Kredietverlening aan ondernemingen update februari 2015
Challenges for a belgian financial sector at the service of citizens and the economy final version
1. Challenges for a Belgian financial sector
at the service of society and the economy
Febelfin 21 May 2013 1
2. Agenda
Febelfin 21 May 2013 2
18.00 Welcome
18.15 Presentation given by Filip Dierckx, Febelfin Chairman,
and Michel Vermaerke, Chief Executive Officer of Febelfin
18.45 Panel debate
19.45 Q & A
20.00 Reception
3. “Challenges for a Belgian
financial sector at the service of
society and the economy”
Séance-débat en
français à Mons le
5 juin
Debate in English in
Brussels on 21 May
Nederlandstalige
debatsessie te
Gent op 29 mei
Nederlandstalige
debatsessie te
Antwerpen op 27
mei
Séance-débat en
français à Namur le
29 avril
Febelfin 21 May 2013 3
Welcome !
4. “Challenges for a Belgian financial
sector at the service of citizens and
the economy”
Febelfin 21 May 2013 4
Filip Dierckx, Febelfin
Chairman
Michel Vermaerke,
Chief Executive
Officer of Febelfin
5. Challenges for a Belgian financial sector at the
service of society and the economy
Filip Dierckx, Febelfin Chairman
Michel Vermaerke, Chief Executive Officer of Febelfin
Febelfin 21 May 2013
- Financing of the economy
- Sustainable solutions for a different use of deposits in the context
of structural banking sector reforms
6. AGENDA
Febelfin 21 May 2013
I. 3 fundamental tasks
II. 3 success factors
III. 4 commitments
IV.Conclusion
6
Challenges for a Belgian financial sector
at the service of society and the economy
8. 3 fundamental tasks for a financial sector at the
service of society
Febelfin 21 May 2013
Financing the economy
A balanced approach
to saving and investing
Organising a modern
and efficient financial
infrastructure
WHICH TASKS?
8
Within the boundaries of a balanced regulation, efficient
supervision and a competitive market
9. II. 3 success factors
Febelfin 21 May 2013
Keywords: realism, cooperation, profitability
9
10. What do banks need to fulfill
their key tasks?
Febelfin 21 May 2013
Execution of
our missions
goes hand in
hand with
Realism
Cooperation
and dialogue
with
authorities
A sufficient
level of
profitability
10
11. Realism is needed
Banks cannot take
any risks
Banks must provide
cheap credit
Banks must shrink
their balance
sheets and
leverage Banks need to supply
more credit
Banks need to
attract long term
funding
LT funding will
become more
expensive as a result
of Basel III and bail-in
Banks shouldn’t be
complex
institutions Banks operate in
complex globalised
markets
11
Banks need to
boost interest rates
on savings
accounts Banks must keep on
providing cheap credit
Febelfin 21 May 2013
12. Cooperation and dialogue with public authorities
Febelfin 21 May 2013 12
A few examples
Basel III (financing of exports, LCR)
Moratorium on complex investment
products
Covered Bonds
Supporting project
Ford Genk & ArcelorMittal
Banking plan /
Roundtable SME financing
13. Source : Febelfin presentation based on NBB data.
Consolidated data, and, since 2006, data based on IAS / IFRS reporting.
4,5
0,7
10,5
-2,6
-36,5
13,2
22,4
18,5
15,8
13,6
11,8
13,7
20,4
-40 -30 -20 -10 0 10 20 30
Jan-Sept 2012
2011
2010
2007
2006
2005
2004
2003
2002
2001
2000
ROE
2008
2009
Febelfin 21 May 2013
A sustainable level of profitability is essential…
13
14. … but profitablilty is under pressure …
PROFITABILITY OF
BELGIAN
FINANCIAL SECTOR
Prudential initiatives
Structural measures
Capital requirements
Protection of
consumers
14
Economic
environment
Cost of capital
Febelfin 21 May 2013
Taxation
Prudential initiatives
Operational
measures
15. … and insufficient profitability can
impact banking on different levels
Decrease of equity may harm
both liquidity and solvency
Less solid financial system
15Febelfin 21 May 2013
16. Febelfin 21 May 2013 16
The evolution towards a sustainable and vital financial
sector goes hand in hand with :
3 FUNDAMENTAL TASKS
3 SUCCESS FACTORS
4 COMMITMENTS
22. Evolution of credit supply to businesses
Febelfin 21 May 2013 22
Hoogtepunt
Extract from the 2012 Annual Report of the National Bank of Belgium
In Belgium, the credit institutions continued the reorganisation of their balance sheets which they had started as of the outbreak
of the financial crisis. In 2012, for instance, they carried out a reduction of their exposures to the peripheral countries of the euro
zone. At the same time, they refocused on their intermediation activity in Belgium and on their strategic markets: the deposits
collected from their retail customers have increased, and the granting of credit has overall been maintained.
