Annual report 2009 B n in u c a k l B re a p n o k r N t. 2 V BinckBank N.V.

Transcription

1 Annual report 2009

2 This document is a translation of the Dutch original and is provided as a courtesy only. In the event of any disparity, the Dutch version shall prevail. No rights may be derived from the translated document.

3 1 Contents e78 million Adjusted net profit in ,574 Number of accounts in million Number of transactions in 2009 BinckBank overview 2 Profile BinckBank 3 Key figures 4 Chairman s message 6 Key events in CVs of executive board members 11 Vision, mission, strategy and aims 12 Information for shareholders 19 Report of the executive board 25 General review of Review of the consolidated results 27 Retail business unit 30 Professional Services business unit 34 Outlook 37 Risk management & capital management 38 Personnel & organisation 43 Corporate social responsibility 45 In-control statement 46 Corporate governance 47 Introduction 48 The Code 48 The Banking Code 53 Principles for a controlled remuneration policy 53 Conclusion 54 Report of the supervisory board 55 The year Composition of the executive and supervisory board 56 Meetings of the supervisory board in Meetings of the audit committee in Remuneration of the executive board 58 Broad outlines of the remuneration report 59 Consultation with the Works Council 65 Financial statements and dividend 66 Concluding 66 CVs of supervisory board members 68 A n n u a l r e p o r t Financial statements 71 Definitions and ratios 160

4 B i n c k B a n k o ve r v i e w

5 3 BinckBank overview Profile Founded in 2000, BinckBank is an independent online bank for investors. BinckBank is ranked in the top 5 in Europe, and is listed on the NYSE Euronext stock exchange in Amsterdam. Since 1 March 2006 the bank has also been listed on the Amsterdam Midkap Index (AMX). Its market capitalisation at the end of 2009 amounted to 954 million, and the average daily turnover in BinckBank N.V. (BinckBank) shares in 2009 was 271,522 shares. BinckBank has the ambition of becoming the largest online bank for investors in Europe, and as the number 1 online bank for investors in the Benelux countries, with strongly growing activities in France, BinckBank is well positioned to achieve this ambition. At the end of 2009 we had 373,574 accounts, of which 320,756 were in the Netherlands, 33,272 in Belgium and 19,546 in France. The total revenue from operational activities amounted to 186 million (FY08: 149 million) and the adjusted net profit was 78 million (FY08: 64 million). BinckBank aims to distribute 50% of the adjusted net profit as dividend to its shareholders every year. BinckBank s operations are divided between two business units: Retail and Professional Services. Retail provides services for independent private investors under the labels Binck and Alex. Under the Binck label, which is used in the Netherlands, Belgium and France, we tailor our services to the active and experienced independent investor. We offer the independent investor order execution at highly competitive fees in combination with a number of facilities such as an investment website including real-time streaming of prices and news, order book depth, research, advice and analysis. A n n u a l r e p o r t Under the Alex label we serve the private investor who wants to get more out of his assets. We offer these investors a comprehensive investment site, investment training, an online savings account and asset management. In recent years both Binck and Alex have several times been named as the best online brokers in the Netherlands by various independent research agencies. In addition to private investors we also serve more than a hundred professional clients. The Professional Services business unit offers services to asset managers, banks and insurers, handling the entire securities transaction and its associated banking administration process on their behalf with the use of our online product. Our Professional Services customers can opt for a service provision agreement with BinckBank, or they can make independent use of the software supplied by our subsidiary company Syntel, which allows customers to manage their own service provision. BinckBank has branches in the Netherlands, Belgium, France and Spain, and had 526 FTEs in employment as of 31 December 2009 (December 2008: 475).

6 B i n c k B a n k o v e r v i e w 4 Key figures (x 1,000) Customer figures* FY09 FY08 FY08 Customer accounts 373, ,826 37% Retail 348, ,299 32% Professional Services 25,386 8, % Number of transactions 9,617,181 7,151,244 34% Retail 9,144,980 6,807,997 34% Professional Services 472, ,247 38% Assets under administration 10,942,742 6,065,852 80% Retail 8,031,695 5,001,484 61% Professional Services 2,911,047 1,064, % Income statement Net interest income 43,825 40,640 8% Net commission income 129, ,181 28% Other income 9,661 6,162 57% Result from financial instruments 4,353 1, % Impairment of financial assets (857) (205) 318% Total revenue from operating activities 186, ,008 25% Employee expenses 43,185 38,443 12% Depreciation and amortisation 35,939 31,789 13% Other operating expenses 43,388 37,316 16% Total operating expenses 122, ,548 14% Result from continuing operations 63,710 41,460 54% Share in profits of associates and joint ventures (1,466) % Result before tax 62,244 41,980 48% Tax (15,083) (8,941) 69% Result after tax (continuing operations) 47,161 33,039 43% Result after tax (discontinued operations) % Net profit 47,161 33,145 42% IFRS amortisation 28,196 28,196 Fiscal goodwill amortisation 2,792 2,792 Adjusted net profit 78,149 64,133 22% Average number of shares outstanding during the year 74,897,706 76,870,870 Adjusted earnings per share % Balance sheet & capital adequacy Balance sheet total 2,930, ,394 14% Equity 480, ,641 1% Total available capital (Tier 1) 95,569 77,295 24% BIS ratio 18.4% 17.2% 7% Solvency ratio 13.0% 13.6% -4% Cost / income ratio Cost / income ratio 66% 72% Cost / income ratio excluding IFRS amortisation 51% 53% * The number of accounts for the Retail business unit has been adjusted to reflect the fact that in some cases an account has been opened and an account number allocated, but identification of the account holder has not taken place. See page 33 for further details. Starting from FY09 Q2, the customer details of the BPO customers are included in the Professional Services business unit. The comparative figures of Professional Services have not been amended.

