ANNUAL REPORT 2017 - BinckBank · Annual Report 2017 // 8 ABOUT BINCKBANK BINCKBANK AT A GLANCE x million Aet under adminitration Aet under management Number of tranaction 0 2 4 6

ABOUT BINCKBANK

A N N U A L R E P O R T 2 017

ABOUT BINCKBANK

A N N U A L R E P O R T 2 017

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.

Annu

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7

TABLE OF CONTENTS

BinckBank at a glance 8Key figures 9

ABOUT BINCKBANK Chairman’s message 11Who are we? 13What do we do? 15Customer value and dialogue 16Notable events in 2017 17Information for shareholders 18Financial calendar for 2018 20Reserve and dividend policy 21

REPORT OF THE EXECUTIVE BOARD Developments in 2017 23Notes to the consolidated key figures for 2017 27Earnings model 29Strengths, Weaknesses, Opportunities and Threats (SWOT analysis) 31Forecasts and targets 32Human Resources 34Corporate Social Responsibility 37Tax policy 42

CORPORATE GOVERNANCE Corporate governance 47Decree implementing Article 10 of the Takeover Directive 53

RISK MANAGEMENT Risk management 55

MANAGEMENT STATEMENT In Control Statement 65

REPORT OF THE SUPERVISORY BOARD Message from the chairman of the supervisory board 67Duties of the supervisory board 68Composition of the supervisory board 69Meetings of the supervisory board and subcommittees in 2018 70Summary of the remuneration report of the supervisory board of BinckBank on financial year 2017 75

PERSONAL DETAILS OF THE BOARD MEMBERS 80

FINANCIAL STATEMENTS 2017 85

Annu

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7 //

8ABOUT BINCKBANK

BINCKBANK AT A GLANCE

x m

illio

n

Number of transactionsAssets under managementAssets under administration

0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015

Customer satisfaction Number of accounts by country

FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €

Adjusted earnings per shareIncome from operational activities Dividend per share

0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016

FTE - verdeling man/vrouw

77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2

Capital ratio Leverage ratio

40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750

SpanjeItalieFrankrijk

201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

FINANCIAL

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

RATIOS

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

INCOME DRIVERS

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

CUSTOMERS AND CUSTOMER SATISFACTION

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538 men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

x m

illio

n


0

2

4

6

8

10

201720162015

x th

ousa

nd

Number of accounts

0

250

500

750

201720162015

0

250

500

750

201720162015


FTE by countryFTE

0

2

4

6

8

10

7.3 7.3 7.5

201720162015

x €


0,0

0,2

0,4

0,6

0,8

1,0

201720162015

Cost/income ratio

0%

20%

40%

60%

80%

100%

2017201620150%

10%

20%

30%

40%

50%

2017201620150%

2%

4%

6%

8%

10%

201720162015

0.79

0.520.45

x €

0,0

0,1

0,2

0,3

0,4

0,5

201720162015

0.260.23

64%79% 81%

7.7 7.79.3

615 633

579

0%

20%

40%

60%

80%

100%

20172016


77%

23%

76%

24%

642634

607

x €

mill

ion

0

50

100

150

200

201720162015

147.7 149.0

x €

billi

on

0

5

10

15

20

25

30

20.622.8

26.0

201720162015

x €

billi

on

0

0.5

1.0

1.5

2.0

1.7

1.31.1

201720162015

170.2


40.2%7.1% 6.7% 6.6%30.8%31.9%

0.39

Male/female ratio

women

159

538men

Total 2016

697Total 2017

631

women

149

482men

FTE per land

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750


201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

Total 2016

642Total 2017

579

Italy

France

Belgium

Netherlands

Italie

Frankrijk

Belgie

Nederland

Total 2016

615Total 2017

633

CULTURE AND EMPLOYEES

BinckBank is an

online bank for investors and savers

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KEY FIGURESfor the period ending December 31, consolidated

(amounts in € 000’s) 2017 2016 2015 2014 2013

CUSTOMER FIGURES

Number of customer accounts 632,825 614,973 606,514 595,506 551,970

Number of transactions* 7,705,024 7,726,110 9,293,591 8,617,490 8,164,978

Assets under administration 26,027,985 22,793,380 20,575,397 18,538,716 16,124,263

