Business performance Specialised Finance

 

Strategy and focus

Specialised Finance provides asset and project financing in a select number of clearly-defined asset classes, in which NIBC has a long-standing track record as long-term lender.

 

Specialised Finance groups together services in the following areas:

  • Origination structures, arranges and underwrites debt financing for its clients and is organised around six asset classes: Corporate Lending, Leveraged Finance, Shipping, Oil & Gas Services, Infrastructure & Renewables and Real Estate;
  • Structuring is the liaison between the origination and distribution teams and is responsible for structuring highly sophisticated transactions for clients as well as fund and tax structuring;
  • The distribution team is the integrated distribution platform of NIBC and matches investor appetite with NIBC’s origination network and structuring capabilities;
  • Portfolio management works closely together with NIBC’s coverage bankers and origination teams to monitor borrower performance. The team proactively monitors credit quality and covenant compliance of borrowers and reviews the status of assets provided as collateral; and
  • Retail markets activities include residential mortgage origination in the Netherlands and Germany on the basis of white labelling through a number of distribution partners. Another important retail activity is NIBC Direct, NIBC’s online retail savings programme, which started in September 2008 in the Netherlands and in February 2009 in Germany.

 

 

Behind the 2008 numbers

Specialised Finance’s Operating income increased by 31% to EUR 305 million. Net interest income and dividend came at a slightly lower level than in 2007, mainly due to the decrease in the average corporate loan and structured investments portfolios. The lower fee income fully reflects the low level of origination as a result of the challenging business climate and the decreased portfolio. Net trading income was positively affected by repurchases of liabilities. Operating expenses fell by 8% because staff numbers decreased and variable compensation was lower. Impairments were made on the corporate loan portfolio. All in all, this resulted in a 45% increase in profit after tax to EUR 148 million. 

 

 

Transaction highlights 2008

NIBC arranged important client transactions in its target segments last year, despite the challenging market circumstances. Examples include:

  • NIBC acted as mandated co-lead arranger in the buyout of See Tickets International, the ticketing service of Joop van den Ende’s Stage Entertainment;
  • Bookrunners and Mandated Lead Arrangers NIBC and Scotia Capital successfully closed syndication of the USD 225 million Term Loan for GE SeaCo SRL. The facility raised an oversubscription in general syndication and was increased to USD 250 million;
  • NIBC acted as co-lead arranger and co-underwriter of the USD 750 million facility for Berlian Laju Tanker Tbk, the largest shipping company in Indonesia; and
  • NIBC participated in a EUR 300 million club deal for Imtech N.V. and herewith supported the company in acquiring its Scandinavian competitor NVS.

 

 

Outlook

Specialised Finance, with its healthy mix of geographical and industry sector exposure, has the liquidity to grow its corporate loan book in 2009. After a successful start of NIBC Direct in the Netherlands in 2008 and its expansion into Germany early 2009, retail savers will continue to be an important client group for NIBC.