7 5 Adjusted net profit* (In million) 90 Interest & commission income* (In million) Commission Interest Number of transactions*/** (in million) Number of accounts */** (In thousand) Solvency* 20% 18.4% 17.2% 16% 13.6% 12.7% 13.0% 12% 9.5% 8% Liquidity position* (In million) 2, , ,558 1,348 1, A n n u a l r e p o r t % Solvency BIS Ratio Standard Solvency Standard BIS Ratio Liquid financial assets Cash * The comparative figures for 2007 concern the pro forma combined results of BinckBank and Alex, with the reported results of Binck en Alex being combined. ** Starting from FY09 Q2, the customer details of the BPO customers are included in the Professional Services business unit. The comparative figures have not been amended. The number of accounts for the Retail business unit has been adjusted to reflect the fact that in some cases an account has been opened and an account number allocated, but identification of the account holder has not taken place. See page 33 for further details.

8 B i n c k B a n k o v e r v i e w 6 Chairman s message Dear shareholders, customers, colleagues and other readers, It is with great pleasure that I present you this annual report of BinckBank for the financial year We can look back on a good year, in which we achieved the highest profit since the foundation of BinckBank. Initially 2009 seemed to start off as a tough year. It seemed that there was no end in sight to the falling market prices, and in the last quarter of 2008 many financial institutions appealed to the government for assistance. The economy had been unprecedentedly hard hit, and the media were gloomy about the prospects. But thanks to our customers and employees, and our solid financial policy, BinckBank weathered the crisis unscathed, without any outside help whatsoever. We ended the 2009 financial year with an outstanding result: an adjusted net profit of 78 million ( 1.04 per share). We will propose a dividend payment of 0.52 per share to shareholders. The customer at the centre The credit crisis meant that great attention was focused on the policies followed by financial institutions. At the start of 2009 an independent investigation into this was carried out by the Future of Banking advisory committee. One of its main conclusions was that banks should once again make the interests of their customer their primary concern. For us this was yet another confirmation of our distinctive strength in comparison with the large banks. At BinckBank the customer has always been at the centre of everything we do, just as it should be. Best online broker This was acknowledged in the market. We scored well in many independent surveys. For example, in February we were named as best broker by IEX Netprofiler, and in November we were presented with the Gouden Stier award for best online broker, investment institution and Stock Market Favourite by the belegger.nl investors website. In Belgium we were voted Best Buy by the Belgian Consumers Association. Our customers value our services, and we greatly appreciate that. BinckBank share price The price of BinckBank shares saw a powerful recovery in In 2008 we were still being swept along with the negative mood in the market, but in 2009 the BinckBank share price rose by 130% from 5.45 to We constantly strive to create shareholder value. By offering our customers an outstanding product with customer-oriented service at highly competitive prices our company can grow and our profits grow with it. In combination with the payment of an attractive dividend, this is how we create maximum shareholder value. The improved conditions on the financial markets in 2009 helped us do this. The Banking Code The Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) drew up the Banking Code in response to the report entitled Restoring Trust ( Naar herstel van vertrouwen ) that was published by the Advisory Committee on the Future of Banks (the Maas Committee ). The aim of the Banking Code is to strengthen governance within banks, improve risk management and auditing and promote the implementation of sound remuneration policies. The Banking Code came into force on 1 January BinckBank has been making careful preparations for the introduction of the Banking Code over the last year. Our current conclusion is that we do not expect that BinckBank s operations will deviate from the Banking Code in any major way, and we have already taken concrete steps towards its implementation. Among other things, the duties and responsibilities on the supervisory board and the executive board have been brought into line with the relevant provisions of the Banking Code.

