insurance risk. BinckBank’s share in BeFrank is recognised using the equity method.

Aggregate financial information on the joint venture, based on its financial statements, and reconciliation with the carrying amount of the investment in the consolidated financial statements is provided below:

Country Interest Share in equity

Share in result

Fixed assets

Current assets

Long-term

liabilities

Current liabilities

Total revenue

Total ex-

penseJoint ventures 2013BeFrank N.V. NL 50% 1,433 (2,858) 1,735 8,472 - 7,341 854 (6,570)Total 1,433 (2,858) 1,735 8,472 - 7,341 854 (6,570)

Joint ventures 2012BeFrank N.V. NL 50% 2,291 (1,918) 1,227 6,206 - 2,851 390 (4,227)Total 2,291 (1,918) 1,227 6,206 - 2,851 390 (4,227)

The joint venture had no off balance sheet or investment commitments as at 31 December 2013 and 31 December 2012.

167

Annual Report 2013

31 December 2013 31 December 2012x € 1,000 x € 1,000

13. Intangible assets 232,634 263,142The movements in 2013 were as follows:

Brand name Coredeposits

Customerbase

Software Goodwill Total

Balance as at 1 January 2013 - 42,048 65,529 2,636 152,929 263,142 Investments - - - 2,689 - 2,689 Disposals - cost - - - (381) (10,047) (10,428)Disposals - cumulative amortisation - - - 381 10,047 10,428 Impairments - - - - (10,047) (10,047)Reclassification to assets held-for-sale - cost

- - (930) (679) - (1,609)

Reclassification to assets held-for-sale - cumulative amortisation

- - 930 313 - 1,243

Amortisation - continuing operations - (8,410) (13,106) (1,168) - (22,684)Amortisation - discontinued operations - - - (100) - (100)Balance as at 31 December 2013 - 33,638 52,423 3,691 142,882 232,634

Cumulative cost 31,405 84,095 131,058 9,461 142,882 398,901 Cumulative amortisation and impairments (31,405) (50,457) (78,635) (5,770) - (166,267)Balance as at 31 December 2013 - 33,638 52,423 3,691 142,882 232,634

Amortisation period (years) 5 10 5-10 5

The movements in 2012 were as follows:

Brand name Coredeposits

Customerbase


Balance as at 1 January 2012 6,281 50,457 78,635 4,096 152,929 292,398 Investments - - - 390 - 390Disposals - cost - - - (5,338) - (5,338) Disposals - cumulative amortisation - - - 5,338 - 5,338Amortisation (6,281) (8,409) (13,106) (1,785) - (29,581)Amortisation - discontinued operations - - - (65) - (65)

Balance as at 31 December 2012 - 42,048 65,529 2,636 152,929 263,142

Cumulative cost 31,405 84,095 131,988 7,832 152,929 408,249 Cumulative amortisation and impairments (31,405) (42,047) (66,459) (5,196) - (145,107)Balance as at 31 December 2012 - 42,048 65,529 2,636 152,929 263,142

Amortisation period (years) 5 10 5 - 10 5

168

Ann

ual R

epor

t 20

13

In November 2013, BinckBank announced that in the context of a proposed divestment it would initiate a study of the available options for a sale or collaboration for its non-banking businesses, the BPO and software & licensing operations. The related intangible assets have been reclassified as assets held for sale.

The items ‘Brand name’ and ‘Customer deposits’ arise from the acquisition of Alex Beleggersbank. The item ‘Customer base’ arises from the acquisition of Able (heretofore Syntel) and Alex Beleggersbank.

Software includes purchased software and proprietary software developed by Able (heretofore Syntel), which is sold to its customers, as well as self-developed software for supporting BinckBank’s operations. The hours charged to these software development projects have been capitalised by BinckBank as software at an average hourly rate reflecting only direct staff costs.

Goodwill relates to the excess of the purchase price paid to acquire the activities of Alex Beleggersbank and Able (heretofore Syntel) over the fair value of the identifiable assets and liabilities.

Goodwill impairment test Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. An impairment is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. If the recoverable amount is lower than the carrying amount, an impairment is recognised. The net sale price is only included in the assessment if the price at which a transaction could be concluded between parties in the current market circumstances can be reliably estimated. In order to estimate the value in use, BinckBank makes an estimate of the expected future cash flows from the cash-generating unit and also determines a suitable discount rate for calculating the net present value of those cash flows.

The goodwill is allocated to the following individual cash-generating units:


Goodwill Retail Nederland (including Alex Asset Management Bank) 142,882 142,882 Able - 8,014 Business Process Outsourcing (BPO) - 2,033

142,882 152,929

Principal assumptions used in calculating the value in use:The recoverable amount of the cash-generating units is based on the value in use. Use has been made of cash flow projections over a period of five years, based on financial estimates used by management for setting targets. The cash flows beyond the 5-year horizon have been extrapolated, using growth rates of between 0% and 2%. Management has compared the principal assumptions against market estimates and market expectations.

The following assumptions have been used:2013 Retail Able/BPODiscount rate 9.60% 9.60%Expected growth rate beyond five-year horizon 2% 0%

2012 Retail Able BPODiscount rate 9.55% 9.98% 9.98%Expected growth rate beyond five-year horizon 2% 0% 0%

169

Annual Report 2013

Goodwill relating to Retail NederlandThe principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were: • The natural attrition rate and inflow of new private investors based on the trends of the past five years and the

budget, including a multi-year forecast, respectively. The conservatively estimated growth in the number of customers is reflected in the expected numbers of transactions and in the amounts of customer deposits and funds invested.

• The interest margin based on the actual interest margin achieved over the past year, allowing for the long-term effect of low interest rates.

• Commission income and expense, based on the expected average number of transactions and the average commission income and expense per transaction. The average income, expense and number of transactions are based on the recognised trends in the past year, including a limited recovery in transaction volumes and a flattening of average income per transaction.

• Growth of Alex based on the developments in the past year.

The impairment test of 2013 showed an increase in the value in use, mainly due to higher commission income from asset management. The results of the test gave no reason to suggest an impairment, and the derived market value was still 51.9% higher than the carrying amount of the Retail Nederland cash-generating unit.

As at 31 December 2013, the derived market value of the Retail Nederland cash-generating unit was higher than the carrying amount. Furthermore, there have been no changes in circumstances since the impairment test in the third quarter of 2013 that would give reason for a different view that could lead to an impairment being recognised.

Goodwill relating to AbleBinckBank N.V. announced that it would restructure its Professional Services activities and software and licensing operations under the new collective name “Able” in early 2013. In practical terms, this meant that the activities of software supplier Syntel and the Professional Services activities of BinckBank would be gradually combined, starting in 2013. During the elaboration of the plans for combining these organisations, it was decided that it would be better to continue the on-balance sheet services provided to independent asset managers, for which a banking license is required, at BinckBank. The cash-generating units of Able and BPO have continued under a common leadership, and because of their mutual interdependence with respect to the result, they have been combined into one cash-generating unit. Since the net sale price cannot be reliably estimated, the recoverable amount is determined on the basis of the value in use of the cash-generating unit, which is calculated on the basis of financial forecasts by the management. Since the recoverable amount has fallen below the carrying amount, in accordance with the provisions of IAS 36 an impairment of the goodwill relating to the activities of Able has been recognised in an amount of € 10.0 million.

Impairment testing of other intangible assetsThe various categories of intangible assets are tested annually or more frequently if events or changes in circumstances indicate that the carrying amount, less applicable annual amortisation, may be impaired. In the first instance, the test is made on the basis of the indicators mentioned in IAS 36.12, augmented by indicators identified by BinckBank compared with the assumptions on which the valuation of the identified immaterial assets was based at the time of the acquisition.

Intangible asset IndicatorBrand name Reputational damage to the Alex brand

Decision to limit the use of the Alex brandCore deposits Low customer deposits under the Alex brand compared to purchase date

Less interest margin compared to purchase dateCustomer base Higher attrition rate in Alex accounts compared to purchase date

Lower average revenues per acquired account than forecast at purchase dateSoftware Decision to limit the use of the acquired softwareGeneral Higher market interest rates, adverse effect on the discount rate

170

Ann

ual R

epor

t 20

13

If the test reveals an indication of impairment, BinckBank performs a full calculation of the recoverable amount of the cash-generating units. This calculation is made in the same way as that described for the calculation of the fair value of intangible assets identified on acquisition. At year-end 2012, the carrying amount of the brand name and software acquired during the acquisition was nil, meaning that the impairment triggers will no longer be tested for these items in 2013.

171

Annual Report 2013


14. Property, plant and equipment 38,835 43,684 The movements in 2013 were as follows:

Real estate Fixtures,fittings andequipment

Computer hardware

Other Total

Balance as at 1 January 2013 28,295 6,789 8,592 8 43,684 Investments - 167 2,000 - 2,167 Disposals - cost - - (875) - (875)Disposals - cumulative depreciation - - 875 - 875 Reclassification to assets held-for-sale - cost - (332) (1,087) - (1,419)Reclassification to assets held-for-sale - cumulative depreciation

- 190 537 - 727

Depreciation - continuing operations (618) (1,040) (4,418) (3) (6,079)Depreciation - discontinued operations - (61) (184) - (245)Balance as at 31 December 2013 27,677 5,713 5,440 5 38,835

Cumulative cost 29,827 9,105 20,973 12 59,917 Cumulative depreciation and impairments (2,150) (3,392) (15,533) (7) (21,082)Balance as at 31 December 2013 27,677 5,713 5,440 5 38,835

Depreciation period in years 50 5 - 10 5 5

The movements in 2012 were as follows:Real estate Fixtures,

fittings andequipment

Computer hardware

Other Total

Balance as at 1 January 2012 28,915 7,382 9,922 10 46,229 Investments - 389 2,651 - 3,040 Disposals - cost - (714) (2,254) - (2,968)Disposals - cumulative depreciation - 714 2,254 - 2,968 Depreciation (620) (924) (3,843) (2) (5,389)

- (58) (138) - (196)Balance as at 31 December 2012 28,295 6,789 8,592 8 43,684



The developments in the Dutch offices market led us to engage a recognised valuer to produce a valuation report of the real estate in 2012. The result of the valuation did not materially differ from the carrying amount, and gave no indication of impairment. Developments in the Dutch offices market in 2013 gave no reason to review this assessment.The investment in real estate includes prepayments in relation to a leasehold (operating lease) which expires on 15 April 2056. In 2013, an amount of € 256,000 in relation to amortisation of the leasehold is included in depreciation and amortisation (2012: € 256,000).

172

Ann

ual R

epor

t 20

13


15. Current taxCurrent tax assets 707 6,023 The balance at year-end relates to the last two financial years.

Current tax liabilities (197) (141)

These concern corporation tax payable by subsidiaries which are not part of the tax group.

The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows:

2013Amount

2013Percentage

2012Amount

2012Percentage

Standard tax rate 9,815 25.0% 7,962 25.0%Effect of different tax rates (in other countries)

197 0.5% 180 0.6%

Effect of substantial-holdingprivileges

598 1.5% 895 2.8%

Effect of tax facilities (295) -0.8% (774) -2.4%Other effects 475 1.3% 96 0.2%Total tax expense/tax burden 10,790 27.5% 8,359 26.2%

The effect of tax facilities includes benefits from lower tax rates as a result of innovation box agreements at the subsidiary Able Holding B.V. The other effects include various tax effects, such as tax adjustments to previous reporting years and differences arising because certain expense items are not deductible for tax purposes, such as the allocation of shares to employees under the remuneration policy. For tax purposes, the allocation of shares is treated as a matter between shareholders and thus cannot be offset against the taxable profit.