Febelfin data
= NBB + self-
employed/professions
NBB data
= volume of credit
taken up by Belgian
non-financial
companies
112,696
111,090
114,655
116,705
120,608
118,033
120,712
117,411116,986
118,445
120,944
120,920
122,296
124,158
126,904
128,753129,391130,031
130,781
128,829
128,244
97,070
100,335
104,350
104,696
106,447
105,069
110,069
105,501
106,354
108,531
110,866111,573
112.607
112,545
116,729
115,695
115,805
116,982
118,387
116,244
116,981
117,823
95,000
100,000
105,000
110,000
115,000
120,000
125,000
130,000
135,000
Turnover(x€1,000,000)
Febelfin Observatorium NBB
23. Credit supply to businesses
at competitive interest rates
Febelfin 21 May 2013
Average weighted interest rate for
new loans
23
Source : NBB figures – Observatory for credit to non-financial companies (current figures)
(*) Average for January – March 2013
Yearly average weighted interest rates, in %
2007 2008 2009 2010 2011 2012 2013 (*)
5.03% 5.32% 3.73% 3.20% 3.45% 3.07% 2.96%
24. Traditional credit supply under pressure…
Febelfin 21 May 2013
Credit demand diminishes Credit production diminishes
Difficult economic context
Possible impact on solvency of
SMEs / Possible decline in
financial independence of SMEs
RegulationEconomy
Basel III
LT/MT credit supply
becomes more difficult
24
25. Economic climate: SME equity under pressure
25
The degree of financial independence is the ratio between the stockholders' equity and the total liabilities. When the
ratio is high, the company is independent of third-party funds, and this has two positive consequences: on the one
hand, the financial charges are weak and thus weigh little on the results; in addition, new debts can, if necessary, be
easily contracted and under good conditions. The degree of financial independence can also to be interpreted as a
measurement of the financial risk incurred by the company, the third-party remuneration being fixed, unlike the
results of the company, which fluctuate in time. (NBB)
Febelfin 21 May 2013
SME
26. The financing capacity in the future?
- Belgian savings do not sleep
- Not all deposits are the same
- Limits to the financing capacity
Febelfin 21 May 201326
27. Belgian savings do not sleep
Febelfin 21 May 2013 27
Financing of the Belgian economy by the credit institutions (million €)
Source: NBB data
Total Belgian deposits Credit to private sector
Credit to public authorities Monetary institutions
28. Belgian savings do not sleep
Febelfin 21 May 2013
-200000
-150000
-100000
-50000
0
50000
100000
Depositosurplus: private sector + overheden Depositosurplus: private sectorDeposit surplus: private sector + government Deposit surplus: private sector
In million EUR. Source: NBB data.