9 A n n u a l r e p o r t Move to Eurocenter I Since the acquisition of Alex Investment Bank at the end of 2007 BinckBank had been renting two offices in Amsterdam. At the time of the acquisition of Alex it was decided to respect the existing rental contracts and not incur any unnecessary costs by buying them out. In 2009 BinckBank decided to move to a new office location, and bought the Eurocenter I building near Amsterdam RAI Station. BinckBank will move to the new location in the second half of Prospects for 2010 Our company s results are highly dependent on our customers activity in the market. The volatility and direction of the market are important in this respect, so it is not possible for us to provide concrete expectations regarding our results for BinckBank will continue to focus on further growth of its customer base, both in the Netherlands and abroad, in order to achieve its ambition of becoming the biggest online bank for investors in Europe. We are on the right track towards this, and at the beginning of 2010 we raised our medium term targets. Finally, I would like to thank to all our employees, customers and shareholders for their confidence in BinckBank. Koen Beentjes, Chairman of the executive board

10 B i n c k B a n k o v e r v i e w 8 Key events in 2009 BinckBank enters into first BPO agreement with a life insurer: Robein Leven ING Bank selects Syntel software BinckBank records strong first quarter results Koen Beentjes succeeds Thierry Schaap as Chairman Binck named as best broker by IEX Netprofiler January February March April May June

11 BinckBank suspends share buy-back programme BinckBank in Belgium voted Best Buy by Belgian consumers association Test Aankoop BinckBank buys new head office building: Eurocenter I BinckBank presented with the Gouden Stier award for best online broker, best investment institution and Stock Market Favourite by belegger.nl investors website BinckBank presents record third quarter figures 0 Research bureau WUA! names the Alex and Binck websites as the best on all fronts BinckBank welcomes 10,000 th account holder in France First shares traded via TOM BinckBank presents strong half year results July August September October November December

12

13 CVs of executive board members Koen N. Beentjes, Chairman of the executive board (1961 Dutch nationality) Evert-Jan M. Kooistra, Executive board member and CFO (1968 Dutch nationality) Koen was appointed as a member of the executive board of BinckBank at the general meeting of shareholders on 28 April 2009 for a period of four years, with responsibility for Human Resources, Information Technology, Legal Affairs, Compliance, Internal Audit, Investor Relations and the Project Bureau. Koen is a certified public accountant and had an international career of over 20 years at the ING Group and its predecessors. In the early part of his career he was particularly active in the field of Finance & Control at subsidiary companies of the ING Group. In 1994 he took on responsibility for the acquisition of foreign retail banks by ING. In 1998 he became a member of the executive board of the Allgemeine Deutsche Direktbank AG in Frankfurt am Main, Germany. Following his return to the Netherlands Koen was appointed as general manager of ING Card at the end of Number of shares in BinckBank at end of 2009: 10,000 Pieter Aartsen, Executive board member (1964 Dutch nationality) Pieter has been an executive board member of BinckBank since 2006, and is responsible for the Professional Services business unit, Syntel and TOM. Pieter studied general economics at VU University Amsterdam. From 1990 to 2004 he worked at the KAS BANK, where he held various positions within the Institutional Banking division. He was appointed Head of Sales and Business Relations Management for the Benelux countries in In 2001 Pieter became Head of Sales and Business Relations Management for the UK, and in 2004 he joined Deutsche Bank AG in London as Head of European Securities Clearing and Vice President, with responsibility for product development and sales. At the annual general meeting of shareholders of 26 April 2010 Pieter will be nominated for reappointment as an executive board member for a period of four years. Evert-Jan has been an executive board member and CFO of BinckBank since He is responsible for Finance & Control, Operations, Risk Management and Internal Control. He studied business economics at the Erasmus University in Rotterdam and is a certified public accountant. Evert-Jan has over 17 years experience in the financial field, including time spent at PriceWaterhouseCoopers and Shell. In his last position he was financial director at the American company International Game Technology. At the general meeting of shareholders of 6 May 2008, Evert-Jan was appointed by the shareholders as an executive board member for a period of four years. Number of shares in BinckBank at end of 2009: 5,768 Nick Bortot, Executive board member (1973 Dutch nationality) Nick has been an executive board member of BinckBank since 2008, and is responsible for the Retail business unit. Nick studied business administration at Nyenrode Business University and international affairs at the University of Amsterdam. Nick has been involved with BinckBank since its foundation in 2000, and he has held posts as Head of Client Relations, Marketing & Sales Director and as Managing Director of the successful BinckBank Belgium. At the general meeting of shareholders of 6 May 2008, Nick was appointed by the shareholders of BinckBank as an executive board member for a period of four years. Number of shares in BinckBank at end of 2009: 39, A n n u a l r e p o r t Number of shares in BinckBank at end of 2009: 22,214 On the photo from left to right: Koen N. Beentjes, Evert-Jan M. Kooistra, Pieter Aartsen, Nick Bortot.