BinckBank has conducted a functional analysis of the methodology to determine valid ‘arm’s-length’ prices to be used for inter-company relations between BinckBank and its European offices branches, as defined in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, and implemented in line with the 2010 report on the attribution of profit to permanent establishments.

Based on the functional analysis and discussions with the tax authorities in the Netherlands and in France, a bilateral APA (advance pricing agreement) has been concluded between the Netherlands and France with respect to BinckBank. It has been agreed that the Transactional Net Margin Method (TNMM) should be used to calculate transfer prices, with gross operating revenue as the profit indicator. The profit margin of the foreign branch will be established as a fixed percentage of the ‘net fee and commission income’ and all other income and expenses will be borne by the head office in the Netherlands. Similar analyses are made for BinckBank’s other foreign offices and rounded off and agreed with the tax authority in the Netherlands. For branch offices that do not generate local income, BinckBank considers the cost-plus method to be the most suitable for the determination of transfer prices.

173

Annual Report 2013

31 December 2013

31 December 2012

16. Deferred taxCompositionDeferred tax assets - - Deferred tax liabilities (20,322) (19,919)Net deferred tax asset / (liability) (20,322) (19,919)

Maturity of deferred tax liabilities:Within one year (1,532) (3,673)One to five years (395) (2,071)Longer than five years (18,395) (14,175)

(20,322) (19,919)

1 January 2013

Movement via income statement

Movement via balance sheet

31 December 2013

Origin of deferred tax assets and liabilitiesAvailable-for-sale financial assets (2,497) - 1,540 (957)Goodwill and intangible assets (13,685) - (4,407) (18,092)Depreciation period differences fornon-current assets

(3,379) - 1,197 (2,182)

Temporary differences as a result of intercompany transactions

- 1,161 - 1,161

Other (358) - 106 (252)Net asset / (liability) (19,919) 1,161 (1,564) (20,322)

1 January 2012

Movement via income statement

Movement via balance sheet

31 December 2012

Origin of deferred tax assets and liabilitiesAvailable-for-sale financial assets (824) - (1,673) (2,497)Goodwill and intangible assets (10,948) - (2,737) (13,685)Depreciation period differences fornon-current assets

(3,997) - 618 (3,379)

Other (864) 399 107 (358)Net asset / (liability) (16,633) 399 (3,685) (19,919)

The item available-for-sale financial assets relates to the deferred tax on unrealised profits as a result of the revaluation of the investment portfolio.

The goodwill and intangible assets in the deferred tax liabilities relate to the differences between the commercial and fiscal amortisation of the goodwill and intangible assets acquired due to the acquisition of Alex.

The depreciation period differences for non-current assets relate to tax facilities with regard to accelerated depreciation on certain investments in non-current assets in the period 2010-2011.

The temporary differences relating to intercompany transactions are the result of eleminated transactions in the consolidation of which the current tax is recognised in different fiscal entities at different moments in several years.

174

Ann

ual R

epor

t 20

13


17. Other assets 30,590 20,818 This item comprises:Trade receivables 1,059 4,660 Receivables relating to securities sold, but not yet delivered 28,125 14,236 Other receivables 1,406 1,922

30,590 20,818 Trade receivables, receivables relating to securities sold but not yet delivered and other receivables are settled within one year.The item receivables arising from securities sold but not yet delivered can fluctuate on a daily basis in line with movements in the market and the total size of the number of transactions.

18. Prepayments and accrued income 53,179 41,679 This item comprises:Interest receivable 25,285 26,269 Commission receivable 23,283 10,450 Other prepayments and accrued income 4,611 4,960

53,179 41,679 Other prepayments and accrued income concern mainly prepaid IT maintenance contracts.

19. Derivatives positions held on behalf of customers 334,373 254,165 The derivative positions held on behalf of customers are held in BinckBank’s own name but for the customer’s account and at the customer’s risk.

20. Customer deposits 2,335,640 2,213,049 This item comprises:Demand deposits savings accounts 363,093 424,388 Demand deposits in current accounts 1,972,547 1,788,661

2,335,640 2,213,049

21. Provisions 4,532 2,400 This item comprises:Provision for legal disputes 4,392 1,012 Other provisions 140 1,388

4,532 2,400 The movement in the provision for legal provisions was as follows:Balance as at 1 January 1,012 1,958 Addition charged to income 3,929 432 Withdrawn from the provision (110) (722)Released to income (439) (656)Balance as at 31 December 4,392 1,012

175

Annual Report 2013


The provision include an estimate of the potential loss for BinckBank as a result of legal proceedings instituted against BinckBank. For the settlement of legal disputes BinckBank is dependent on the activities of third parties, however it expects these to be settled within a period of one year.

The movement in the other provisions were as follows:

Balance as at 1 January 1,388 982

Addition charged to income 3,267 1,388

Withdrawn from the provision (4,180) (797)

Released to income (335) (185)

Balance as at 31 December 140 1,388

The item other provisions includes provisions in relation to individual payments that will fall due on termination of employment agreements. BinckBank expects the provisions to be settled within a period of six months.

BinckBank operates in an environment that is regulated by legislation and supervision that means the organisation is exposed to significant legal processes and associated risks arising from disputes and regulatory requirements. BinckBank is therefore involved in various disputes and legal proceedings. The results of these proceedings are uncertain and difficult to predict. These uncertainties affect the amount and term of potential cash outflow, and thereby on the measurement of a provision.BinckBank also has numerous cross-border contracts with suppliers, meaning differences of opinion regarding the interpretation of the contract conditions in the various jurisdictions may occur. Opinions in relation to these contracts may give reason to form a provision.

For some provisions, BinckBank discloses the circumstances and the amount of the provision. In other cases, BinckBank chooses not to do so because management considers that disclosure of the circumstances and the amount involved could damage BinckBank’s position in the proceedings in question.

176

Ann

ual R

epor

t 20

13

31 December 2013 31 December 2012

x € 1,000 x € 1,000

22. Other liabilities 53,032 20,163 This item comprises:Liabilities in respect of securities transactions not yet settled 41,944 10,182 Tax and social security contributions 4,386 3,273 Trade payables 4,040 3,820 Other liabilities 2,662 2,888

53,032 20,163 The item liabilities in respect of securities transactions not yet settled can fluctuate on a daily basis in line with movements in the market and the total size of the number of transactions.

23. Accruals and deferred income 9,488 11,507 This item comprises:Accrued interest 1,056 2,294 Employee expenses 4,850 4,808 Stock exchange and clearing costs payable 793 681 Other accruals and deferred income 2,789 3,724

9,488 11,507

Employee expenses under this heading mostly concern performance-related pay to board members and employees of BinckBank.

177

Annual Report 2013


24. Equity 431,631 455,221 This item comprises:Issued share capital 7,450 7,450 Share premium reserve 373,422 373,422 Treasury shares (30,340) (21,539)Fair value reserve 2,124 7,493 Unappropriated profit 19,248 24,100 Other reserves 59,720 64,286 Non-controlling interests 7 9

431,631 455,221

Issued share capital 7,450 7,450

A total of 74,500,000 ordinary shares were in issue (with a nominal value of € 0.10 per share). The share capital is fully paid up.

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium reserve 373,422 373,422

The share premium reserve is tax exempt.

Treasury shares (30,340) (21,539)

Number Amount Number Amount Balance as at 1 January 3,151,213 (21,539) 464,117 (3,954)Sold to executive board and employees - - - - Issued to executive board and employees (44,586) 310 (49,395) 420 Buy-back of shares 1,276,753 (9,111) 2,736,491 (18,005)Balance as at 31 December 4,383,380 (30,340) 3,151,213 (21,539)

As at 1 January 2013, the number of treasury shares held was 3,151,213, acquired at an average purchase price of € 6.84. In 2013, 1,276,753 shares were repurchased at an average price of € 7.14. In 2013, 44,586 shares were granted to the executive board and employees in connection with the settlement of the remuneration policy at an average purchase price of € 6.94.

The carrying amount of the treasury shares at year-end 2013 are measured at the average purchase price of € 6.92. The change in equity in respect of treasury shares reflects the amounts bought and sold. The quoted share price at year-end 2013 was € 7.71 (2012: € 6.22).

178

Ann

ual R

epor

t 20

13


Fair value reserve 2,124 7,493 The reserve comprises the fair value gains and losses, aftertax, on available-for-sale financial assets.

This item comprises:Unrealised profits 3,826 10,436 Unrealised losses (994) (445)Tax on unrealised profits and losses (708) (2,498)

2,124 7,493

The movements in the fair value reserve were as follows:Balance as at 1 January 7,493 (973)Movement in fair value (7,159) 11,289 Tax on the movement in value 1,790 (2,823)Balance as at 31 December 2,124 7,493

Other reserves 59,720 64,286 Balance as at 1 January 64,286 59,361 Payment of interim dividend (9,115) (12,365)Grant of rights to shares 529 1,105 Shares granted to executive board and employees (310) (420)Appropriation of profit for previous year 4,325 16,605Other movements 5 - Balance as at 31 December 59,720 64,286

Unappropriated profit 19,248 24,100 Balance as at 1 January 24,100 34,210 Payment of final dividend (19,775) (17,605)Addition to other reserves (4,325) (16,605)Result for the year 19,248 24,100 Balance as at 31 December 19,248 24,100

Non-controlling interests 7 9Balance as at 1 January 9 7 Capital injection non-controlling interests 320 722 Result attributable to non-controlling interests (322) (720)Balance as at 31 December 7 9

The non-controlling interests arose due to the acquisition of a 60% interest in ThinkCapital Holding B.V. in 2010.BinckBank has a primary preference on certain retained reserves up to an amount of € 1.1 million. The total measurement of the non-controlling interests is therefore equal to the paid-up nominal share capital plus the part of the retained reserves in excess of the value of BinckBank’s primary preference. For a more detailed description see note 37: Related parties.

179

Annual Report 2013

2013 2012 x € 1,000 x € 1,000

25. Net interest income 27,641 31,921 This includes all income and expense items relating to the lending and borrowing of money, providing they are of a similar nature to interest, as well as interest income on credit balances or interest expense on overdrafts.

This item comprises:Interest incomeBalances with central banks 249 409 Available-for-sale financial assets 15,126 24,874 Loans and receivables 17,624 17,092 Other interest income 46 245

33,045 42,620 The interest income recognised on non-performing loans is € 14,000 (2012: € 15,000).

Interest expenseInterest on customer deposits measured at amortised cost 5,332 10,421 Other interest expense 72 278

5,404 10,699

26. Net fee and commission income 130,477 109,186 Net fee and commission income comprises fees for services as performed for and by third parties in respect of securities transactions and related services.

This item comprises:Fee and commission incomeCommission income 110,468 110,583 Distribution fees 6,185 7,600 Custody services 4,130 6,207 Asset management fees 30,336 11,034 Other commission income 7,795 4,729

158,914 140,153

The item asset management fees includes a performance fee of € 17.2 million (2012: € 4.1 million).The item other fee and commission income includes all-in service fees, charges for foreign currency transactions and transfers, and other securities services.

Fee and commission expenseStock exchange and clearing costs 19,665 18,525 Return commission to independent investment managers 5,726 9,476 Other commission expense 3,046 2,966

28,437 30,967

Other commission expense includes fees for the deposit and withdrawal of securities, transfer fees and other management activities.

