Letter from the Managing Board
NIBC’s Managing Board, from left to right: Kees van Dijkhuizen, Jeroen Drost, Jan Sijbrand and Jan van Nieuwenhuizen
Last year proved even more difficult than feared. The market turmoil intensified into the worst crisis in decades, hammering the financial markets and affecting all its players. We enter 2009 with the world slipping into recession and a highly uncertain future ahead.
NIBC Bank N.V. (NIBC) ended 2008 with a Net profit of EUR 92 million, 6% below last year’s results.
Our fourth-quarter 2008 results were impacted by negative fair value adjustments and impairments on equity and mezzanine investments. For the year 2008, we made a profit of EUR 92 million and further strengthened our capital and liquidity positions. By addressing the situation at an early stage, we minimised the impact on our financial performance and by the autumn were in relatively stable shape. We further improved the efficiency of our organisation and cut costs in response to declining income, in close cooperation with our Employees’ Council.
NIBC Holding N.V. (NIBC Holding) raised EUR 400 million of new cash equity from its shareholders, in the first quarter of 2008, a key step in supporting NIBC Holding’s Tier-1 ratio to the robust 16.7% at which it ended the year. At the same time, we sharply reduced our risk profile, primarily by reducing positions in the financial markets area.
In line with our strategy, we diversified our funding to ensure stable, transparent and tightly-controlled liquidity. In 2008, we issued EUR 0.7 billion under our covered bond programme, raised EUR 1 billion by year-end with our Dutch online retail savings programme NIBC Direct, and issued a three-year EUR 1.4 billion bond under the Dutch State’s Credit Guarantee Scheme.
As markets grew increasingly turbulent, we became ever more aware of the need to sharpen our strategy to focus on our strengths. We streamlined NIBC around two pillars, Merchant Banking and Specialised Finance, in order to make us more effective in meeting the needs of our clients.
The market deterioration took a heavy toll on all financial services companies. We too were disappointed to have our credit ratings downgraded during the year as the operating environment worsened.
The major risk to NIBC as we enter 2009 is the dire business environment. All sectors are affected by the deep economic crisis, and companies are reluctant to invest or do deals. With economic forecasts gloomy, the year ahead is unpredictable at best.
However, with strong capital buffers, a firm grip on liquidity and a healthy geographical and industrial business mix, NIBC remains in a strong position to further deliver market leading services to our clients. Although we are not immune to the market turmoil, the intensified focus we introduced last year stands us in good stead.
It goes without saying that circumstances such as these impose a heavy strain on employees. Since my arrival at NIBC last May, I have been consistently impressed by the talent, teamwork and flexibility of our staff. On behalf of the Managing Board, I should like to extend sincere thanks to all employees for their superb efforts in 2008.
As last year’s challenges persist in 2009, our employees’ resilience will continue to be tested. But we can be confident that their drive and determination will see them - and NIBC - through.
On behalf of the Managing Board,
The Hague, 8 April 2009
Jeroen Drost
Chairman of the Managing Board,
Chief Executive Officer