14 Vision, mission, strategy and aims The market for specialist online brokers such as BinckBank is a growing one. Generalist banks cannot match the level of service of the specialists. Customers are becoming increasingly critical, and are increasingly likely to go to a specialist. 12 B i n c k B a n k o v e r v i e w Vision and Mission The internet is changing the competitive relations between market parties, putting the customer in a central position and giving clients more influence. Through comparison sites on the internet consumers can easily find and compare products and services from new and existing parties. What is more, they can also exchange opinions on them online. These possibilities have increasingly contributed to consumers making rational choices based on price, quality and service rather than, for instance, a brand name. Because of this we think that the image of a business is no longer purely determined by marketing campaigns and similar factors, but also by consumers experiences that are published on the internet. Customer satisfaction will therefore be an increasingly important factor in the growth of businesses in the future. It is the mission of BinckBank to provide the private investor with the same technical resources as professional investors. In this way we aim to achieve high customer satisfaction and so create maximum value for the BinckBank shareholders. We want to amaze our customers with a high quality product and an exceptional customer-oriented attitude at competitive prices. We want our customers to become ambassadors for BinckBank and so bring about accelerated customer growth. BinckBank strives towards the highest possible customer satisfaction Among professional investors we are seeing increasing demand for fast, low-cost order execution and a reliable custodian bank. We can also see banks and insurers moving towards the outsourcing of securities transactions, because for them the process associated with the completion and administrative processing of a securities transaction is an expensive and labour-intensive affair. Mounting regulation in particular is leading to an ever more complex environment, which calls for changes in processes and systems. BinckBank offers its professional customers a high-quality infrastructure for completing securities transactions at a low cost, allowing them to profit from the economies of scale of the BinckBank platform. Ambition BinckBank is an online bank for investors with a Top 5 position in Europe. As an online bank for investors we offer our customers fast and low-cost access to all the main financial markets in the world. We have the ambition to become the biggest online bank for investors in Europe, measured by the number of brokerage accounts, transactions and profit, and we aim to be active in a minimum of five countries. Where does BinckBank stand at the end of 2009? The Retail business unit offers its services to private investors under the Alex and Binck labels; these services have grown strongly ever since it was founded in Following the acquisition of Alex Beleggersbank in 2007 BinckBank became the market leader in the Netherlands by a wide margin. The Retail business unit continued its successful growth in the Netherlands in To realise BinckBank s ambition, expansion in Europe is needed. For this reason, in 2006 the Retail business unit expanded its activities to Belgium, where it reached break-even point within 18 months. Activities in Belgium grew strongly in 2009, and after 4 years we have almost reached the position of market leader in the country. These excellent results were the catalyst for us to also offer our services to independent asset managers in Belgium at the start of 2007 via the Professional Services business unit. In September 2008 we began offering online brokerage services to French private investors. By expanding our activities to Belgium and France we have taken the first steps on the way to expansion throughout Europe.

15 BinckBank from a European perspective The European online brokerage landscape is fragmented. There are a large number of smaller and larger players in various Western European countries, but only a limited number of them are active internationally. On the one hand there are strong local players such as Keytrade in Belgium, Avanza Bank in Sweden, Swissquote in Switzerland, Fortuneo in France and Renta4 in Spain. On the other, there are brokers who are already active in a number of countries, such as Comdirect in Germany (their home market), France, the UK, Italy and Austria; DAB Bank in Germany (their home market) and Austria; Boursorama in France (their home market), Spain, Germany and the UK; Cortal Consors in France (their home market), Germany, Italy, Spain and Luxemburg, and for example Nordnet, which is active in Sweden (their home market), Norway, Denmark and Luxemburg. The overview on page 14 gives a good impression of the European online brokerage landscape. A number of the larger European brokers are wholly or partly owned by major banks such as Boursorama (part of Société Générale), Cortal Consors (BNP Paribas), Fortuneo (Crédit Mutuel) and Comdirect (Commerzbank). As a rule they have different strategies to a specialised player like BinckBank. Where BinckBank has a sharp focus on online brokerage and securities-related services, the bigger players have more of a tendency to develop into online banks, with an orientation towards expanding their product range with, for example, current accounts, credit cards, mortgage products, insurance and other services. These services are often offered with the help of product knowledge that is drawn from the parent company. In our opinion, this expansion comes at the expense of services to their actively investing customers, thus creating growth opportunities for specialists like BinckBank. The fragmented European market offers a good basis for cross-border consolidation, and many analysts and investors expect to see this happening. Strong local players need to operate across borders to be able to guarantee their growth in the longer term. However, we have not seen the consolidation process gearing up in Many valuations were still low in 2009, especially at the beginning of the year, so it was not attractive for parties to sell their profitable online brokers. In addition, many brokers are owned by major banks, which often finance their banking activities with the excess liquidity of their brokerage firms. A brokerage firm also makes only a limited demand on a bank s available capital, meaning that disposing of the brokerage firm is no solution for any balance restructuring by the parent bank. Competitive basis for European growth Over recent years BinckBank has built up a large customer base and extensive expertise in the field of online brokerage, and in this way it has created a solid basis for further European growth. 18% of new customers are brought in by existing customers Strong marketing model Our marketing model is simple, and leads to success in three steps (price, quality/service and ambassadors). BinckBank offers its services at competitive prices. By offering products and services at lower prices than our competitors we build up market share. A disadvantage of price competition, however, is that it does not create loyalty among the customer base that it attracts. For this reason we generate customer loyalty to BinckBank by offering a high quality product and customer-centred service. Accelerated growth is achieved because satisfied customers play an ambassadorial role. BinckBank benefits from this ambassadorial function through member gets member programmes, where existing customers have an incentive to recruit new customers. In % of new customers were introduced through the member gets member programme. The marketing model has currently proved itself in the Netherlands and Belgium, so it is now also being applied in the French market, where we are establishing our market position on the basis of competitive prices and outstanding service. Strong brand names BinckBank s products and services have been given high scores in quality evaluations by customers and research bureaus for several years. The Alex and Binck labels are renowned as strong brands. With the Binck label we tailor our services to the active and experienced independent investor, while the Alex 13 A n n u a l r e p o r t