Notes to the consolidated income statement

180

Ann

ual R

epor

t 20

13

2013 2012 x € 1,000 x € 1,000

27. Other income 1,433 1,715

The item other income includes fees for subscriptions, courses, currency results, and other income and expense items that cannot be accounted for under other items.

28. Result from financial instruments 7 47 This item comprises:Result from SRD (Service de Règlement Différé)Result on SRD derivative positions (3,053) 1,248 Result on SRD equity positions 3,053 (1,248)

- - The SRD receivables and payables are classified as derivatives and are recognised as financial assets and liabilities held for trading. Movements in value are recognised directly in the income statement under result from financial instruments. The corresponding positions in equities are classified as financial assets and liabilities at fair value through profit or loss. Movements in value are also recognised under result from financial instruments. Since BinckBank takes a position in equities which exactly offsets the customers’ SRD derivatives position, there is a natural hedge of the price risk.

Result from other financial instrumentsOther results from financial instruments 7 47

7 47

29. Impairment of financial assets 32 (2) This item comprises:Loans and receivables 32 (2)

32 (2)

181

Annual Report 2013

2013 2012

x € 1,000 x € 1,000 30. Employee expenses 36,405 36,211 This item comprises:Salaries 24,373 24,381 Social security contributions 4,376 4,001 Pension costs 1,888 1,824 Profit sharing and performance-related pay 2,391 1,575 Other employee expenses 3,377 4,430

36,405 36,211 The levy on salaries exceeding € 150,000 introduced in the Budget Agreement 2013 Tax Measures (Implementation) Act (Wet uitwerking fiscale maatregelen 2013) that originally was only to apply to the year 2013 has been continued in the Budget Agreement 2014 Tax Measures (Implementation) Act. The amounts have been charged to 2012 and 2013 respectively under the item social insurance contributions.

Number of employees (including members of the executive board).Average during the financial year 680 665 End of the financial year 714 639

The following expenses are included in employee expenses in relation to associated parties (executive board and supervisory board)

Salaries 1,065 1,317 Social security contributions 153 219 Pension costs 213 263 Performance-related pay 683 198 Severance payments - 300 Remuneration of supervisory directors 172 172

2,286 2,469

Details of the remuneration paid to the individual members of the executive board and supervisory board of BinckBank N.V. are disclosed in the remuneration section of the annual report on pages 126-130. At year-end 2013, members of the executive board had no loans collateralised by securities on the general conditions applying to employees (2012: € nil).

182

Ann

ual R

epor

t 20

13

Implementation of the variable performance pay policyAn amended remuneration policy in accordance with the Regulation for a Controlled Remuneration Policy in the Wft 2011 of DNB was approved by the General Meeting of Shareholders held on 23 April 2012. The amended remuneration policy took effect with retroactive effect as of 1 January 2011, and also applies to the 2013 financial year. The effects of payments in shares for 2011 are recognised in the allocation of shares which took place in April 2012.

50% of the payment is made in issued shares, and 50% in cash. The full payment is spread over three years, with 50% being paid on the initial establishment of the performance delivered in the case of the executive board, and 60% in the case of other Identified Staff. After re-evaluation by the remuneration committee of the performance delivered in the performance period, the remainder is paid pro rata in the three years following the performance year.

An employee expense of € 529,000 is recognised in 2013 in relation to the fair value of the variable performance fee in shares for the performance year 2013. An employee expense of € 545,000 is recognised in 2012 in relation to the fair value of the variable performance fee in shares for the performance year 2012.

The fair value of shares in the future is equal to the fair value at the time of measurement. This fair value is adjusted for: • ‘Missed’ dividends, by discounting the value of the shares by a dividend yield; • The lock-up period, by adjusting the value for the value of an American call option, calculated using a binomial tree.

The parameters used in the calculation of the fair value of the variable performance fee payable in shares are stated below.

2013 2012Share price on initial allocation date € 6.22 € 8.33Volatility 35.0% 35.0%Dividend yield 7.2% 5.3%Risk-free interest rate 1.5% 2.4%Average fair value of share price on allocation date € 4.55 € 6.21

The projected volatility is estimated on the basis of the historical daily volatility of BinckBank shares. The dividend yield is determined by dividing the dividend in the previous financial year (interim and final) by the share price at the end of the previous financial year.

183

Annual Report 2013

The total variable performance pay for the executive board and Identified Staff are shown in the tables below.

x € 1,000 Total In cashIssue of shares

(in cash)Issue of shares

(in shares)Variable performance pay in 2013E. Kooistra 223 112 111 14,484P. Aartsen 208 104 104 13,514K. Beentjes 251 126 125 16,286Other Identified Staff 762 380 382 49,369Total 1,444 722 722 93,653

Variable performance pay in 2012N. Bortot 45 23 22 3,620E. Kooistra 48 24 24 3,821P. Aartsen 49 25 24 3,922K. Beentjes 56 28 28 4,525Other Identified Staff 442 220 222 35,629Total 640 320 320 51,517

The variable performance fee paid in shares is converted at the closing share prices for the performance year in question (2013: € 7.71; 2012: € 6.22).

184

Ann

ual R

epor

t 20

13

The following tables show the amounts paid and yet to be paid in shares and cash to the executive board and Identified Staff. All future payments in shares and cash are subject to the re-evaluation of the performances delivered in the relevant performance year. The performances in 2012 and 2011 were re-evaluated at year-end 2013, and a revision was made with respect to Identified Staff whereby entitlements to cash payments and shares have been cancelled. No claw-back has been applied to variable performance remunerations that have been paid. The following tables are included on the basis of projected payments and distributions.

(in numbers)Total Shares

cancelled Shares issued

To be issued after AGM

2014

Shares still to be issued

Variable performance pay in shares 2013

-

E. Kooistra 14,484 - - 7,242 7,242 P. Aartsen 13,514 - - 6,757 6,757 K. Beentjes 16,286 - - 8,143 8,143 Other Identified Staff 49,369 - - 29,624 19,745 Total 93,653 - 51,766 41,887

Variable performance pay in shares 2012N. Bortot 3,620 - 1,810 604 1,206 E. Kooistra 3,821 - 1,911 637 1,273 P. Aartsen 3,922 - 1,961 654 1,307 K. Beentjes 4,525 - 2,263 754 1,508 Other Identified Staff 35,629 - 21,383 4,753 9,493 Total 51,517 - 29,328 7,402 14,787

Variable performance pay in shares 2011N. Bortot 11,017 - 7,345 1,836 1,836 E. Kooistra 11,017 - 7,345 1,836 1,836 P. Aartsen 11,935 - 7,957 1,989 1,989 K. Beentjes 13,771 - 9,181 2,295 2,295 Other Identified Staff 42,529 1,237 30,784 5,258 5,250 Total 90,269 1,237 62,612 13,214 13,206

185

Annual Report 2013

x € 1.000

Total to be payed in cash

Cash payments cancelled

Paid in cashTo be paid

in cash after AGM 2014

Still to be paid in cash

Variable performance fee in cash 2013E. Kooistra 112 - - 56 56 P. Aartsen 104 - - 52 52 K. Beentjes 126 - - 63 63 Other Identified Staff 380 - - 228 152 Total 722 - - 399 323

Variable performance fee in cash 2012N. Bortot 23 - 11 4 8 E. Kooistra 24 - 12 4 8 P. Aartsen 25 - 12 4 9 K. Beentjes 28 - 14 5 9 Other Identified Staff 220 - 133 29 58 Total 320 - 182 46 92

Variable performance fee in cash 2011N. Bortot 92 - 61 15 16 E. Kooistra 92 - 61 15 16 P. Aartsen 100 - 66 17 17 K. Beentjes 114 - 76 19 19 Other Identified Staff 354 10 256 44 44 Total 752 10 520 110 112

Under the remuneration policy, the cash payments not yet paid amounts are interest-bearing. BinckBank pays interest according to general conditions of employment at a rate derived from the interest paid to customers of Alex Sparen. The figures shown above are exclusive of interest. A total of € 3,000 (2012: € 5,000) in interest on cash payments not yet paid is recognised in the income statement in 2013. The figures have been discounted using the expected interest due on the variable performance remunerations in cash not yet paid.

186

Ann

ual R

epor

t 20

13

2013 2012 x € 1,000 x € 1,000

31. Amortisation and depreciation 28,763 34,970 This item comprises amortisation and depreciation on:Intangible assets 22,684 29,581 Property, plant and equipment 6,079 5,389

28,763 34,970

32. Other operating expenses 52,768 36,257 This item comprises:Marketing costs 15,552 13,791 ICT costs 12,423 8,590 Audit and professional services 6,535 4,385 Premises costs 1,939 1,908 Communication and information costs 11,227 7,680 Miscellaneous overheads 5,092 (97)

52,768 36,257 The item Miscellaneous overheads includes a non-recurring VAT benefit of € 2.1 million concerning an additional reclaim of VAT for the years subsequent to 2008 (pro rata VAT).

187

Annual Report 2013

2013 2012 x € 1 000 x € 1,000

33. Earnings per shareThe basic earnings per ordinary share are calculated by dividing the earnings attributable to ordinary shareholders for the period by the weighted average number of shares outstanding during the period.

The calculation of the earnings per share is based on thefollowing:Result from continuing operations (after tax) 28,471 23,490 Result from discontinued operations (after tax) (9,545) (110)Net result after tax 18,926 23,380 Result attributable to minority shareholders (322) (720)Result attributable to shareholders of BinckBank N.V. 19,248 24,100

Number of shares in issue on 1 January 74,500,000 74,500,000 Less: repurchased shares on 1 January (3,151,213) (464,117)

71,348,787 74,035,883 Weighted average number of shares relating to (*):Issued to executive board and employees 30,632 33,968 Repurchased (946,840) (1,268,560)Average number of shares in issue 70,432,579 72,801,291

(*) The above numbers are based on the total numbers disclosed in note 24, taking account of the date of movement in equity

Earnings per share on continuing operations (in €) 0.41 0.33 Earnings per share on discontinued operations (in €) (0.14) 0.00 Earnings per share (in €) 0.27 0.33

There are no rights outstanding that could lead to a dilution of earnings per share. The diluted earnings per share are therefore the same as the basic earnings per share, and consequently are no longer separately disclosed in these financial statements. No other transactions in ordinary shares or potential ordinary shares that could lead to a dilution were conducted between the reporting date and the date of completion of these financial statements.

188

Ann

ual R

epor

t 20

13

2013 2012 x € 1,000 x € 1,000

34. Dividend distributed and proposedDeclared and paid during the yearDividend on ordinary shares:Final dividend for 2012: € 0.28 (2011: € 0.24) 19,775 17,605 Interim dividend for 2013: € 0.13 (2012: € 0.17) 9,115 12,365

28,890 29,970

Proposed for approval by the general meeting ofshareholders (not recognised as a liability as at 31 December)Dividend on ordinary shares: Final dividend for 2013: € 0.26 (2012: € 0.28) 19,370 20,860

35. Fair value of financial instrumentsBinckBank has classified its financial instruments that are measured in the balance sheet at fair value in a hierarchy of three levels based on the priority of the inputs to the valuation. The fair value hierarchy assigns the highest priority to quoted prices in an active market for similar assets and liabilities and the lowest priority for techniques based on unobservable input. An active market for assets and liabilities is a market in which transactions for assets and liabilities occur with sufficient frequency and volume to provide reliable price information on an ongoing basis.

The fair value hierarchy consists of three levels:

Level 1: Fair value is determined on the basis of quoted prices in an active market

Level 2: Measurement techniques using observable market parameters

Level 3: Measurement techniques using input not based on an observable market and which has a more than immaterial effect on the fair value of the instrument.