Assets under management 1,090,881 1,279,980 1,697,871 1,952,193 2,147,591

COMPANY PROFIT AND LOSS ACCOUNT

Net interest income 30,039 26,325 25,724 28,497 27,686

Net fee and commission income 105,858 109,076 131,461 125,951 137,936

Other income from operational activities 13,072 12,324 12,993 11,285 11,088

Total income from operating activities 148,969 147,725 170,178 165,733 176,710

Total adjusted operating expenses** 120,071 116,634 108,863 119,870 112,863

Total operating expenses 28,898 31,091 61,315 45,863 63,847

Adjusted tax** 4,681 2,273 (3,961) (1,148) (6,559)

Results of associates and joint ventures 864 (2,821) (730) 12,674 (2,393)

Net result 34,443 30,543 56,624 57,389 54,895

Result attributable to non-controlling interests 450 (87) (1,076) 87 322

Result attributable to shareholders BinckBank 34,893 30,456 55,548 57,476 55,217

Adjusted net earnings per share (in €) 0.52 0.45 0.79 0.82 0.78

Cost/income ratio excluding IFRS amortisation 81% 79% 64% 72% 64%

Result under IFRS

Net result 8,521 4,621 30,702 31,467 18,926

Earnings per share (in €) 0.13 0.07 0.42 0.45 0.27

CAPITAL ADEQUACY

Own funds 249,522 245,542 253,582 225,898 200,693

Capital ratio 30.8% 31.9% 40.2% 37.1% 36.2%

Leverage ratio 6.6% 6.7% 7.1% 6.7% -

* The number of transactions include transactions which do not have a direct commission income, such as the transactions in Binck turbos that have been offered free of charge since October 2017.

** Compared to the IFRS results, within the adjusted result, the total operating expenses and taxes are adjusted for IFRS amortisation and tax savings on the difference between fiscal and commercial amortisation of the intangible assets acquired with the acquisition of Alex and goodwill paid. Page 28 of this report includes the reconciliation of the adjusted result to the IFRS result.

ABOUT BINCKBANK

ABOUT BINCKBANK

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CHAIRMAN’S MESSAGE

“Our stakeholders saw a dynamic BinckBank in 2017. We expanded our service offering to include

new products aimed at the financial independence of our customers. I am therefore proud of

the steps we have taken to make this strategic transformation possible. Despite the heavy

legislative and regulatory burden that large-scale projects placed on the organisation, we were

able to demonstrate the necessary innovative strength. I am also pleased that our customers

and shareholders continue to have confidence in our approach. Although perhaps not with the

curve and speed we had previously hoped for, I expect that we will be able to give our innovative

strength even more visible form and substance and reap the benefits in the year ahead.”

BinckBank’s ambition is to serve a broader and growing group of private individuals within our European footprint, namely those customer groups that are looking for the best alternative to preserve or continue to accumulate assets for the future in a reliable, transparent, simple, and cost-effective manner, either independently or with our assistance. This ambition is focused on long-term value creation for the customers and the shareholders of BinckBank and is reflected in the ReThink Binck strategy. Steps were therefore taken on various fronts in 2017 to achieve the strategic transformation of BinckBank (ReDesign Binck) and develop new products and services within the product matrix. The organisation’s infra-structure was also further improved in 2017 and provides a stable foundation for our core activities and the development of new initiatives. This involved a further simplification of the structure of the organisation.

In the first quarter of 2017, for example, we acquired the activities of the fintech company Pritle. We were consequently able to accelerate the rollout of our automated management service to various areas within ‘Laten Beleggen’ with Binck Forward, Binck Comfort, and Binck Pensioen. This enabled us to enhance our propositions in the Laten Beleggen segment with products geared specifically to the individual customer’s financial goals and risk appetite. For our self-investing customers, we started offering trading in Binck turbos with no transaction charges in the fourth quarter of 2017. This led to an increase in the number of turbo transactions and the financing level. We also enabled private investors to take part in securities lending programmes, and the first customers were able to generate additional returns on their investments in the fourth quarter.

BinckBank strives for high customer satisfaction and with an average score of 7.5 faces a challenge in improving its services further. But its relationship with customers goes beyond achieving a high customer satisfaction rating. BinckBank believes it is vital to identify customers’ needs before trying to meet them. We build on strong relationships with our customers by continuously improving existing services and developing new, innovative products and services in collaboration with customers.