16 United Kingdom Population: 61.1 million Retail Investors: 2.5 million % using online banking: 19% Internet access: 80% Online brokers: Barclays, E*Trade, Charles Schwab Average price level: Flat fee, Average Most traded products: Spread betting, CFDs, FX Population: Retail Investors: Scandinavia % using online banking: 24% Internet access: 83% Online brokers: Average price level: Most traded products: 24.6 million 1.8 million Nordnet, Netfonds, Saxo Bank, Avanza, Skandiabanken, FIM Very low Shares, funds, ETFs and bonds Germany Population: 82.3 million Retail Investors: 2.6 million % using online banking: 20% Internet access: 75% Online brokers: Cortal Consors, DAB Bank, Comdirect, ING DIBa, FlatEx Average price level: Low Average Most traded products: Shares, bonds, OTC certificates and warrants Home Markets NL/BE/FR Population: 91 million Retail Investors: 3.3 million % using online banking: 68% Internet access: 70% Online brokers: Keytrade, Fortuneo, Boursorama, Cortal Consors, Bolero, Deutsche Bank, Bourse Direct and Comdirect Average price level: Average Most traded products: Shares, options, warrants and funds B i n c k B a n k o v e r v i e w 14 Switzerland Population: 7.6 million Retail Investors: 0.4 million % using online banking: n/a Internet access: 76% Online brokers: Swissquote, Postfinance, Saxo Average price level: Average High Most traded products: Shares and funds Portugal Population: 10.7 million Retail Investors: 0.2 million % using online banking: 9% Internet access: 42% Online brokers: Golden Broker, Dif Broker, GoBulling Average price level: Low Most traded products: Shares, Derivatives Spain Population: 40.4 million Retail Investors: 1.6 million % using online banking: 2% Internet access: 62% Online brokers: Renta4, Selftrade, BankInter, Cortal Consors and Boursorama Average price level: Low Average Most traded products: Funds, bonds and warrants Italy Population: 58.1 million Retail Investors: 1.7 million % using online banking: 6% Internet access: 43% Online brokers: Fineco, IW Bank, Sella, Mediolanum Average price level: Very low Most traded products: Shares and derivatives

17 label is oriented towards the private investor who wants to get the most from his assets. Only the Binck label is used outside of the Netherlands. Market leadership in the Netherlands BinckBank is the market leader in the Netherlands, with a strong second place in Belgium, making it the biggest online bank for investors in the Benelux countries. BinckBank is also building up its position in France. Our ambition is to become the largest online bank for investors in Europe. Low fixed costs of foreign branches BinckBank operates its international brokerage activities through branches in Belgium and France. Thanks to the European passport of our Dutch banking licence we can offer accounts and securities services from our Belgian and French branches. Our portfolio of products and services is adapted to local wants and needs, and is in compliance with local legislation. The foreign branches have a low fixed costs structure, given that BinckBank carries out only its front office activities (sales and customer service) in its branches. The foreign securities transactions are completed at the central back office and IT platform in the Netherlands. The local product in combination with the low fixed costs structure and the enthusiasm and commitment of our local employees are the key ingredients of our success in Belgium and France. Central back office and IT platform BinckBank has its central back office and IT platform, on which transactions for all Euronext markets can be completed, in Amsterdam. This central organisation for the completion of securities and the administration of securities positions is highly efficient, so that the cost price per transaction can be steadily lowered. Product development is also carried out centrally. Economies of scale and a high transaction volume are essential to sustained long term competitiveness. More transactions were completed in 2009 than in 2008, with a lower average staffing level in the back office. In 2009 significant investments were made in the construction of a new data centre as an element of the integration of the Alex and Binck IT systems. Innovative The introduction of MiFID (best execution) led to an altered relationship between the market, liquidity providers and brokers, which will result in (alternative) trading platforms and new partnerships between these parties. In 2008 BinckBank, in partnership with leading international trading house Optiver, decided to set up the alternative platform TOM (The Order Machine). TOM will put the best execution that is required by MiFID into practice for BinckBank. In this groundbreaking joint venture initiative the power of BinckBank high order flow will be combined with the strength of high frequency trader Optiver as a liquidity provider. MiFID resulted in groundbreaking TOM initiative TOM enables us to offer our customers better prices for their securities. In view of the fact that in the future the costs of completing a securities transaction will be considerable lower on TOM than on Euronext, the TOM initiative does not only offer best execution for our customers, but also the benefit for BinckBank that transactions can be completed at lower costs. Expertise In recent years the employees of BinckBank have built up a wealth of expertise regarding the completion and administration of securities transactions. Syntel develops and supplies innovative software with which financial institutions can process and administer all conceivable securities transactions. Syntel software is fast, reliable, comprehensive and capable of processing large volumes. An estimated one in three private share transactions in the Netherlands are processed using Syntel software. Syntel has been the market leader in the Netherlands in the field of investment applications-related software for several years. Moderate risk profile BinckBank aims to maintain a moderate risk profile. Our primary focus on online brokerage and 15 A n n u a l r e p o r t