Observable input concerns market data that are obtained from independent sources. Unobservable input is input based on subjective assumptions by BinckBank with regard to factors used by market participants to determine the price of an asset or liability developed on the basis of best information available in the circumstances. Unobservable input may include factors such as volatility, correlation, spreads to discount rates, default rates, recovery rates, prepayment rates and certain credit spreads.

Other notes to the consolidated financial statements

189

Annual Report 2013

The fair value of financial instruments measured at fair value is determined as follows:

31 December 2013Level 1 Level 2 Level 3 Totalx € 1,000 x € 1,000 x € 1,000 x € 1,000

Financial assets held for trading - 70 - 70 Financial assets designated at fair value through profit and loss 19,130 - - 19,130 Available-for-sale financial assets - 1,582,146 - 1,582,146 Total assets 19,130 1,582,216 - 1,601,346

Financial liabilities held for trading - 486 - 486 Financial liabilities designated at fair value through profit and loss

704 - - 704

Total liabilities 704 486 - 1,190

31 December 2012Level 1 Level 2 Level 3 Totalx € 1,000 x € 1,000 x € 1,000 x € 1,000

Financial assets held for trading - 168 - 168 Financial assets designated at fair value through profit and loss 15,876 - - 15,876 Available-for-sale financial assets - 1,515,549 - 1,515,549 Total assets 15,876 1,515,717 - 1,531,593

Financial liabilities held for trading - 65 - 65 Financial liabilities designated at fair value through profit and loss

1,084 - - 1,084

Total liabilities 1,084 65 - 1,149

Level 1: The fair value is determined on the basis of quoted prices in an active marketThe fair value of all financial instruments in this category is determined on the basis of quoted prices originating from a stock exchange, broker or data provider, providing that these prices reflect orderly transactions between market participants. In BinckBank’s case, this concerns the equity positions relating to SRD receivables and payables. The price between the bid and offer price that best represents the fair value in the given circumstances must be used to determine the fair value. Generally, this is the offer price for long positions and the bid price for short positions. In the case of SRD, where risk-compensating positions are taken between the position in securities and derivatives (implicit hedge), this is the mid price.

Level 2: Measurement techniques using observable market parametersThe fair value of all financial instruments in level 2 is determined using a measurement technique for which the input is derived from market prices, however there is no demonstrably active market. In this case the available prices are substantiated mainly using market information such as interest rates and current risk premiums associated with the various credit ratings.In BinckBank’s case, this concerns the following financial instruments: • Derivatives positions in relation to SRD receivables and payables.

This concerns OTC (Over The Counter) derivatives which are directly agreed with individual customers and not traded in a separate market. The value is directly derived from the market prices of the underlying listed equities.

• Investment portfolio - bonds The investment portfolio concerns current bonds that are mainly traded between professional market participants without the intermediation of a regulated market. Prices are available from brokers on request. Transactions in these bonds are not centrally registered or published by a stock exchange, and BinckBank is thus of the opinion that there is no demonstrably active market.

No financial assets were reclassified from level 2 to level 1or to level 3 in 2012 or 2013.

190

Ann

ual R

epor

t 20

13

Level 3: Measurement techniques using input not based on an observable market and which has a more than immaterial effect on the fair value of the instrumentAny financial instruments in this category are individually assessed. Valuation is based on a management best estimate, taking account of the last known prices and analysis by external valuation agencies. BinckBank has no financial instruments in this category.

No financial assets were reclassified from level 3 to level 2 in 2012 or 2013.

All other financial assets and liabilities concern financial instruments available on demand, for which the carrying amount is a representative approximation of the fair value. In accordance with IFRS 7.29 these items are presented at the carrying amount.

36. Classification of assets & liabilities by expected maturityThe table below shows the assets and liabilities classified by expected remaining life to maturity.

As at 31 December 2013< 12 months > 12 months Total

x € 1,000 x € 1,000 x € 1,000AssetsCash and balances with central banks 332,523 - 332,523 Banks 136,658 8,126 144,784 Financial assets held for trading 70 - 70 Financial assets designated at fair value through profit and loss 19,130 - 19,130 Available-for-sale financial assets 638,850 943,296 1,582,146 Loans and receivables 428,180 - 428,180 Investment in associates and joint ventures - 3,710 3,710 Intangible assets - 232,634 232,634 Property, plant and equipment - 38,835 38,835 Current tax 707 - 707 Other assets 30,590 - 30,590 Prepayments and accrued income 53,179 - 53,179 Derivative positions held on behalf of customers 334,373 - 334,373 Assets held for sale 8,543 - 8,543 Total assets 1,982,803 1,226,601 3,209,404

LiabilitiesBanks 15,034 - 15,034 Financial liabilities held for trading 486 - 486 Financial liabilities designated at fair value through profit and loss

704 - 704

Customer deposits 2,335,640 - 2,335,640 Provisions 4,532 - 4,532 Current tax 197 - 197 Deferred tax 1,532 18,790 20,322 Other liabilities 52,503 529 53,032 Accruals and deferred income 9,488 - 9,488 Derivative positions held on behalf of customers 334,373 - 334,373 Liabilities held for sale 3,965 - 3,965 Total liabilities 2,758,454 19,319 2,777,773

Net (775,652) 1,207,283 431,631

191

Annual Report 2013

36. Classification of assets & liabilities by expected maturity (continued)The table below shows the assets and liabilities classified by expected remaining life to maturity.

As at 31 December 2012< 12 months > 12 months Total

x € 1,000 x € 1,000 x € 1,000AssetsCash and balanced with central banks 365,362 - 365,362 Banks 135,590 9,326 144,916 Financial assets held for trading 168 - 168 Financial assets designated at fair value through profit and loss 15,876 - 15,876 Available-for-sale financial assets 704,404 811,145 1,515,549 Loans and receivables 323,008 - 323,008 Investment in associates and joint ventures - 3,384 3,384 Intangible assets - 263,142 263,142 Property, plant and equipment - 43,684 43,684 Current tax 6,023 - 6,023 Other assets 20,818 - 20,818 Prepayments and accrued income 41,679 - 41,679 Derivative positions held on behalf of customers 254,165 - 254,165 Assets held for sale - - - Total assets 1,867,093 1,130,681 2,997,774

LiabilitiesBanks 20,060 - 20,060 Financial liabilities held for trading 65 - 65 Financial liabilities designated at fair value through profit and loss

1,084 - 1,084

Customer deposits 2,213,049 - 2,213,049 Provisions 2,400 - 2,400 Current tax 141 - 141 Deferred tax 3,673 16,246 19,919 Other liabilities 19,821 342 20,163 Accruals and deferred income 11,507 - 11,507 Derivative positions held on behalf of customers 254,165 - 254,165 Liabilities held for sale - - - Total liabilities 2,525,965 16,588 2,542,553

Net (658,872) 1,114,093 455,221

192

Ann

ual R

epor

t 20

13

37. Related partiesThe consolidated financial statements include the following BinckBank related parties:

Main activity Country Interest year-end

2013

Interest year-end

2012Consolidated companies:Able Holding B.V. * ICT services Netherlands 100% 100%Bewaarbedrijf BinckBank B.V. Securities custody Netherlands 100% 100%ThinkCapital Holding B.V. Investment management Netherlands 60% 60%

Joint ventures:BeFrank N.V. Collective pension accumulation Netherlands 50% 50%

Associates:TOM Holding N.V. Multilateral trading facility &

smart order routerNetherlands 25.7% 34.2%

* All figures for the 2013 financial year relating to Able Holding B.V. are presented under assets and liabilities held for sale and result from discontinued operations.

The group of related parties consists of consolidated companies, joint ventures, associates, and the executive board and supervisory board of BinckBank. The interest presented is equal to the voting rights held in relation to the company concerned.

Terms and conditions of transactions with related partiesTransactions with related parties are conducted on commercial terms and conditions and at market prices.As at year-end 2013, BinckBank has not recognised any bad debt provisions for receivables from related parties (2012: nil). The judgement concerning the need for such provisions is made each year on the basis of an assessment of the financial position of the individual related parties and the markets in which they operate. No guarantees have been issued or received with regard to related parties.

ThinkCapital Holding B.V.An additional capital injection of € 800,000 (2012: € 1,804,000) was invested by the shareholders in 2013, € 480,000 of which was contributed by BinckBank. BinckBank holds a primary preference on retained reserves up to an amount of € 1.1 million, followed by a secondary preference of the other shareholders up to an amount of € 1.1 million. The results in the financial year are allocated to the shareholders, i.e. BinckBank and the other shareholders, taking into account the preferences as established in the shareholder agreements.

BeFrank N.V.An additional capital injection of € 2,000,000 was invested in the joint venture BeFrank N.V. in 2013.An amount of € 559,000 was charged in relation to ICT and administrative services in 2013 (2012: € 418,000). At year-end 2013, BinckBank had a receivable from BeFrank N.V. of € 216,000 (2012: € 186,000).

TOM Holding N.V.An additional capital injection of € 719,000 was paid into the associate TOM Holding B.V. in 2013. BinckBank provided premises, office automation and administrative services to TOM in 2013, for which a fee of € 396,000 (2012: € 561,000) is recorded. In 2013, € 3,805,000 (2012: € 767,000) was charged to BinckBank by subsidiary companies of TOM Holding N.V. for securities services. At year-end 2013, BinckBank had an account payable to TOM Holding B.V. and its subsidiaries of € 457,000 (2012: € 102,000).

On 10 December 2012 it was announced that NASDAQ OMX had acquired a 25% interest in TOM Holding N.V. The associated share issue and payment for the shares were completed on 17 April 2013. BinckBank’s holding has thus been diluted to 25.7% (previously 34.2%). A dilution profit in an amount of € 2.3 million was recognised in the second quarter of 2013.

193

Annual Report 2013

In a shareholder agreement the existing shareholders have granted an option to NASDAQ OMX to increase its holding from 25% to 50.1%, subject to conditions and regulatory approval. This option may be exercised on two occasions each year in a 30-day period following 1 January and 1 July of each year and expiring on 2 July 2018. NASDAQ OMX has not exercised its option in the 30 days following 1 January 2014.

No transactions involving the executive board or the supervisory board took place during the year other than under contracts of employment. See note 29 on Employee expenses and the broad outlines of the remuneration report on page 126 of the annual report for further details.

Transactions with consolidated companies are fully eliminated in the consolidated financial statements.


38. Off balance sheet commitmentsContingent liabilitiesLiabilities in respect of contracts of suretyship and guarantees

2,729 2,558

Liabilities in respect of irrevocable facilities - -

Suretyships and guaranteesTo meet the requirements of its clients, BinckBank offers products such as contracts of suretyship and guarantees in relation to loans. The underlying value of these products is not presented as assets or liabilities in the statement of financial position. The above figure represents the maximum potential credit risk for BinckBank related to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

Alex Bottom-LineWith acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the Dutch Shareholders’ Association (the VEB). If BinckBank terminates the VEB agreement, it will be liable to pay an amount equal to the custody fee and dividend commission paid by each customer of Alex Bottom-Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each customer on exceeding set limits.

Acquisition of SNS FundcoachIn 2013, BinckBank reached an agreement regarding the acquisition of the Fundcoach business of SNS for a price of up to € 3 million by means of an asset and liability transaction. The actual transfer of the assets and liabilities will take place in 2014, after which BinckBank will take control of this business. This will lead to recognition of the assets and liabilities in the consolidated statement of financial position at that time. The assets and liabilities relating to Fundcoach as at 31 December 2013 are not reported. The assets and liabilities to be acquired concern mainly bank balances, domain and brand names, and customer deposits. Completion of the transaction is subject to obtaining a declaration of no objection from De Nederlandsche Bank.