It is still too soon to see the results of our new propositions reflected in the financial results. Stock market sentiment in 2017 was positive, but transactions remained at the 2016 level due to limited volatility. The net result under IFRS for 2017 was € 8.5 million (2016: € 4.6 million), amounting to € 0.13 per share (2016: € 0.07 per share). Adjusted net earnings per share amounted to € 0.52 in 2017 (FY16: € 0.45 per share). In keeping with our dividend policy the proposed dividend for 2017 was € 0.26 per share. Taking into account the distribution of an interim dividend of € 0.03, the final dividend thus amounts to € 0.23 per share.

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BinckBank’s transformation is set to enter an important phase in the periods ahead. With its broad range of services, BinckBank is well-placed to guide its customers towards the right proposition. The particular focus in the year ahead will be on the commercial rollout of the new propositions and on increasing the organisation’s efficiency and responsiveness. This should also result in a reduction in operating costs, with the expectation that these will, in due course, stabilise at a lower level.

I would like to thank our shareholders for the confidence they have placed in us. As I have said previously, the strategic transformation is taking time, more than was perhaps expected at the outset, but we are moving forward carefully, step by step. As a board we are focused ultimately on delivering even better customer service as a result of the new positioning. This should also achieve the desired value creation for all our stakeholders. We are very happy with BinckBank’s start to 2018. Finally, I would like to thank all our people for their dedication over the past year.

Amsterdam, 12 March 2018

BinckBank N.V.Vincent Germyns, Chairman of the executive board

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WHO ARE WE?

BinckBank profileBinckBank N.V. (BinckBank) is an online bank for investors and savers, established in the Netherlands and listed on the Euronext Amsterdam exchange. Our services are deployed from our head office in the Netherlands and our local branches in Belgium, France, and Italy, and representation in Spain. BinckBank offers services in investment, asset management and savings, and targets its services to retail customers, businesses/legal entities, and independent asset managers. An important feature of BinckBank’s online services is a stable platform that gives users access to important financial markets, professional trading facilities, and analysis tools.

BINCKBANK IN A

EUROPEAN CONTEXT

N E T H E R L A N D SNumber of accounts 487 thousand

Number of transactions 5.4 million

Assets under administration € 20.9 billion

Assets under management € 1.1 billion

Customer satisfaction 7.3 B E L G I U M Number of accounts 71 thousand



Assets under management € 30.1 million

Customer satisfaction 8.2

F R A N C ENumber of accounts 67 thousand



Customer satisfaction 7.6I T A L Y

Number of accounts 7 thousand



Customer satisfaction 7.7

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Our missionBinckBank supports and assists consumers who are actively engaged with their financial future with the innovative products and services that give them convenience, simplicity, clarity, understanding, and accessibility at acceptable prices. BinckBank activates, facilitates, and teaches customers how to independently build up and maintain their own asset base.

Our vision and ambitionBinckBank believes in customers’ financial self-reliance. People should be able to control their own financial affairs. We believe each and every customer should have optimum control of and insight into the development, risk, and return of his or her capital. We aspire to serve a broader and growing group of private individuals within our European footprint, namely those customer groups that are looking for the best alternative to preserve or continue to accumulate assets for their financial future in a reliable, transparent, simple, and cost-effective manner, either independently or with our assistance. This ambition is focused on long-term value creation and is reflected in the ReThink Binck strategy launched in 2015. In order to carry out this strategy, BinckBank provides a diverse range of financial products and services within a customer environment that is as digitally driven as possible. In the total range of products and services, BinckBank will assume the role of navigator and assist customers in making the choices that fit them best.

Our strategyBinckBank pursues a dual strategy. On the one hand, this strategy is directed to furthering our current core activities like brokerage services (trading) and operational excellence in the trading and investment platform. On the other hand, it is designed to, with the help of our partners, create new value propositions for customers in Investing, Trading, and Saving. This strategy will, in part, enable us to expand our services into automated asset management and allow us to fulfil the navigator role in a way that makes us the valued partner helping our customers to grow their assets. At the core of this strategy is the customer experience and customer satisfaction that BinckBank’s services deliver.

Our peopleOur staff form the core of BinckBank: what we stand for, who we are, and where we want to be. What makes us a customer- oriented and innovative enterprise is our people. Without our people, we could not achieve BinckBank’s goals. That’s why we constantly invest in the health, growth, safety and vitality of our personnel, and why we have, in dialogue with our personnel, defined the competences and core values for which we stand.