18 our offering of a savings product restrict our risk profile. BinckBank also has a substantially different risk profile to that of a traditional large Dutch bank. BinckBank s banking activities are relatively simple, consisting of collateralised lending against readily liquidatable securities portfolios, facilitating payments to regular contra accounts with other banking institutions and interest-based activities relating to client accounts. These activities are generally classified as relatively low-risk. Management BinckBank has a balanced executive board and management team, whose individual members have years of experience in their own areas of attention and/or responsibility. Reporting lines are short, so decisions can be taken quickly. in the Netherlands, Belgium and France, by the introduction of new transaction-generating services, by giving our professional customers access to the BinckBank infrastructure (BPO product) and by connecting new markets, to our profitable existing platform, for example. We will continue to develop our infrastructure in 2010, so that we can serve new European markets in the future. We will also be focusing on further improving the platform s stability. We expect that in the medium to long term consolidation will take place between online brokerage providers in Europe. The provider with the most efficient platform and the lowest cost price per transaction will have the best basis for European market leadership. 16 B i n c k B a n k o v e r v i e w Strategy & aims More business on the same platform In 2010 BinckBank will concentrate on further strengthening its position in the Dutch, Belgian and French markets, with the primary focus remaining on online brokerage. We see ample opportunities for growth in our current markets through the improvement and expansion of our range of products and services. The core of our strategy is to further improve the profitability of our existing infrastructure (back office and IT platform) by completing as many transactions as possible on it. Our transaction volume can be increased in various ways: by growth in the number of account holders BinckBank s strengths, weaknesses, opportunities and threats Strengths Market leader in the Netherlands and strong position in Belgium High customer satisfaction level High-quality products and services Strong solvency ratio Low fixed costs of foreign branches and central back office and IT platform Competitive base position for further expansion in Europe Opportunities More volume on the same platform Deepening and widening Retail in 2010 In relation to the Retail business unit we need to maintain our market leadership in the field of online investment in the Netherlands through product improvement and expansion. Faster and more stable websites, new website functionalities and further improvement of our service are needed to give us an enduring lead over competitors who are entering the Dutch market with low fees. The widening of our product range will be restricted to the investment sphere, such as online asset management and Weaknesses Highly dependent on transaction incomes Inelastic cost base Recourse to capital market necessary for financing mergers and acquisitions Threats MiFID and best-execution requirements via TOM Broadening services to private investors Expanding into additional European countries Trend among independent asset managers, private banks and insurers to outsource non-core activities Decreasing volatility on stock markets Saturation of the Dutch market Increasing competition and price pressure

19 offering investment funds and online saving. We also want to widen our product offering in Belgium in In 2009 we built up initial experience in marketing & sales in France. BinckBank is offering a basic product at highly competitive prices. In 2010 the focus will be on upgrading our product offering in order to further increase our market share. Expanding Professional Services The aim for the Professional Services business unit is to grow into a market leadership position in the field of services to independent asset managers in the Netherlands and Belgium. We will focus on further growth of our services to banks by insourcing stock exchange orders, securities administration and securities-related payment transactions (BPO product) or by licensing software through our daughter company Syntel. The Professional Services business unit has made significant investments in the development of its BPO product in recent years, and now has an extremely strong proposition through a combination of product knowledge, a modular organisation, a strong brand name, software property, bank licensing and a proven technology. Because of the limited competition in this market, and by utilising the already existing platform, these activities provide an attractive contribution margin. Research will be carried out into starting up services for France at the end of 2011/beginning of Cost control At BinckBank we are convinced that operational excellence is the key to keeping costs under control. We aim to keep our costs manageable by continually working on structural improvements to our operational methods. BinckBank aims to keep its cost/income ratio at around 50%. In 2010 we will continue working on the integration of the Alex and Binck IT platforms and the associated integration of the front and back office systems to improve operational efficiency still further. Improved risk management Managing BinckBank s rapid growth calls for constant attention to internal controls in order to keep the organisation manageable. BinckBank made great progress in 2009 with the implementation of the internal risk management system in a Governance Risk Compliance application (GRC). Processes, risks and control measures are analysed by this application, and in this way the effectiveness of the identified control measures is established and periodically monitored in a transparent manner. The professionalisation of our internal control systems will be further continued in International expansion In 2010 we will focus on further expansion of our position in Belgium and France. Once we see a substantial pick-up of growth and are in sight of reaching break-even level in France BinckBank will enter another European market. Our preferred model for international growth is a combination of a greenfield operation (independent start-up) and accelerated growth through acquisitions. This is of course dependent on local market conditions and the price level of potential acquisition targets. International growth through greenfields and acquisitions Improving the balance position BinckBank pursues a conservative financial policy, and is cautious in investing customer deposits. The Capital adequacy & risk report published in October 2009 indicates that because of the strong growth in its operational activities BinckBank should retain more capital. We see the growing regulation of the financial sector (with its associated heightened capital demands) as a factor that must be given due consideration, and so we consider it desirable to further strengthen our capital position in BinckBank s capital aims for 2010 have been established as follows, partly in response to the Capital adequacy & risk report: Minimum Tier 1 capital of 100 million ( 95.6 million at the end of 2009) A solvency ratio between 12%-20% (13.0% at the end of 2009) BinckBank aims to make a dividend payment of 50% of the adjusted net profit. Medium-term goals In view of our continuing growth in 2009 we have amended the medium-term goals as they were formulated last year. For the coming four years, that is to say until 31 December 2013, BinckBank has set itself the following goals: (see next page) 17 A n n u a l r e p o r t