Lease commitmentsThe company has leases and service contracts for office premises in the Netherlands, Belgium, France, Spain and Italy. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined annual expense relating to office rents and operating lease payments for the vehicles at year-end 2013 amounts to € 3.0 million (2012: € 3.2 million).


The remaining maturity of the outstanding liabilities is as follows:Within one year 2,750 2,642One to five years 2,982 2,759Longer than five years 692 262

194

Ann

ual R

epor

t 20

13

Legal proceedingsBinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or results, with the exception of the cases reported under the note on provisions.

Legal proceedings concerning TOMEuronext has commenced substantive proceedings against BinckBank and TOM for among other things infringement of Euronext’s brand rights. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcome of these proceedings is not likely to have material adverse effects on BinckBank’s financial position or results.

International services subject to foreign legislationBinckBank takes international services from data and other suppliers that may be subject to foreign legislation, meaning there is an inherent risk of differences of interpretation. The executive board believes that while the outcome of discussions regarding such differences of interpretation is uncertain when they do arise, there is currently no reason to assume that this could have material adverse effects on BinckBank’s financial position or results.

Deposit guarantee schemeThe deposit guarantee scheme (DGS) is intended to guarantee certain deposits by accountholders if a bank cannot meet its obligations. The scheme provides security for deposits of up to € 100,000 and applies per accountholder per bank, regardless of the number of accounts held. In case of a joint account operated by two persons, the maximum applies per person. More or less all savings accounts, current accounts and term deposits are covered. Equities or bonds are not covered. If a credit institution finds itself in difficulties and does not have sufficient funds to pay all or part of the guaranteed amounts to its account holders, De Nederlandsche Bank will make up the difference. The total amount paid out by DNB will then be recovered from the banks on a pro rata basis.

The funding of the deposit guarantee scheme will be changed from an ex-post basis to an ex-ante basis with effect from 1 July 2015. The banks will then have to contribute a sum to a fund for the deposit guarantee scheme on a quarterly basis. The Stichting Depositogarantiefonds will be the owner of the fund and its resources are not refundable. De Nederlandsche Bank will manage the assets of the deposit guarantee fund and thereby act as the agent of the Stichting. The deposit guarantee fund should increase to 1% of the deposits guaranteed under the DGS in approximately 10 years, which equates approximately to € 4 billion. The intended capital of 1% of the guaranteed deposits is determined by bank. If the resources of the deposit guarantee fund are not sufficient for compensation, the remainder will be recovered from the banks on a pro rata basis.

Investor Compensation SchemeThe investor compensation scheme protects private investors and “small” businesses who have entrusted money or financial instruments (such as securities or options) to a licensed bank or investment institution on the basis of an investment service. While banks and investment firms in the Netherlands are subject to regulation by DNB and the AFM, the possibility that a bank or investment firm will encounter payment problems cannot be ruled out. In this case, the investor compensation system guarantees a minimum level of protection in the event that the bank or investment firm cannot meet its obligations arising from the investment services it provides to its clients. Briefly, claims (in cash or securities) relating to the performance of certain services and investment services are eligible for payment. This concerns investor’s cash or securities held in connection with these investment or other services, which cannot be repaid to the investor in the event that a bank or investment firm is unable to meet its obligations to its investment clients. Investment losses on financial instruments are not covered by the scheme. The investor compensation scheme provides a guarantee of up to € 20,000 per person per institution.

Resolution levy in connection with SNSThe Dutch government nationalised SNS Reaal on the basis of the Intervention Act on 1 February 2013. The Minister of Finance announced that a non-recurring resolution levy to be paid to the public treasury would be imposed on the banks in an amount of € 1 billion. The levy will not be deductible for the purpose of corporate income tax. The Minister of Finance submitted a bill to the parliament to ratify the resolution levy in June 2013. The proposal is to impose the levy on banks in possession of a banking licence on 1 February 2013, but only if they are still in possession of a banking licence on 1 March 2014, 1 May 2014 and 1 July 2014. In accordance with relevant IFRS guidelines, BinckBank has concluded that the expense arising from the resolution levy should only be recognised in the income statement at the time the levy is due.

195

Annual Report 2013

The contribution of the various banks will be related to the total sum of the deposits guaranteed under the deposit guarantee system held with them on 1 February 2013. A contribution of 0.075% of the base amount will be levied in three instalments on the above-mentioned dates. BinckBank estimates its total contribution at € 4 million.

39. Segment informationAs an online broker, BinckBank offers its retail customers fast and low-cost access to all the world’s major financial markets. Moreover, as an asset management bank, BinckBank provides support to its customers in the management of their assets through online asset management services and online savings accounts. For its professional customers, BinckBank offers administrative processing of securities and cash transactions in addition to fast and low-cost order execution. The company has offices in the Netherlands, Belgium, France, Spain and Italy.

A segment is a clearly distinct component of BinckBank that provides services with a risk or return profile that is different from the other segments (a business segment), or which provides services to a particular economic market (market segment) that has a different risk and return profile to that of other segments. In terms of organisation, the operations of BinckBank are divided into two primary business segments. The executive board determines the performance targets, and authorises and monitors the budgets prepared for these business segments. The management of the business segment is responsible for setting policy for that segment, in accordance with the strategy and performance targets formulated by the executive board.The business segments are:

• Retail • Professional Services

The business unit Retail operates as an (internet) broker for the private customer market. The business unit Professional Services provides brokerage services in securities and derivatives transactions on behalf of professional investors in the Netherlands and abroad, including the provision of the majority of the related administration. All directly attributable income and expenses are recognised within the Retail and Professional Services business segments, together with the attributed costs of the group activities.

In November 2013, BinckBank announced that in the context of the proposed divestment it would initiate a study of the available options for a sale or joint venture for its non-banking businesses, the BPO and software & licensing operations, which were previously included in the Professional Services segment. These have been reclassified as discontinued operations in 2013, and the comparative figures have been adjusted.

The item Group operations includes the departments directly managed by the executive board and for which the income and expenses are not included in one of the other business segments.This includes ThinkCapital and the results of central Treasury, including the results on sales in the investment portfolio and extraordinary expenses.

The same accounting policies are used for a business segment as those described for the consolidated statement of financial position and income statement of BinckBank.The prices used for transactions between business segments are the prices that would occur under normal market conditions (‘at arm’s length’).

The results of associates and joint ventures are attributed to business segments to the extent that the business segments exercise direct influence on the associates and joint ventures. All other results of associates and joint ventures are recognised at group level.

Investments in intangible assets and property, plant and equipment are attributed to the business segments to the extent that the investments are directly acquired by the business segments. All other investments are recognised at group level.

Tax is managed at group level and is not attributed to the operating segments.

Able charged a sum of € 7.5 million (2012: € 6.5 million) for services provided to BinckBank. These costs have been eliminated in the segment information presented below and replaced by the allocation of the actual costs.

196

Ann

ual R

epor

t 20

13

As was the case in 2012, no customer or group of associated customers was responsible for more than 10% of the bank’s total income in 2013.

Business segmentation

x € 1.000

2013 2012

RetailProfes-sional

ServicesGroup

Operations Total RetailProfes-sional

ServicesGroup

Operations Total

Interest income 29,044 3,825 176 33,045 37,051 5,171 398 42,620 Interest expense (4,676) (558) (170) (5,404) (9,350) (951) (398) (10,699)Net interest income 24,368 3,267 6 27,641 27,701 4,220 (0) 31,921 Commission income 135,542 22,421 951 158,914 115,435 24,453 265 140,153 Commission expense (20,311) (7,945) (181) (28,437) (18,190) (12,676) (101) (30,967)Net fee and commission income

115,231 14,476 770 130,477 97,245 11,777 164 109,186

Other income 1,072 5 356 1,433 1,659 14 42 1,715

Result from financial instruments

- - 7 7 - - 47 47

Impairment of financial assets 37 (5) - 32 (1) (1) - (2)

Total income from operating activities

140,708 17,743 1,139 159,590 126,604 16,010 253 142,867

Employee expenses 30,008 3,683 2,714 36,405 32,436 3,408 367 36,211 Depreciation and amortisation 26,643 1,664 456 28,763 33,824 1,146 - 34,970 Other operating expenses 43,114 7,922 1,732 52,768 32,775 4,945 (1,463) 36,257 Total operating expenses 99,765 13,269 4,902 117,936 99,035 9,499 (1,096) 107,438 Result from operating activities

40,943 4,474 (3,763) 41,654 27,569 6,511 1,349 35,429

Share in results of associates and joint ventures

(2,393) (3,580)

Result before tax 39,261 31,849 Tax (10,790) (8,359)Result after tax (continuing operations)

28,471 23,490

Result after tax (discontinued operations)

(9,545) (110)

Net result 18,926 23,380

Total assets 2,409,852 404,848 394,704 3,209,404 2,250,473 419,801 327,500 2,997,774

Total liabilities 2,075,595 321,837 380,341 2,777,773 1,866,455 378,086 298,012 2,542,553

197

Annual Report 2013

The analysis below shows the geographical distribution of income from operating activities and the property, plant and equipment and intangible assets of BinckBank. Income is allocated on the basis of the country of domicile of the branch where the account is opened, and the property, plant and equipment and intangible assets on the basis of the country in which the assets are held.

Segmentation of continued operations by region

x € 1,000Netherlands Other countries Total

2013 2012 2013 2012 2013 2012Total income fromoperating activities

134,967 117,544 24,623 25,323 159,590 142,867

Property, plant andequipment, and intangibleassets

271,197 306,491 272 335 271,469 306,826

40. Offsetting of financial assets and liabilitiesFinancial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when there is a legally enforceable right to set off the amounts and an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Generally, this does not apply to master netting agreements, and the assets and liabilities concerned are therefore presented on a gross basis in the balance sheet.Master netting agreements usually stipulate separate net settlement of all financial instruments falling under the agreements in the event of default on a particular contract. While master netting agreements can substantially reduce credit risk, it must be remembered that the extent to which the total credit risk is reduced can vary significantly within a short period, since the receivable is affected by every transaction under the agreement.

The following tables show which financial assets and liabilities are subject to offsetting within the balance sheet under IAS 32 and the effects of master netting agreements that do not comply with IAS 32:

Financial assets subject to offset, enforceable master netting agreements and similar agreements

At 31 December 2013x € 1,000

(a) (b) (c) = (a) - (b) (d)Related amounts not offset in

the balance sheet

(e) = (c) - (d)

Financial assets

included, gross

Recognised financial liabilities

offset in the balance sheet,

gross

Financial assets

included in the balance sheet, net

Financial instruments

Collateral received in

cash

Net amount

Banks 144,784 - 144,784 (15,034) - 129,750

Total 144,784 - 144,784 (15,034) - 129,750

At 31 December 2012x € 1,000


the balance sheet

(e) = (c) - (d)

Financial assets

included, gross

Recognised financial liabilities

offset in the balance sheet,

gross

Financial assets




cash

Net amount

Banks 144,916 - 144,916 (20,060) 124,856

Total 144,916 - 144,916 (20,060) - 124,856

198

Ann

ual R

epor

t 20

13

Financial liabilities subject to offset, enforceable master netting agreements and similar agreements

At 31 December 2013x € 1,000


the balance sheet

(e) = (c) - (d)

Financial liabilities included,

gross

Financial assets offset

in the balance sheet, gross

Financial liabilities




cash

Net amount

Banks 15,034 - 15,034 (15,034) - -

Total 15,034 - 15,034 (15,034) - -

At 31 December 2012x € 1,000


the balance sheet

(e) = (c) - (d)

Financial liabilities included,

gross

Financial assets offset

in the balance sheet, gross

Financial liabilities




cash

Net amount

Banks 20,060 - 20,060 (20,060) - -

Total 20,060 - 20,060 (20,060) - -

41. Transferred financial assets and financial assets pledged or received as collateral

Financial assets pledged as collateralReceipts and payments in relation to the settlement of securities transactions with the various parties involved do not occur at exactly the same time on the settlement date. In order to bridge these intra-day time differences, BinckBank has pledged part of its investment portfolio of fixed-income securities as collateral with its custodian. There were no overnight exposures during or at year-end 2013 (or 2012), and therefore no right of pledge was vested.

