CROSS-FUNCTIONALITY, PROACTIVITY AND AGILITY
In 2017, Degroof Petercam strengthened its operational foundations around its main strategic axes. Our clients have thus benefited from the synergies of the natural expertise between our various businesses, i.e. private banking, institutional asset management, investment banking and asset services (custodian and fund administration activities).
At the same time, our governance bodies have evolved to meet the new challenges of our industry and those of our group. Our objectives? To be more proactive and more agile and to capitalize both on our international network and on the synergies resulting from our business model.
This year, we focused a great deal of our attention on Family Business Owners as part of our development. Our approach allows providing specialized solutions to meet their specific needs, for the management of both their private and professional assets.
At international level, by increasingly sharing our IT, reporting and communication tools, we are improving the efficiency with which we expand our services offer to the various entities of the group. The successful development of our subsidiaries continued. We have extended our network in Spain and created a specialized hub in Luxembourg to support our clients in their international projects. In Institutional Asset Management, local teams were reinforced in our key markets, namely in Germany, France, Spain and Italy. Investment Banking posted excellent results, particularly in France, while Asset Services recorded strong growth in Luxembourg.
GROUP REVENUES AND PROFITABILITY ON THE RISE
The strength of our cross-functional and international commercial dynamics enabled us to have an excellent year, particularly in fund distribution, credits and international private banking.
In 2017, our revenues amounted to 468 million euros, up from 436 million euros in 2016. This result reflects the good performance of fee-generating businesses, in particular institutional management, private banking, investment banking and asset services, which largely offset the decline in market activities in a negative interest rate environment.
In 2017, Degroof Petercam recorded a gross operating income of 129 million euros, compared to 122 million euros in 2016. After exceptional items, mainly integration costs and after tax, the consolidated net profit for 2017 was 86 million euros, up from 58 million euros in 2016.
On 31 December 2017, assets under management amounted to 54.8 billion euros, against 52.3 billion euros at the end of 2016. This increase is due to significant new assets generated in particular by the distribution of our funds and by market effects. On 31 December 2017, outstanding loans amounted to 1.9 billion euros for a balance sheet of 8.3 billion euros and cash deposits of 6.7 billion euros. The capital ratio (CET1) was 17.1%, well in excess of regulatory requirements and a reflection of our strong balance sheet. Compared to 2016, the number of employees has slightly increased.
INVESTMENTS IN TALENT, EXPERTISE AND DIGITAL TECHNOLOGY
For 2018, our outlook on the economic and equity market remains positive, particularly in Europe. Economic growth seems to be holding steady at a relatively sustained pace in the various geographical areas and our baseline scenario is based on a continuation of this trend. Of course, we remain aware of the various persistent risk factors, namely interest rates, inflation, the dollar and the need to rebalance the Chinese economy. The positive business momentum that began in 2017 gives us confidence for this year. We intend capitalizing on the progress we have made which should now achieve its full potential.
We are continuing our efforts in the digital world to offer the best possible experience to our clients and staff members. Our digital platforms and applications are a priority and we plan to invest significant resources in them. The goal of these digital technologies is to reinforce the relationship with the clients and to enhance the user-friendliness of our services, but not to replace the human contact.
We are delighted to celebrate the 10th anniversary of the Degroof Petercam Foundation this year. The Foundation benefits from increased resources to support projects in connection with new sources of employment in the future. As with the dynamics around responsible investment, the social responsibility dimension is particularly important to us, as we are convinced that economic players like us play an important role in the community. We share this conviction with our clients, who are increasingly demanding responsible finance.
We would like to take this opportunity to once again thank our clients for their loyalty and trust. We would also like to express our gratitude to our employees for their commitment. We are proud of their teamwork, and are aware that the complexity of their efforts is not always perceptible in a challenging regulatory environment. To accompany our staff in a constantly changing world, we are pursuing an ambitious training program. Being agile and well prepared for digital evolutions is key for our organization. In addition, Degroof Petercam is looking for new talent to strengthen its teams, in particular in Flanders where we have the ambition to grow significantly.
Finally, we are grateful to our directors and family shareholders for their continued support. We are committed to investing in talent and expertise and in our tools to provide the best services to our clients in an ever-changing world.
Philippe Masset CEO
Alain Philippson Chairman of the board of directors
Since 1 January 2018, Ludwig Criel succeeded to Alain Philippson as chairman of the board of directors of Degroof Petercam. After 45 years with the group, Alain Philippson decided to pass on the board chairmanship, while remaining a member of the board of directors. As independent director, chairman of the remuneration committee, and member of the risk and appointments committees, Ludwig Criel knows our institution inside out.
Alain Philippson: “I am confident that under Ludwig Criel’s leadership, we will remain at the forefront of serving our clients in an increasingly complex financial world. Our independent group, in the hands of family shareholders, will continue to build on its unique heritage dating back to 1871. I would like to thank our clients for the trust they have placed in us. My family looks forward to continuing to be closely involved in the group as a reference shareholder and through its active participation in the board of directors.”