20 BinckBank s medium-term goals Goal description Old goals New goals Situation at Dutch Retail brokerage accounts 250, , ,890 Belgian Retail brokerage accounts 40,000 90,000 32,757 French Retail brokerage accounts 40,000 80,000 13,137 Number of BPO agreements Total savings assets 1.5 billion 1.5 billion 874 billion Total administered assets 10 billion 15 billion 11 billion B i n c k B a n k o v e r v i e w 18

21 Information for shareholders BinckBank ordinary shares are traded continuously on NYSE Euronext Amsterdam and have been included since 1 March 2006 in the Amsterdam Midkap Index (AMX), with a weighting as at 31 December 2009 of 2.85% of the index. The ISIN code is NL (Reuters: BINCK AS, Bloomberg: BINCK NA). The shares were monitored in 2009 by analysts at Fortis, ING, KBC, Kempen & Co, Kepler Capital Management, Petercam, Rabo Securities, RBS, SNS Securities and Theodoor Gilissen. The total number of shares outstanding as at 31 December 2009 was 76,068,928, with a market capitalisation of 954 million (2008: 420 million). Options on BinckBank ordinary shares have been traded since 21 March Key figures for BinckBank shares Figures per BinckBank share Key figures per BinckBank share ** Earnings per share continuing activities Earnings per share discontinued activities Total earnings per share Adjusted earnings per share Dividend per share* Dividend yield in % (based on year-end closing quote) 4.1% 7.5% 2.1% 19 Net asset value Year-end share price AEX index Price-to-earnings ratio based on adjusted net profit ** Upon approval of the General Meeting of Shareholders ** Comparative figures for 2007 include only the BinckBank figures, excluding Alex BinckBank share price & volumes Share price & volumes * Opening price Highest price (intraday) Lowest price (intraday) Closing price A n n u a l r e p o r t Share turnover 69,509,627 90,492,493 86,815,383 Turnover high 1,215,751 2,287,767 3,041,189 Turnover low 32,437 24,802 39,670 Average daily turnover 271, , ,626 * The year-end price 2007 is adjusted after the rights issue

22 BinckBank share capital Share capital Authorised ordinary shares 100,000, ,000, ,000,000 Issued shares previous year-end 77,093,508 77,093,508 30,837,403 Number of shares issued during the year ,256,105 Number of shares cancelled during the year 1,024, Issued shares year-end 76,068,928 77,093,508 77,093,508 Treasury shares 2,070,509 1,053, ,137 Number of priority shares Average number of shares outstanding during the year 74,897,706 76,870,870 32,829,886 Market capitalisation year-end 953,904, ,159, ,415, BinckBank shares Driven by the outstanding results achieved in 2009, BinckBank shares have risen sharply in value. On 31 December 2008 BinckBank shares closed at During the year the share value rose by 130% and closed at B i n c k B a n k o v e r v i e w BinckBank vs AMX Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 BinckBank AMX Index (normalised)

23 Movement and volume of BinckBank shares 14 14,000 Share price in July 2009: Q2 FY09 results: Adjusted net profit: 16.9 million 9 March 2009: FY08 results: Adjusted net profit: 64.1 million 28 April 2009: Q1 FY09 results: Adjusted net profit: 17.9 million 30 Oct 2009: Q3 FY09 Adjusted net profit: 21.5 million 12,000 10,000 8,000 6,000 Volume (x 1,000) 4, , Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Volume BinckBank Price BinckBank s relative performance is measured Schwab (United States), Swissquote (Switzerland) and against a peer group of international competitors TD Ameritrade (United States). BinckBank performed that engage in broadly comparable activities above average in 2009 in relation to this group, with and whose stock market profiles are similar to a third place measured by Total Shareholder Return BinckBank s. They are Avanza (Sweden), DAB (TSR). Bank (Germany), Boursorama (France), Comdirect (Germany), E*trade Financial (United States), Nordnet Securities (Sweden), Optionsxpress (United States), BinckBank shares in comparison the peer group average % change from start date A n n u a l r e p o r t Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Peer group BinckBank