=> More than 100% of Belgian deposits is transferred into credit (private + government)
28
29. Not all deposits are the same
Febelfin 21 May 2013 29
Deposits: volumes according to type of deposit (in million EUR)
Since the crisis
more insecurity
leads to more short
term savings
accounts
Since the crisis
more insecurity
leads to less long
term deposits
Source: NBB data
Macro economic parameters determine duration of deposits
(e.g. GDP growth, interest rates, unemployment, etc…)
Current accounts
Savings deposits
Total deposits (including public authorities, insurers and pension funds)
Time deposit accounts
Total
30. Febelfin 21 May 2013 30
Limits to the financing capacity
A changing financial and economic environment may cause a standstill in the growth of
retail/corporate deposits
Evolution share of savings accounts in the financial assets of households
Source: NBB data
Prudence needed
in government policy measures
as financing capacity may
diminish in the future
32. Financing needs of the economy
LT credit supply
by banks
Investment credit
LT export credit
ST credit supply
by banks
Documentary credit
Straight loans
ST export credit
LT debt financing
SME fund
Project bonds
People’s loan
Equity
Vernture capital
Win-win
Crowd funding
TRANSFORMATION INTERMEDIATION
Traditional credit supply
by banks
Alternative forms
of financing
32Febelfin 21 May 2013
33. Dialogue between the sector and the public
authorities on alternative financing methods
Febelfin 21 May 2013
SME funds
Venture capital /
win-win loans
„People‟s loans‟
Project bonds
Crowd funding Corporate bonds
Euronext
33
34. Febelfin 21 May 2013 34
• Keep on supplying credit (NBB)
• Economic context weighs on demand
• Initiatives for alternative financing
• Specific points of attention
35. Febelfin 21 May 201335
• 2013 is not the same as 2008
• Upcoming challenges
36. 2013 is not the same as 2008
Major efforts in the field of solvency, liquidity and balance
sheet reduction
Source: Febelfin calculations based on NBB data (consolidated basis)
36Febelfin 21 May 2013 36
Reduced balance sheet, increased capital, less leverage
Total liabilities of
the Belgian
banking sector
(in billion EUR)
Total capital and
reserves of the
Belgian banking
sector
(in billion EUR)
Leverage
(in units)
End
September 2007
1,567.9 50.7 29.9
End
September 2012
1,143.0 59.1 18.3
Evolution as a
percentage
-27.1% +16.6% -38.7%
37. Febelfin 21 May 2013
Source:NBB (in billion EUR)
Belgian banks rely more on deposits than on funding provided by the financial
markets
2013 is not the same as 2008
Major efforts to improve liquidity
37
* Regulated liquidity ratio: this is the ratio between the net loss of means in a stress scenario (1 month
period) and the buffer of liquid assets that are available for countering the loss. The ratio must be 100 %
or less (the lower the figure, the stronger the liquidity position). Source NBB
*Retail deposits wholesale financing regulatory liquidity ratio
38. Evolution of risk-weighted assets
(Source: NBB, in billion EUR)
2007 2008 2009 2010 2011 Sept
2012
Difference
(%)
583.5 491.7 407.5 372.5 373.8 368.5 - 36.8%
Febelfin 21 May 2013
Banks take less risks
2013 is not the same as 2008
Major effort to improve solvency
38
39. Febelfin 21 May 2013
Reduction:
• Of international activities and
exposure abroad
• Of financing via financial markets
Growth:
• Of funding via the national market
(savings deposits)
• Of granting of credit to the national
market (mortgages and credit to
enterprises)
2013 is not the same as 2008
Belgian banking activities have become more Belgian
39
457.8 543.4 568.3 642.1
1,110.1
599.6
999.6
500.9
09/2007… sep/12 09/2007… sep/12
National (EUR Bio.)*
International (EUR Bio.)
Assets Liabilities
09/2012
1,567.9 1,567.9
1,143.0 1.143.0
+18.7% +13,0%
-46.0% -49.9%
-27.1% -27.1%
* Consolidated figures, Belgian banks
09/2012
40. Brussel is not Wall Street
Belgian investment banking essential for open and
export based economy
Febelfin 21 May 2013 40
What is investment banking
in Belgium?