Our environmentOur business activities are first and foremost about achieving added value for our customers. BinckBank is about confidence, convenience, simplicity, clarity, understanding, and accessibility at acceptable prices. By staying true to these principles, we are able to offer services accessible to all. BinckBank also understands its role in maintaining the public’s trust in the financial sector. The social responsibility that BinckBank must live up to continues to expand. Privacy and online security is one critical area; compliance with corporate governance is another. We regard concern for the social effects of the company’s operations as a core value.

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WHAT DO WE DO?

ZELF BELEGGEN (PERSONAL INVESTMENT)We see personal investment as facilitating the performance of the transactions initiated by the customer. As part of this, we equip the customer as best as we can to make their investment decisions themselves.

FONDS BELEGGEN (FUND INVESTMENT)BinckBank gives customers the facility to conduct their own transactions in investment funds. In this segment, we offer the services ‘All-in-one Portfolios’, which allows the customer to invest in mix of shares, bonds and property in a single package using ETF’s, and ‘Fundcoach’, which allows the customer to choose from a broad spectrum of investment funds and ETF’s.

BETER BELEGGEN (BETTER INVESTMENT)As a part of ‘Zelf Beleggen’, BinckBank offers investment education under the ‘Beter Beleggen’ service. BinckBank offers education on various subjects, such as information about investment instruments, instructive webinars, successful strategies and handy forms of analysis, on the basis of which entry and exit strategies can be determined.

LATEN BELEGGEN (INVEST FOR ME)‘Laten Beleggen’ means outsourcing your portfolio management to BinckBank. We then navigate the customer, to the most appropriate service, based on personal wishes, characteristics, asset targets, and expected risks and returns. Under Laten Beleggen, we offer the following services: Binck Forward for asset growth for the objectives specified by the customer, Binck Comfort for both asset growth and asset retention with more rigorous restrictions on investment risk, and Binck Pensioen, with a focus on asset growth to supplement retirement benefits in observance of the specific applicable tax structures. Alex Asset Management is the asset management service under the label Alex, and is focused on asset growth or retention using an asymmetric investment model.

BINCK SPAREN (BINCK SAVINGS)Binck Sparen is a simple and innovative online savings brokerage service for savings deposits with various financial institutions in trusted European countries. The choice between savings deposits in various European countries should help savers, with the added benefit of diversification, to achieve greater returns in the current low interest rate environment, without the risks of investing. The commercial roll-out of Binck Sparen took place in early 2018.

(THE AWARD-WINNING PLATFORMS OF BINCK – User-friendly, professional and mobile)

(INEXPENSIVE INVESTING – The best price, without hidden costs)

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CUSTOMER VALUE AND DIALOGUE

In today’s digital world, serving every individual’s specific needs and expectations is becoming ever more important. BinckBank’s challenge is to identify where customers are in the realisation of their individual goals and possiblities and to respond with the correct mix of products and services. BinckBank is very active in the dialogue with customers in a number of ways, such as using customer panels to further develop existing and new products in order to achieve optimum customer value. The handling of customer’s questions and complaints is one of the most important aspects of the BinckBank customer experience. BinckBank’s customer service desk is geared to swift, adequate and suitable handling of customer’s questions and complaints.

(EXPERT CUSTOMER SERVICE – We are there for you to help you further)

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NOTABLE E VENTS IN 2017

17 NOVEMBERBinckBank wins

Cashcow award for best online

asset manager.

20 JANUARYBinckBank reaches

agreement with Vermogensmonitor

and VEB on Alex-related complaints.

11 APRILBinckBank introduces Binck Forward discretionary asset management.

JANUARY

APRIL

31 MARCHBinckBank announces phase-out

of TOM activities.

17 MARCHBinckBank acquires

fintech company Pritle.

5 APRILBinckBank moves into professional cycling sponsor-ship by lending its name to the BinckBank Tour.

28 SEPTEMBERWith Binck Comfort,

BinckBank helps customers build their

financial future.

2 DECEMBERBinckBank Belgium selected as best investment bank 2017 by Spaargids.be.

20 OCTOBERBinckBank offers

free trading in Binck Turbo’s.

SEPTEMBER

DECEMBER

23 OCTOBERBinckBank sells

software company Able to Topicus.

11 OCTOBERBinckBank makes securities

lending available to private investors.

30 NOVEMBERBinckBank Italy

wins best broker award for investments in depositary receipts

and structured products.

