Dutch private bank Van Lanschot would be a buyer of private banking assets if the European Commission forces banks that took state aid to sell them, Chief Executive Floris Deckers said on Tuesday.
In an interview with Reuters, Deckers said he believes the EC will force many of the banks that took aid last year to divest assets, including their private bank operations.
We would be a buyer of some of those, Deckers said. He spoke shortly after the company presented its first-half results, when it lost almost twice what analysts expected, on rising loan loss provisions.
Deckers said he would prefer Benelux onshore private banking assets, to the extent those are available, but would look at other private bank operations on a case-by-case basis.
Van Lanschot finds itself in a stronger position than some larger competitors, in that it did not need state aid itself last year and so is not saddled with repayment obligations. With a Tier 1 capital ratio of 9.2 percent, it also finds itself with the freedom to use its capital to do deals.
One asset it is not keen to hold, though, is Dutch life insurer Robein Leven, which it assumed control of on Monday. Robein Leven's shareholder, who Van Lanschot declined to identify, had pledged the company's shares as collateral.
With the prospect of default looming, the shareholder agreed to surrender the shares instead of defaulting, Van Lanschot said. But Deckers said it is a business that does not fit with his own, which he wants to sell as soon as we can find someone who will pay us what we put into it.
In the meantime Deckers said he is working with auditors to see if there is a way Van Lanschot can hold the business for sale and not consolidate its results.
NET LOSS DOUBLE ESTIMATES
Van Lanschot reported a net loss of 46.3 million euros compared with a consensus of a loss of 24 million and a worst-case estimate of 27 million from a Reuters poll of five analysts.
The bank posted a year-earlier profit of 60.2 million euros and a loss of 30.1 million euros in the second half of 2008.
Income from operating activities, however, fell less than expected, dropping 9 percent to 258.9 million euros. Analysts took some comfort in that news.
With the top line coming in at a higher level than we expected and given good market activities in (the third quarter), we believe that Van Lanschot is at a turning point for recovery in earnings, KBC Securities analyst Dirk Peeters said in a note.
The latest figures included a pretax impairment charge of 34.5 million euros for amortization of technology costs and 50.6 million euros of fresh loan loss provisions.
Deckers said he is confident the company's reserves are in a good position. The majority of the reserves, he said, are to protect against loans to entrepreneurs and other businesspeople who may have overpaid for assets during the boom.
Quite often these are impressive people, who used their impressive qualities to impress their private banker, who should not have been impressed, Deckers said.
Van Lanschot shares, which fell as much as 5 percent at the open, were down 1 percent at 35.84 at 1057 GMT (6:57 a.m. EDT) in Amsterdam.
Since the local market hit bottom on March 6, Van Lanschot stock is down 9.3 percent. Over the same period, the Dutch financials index .NLFIN, of which the stock is a component, is up 126 percent.
(Reporting by Ben Berkowitz; Editing by Rupert Winchester, John Stonestreet and Simon Jessop)