Van Lanschot Kempen has reported a net profit of €62.3m for the first six months of 2017 (H1 2016: €31.5m), its 'strongest half-year performance in many years' while the underlying net result advanced to €69.6 for the period, up from €37.7m during the same period in 2016. The persistently low interest rate environment saw a great deal of demand for Kempen Securities' structured products, with enhanced activity on the part of private banking clients also visible, according to the bank.
The merchant banking division, which includes the Dutch bank's structured products desk, saw its underlying net result increase to €3.4m (H1 2016: €2.1m), with commission income working out at €22.3m (H1 2016: €19.3m).
Results on financial transactions, at €7.2m, include the negative result on securities trading (-€0.7m) which primarily reflects the result from positions in Van Lanschot Kempen's own issued debt securities while results on currency trading rose 29% compared with H1 2016, to €4.5m, mainly due to a higher volume of securities transactions and payment services in foreign currency, according to the bank.
The bank's €2m profit on the investment portfolio can be broken down into realised profits of €1.6m on the sale of bonds in the investment portfolio (H1 2016: €7m) and €0.4 million on its mark-to-market portfolio (H1 2016: -€0.9m).
The gain on interest rate hedges (€2.9m) largely relates to the Kempen Dutch Inflation Fund I NV structured product on the bank's own books (€1.4m) while other income, at a negative €1.5m, comprises charges on debt securities (medium-term notes) issued by Van Lanschot Kempen (- €3.3m) as well as the €1.9m positive result generated by merchant banking's structured products and a negative €0.1 million from other financial derivatives, according to the bank.
Net assets under management (AUM) inflows and a positive market performance boosted client assets to €72bn, compared with €69.4bn at year-end 2016.
'Our wealth management strategy generated robust results in the first six months of the year,' said Karl Guha (pictured), chairman, Van Lanschot Kempen, in a statement. 'Our focus on preserving and creating wealth for our private and institutional clients has increased assets under management and sparked a 13% advance in commission income. We're delighted with our takeover of UBS's wealth management activities in the Netherlands - completed only last week - as it significantly strengthens our position in the market for ultra-high net worth private individuals, family offices and foundations & charities.'
On June 7, 2017 Van Lanschot Kempen and UBS announced that it had reached agreement on the acquisition by Van Lanschot Kempen of UBS's domestic wealth management activities in the Netherlands. The transaction, which was completed on August 25, comprises the client relationships and employees of the wealth management activities of UBS Netherlands, a branch of UBS Europe, which currently manages assets of around €2.6bn. The transaction also comprises the products and services of the Netherlands branch of UBS Europe SE. Van Lanschot Kempen will pay an initial acquisition price of €28m for the activities to be acquired, however, the final price may be higher or lower depending on the AUM amount that will actually transfer to Van Lanschot Kempen.
The SRP Netherlands database lists 53 live structured products which are distributed via Kempen. Of these, 46 are issued on the paper of the bank's parent Van Lanschot Bankiers with the remaining products issued in collaboration with BNP Paribas (four), UBS (three) and ING (one). In Ireland, the bank is the issuing company behind 18 structured products from Wealth Options; in Belgium, Van Lanschot collaborated with Crelan for two products; and in Sweden the bank is the manufacturer behind Mangold's Autocall SX5E 3.
Click the link to view the Van Lanschot Kempen 2017 half-year financial report and the presentation.
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