23 MAYWinner’s circle finish for Binck Forward and Binck Fundcoach ‘All-in-1 investment’ in periodic investment survey by Beleggingsmatch.

7 JULYNamed Best Broker Overall in IEX Netprofiler broker survey.

MAY

AUGUST

18 JULYBinckBank launchesBinck Pensioen.

4 JULYBinckBank launches

as first Dutch bank Morningstar Sustainability Rating.

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INFORMATION FOR SHAREHOLDERS

BinckBank attaches great importance to a transparent and consistent information policy and actively seeks dialogue with its shareholders. It communicates openly with investors and others with a stake in the company (financial or otherwise). The purpose of this is to provide clear and timely information about the policy, the company’s developments and its outlook so that they can make well-considered investment decisions. All relevant information, such as the annual report, half-yearly reports, quarterly reports, analyst presentations, and background information, is available on the corporate website www.binck.com.

The BinckBank share is listed on Euronext Amsterdam and is listed on the Amsterdam Smallcap Index (AScX), with an index weighting factor of 2.63% on 31 December 2017 (2016: 5.63%).

ISIN code: NL0000335578Reuters: BINCK.ASBloomberg: BINCK.NA

SHAREHOLDINGThe following shareholders of an interest of 3% or more in BinckBank (position on 31 December 2017):• NN Group N.V. (>6%)• Boron Investments B.V. (>5%)• Navitas B.V. (>5%)• Omam Inc. (>4%)• Fidelity Management & Research L.L.C. (>4%)• Dimensional Fund Advisors LP (>3%)• Farringdon Capital management (>3%)

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KEY FIGURES FOR BINCKBANK SHARES

2017 2016 2015

Net result per share (IFRS) € 0.13 € 0.07 € 0.42

Adjusted earnings per share € 0.52 € 0.45 € 0.79

Dividend per share* € 0.26 € 0.23 € 0.39

Earnings per share € 0.13 € 0.07 € 0.42

Dividend yield in % (based on year-end closing quote) 5.90% 4.20% 4.90%

Net asset value € 5.85 € 5.59 € 6.16

Year-end share price BinckBank N.V. € 4.43 € 5.50 € 7.95

P/E ratio 8.52 12.22 10.06

* 2017 figures are subject to approval of the General Meeting.

SHARE CAPITAL

2017 2016 2015

Authorised ordinary shares 100,000,000 100,000,000 100,000,000

Cancelled treasury shares during the year 3,500,000 - -

Issued shares at year-end 67,500,000 71,000,000 71,000,000

Treasury shares held at year-end 767,419 5,281,525 719,277

Number of priority shares 50 50 50

Average number of shares outstanding during the year 66,472,824 67,578,245 70,251,842

Market capitalisation year-end 299,025,000 390,500,000 564,379,000

SHARE PRICE & VOLUMES

2017 2016 2015

Closing price € 4.43 € 5.50 € 7.95

Highest price € 5.69 € 7.90 € 9.33

Lowest price € 4.04 € 4.07 € 6.50

Share turnover 44,863,643 65,675,191 100,442,801

Daily turnover - high (number) 907,890 2,341,873 2,317,382

Daily turnover - low (number) 35,743 41,015 27,727

Average daily turnover (number) 175,936 255,546 392,355

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FINANCIAL CALENDAR 2018/2019