Financial assets received as collateralBinckBank provides loans and other facilities on the basis of securities pledged by customers as collateral. BinckBank is not entitled to lend the securities received as collateral and may only proceed to selling them if the borrower remains in default. BinckBank has established that all the risks and rewards of these securities are for the customer and therefore has not recognised these securities in the balance sheet.

Transferred financial assetsAs part of its liquidity management, BinckBank has repo facilities with several banks. Securities sold under the repo facilities are transferred to a third party, for which BinckBank receives cash. These transactions are effected subject to conditions based on the ISDA rules with regard to collateral. BinckBank has established that it retains more or less all the risks and rewards of these securities – credit risk and market risk in particular – and therefore continues to recognise them in the balance sheet. Furthermore, it recognises a financial liability with regard to the cash to be repaid.

BinckBank did not use these facilities in either 2013 or 2012, and accordingly no such positions are recognised in the balance sheet.

42. Events after balance sheet date No material events took place after the balance sheet date.

199

Annual Report 2013

Company balance sheet (before appropriation of profit)

Note 31 December 2013 31 December 2012x € 1,000 x € 1,000

AssetsCash and balanced with central banks c 332,523 365,362 Banks d 143,303 140,690 Loans and receivables e 428,180 323,008 Bonds and other fixed-income securities f 1,582,146 1,515,549 Equities and other non-fixed-income securities g 19,200 16,044 Investment in associates and joint ventures h 4,774 12,386 Intangible assets i 232,634 262,868 Property, plant and equipment j 38,835 43,043 Current tax k 707 5,792 Other assets m 30,386 15,925 Prepayments and accrued income n 61,442 40,923 Derivatives positions held on behalf of customers 22 334,373 254,165 Total assets 3,208,503 2,995,755

LiabilitiesBanks d 15,034 20,060 Customer deposits o 2,335,640 2,213,049 Current tax k 197 141 Deferred tax l 20,322 19,919 Other liabilities p 56,614 21,197 Accruals and deferred income q 10,167 9,612 Derivatives positions held on behalf of customers 22 334,373 254,165 Provisions r 4,532 2,400

Total liabilities 2,776,879 2,540,543

Issued share capital 7,450 7,450 Share premium 373,422 373,422 Treasury shares (30,340) (21,539)Revaluation reserve 2,124 7,493 Other reserves 59,720 64,286 Unappropriated profit 19,248 24,100 Equity s 431,624 455,212 Total liabilities 3,208,503 2,995,755

Company income statement

2013 2012x € 1,000 x € 1,000

Share in results in associates and joint ventures (after tax) (1,263) 639 Other results (after tax) 20,511 23,461 Net result 19,248 24,100

200

Ann

ual R

epor

t 20

13

Company statement of changes in equity

x € 1,000Note Issued

sharecapital


Treasuryshares

Revalua-tion

reserve

Legalreserves

Otherreserves

Unappro-priatedprofit

Totalequity

1 January 2013 7,450 373,422 (21,539) 7,493 - 64,286 24,100 455,212

Unrealised gain on available-for-sale assets (after tax)

s - - - (5,369) - - - (5,369)

Realisation of revaluations through profit and loss

s - - - - - - - -

Result recognised directly in equity - - - (5,369) - - - (5,369)

Result for the year - - - - - - 19,248 19,248

Total income and expense - - - (5,369) - - 19,248 13,879

Payment of final dividend FY12 s - - - - - - (19,775) (19,775)

Payment of interim dividend FY13 s - - - - - (9,115) - (9,115)

Grant of rights to shares s - - - - - 529 - 529


s - - 310 - - (310) - 0

Buy-back shares s - - (9,111) - - - - (9,111)

Transfer of retained earnings toother reserves

- - - - - 4,325 (4,325) -

Other movements - - - - - 5 - 5

31 December 2013 7,450 373,422 (30,340) 2,124 - 59,720 19,248 431,624

x € 1,000Note Issued

sharecapital


Treasuryshares

Revalua-tion

reserve

Legalreserves

Otherreserves

Unappro-priatedprofit

Totalequity

1 January 2012 7,450 373,422 (3,954) (973) - 59,361 34,210 469,516

Unrealised gain on available-for-sale assets (after tax)

s - - - 8,466 - - - 8,466

Realisation of revaluations through profit and loss

s - - - - - - - -

Result recognised directly in equity - - - 8,466 - - - 8,466

Result for the year - - - - - - 24,100 24,100

Total income and expense - - - 8,466 - - 24,100 32,566

Payment of final dividend FY11 s - - - - - - (17,605) (17,605)

Payment of interim dividend FY12 s - - - - - (12,365) - (12,365)

Grant of rights to shares s - - - - - 1,105 - 1,105

Sale of shares to executive board and employees

s - - 420 - - (420) - -

Buy-back shares s - - (18,005) - - - - (18,005)

Transfer of retained earnings toother reserves

- - - - - 16,605 (16,605) -

31 December 2012 7,450 373,422 (21,539) 7,493 - 64,286 24,100 455,212

201

Annual Report 2013

Notes to the company financial statements

a. General

Company informationBinckBank N.V. is a company established in the Netherlands with its domicile in Amsterdam, whose shares are publicly traded. BinckBank N.V. provides conventional and internet broking services in securities and derivative transactions for private and professional investors. In the following pages, the name ‘BinckBank’ will be used to refer to BinckBank N.V. and its various subsidiaries.

The company financial statements for BinckBank for the period ending on 31 December 2013 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 6 March 2014.

Amsterdam,

Executive board: Supervisory board:K.N. Beentjes (chairman) C.J.M. Scholtes (chairman) E.J.M. Kooistra (CFO) J.K. BrouwerP. Aartsen L. Deuzeman A.M. van Westerloo

b. Accounting policies

GeneralThe company financial statements of BinckBank N.V. have been prepared in accordance with the provisions of Part 9 of Book 2 of the Dutch Civil Code. As the income statement of BinckBank N.V. for 2013 is included in the consolidated financial statements, a summary income statement is sufficient in accordance with Section 402 Book 2 of the Dutch Civil Code.

The option described in Section 362 Book 2 of the Dutch Civil Code of applying the same principles in the company financial statements as in the consolidated financial statements has been used. The principles in the company financial statements are therefore the same as those stated for the consolidated financial statements, with the exception of the following:

AssociatesThe investments in group companies are recognised and measured at net asset value. The reporting dates of these companies are the same and the accounting principles applied to their financial reporting are in accordance with those applied by BinckBank for similar transactions and events in similar circumstances.

202

Ann

ual R

epor

t 20

13

Notes to the company balance sheet


c. Cash and balanced with central banks 332,523 365,362 This item includes all cash in legal tender, including bank notes and coins in foreign currency, and any credit balances available on demand from the central banks in countries where BinckBank has offices and the European Central Bank.

d. BanksDue from banks 143,303 140,690 This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:Credit balances available on demand 135,166 131,335 Call money 11 29 Receivable from DNB in relation to the Deposit GuaranteeScheme for DSB Bank

8,126 9,326

143,303 140,690

The call money receivables have original maturities of less than three months. Interest is received on these balances at a variable rate based on EONIA or EURIBOR.

For the receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank, see note 8 to the consolidated statement of financial position.

Due to banks 15,034 20,060 BinckBank has sweeping arrangements with various banks whereby the debit and credit balances in a large number of bank accounts are regulated with a fixed treasury contra-account. This is only visible on the statement for the next business day; Therefore at year-end BinckBank may have a liability on a single bank account for a very short period.

e. Loans and receivables 428,180 323,008 This item comprises receivables from private sector customers, including overnight loans and overdrafts collateralised by securities and bank guarantees (collateralised loans).

The analysis is as follows:Receivables collateralised by securities 423,209 319,139 Receivables collateralised by bank guarantees 4,933 3,846 Other receivables 441 459 Loans and receivables, gross 428,583 323,444 Less: impairment provision (403) (436)

428,180 323,008

203

Annual Report 2013


The interest rate is based on EURIBOR or EONIA. Otherreceivables refers to remaining amounts receivable afterexecution of collateral (securities and bank guarantees).

f. Bonds and other fixed-income securities 1,582,146 1,515,549This item comprises:Government bonds / government-guaranteed bonds 813,281 693,400 Other bonds 768,865 822,149

1,582,146 1,515,549

This item concerns a portfolio of interest-bearing securities with remaining maturities of between 0 and 3 years. At year-end 2013 the effective yield was 0.82% (2012: 1.21%).

g. Equities and other non-fixed-income securities 19,200 16,044

The trading portfolio comprises:SRD derivatives receivables 70 168Equity positions in relation to SRD receivables 19,130 15,876

19,200 16,044BinckBank offers SRD (Service de Règlement Différé) contracts in France. For further information regarding this financial instrument, see note 9 to the consolidated financial statements.

204

Ann

ual R

epor

t 20

13


h. Investment in associates and joint ventures 4,774 12,386 This item comprises:Group companies 1,064 9,002 Other associates 2,277 1,093 Joint ventures 1,433 2,291

4,774 12,386

Movements during the year were as follows:

Balance as at 1 January 12,386 11,170 Capital increases and acquisitions 3,199 4,827 Dividends and capital refunds (11,350) (4,250)Reclassification as a result of intercompany transactions

1,802 -

Dilution earnings 2,300 550Result in associates and joint ventures (3,563) 89 Balance as at 31 December 4,774 12,386

The item investment in associates and joint ventures includes among others investments in TOM Holding N.V., BeFrank N.V. and ThinkCapital Holding B.V.

The item dividends, capital payments and dissolutions relates to the dividends received from Able Holding B.V.

Overview of group companiesThe following statement lists the group companies.

Place Country Interestyear-end 2013

Interestyear-end 2012

Bewaarbedrijf BinckBank B.V. Amsterdam Netherlands 100% 100%Able Holding B.V. Reeuwijk Netherlands 100% 100%ThinkCapital Holding B.V. Amsterdam Netherlands 60% 60%

For the other capital holdings, see note 12 to the consolidated statement of financial position on associates and joint ventures.