Financing of businesses
Specialized financing:
Foreign trade highly important for Belgian economy
Hedging currency & interest rate risks
Prop trading highly reduced and low in volume
41. Stricter regulation and reinforced control
at Belgian, European and international level
Febelfin 21 May 2013 41
Basel III
(i.a. stricter
capital, liquidity and
governance
requirements)
2010 Banking Act/
Twin Peaks I
(i.a. NBB/ FSMA
model, blocking of
strategic decisions)
Twin Peaks II G20/EU
42. New regulation may pressure profitability
Febelfin 21 May 2013 42
31/12/2006
31/12/2012
0
5
10
15
20
25
30
35
40
31/12/2006
31/12/2012
Evolution of profitability by sector
44. Febelfin 21 May 201344
• Radically different landscape
• Stricter regulation and tightening control at various
levels
• Investment banks in Belgium important for an open
economy and for SMEs
• Cumulative impact of existing regulations before
undertaking the next reforms
46. The service provided by the Belgian banks
is multi-channel and innovative
Febelfin 21 May 2013
Network of branches
and independent
agents
Selfbanks Phone banking
Internet banking Mobile banking
46
47. Promotion of payments
“By card, of course”
Campaign with Comeos
Introduction of codeless
payments
…
Development of new
instruments
Several smartphone
/ mobile banking formulas
Investing in e-commerce
…
Public Authority
Involvement
Public authorities’ example
function
Tax incentives
Banning cash payments
above a certain threshold
Febelfin 21 May 2013
What can the banking sector do?
47
48. Febelfin 21 May 201348
• Multi-channel landscape
• Broadening of the payments offer through innovation
• Security a priority, i.a via prevention campaigns
51. Febelfin 21 May 201351
• Updating the Codes of Conduct
• Specific support
• Creating a framework for responsible
investment, savings and credit supply
• Investing in training
• Involvement in social initiatives
54. Alex Puissant
Debate moderated by Alex Puissant
Max Jadot, Chief Executive
Officer & Chairman of the
Executive Committee BNP
Paribas Fortis
Jan de
Brabanter, Deputy
Secretary-General
BECI
Luc Versele, Chairman of
the Executive Committee
Crelan
Rudy
Demotte, Minister-
President of Wallonia
Olivier Hamoir, Director
McKinsey & Company Febelfin 21 May 2013 54
!!! Opgelet: dit jaar eerder rond de 4% - beduidend méér, maar te weinig voor gezonde en duurzame financiering economie (verder uit te werken)Duiding rond 4,5%:Hoe duurzaam is deze winst?Vergeet niet dat je oog moet hebben voor verplichtingen inzake versterking van eigen vermogen & winstreserveringen die in deze gebruikt worden (goed voor een 60% van die 4,5% = > 1,8% blijft over)Hierop eveneens nog roerende voorheffing betalen (in zelfde voorbeeld blijft er met roerende voorheffing ad 25% nog 1,35 over)
Hier kan het idee over een ander soort FTT gelanceerd worden, gebaseerd op de financial stabilitycontribution, met een weging.Bij operationele maatregelen kan ingegaan worden op de costtoincome ratio
Rentabilité pour leclient:Unerentabilitéinsuffisantepourraitaboutir àuneréduction des investissements,un étiolement de l’offre.Unerentabilitéinsuffisantepourraitaboutir àuneraréfaction des crédits,un renchérissement du prix des crédits,une contraction au niveau du service,unehausse du prix des produits.Rentabilité pour lepersonnel:Rentabiliténécessaire pour pouvoirrémunérer les travailleursRentabilité pour l’actionnaire:Rentabiliténécessaire pour pouvoirrémunérer les actionnaires
Dit vormt een kern-slide om te tonen dat de Belgische banksector zijn opdracht inzake de financiering van de Belgische economie niet heeft veronachtzaamd.
Watbetreftdalinggraadfinanciëleonafhankelijkheid: in het eerstedeciel (dwzvoor de allerkleinsteondernemigen) van de onderzochteKMO-populatiedaalde de graad van financiëleonafhankelijkheid maar liefst met 12,7%-punt over de voorbije 10 jaar!Watbetreftnegatiefvermogen: in 2002 bedroegdit 15,4%
Eventuele achtergrond - bijkomende informatie over SME Lease fund (mail Anne-Mie Ooghe):Michel, Filip,Zoals afgesproken tijdens de vergadering over het ‘SME Lease Fund’ van 21 februari jl., heeft de BLV het idee van het SME Lease Fund’ verder uitgewerkt tijdens een vergadering die gisteren heeft plaatsgevonden. Bijgaand vinden jullie de conclusies van die vergadering.Ook werd nagedacht over de boodschap die jullie m.b.t. de idee van een ‘SME Lease Fund’ zouden kunnen brengen tijdens de Febelfin persconferentie en/of de luncheon. Hieronder gaat een voorstel van boodschap. Boodschap die kan worden meegegeven in kader van Febelfin persconferentie en/of luncheonMomenteel wordt onderzocht of op het niveau van de leasingsector een SME Lease Fund kan worden opgericht met het oog op het faciliteren van de financiering van investeringen van KMO’s via leasing. De criteria voor de financieringen die zullen worden opgenomen in het Fonds zullen op die wijze worden vastgelegd dat vooral dossiers die vandaag moeilijk financierbaar zijn, dankzij de funding die wordt aangetrokken via het Fonds de nodige financiering zullen vinden. Op die manier kan een boost worden gegeven aan de Belgische economie.De doelstelling is om een Fonds te creëren ten bedrage van circa 300 miljoen EUR. Vooral investeringen op lange termijn (meer dan 7 jaar) en innovatieve investeringen zouden via het Fonds worden gefinancierd.’