Publication annual report 2017 12 March 2018

Publication trading update for the first quarter of 2018 23 April 2018

General Meeting 24 April 2018

Ex-date dividend 26 April 2018

Record-date dividend 27 April 2018

Payment of dividend 3 May 2018

Publication half-year report 23 July 2018

Ex-date interim dividend 25 July 2018

Record-date interim dividend 26 July 2018

Payment of interim dividend 30 July 2018

Publication trading update for the third quarter of 2018 22 October 2018

Publication yearly report 2018 4 February 2019

DEC 1 2

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10 11 12 13 14 15 16

17 18 19 20 21 22 23

24 25 26 27 28 29 30

31

SEP 1 2

3 4 5 6 7 8 9

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24 25 26 27 28 29 30

JUN 1 2 3

4 5 6 7 8 9 10

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AUG 1 2 3 4 5

6 7 8 9 10 11 12

13 14 15 16 17 18 19

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27 28 29 30 31

NOV 1 2 3 4

5 6 7 8 9 10 11

12 13 14 15 16 17 18

19 20 21 22 23 24 25

26 27 28 29 30

MAY 1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

OCT 1 2 3 4 5 6 7

8 9 10 11 12 13 14

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29 30 31

JUL 1

2 3 4 5 6 7 8

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30 31

MAR2018 1 2 3 4

5 6 7 8 9 10 11

12 13 14 15 16 17 18

19 20 21 22 23 24 25

26 27 28 29 30 31

JAN 2019 1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

FEB 1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28

APR 1

2 3 4 5 6 7 8

9 10 11 12 13 14 15

16 17 18 19 20 21 22

23 24 25 26 27 28 29

30

ABOUT BINCKBANK

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RESERVE AND DIVIDEND POLICY

INTRODUCTIONBinckBank’s authorised capital consists of ordinary shares and 50 priority shares, each with a nominal value of €0.10. The priority shares are unlisted registered shares and are held by Stichting Prioriteit Binck (hereinafter, the Priority’. BinckBank’s articles of association stipulate that – if and insofar as profits permit – a sum of six per cent (6%) is paid out on the priority shares, based on the nominal amount of those shares (50 x €0.10 x 6%). The Priority determines the extent to which the profits are transferred to reserves. The remaining profit is placed at the disposal of the general meeting. Any amounts not distributed will be transferred to BinckBank’s reserves. BinckBank’s executive board is authorised to pass a resolution for BinckBank to pay an interim dividend with the prior approval of the Priority.

BinckBank operates the following principles for dividend payments.

• Sustainability and prudence are preconditions for making dividend payments, determining their level and the form in which they are made.

• Dividend payments must comply with the applicable laws and regulations (including those set by the European Central Bank (ECB) and De Nederlandsche Bank (DNB)).

• Dividend payments must be judged as being responsible from the perspective of sustainability and prudence and based on the solvency position and economic outlook.

• If a dividend is proposed to the general meeting, BinckBank aims for a payout ratio of 50% of the adjusted net result.• Dividend payments are made in cash and are payable no later than fourteen days following the resolution.• Interim dividend is paid from the net profit of the current financial year.

BinckBank continuously evaluates its reserves and dividend policy and discusses this policy annually as a separate agenda item at the general meeting.

DIVIDEND PROPOSAL 2017A total dividend for the 2017 financial year of € 0.26 will be proposed to the shareholders. On 31 July 2017 an interim dividend of € 0.03 per share was paid out in cash, taking the proposed final cash dividend to € 0.23 per share. The calculation of the payable dividend meets the requirements of CRD IV (EU/2013/36) and CRR (EU/2013/575) and the related legislation, as well as the recommendation of the European Central Bank (ECB/2017/44). The 2017 net result is insufficient for payment of the final dividend from the current year’s profit. The proposed dividend payment will therefore be drawn in part from retained earnings. Subject to the approval of the general meeting on 24 April 2018, the share will be listed ex-dividend on 26 April 2018. The final dividend will be paid on 03 May 2018.

R E P O R T O F T H E

E X E C U T I V E B O A R D

From left to right: Steven Clausing, Vincent Germyns and Evert-Jan Kooistra.

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DEVELOPMENTS IN 2017

Firstly, we would like to start by thanking our shareholders; we are very well aware that the price developments in the BinckBank N.V. share this past year have put our shareholders’ patience very much to the test. Of course, we must also thank our customers for their loyalty. Over the past year we have once again been able to count on a broad and loyal customer base and we have had the pleasure to welcome many new customers again. BinckBank once again had an intensive year in 2017. On the one hand, we took real steps towards achieving the strategic transformation with the introduction of new product and services, while on the other, by divesting certain business activities we succeeded in increasing the focus on our core activities. In the years ahead, BinckBank expects to start plucking the first fruits of our strategic transformation.

ACQUISITIONIn March 2017, BinckBank acquired fintech company Pritle. The acquisition of this robo-advisor gives BinckBank a channel to meet a growing customer need. With the takeover of the business activities of Pritle in the Netherlands, BinckBank expanded its services in automated investment management within the discretionary management segment. With Pritle, BinckBank makes it easy for our customers to have their assets managed online. This includes online opening of an account and, after setting up an individual profile, creating a financial target with a timeline linked to it. The tech application automatically creates a tailor-made investment portfolio. Every quarter, the portfolio is recalibrated against the customer’s expectations. The investment risk is automatically scaled down as the end date approaches. Adjusting targets is online, easy, and free. BinckBank introduced a number of other products based on the Pritle platform in 2017: the Binck Forward product in April, and the Binck Pension product in July. In the future, Binck Forward will be what allows us to roll out new products and services in the geographic markets in which BinckBank is active.