205

Annual Report 2013


i. Intangible assets 232,634 262,868

The movements in 2013 were as follows:Brand name

Coredeposits

Customerbase


Balance as at 1 January 2013 - 42,048 65,529 2,362 152,929 262,868 Investments - - - 2,497 - 2,497 Disposals - cost - - - - (10,047) (10,047)Disposals - cumulative amortisation - - - - 10,047 10,047 Impairments - - - - (10,047) (10,047)Amortisation - (8,410) (13,106) (1,168) - (22,684)Balance as at 31 December 2013 - 33,638 52,423 3,691 142,882 232,634

Cumulative cost 31,405 84,095 131,058 9,461 142,882 398,901 Cumulative amortisation and impair-ments

(31,405) (50,457) (78,635) (5,770) - (166,267)


Amortisation period (years) 5 10 5 - 10 5

The movements in 2012 were as follows:Brand name

Coredeposits

Customerbase


Balance as at 1 January 2012 6,281 50,457 78,635 3,846 152,929 292,148 Investments - - - 202 - 202 Disposals - cost - - - (4,859) - (4,859)Disposals - cumulative amortisation - - - 4,859 - 4,859 Amortisation (6,281) (8,409) (13,106) (1,686) - (29,482)Balance as at 31 December 2012 - 42,048 65,529 2,362 152,929 262,868

Cumulative cost 31,405 84,095 131,058 6,964 152,929 406,451 Cumulative amortisation and impair-ments

(31,405) (42,047) (65,529) (4,602) - (143,583)


Amortisation period (years) 5 10 5 - 10 5 A note on the impairment of goodwill is included as note 13 to the consolidated financial statements.

206

Ann

ual R

epor

t 20

13


j. Property, plant and equipment 38,835 43,043

The movements in 2013 were as follows:Real

estateFixtures,


Computer hardware

Other Total

Balance as at 1 January 2013 28,295 6,628 8,112 8 43,043 Investments - 126 1,745 - 1,871 Disposals - cost - - (875) - (875)Disposals - cumulative depreciation - - 875 - 875 Depreciation and amortisation (618) (1,041) (4,417) (3) (6,079)Balance as at 31 December 2013 27,677 5,713 5,440 5 38,835



The movements in 2012 were as follows:Real

estateFixtures,


Computer hardware

Other Total

Balance as at 1 January 2012 28,915 7,339 9,541 10 45,805 Investments - 313 2,415 - 2,728 Disposals - cost - - (1,630) - (1,630)Disposals - cumulative depreciation - - 1,630 - 1,630 Depreciation and amortisation (620) (1,024) (3,844) (2) (5,490)Balance as at 31 December 2012 28,295 6,628 8,112 8 43,043



The investment in property includes prepayments in relation to a leasehold (operating lease) which expires on 15 April 2056. In 2013, an amount of € 256,000 in relation to amortisation of the leasehold is included in depreciation and amortisation (2012: € 256,000).

207

Annual Report 2013


k. Current taxCurrent tax assets 707 5,792 Current tax liabilities (197) (141)Net asset / (liability) 510 5,651

The balance at year-end relates to the last two financial years.

l. Deferred taxCompositionDeferred tax assets - - Deferred tax liabilities (20,322) (19,919)Net asset / (liability) (20,322) (19,919)

Origin of deferred tax assets and liabilities:Available-for-sale financial assets (957) (2,497)Goodwill and other intangible assets (18,092) (13,685)Depreciation period differences for non-current assets (2,182) (3,379)Temporary differences as a result of intercompany transactions

1,161 -

Other assets / (liabilities) (252) (358)Net asset / (liability) (20,322) (19,919)

m. Other assets 30,386 15,925 This item comprises:Trade receivables 934 191 Receivables relating to securities sold, but not yet delivered 28,125 14,236 Other receivables 1,327 1,498

30,386 15,925

- of which receivables from group companies - 31

Trade receivables, receivables relating to securities sold but not yet delivered and other receivables will be settled within one year.The item receivables arising from securities sold but not yet delivered can fluctuate on a daily basis in line with movements in the market and the total size of the number of transactions.

n. Prepayments and accrued income 61,442 40,923 This item comprises:Interest receivable 25,278 26,196 Commission receivable 25,206 10,450 Other prepayments and accrued income 10,958 4,277

61,442 40,923

The other prepaid sums mainly concern prepaid ICT licences and maintenance agreements.

208

Ann

ual R

epor

t 20

13


o. Customer deposits 2,335,640 2,213,049 This item comprises:Demand deposits savings accounts 363,092 424,388 Demand deposits current accounts 1,972,548 1,788,661

2,335,640 2,213,049

p. Other liabilities 56,614 21,197 This item comprises:SRD derivative payables 486 65 Equity positions in relation to SRD payables 704 1,084 Liabilities in respect of securities transactions not yet settled 41,944 10,182 Tax and social security contributions 4,336 2,319 Amounts owed to group companies 124 124 Trade payables 5,097 5,301 Other liabilities 3,923 2,122

56,614 21,197 BinckBank offers SRD (Service de Règlement Différé) contracts in France. For further information regarding this financial instrument, see note 9 to the consolidated financial statements. The item liabilities in respect of securities transactions not yet settled can fluctuate on a daily basis in line with movements in the market and the total size of the number of transactions.

q. Accruals and deferred income 10,167 9,612 This item comprises:Accrued interest 1,056 2,294 Employee expenses 5,580 4,272 Stock exchange and clearing costs payable 793 681 Other accruals and deferred income 2,738 2,365

10,167 9,612

Employee expenses mostly concern performance-related pay to board members and employees of BinckBank.

209

Annual Report 2013


r. Provisions 4,532 2,400 This item comprises:Provision for legal disputes 4,392 1,012 Other provisions 140 1,388

4,532 2,400

The movement in the provision for legal disputes was as follows:Balance as at 1 January 1,012 1,958 Additions 3,929 432 Charged to the provision (110) (722)Releases (439) (656) Balance as at 31 December 4,392 1,012

The provision is an estimate of the potential loss for BinckBank as a result of legal proceedings instituted against BinckBank.

The movements in the other provisions were as follows: Balance as at 1 January 1,388 982 Additions 3,267 1,388 Charged to the provision (4,180) (797)Releases (335) (185)Balance as at 31 December 140 1,388

The item Other provisions includes provisions in relation to individual payments that will fall due on termination of employment agreements.

210

Ann

ual R

epor

t 20

13


s. Equity 431,624 455,212

Issued share capital 7,450 7,450 A total of 74,500,000 ordinary shares were in issue (with a nominal value of € 0.10 per share). The share capital is fully paid up.

Stichting Prioriteit Binck holds 50 priority shares (with a nominal value of € 0.10 per share).

Share premium reserve 373,422 373,422 The share premium reserve is exempt from tax.

Buy-back of own shares (30,340) (21,539)

Number Amount Number Amount Situation at opening date 3,151,213 (21,539) 464,117 (3,954)Issued to executive board and employees (44,586) 310 (49,395) 420 Buy-back of shares 1,276,753 (9,111) 2,736,491 (18,005)Balance as at 31 December 4,383,380 (30,340) 3,151,213 (21,539)

As at 1 January 2013, the number of treasury shares held was 3,151,213, acquired at an average purchase price of € 6.84. In 2013 1,276,753 shares were repurchased at an average price of € 7.14. In 2013, 44,586 shares were granted to the executive board and employees in connection with the settlement of the remuneration policy at an average price of € 6.94.

The carrying amount of the treasury shares acquired at year-end 2013 was measured at the average purchase price of € 6.92. The change in equity in respect of treasury shares is based on the amounts bought and sold. The quoted share price at year-end 2013 was € 7.71 (2012: € 6.22).

211

Annual Report 2013


Revaluation reserve 2,124 7,493 Balance as at 1 January 7,493 (973)Unrealised result on available-for-sale financial assets (7,159) 11,289 Tax on unrealised result on available-for-sale financial assets 1,790 (2,823)Balance as at 31 December 2,124 7,493

The reserve comprises the fair value changes, after tax, on available-for-sale financial assets.In the determination of the distributable profit, any negative revaluation reserve is deducted from the reserves available for distribution.

Other reserves 59,720 64,286 Balance as at 1 January 64,286 59,361 Payment of interim dividend (9,115) (12,365)Grant of rights to shares 529 1,105 Shares sold to executive board and employees (310) (420)Appropriation of profit for previous year 4,325 16,605 Other movements 5 -Balance as at 31 December 59,720 64,286

Unappropriated result 19,248 24,100 Balance as at 1 January 24,100 34,210 Payment of final dividend (19,775) (17,605)Addition to other reserves (4,325) (16,605)Result for the year 19,248 24,100 Balance as at 31 December 19,248 24,100

212

Ann

ual R

epor

t 20

13

t. Employee data 2013 2012Number of employees (including executive directors)Average during the financial year 537 540End of the financial year 572 505

Employee expenses in the financial year – executive and supervisory directors x € 1,000 x € 1,000Salaries 1,065 1,317Social security contributions 153 219Pension costs 213 263Performance-related pay 683 198Severance payments - 300Remuneration of supervisory directors 172 172Total 2,286 2,469

The levy on salaries that exceed € 150,000 introduced in the Budget Agreement 2013 Tax Measures (Implementation) Act (Wet uitwerking fiscale maatregelen 2013) that originally was only to apply to the year 2013 has been continued in the Budget Agreement 2014 Tax Measures (Implementation) Act. The amounts have been charged to 2012 and 2013 respectively are included in the item social security contributions.

The information on the remuneration of members of the executive board and members of the supervisory board is presented in the consolidated financial statements (page 158).

Ernst & Young Accountants

Ernst & Young Other services

Total

x € 1,000 x € 1,000 x € 1,000u. Fees of group auditorThe following fees were charged to the company, itssubsidiaries and other consolidated entities by the audit firmErnst & Young Accountants LLP and other divisions of Ernst& Young as referred to in Section 2:382a of the NetherlandsCivil Code:

2013Audit of the financial statements, including audit ofstatutory financial statements and other statutory audits ofsubsidiary companies and consolidated entities

578 - 578

Other audit services 85 - 85Other non-audit services - - -

663 - 6632012Audit of the financial statements, including audit ofstatutory financial statements and other statutory audits ofsubsidiary companies and consolidated entities

745 - 745

Other audit services 90 - 90Other non-audit services - - -

835 - 835

213

Annual Report 2013

2013 2012x € 1,000 x € 1,000

v. Off balance sheet commitmentsContingent liabilitiesLiabilities in respect of contracts of suretyship and guarantees 2,577 2,434Liabilities in respect of irrevocable facilities - -

Collateral and guaranteesTo meet the requirements of its customers, BinckBank offers products such as contracts of suretyship and guarantees in relation to loans. The underlying value of these products is not presented on the face of the balance sheet. The above figure represents the maximum potential credit risk for BinckBank related to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

Alex Bottom-LineWith acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the Dutch Shareholders’ Association (VEB). If BinckBank terminates the VEB agreement, it will be liable to pay an amount equal to the custody fee and dividend commission paid by each customer of Alex Bottom-Line on entry into the agreement, plus the amount of any custody fee and dividend commission additionally paid by each customer on exceeding set limits.

Acquisition of SNS FundcoachIn 2013, BinckBank reached agreement regarding the acquisition of the Fundcoach business of SNS for a price of up to € 3 million by means of an asset and liability transaction. The actual transfer of the assets and liabilities will take place in 2014, after which BinckBank will take control of this business. This will lead to recognition of the assets and liabilities in the consolidated statement of financial position at that time. The assets and liabilities relating to Fundcoach as at 31 December 2013 are not reported. The assets and liabilities to be acquired concern mainly bank balances, domain and brand names, and customer deposits. Completion of the transaction is subject to obtaining a declaration of no objection from De Nederlandsche Bank.

Lease commitmentsThe company has leases on office premises in the Netherlands, Belgium, France, Spain and Italy. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years. The combined annual expense relating to office rents and operating lease payments for the vehicles at year-end 2013 amounts to € 1.3 million (2012: € 2.0 million).