Dalend vertrouwen & mindere groei voorbije jaren bepalend voor aangroei spaardeposito’s
Gezien dan Belgische fin instellingen de economie financierenOpletten omdat groeiscenario (en dus toename van de vraag) druk op spaardeposito’s kan leggenNadenken over de fiscale regimes: elke ingreep heeft zeker ook een impact die dus ingecalculeerd moet wordenBegrijpen inherente zwakte in het belang dat spaardeposito’s spelen bij financiering Belgische financiële sectorSpaardeposito’s vs LT financiering moeilijk evenwicht
Corporate bond emissions 2012 7,693 mia (2011 2,308 / 2010 2,266 / 2009 7,211 / 2008 0,798 / 2007 0,144)
Eventuele achtergrond - bijkomende informatie over SME Lease fund (mail Anne-Mie Ooghe):Michel, Filip,Zoals afgesproken tijdens de vergadering over het ‘SME Lease Fund’ van 21 februari jl., heeft de BLV het idee van het SME Lease Fund’ verder uitgewerkt tijdens een vergadering die gisteren heeft plaatsgevonden. Bijgaand vinden jullie de conclusies van die vergadering.Ook werd nagedacht over de boodschap die jullie m.b.t. de idee van een ‘SME Lease Fund’ zouden kunnen brengen tijdens de Febelfin persconferentie en/of de luncheon. Hieronder gaat een voorstel van boodschap. Boodschap die kan worden meegegeven in kader van Febelfin persconferentie en/of luncheonMomenteel wordt onderzocht of op het niveau van de leasingsector een SME Lease Fund kan worden opgericht met het oog op het faciliteren van de financiering van investeringen van KMO’s via leasing. De criteria voor de financieringen die zullen worden opgenomen in het Fonds zullen op die wijze worden vastgelegd dat vooral dossiers die vandaag moeilijk financierbaar zijn, dankzij de funding die wordt aangetrokken via het Fonds de nodige financiering zullen vinden. Op die manier kan een boost worden gegeven aan de Belgische economie.De doelstelling is om een Fonds te creëren ten bedrage van circa 300 miljoen EUR. Vooral investeringen op lange termijn (meer dan 7 jaar) en innovatieve investeringen zouden via het Fonds worden gefinancierd.’
Zie hierover ook de NBB in haar jaarverslag (quote geciteerd op slide 20):“In Belgiëzetten de kredietinstellingen de sedert het uitbreken van de financiële crisis begonnenherstructurering van hunbalansvoort. In 2012 verminderdenze met name hunvorderingen op de periferelanden van het eurogebied. Terzelfdertijdspitstenzezichopnieuw toe op hunintermediatieactiviteiten in België en op hunstrategischemarkten: de bij de retailcliëntenaangretrokkendeposito’snamen toe en de octroi de créditbleef over het geheelgenomengehandhaafd. “
We zijn op de goede weg, maar opletten dat nieuwe regelgeving de klok niet terugdraaien.
May necessitate:AdditionalcostsavingsUpwardspressure on credit priceRepricing funds entrustedImpact on real economy => is further structural reform desirable and effective?
Veranderdlandschap: hard gewerktaansolvabiliteit, liquiditeit risicoprofiel is forsverminderdNieuwregelgeving & toezicht arsenaalomrisicoprofieltebeperken is aanwezig