24 22 The share buy-back programme On 30 September 2008 BinckBank announced the start of a programme of buying back BinckBank ordinary shares with the aim of reducing the share capital. The buy-back programme was successful in 2008 and In the period from 1 October 2008 to 31 December 2008 BinckBank repurchased 1,024,580 shares at an average price of These shares were cancelled at the General Meeting of Shareholders on 28 April In the period from 1 January 2009 to 31 December 2009 BinckBank repurchased 2,041,647 shares at an average price of The shareholders will be invited to renew the authority to cancel the majority of the shares repurchased in 2009 at the upcoming General Meeting of Shareholders on 26 April A number of shares will be reserved for the long term key staff incentive plan operating within BinckBank. The share buy-back programme was implemented by Fortis Bank Nederland B.V. ( Fortis ) in both 2008 and BinckBank has entered into an agreement with Fortis under which Fortis will implement the buy-back programme independently, i.e. without BinckBank s intervention, in accordance with the provisions of EU regulation 2273/2003 (Safe Harbour Rules). The Compliance department has monitored the conduct of the buy-back programme. The purchase of own shares in 2009 has taken place in accordance with the authorisation issued to the executive board by the General Meeting of BinckBank Shareholders on 28 April The Capital adequacy & risk report published in October 2009 indicated that because of the strong growth in its operational activities BinckBank should retain increasing amounts of capital. Partly in response to this, and in view of the growing regulation of the financial sector, we wish to further strengthen our capital position in For this reason BinckBank announced on 22 December 2009 that the share buy-back programme would be suspended for an indefinite period. B i n c k B a n k o v e r v i e w Maximum number of shares eligible for buy-back Volume 160, , , ,000 80,000 60,000 40,000 20,000 0 Dec-08 Feb-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 number of repurchased shares 25% of average volume over previous 20 trading days

25 Dividend policy BinckBank s articles of association prescribe that, if and to the extent that the profit permits, a dividend will first be paid on the priority shares equal to 6% of their nominal value (50 x 0.10 x 6%). The Stichting Prioriteit will then determine what part of the remaining profit is to be retained. That sum is not distributed to the shareholders, but is added to the company s reserves. The profit remaining after the appropriation to reserves is placed at the disposal of the General Meeting of Shareholders, which can choose whether to distribute the remaining profit, add it to reserves or a combination of the two. With due observance of the provisions of BinckBank articles of association, dividends may be paid in ordinary shares instead of cash. For an amount of profit to be placed at the disposal of the General Meeting of Shareholders, the company must consider that it has an adequate amount of capital at its disposal. If, with due observance of the foregoing, an amount of profit is placed at the disposal of the General Meeting of Shareholders, the Stichting Prioriteit will use its best endeavours to ensure a pay-out ratio of 50% of the adjusted net profit. BinckBank aims to pay an annual dividend of 50% of the adjusted net profit 2009 dividend proposal The shareholders will be invited to approve a total dividend for the 2009 financial year of 0.52 per share (50% of the adjusted net profit for 2009), net of 15% dividend tax. An interim dividend of 0.21 per share in cash having been distributed in August 2009, the proposed final dividend will be 0.31 per share in cash. The company will not pay a stock dividend. Subject to the approval of the General Meeting of Shareholders on 26 April 2010, the shares will be quoted ex-dividend from 28 April The final dividend will then be paid on 3 May Shareholdings Four shareholders have disclosed interests of over 5% as at 31 December 2009 pursuant to the Financial Supervision Act. These are Aviva plc (> 10%), Boron Investments N.V. (> 5%), Navitas B.V. (> 5%) and Delta Deelnemingenfonds N.V. (> 5%). As at year-end 2009, the members of BinckBank s executive board held the following shares: Koen Beentjes: 10,000 shares Evert Kooistra: 5,768 shares Pieter Aartsen: 22,214 shares Nick Bortot: 39,280 shares Investor Relations BinckBank operates an open information policy towards investors and others with a financial or other interest in the company, with the aim of informing them of the strategy of and developments within the company in as good and timely a manner as possible. BinckBank actively seeks dialogue with its investors, and this annual report is one of the means to achieving this. All other relevant information, such as half-year reports, quarterly reports, press releases and background information can be found on the website Members of the executive board and investor relations held more than 140 meetings with (potential) investors in A telephone conference with analysts is held after the publication of the first and third quarterly results and the annual results. BinckBank holds an analysts meeting after the publication of the half-year report. This can be followed on the BinckBank website as an audio webcast. The accompanying material and transcripts can also be found on the BinckBank website. BinckBank also gives journalists information on the results by telephone every quarter. Direct questions of investors and their advisors can be put to Ms Anneke Hoijtink of the Investor Relations department. Investor Relations Department Telephone: +31 (0) Fax: +31 (0) IR@binck.com 23 A n n u a l r e p o r t