2013 2012x € 1,000 x € 1,000

The remaining maturity of the outstanding liabilities is as follows:Within one year 1,621 1,521One to five years 1,397 837Longer than five years 516 29

Legal proceedingsBinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or results, with the exception of the cases reported under the note on provisions.

214

Ann

ual R

epor

t 20

13

Legal proceedings concerning TOMEuronext has commenced substantive proceedings against BinckBank and TOM for among other things infringement of Euronext’s brand rights. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcome of these proceedings is not likely to have material adverse effects on BinckBank’s financial position or results.

International services subject to foreign legislationBinckBank takes international services from data and other suppliers that may be subject to foreign legislation, meaning there is an inherent risk of differences of interpretation. The executive board believes that while the outcome of discussions regarding such differences of interpretation is uncertain when they do arise, there is currently no reason to assume that this could have material adverse effects on BinckBank’s financial position or results.

Deposit guarantee schemeThe deposit guarantee scheme (DGS) is intended to guarantee certain deposits by accountholders if a bank cannot meet its obligations. The scheme provides security for deposits of up to € 100,000 and applies per accountholder per bank, regardless of the number of accounts held. In case of a joint account operated by two persons, the maximum applies per person. More or less all savings accounts, current accounts and term deposits are covered. Equities or bonds are not covered. If a credit institution finds itself in difficulties and does not have sufficient funds to pay all or part of the guaranteed amounts to its account holders, De Nederlandsche Bank will make up the difference. The total amount paid out by DNB will then be recovered from the banks on a pro rata basis.

The funding of the deposit guarantee scheme will be changed from an ex-post basis to an ex-ante basis with effect from 1 July 2015. The banks will then have to contribute a sum to a fund for the deposit guarantee scheme on a quarterly basis. The Stichting Depositogarantiefonds will be the owner of the fund and its resources are not refundable. De Nederlandsche Bank will manage the assets of the deposit guarantee fund and thereby act as the agent of the Stichting. The deposit guarantee fund should increase to 1% of the deposits guaranteed under the DGS in approximately 10 years, which according to the most recent data is approximately € 4 billion. The intended capital of 1% of the guaranteed deposits will be established for each bank. If the resources of the deposit guarantee fund are not sufficient for compensation, the remainder will be recovered from the banks on a pro rata basis.

Investor Compensation SchemeThe investor compensation scheme protects private investors and “small” businesses who have entrusted money or financial instruments (such as securities or options) to a licensed bank or investment institution on the basis of an investment service. While banks and investment firms in the Netherlands are subject to regulation by DNB and the AFM, the possibility that a bank or investment firm will encounter payment problems cannot be ruled out. In this case, the investor compensation system guarantees a minimum level of protection in the event that the bank or investment firm cannot meet its obligations arising from the investment services it provides to its clients. Briefly, claims (in cash or securities) relating to the performance of certain services and investment services are eligible for compensation. This concerns investor’s cash or securities held in connection with these investment or other services, which cannot be repaid to the investor in the event that a bank or investment firm is unable to meet its obligations to its investment clients. Investment losses on financial instruments are not covered by the scheme. The investor compensation scheme provides a guarantee of up to € 20,000 per person per institution.

Resolution levy in connection with SNSThe Dutch government nationalised SNS Reaal on the basis of the Intervention Act on 1 February 2013. The Minister of Finance announced that a non-recurring resolution levy to be paid to the public treasury would be imposed on the banks in an amount of € 1 billion. The levy will not be deductible for the purpose of corporate income tax. The Minister of Finance submitted a bill to the parliament to ratify the resolution levy in June 2013. The proposal is to impose the levy on banks in possession of a banking licence on 1 February 2013, but only if they are still in possession of a banking licence on 1 March 2014, 1 May 2014 and 1 July 2014. In accordance with relevant IFRS guidelines, BinckBank has concluded that the expense arising from the resolution levy should only be recognised in the income statement at the time the levy is due. The contribution of the various banks will be related to the total sum of the deposits guaranteed under the deposit guarantee system held with them on 1 February 2013. A contribution of 0.075% of the base amount will be levied in three instalments on the above-mentioned dates. BinckBank estimates its total contribution at € 4 million.

215

Annual Report 2013

Events after balance sheet date

No material events took place after the balance sheet date.

216

Ann

ual R

epor

t 20

13

Independent auditor’s report

To: General Shareholders Meeting of BinckBank N.V.

Report on the financial statementsWe have audited the accompanying financial statements 2013 of BinckBank N.V., Amsterdam. The financial statements include the consolidated financial statements and the company financial statements. The consolidated financial statements comprise the consolidated balance sheet as at 31 December 2013, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended and notes, comprising a summary of the significant accounting policies and other explanatory information. The company financial statements comprise the company balance sheet as at 31 December 2013, company income statement and company statement of changes in equity for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management’s responsibilityManagement of BinckBank N.V. is responsible for the preparation and fair presentation of these financial statements and for the preparation of the management board report, both in accordance with International Financial Reporting Standards as accepted in the European Union and with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the consolidated financial statementsIn our opinion, the consolidated financial statements give a true and fair view of the financial position of BinckBank N.V. as at December 31, 2013 and of its result and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the European Union and with Part 9 of Book 2 of the Dutch Civil Code.

Opinion with respect to the company financial statementsIn our opinion, the company financial statements give a true and fair view of the financial position of BinckBank N.V. as at December 31, 2013 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

217

Annual Report 2013

Report on other legal and regulatory requirements Pursuant to the legal requirement under Section 2:393 sub 5 at e and f of the Dutch Civil Code, we have no deficiencies to report as a result of our examination whether the management board report, to the extent we can assess, has been prepared in accordance with Part 9 of Book 2 of this Code, and whether the information as required under Section 2:392 sub 1 at b-h has been annexed. Further we report that the management board report, to the extent we can assess, is consistent with the financial statements as required by Section 2:391 sub 4 of the Dutch Civil Code. Amsterdam, 6 March 2014 Ernst & Young Accountants LLP

Signed by A.B. Roeders

218

Ann

ual R

epor

t 20

13

Provisions of the articles of association regarding priority shares (articles 15 and 21)The rights attached to the priority shares include the right to make non-binding nominations for appointment to the company’s supervisory board and executive board and to take various other actions. The priority shares are held by Stichting Prioriteit Binck, Amsterdam. This foundation’s board, which consists of three members, is appointed by the supervisory board and executive board of the company.

The board members of Stichting Prioriteit Binck are:C.J.M. ScholtesJ.K. BrouwerK.N. Beentjes

Provisions of the articles of association in respect of profit appropriation (article 32)1. The company may only make distributions to the shareholders if the company’s equity exceeds its issued and

paid-up share capital plus the reserves required to be held by law or by the articles of association.2. Firstly – and only insofar as profits allow – an amount equal to six per cent (6%) of the nominal value of the priority

shares will be distributed on these shares.3. The foundation will determine the extent to which the remaining profits will be transferred to reserves. Profits

remaining after application of subsection 2 and the first sentence of this subsection will be at the disposal of the general meeting of shareholders. Any amounts not distributed will be transferred to the company’s reserves.

4. Withdrawals from distributable reserves may be made pursuant to a resolution by the general meeting of shareholders, subject to the prior consent of the foundation.

5. The executive board may resolve to allow the company to make interim distributions, providing it demonstrates in the form of an interim statement of assets and liabilities as referred to Section 105(4) Book 2 of the Dutch Civil Code that it complies with item 1 above and subject to the prior consent of the foundation. The distributions referred to in this subsection may be made in cash, in shares in the company’s equity or in marketable rights thereto.

6. The general meeting of shareholders may resolve to declare that distributions on shares other than interim distributions as referred in subsection 5 of this article (whether at the shareholders’ discretion or otherwise) may, instead of being made in cash, be made fully or partly (whether at the shareholders’ discretion or otherwise) in:

a. ordinary shares (which will, if desired and possible, be charged to the share premium reserve) or marketable rights to ordinary shares, or

b. equity instruments of the company or marketable rights thereto. A resolution as referred to in the previous sentence may only be passed after being proposed by the executive board and approved by the supervisory board. A proposal to pass a resolution as referred to in b will be submitted only after consultation with Euronext Amsterdam N.V.

7. No distribution will be made to the company in respect of shares it holds in its own capital or on shares for which the company holds depositary receipts.

8. The calculation of the profit distributable on shares will disregard shares that are not eligible, pursuant to subsection 7, for such distribution.

9. Once a resolution to make a distribution has been passed, the amount will be declared payable within fourteen days. An entitlement to receive a distribution will lapse five years after the date on which the amount is declared payable, and the said amount will then revert to the company.

Proposal for profit appropriationOn the proposal of the foundation, no transfer will be made to the reserves. The entire profit will be made available to the shareholders. The proposal is to distribute a final dividend of € 0.26 per ordinary share. A sum of € 9,237,000 will be withdrawn from the other reserves for this purpose.

The profit appropriation and the proposed dividend distribution will then be as follows:

The profit appropriation will then be as follows:x € 1,000Profit in 2013 19,248Less: Paid interim dividend (9,115)At shareholders’ disposal 10,133Plus: withdrawal from the general reserves 9,237Proposed dividend 19,370

* This proposal is not reflected in the balance sheet.

219

Annual Report 2013

Principal subsidiaries

Bewaarbedrijf BinckBank B.V.Barbara Strozzilaan 3101083 HN AmsterdamTelephone +31 (0)20 522 03 30

Able Holding B.V.Reeuwijkse Poort 1142811 MX ReeuwijkTelephone +31 (0)182 398 888 www.able.eu

Executive Board:P. AartsenK.N. Beentjes

ThinkCapital Holding B.V.Barbara Strozzilaan 3101083 HN AmsterdamTelephone +31 (0)20 314 96 70www.thinkcapital.nl

Executive Board:M. RozemullerG. Koning

Foreign offices

BinckBank BelgiumDe Keyserlei 582018 AntwerpenBelgiumTelephone +32 3 303 3133www.binck.be

New address from March 2014Quellinstraat 222018 Antwerpen

BinckBank France102-106, rue Victor Hugo92300-Levallois-Perret CEDEXFranceTelephone +33 170 36 70 62www.binck.fr

BinckBank ItalyVia Ventura 520134 MilanoItalyTelephone +39 02 217 11 380www.binck.it

BinckBank SpainTrading name: Alex SpanjeUrbanizacion Marbella Real, local 15Carretera de Cadiz, km 178,729602 MarbellaMalagaSpainTelephone +34 952 92 4011www.alexspanje.com

220

Ann

ual R

epor

t 20

13

BinckBank N.V.Barbara Strozzilaan 3101083 HN AmsterdamThe Netherlands

Correspondence addressP.O. Box 155361001 NA AmsterdamThe Netherlands

Tel: +31 (0)20 522 03 30Fax: +31 (0)20 320 41 76

Internet: www.binck.com

BinckBank N.V., established in Amsterdam and entered in the Trade Register of the Amsterdam Chamber of Commerce under no. 33 16 22 23.

Investor RelationsTel: +31 (0)20 522 03 72Email: [email protected]

ColophonPhotographyLex van Lieshout Fotografie, Zoetermeer

BinckBank N.V.Barbara Strozzilaan 3101083 HN Amsterdam

P.O. Box 750471070 AA Amsterdam

t 020 606 26 66f 020 320 41 76e [email protected] www.binck.nl

Annual Report 2013

Annual Report 2013 - BinckBank · Risk & capital management 60 Introduction 61 Key developments in...

Documents

Transcript of Annual Report 2013 - BinckBank · Risk & capital management 60 Introduction 61 Key developments in...