NEW PRODUCTS AND SERVICES (REDESIGN)At the end of 2015, BinckBank introduced a Strategic Product Framework as part of ReThink Binck. Progress was made in 2017 with the development and market launch of new products and services in the three segments of the strategic product framework and improvements in the services delivered to our customers. Within the Trading segment a number of new products and functionalities have been developed for customers, such as: online account opening, launch of the new trading application ProTrader (360), further development of mobile sites, introduction of new websites (MVC), offering free trading in Binck instruments (Binck turbo) and securities lending has been made available to our customers.

Since November 2017, BinckBank has offered free trading in Binck instruments (Binck turbos). BinckBank lowered the transaction costs on the popular Binck turbo to zero for customers in the Netherlands. By eliminating the transaction costs, BinckBank has made trading in Binck turbos more attractive to existing and new customers. The costs for tradingin and maintaining these turbos for Dutch customers will now primarily consist of the financing interest that is intrinsic to the product. BinckBank’s goal in doing this is to achieve higher and more stable revenues from its turbo activities.

In the third quarter, BinckBank made securities lending available for its customers. By using the securities lending service, the customers accept that the securities in their portfolio can be loaned out to another party. In exchange for this loan of the securities, the customers are paid a fee hereby improving the return on their investments.

There are also a number of other products in development within the investing segment. After first being launched in Belgium at the end of 2016, Binck ‘Laten Beleggen’ (a discretionary investment concept) was brought to the Netherlands in September 2017 under the label Binck Comfort.

With Binck Comfort, BinckBank’s objective is to help customers find solutions for the challenges in their financial future, like: low interest rates, increasing pension insecurity, and a dwindling social security system. Binck Comfort is an online personalised portfolio management service that offers discretionary management starting at € 10,000, and strives for an optimum combination of risk avoidance and return. The launch of Binck Comfort within the Investment segment establishes three new online management systems: Binck Comfort, Binck Forward and Binck Pension.

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At the end of 2016, BinckBank launched a pilot in the Netherlands (technical market launch) with an innovative savings product (Binck Sparen). With Binck Sparen, BinckBank offers its customers a secure platform that allows them to spread their savings over one or more carefully selected partner banks in the Eurozone. The commercial launch of this product took place on 15 February 2018.

Furthermore, at the end of 2017 a start was made with the development of the navigator function. The navigator will assist customers in making the right choices for realising their financial ambitions.

Looking back on 2017, we can be proud of a productive and constructive year. The bottom line is that we have made good progress with the development of new service concepts on some components of the ReThink Binck spectrum, but partly as a result of unforeseen circumstances we have encountered delays on others, so that all in all the Relaunch of BinckBank will take longer than initially foreseen. For example, the full launch of the Trade With Colour (TWC) concept (more creative investment with greater convenience and inspiration), which was scheduled for the end of 2017, was delayed due to changing priorities and will be postponed until 2018/2019. A number of TWC pilots were conducted over the course of 2017, and these will be evaluated in 2018.

STRATEGIC PRODUCT FRAMEWORKThe strategic product framework consists of three segments and various levels of customer involvement. The graphic below shows where the products fit within the strategic product framework.

DO IT MYSELF DO IT FOR ME

TRADING• Binck Basic• Binck Active

TRADE WITH COLOR

SAVINGS BROKER

INVESTING• Binck Forward• Binck Comfort• Binck Pension

FUND INVESTMENTS• Binck Fundcoach• All-in-1 portfolio


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BINCKBANK IN THE MEDIAIn 2017 BinckBank became the new title sponsor of the BinckBank tour, a multi-day UCI World Tour cycle race in the Netherlands and Belgium. The event took place in August and was a great success. BinckBank has agreed to be the title sponsor of the top sporting event for five years. Sponsorship of cycle racing is an attractive and distinctive way to bring the BinckBank brand to the attention of a wider target group that is consistent with the expansion of BinckBank’s service concept.

With regard to awards, BinckBank won the best broker award in a survey conducted by IEX and Netprofiler, with the platform and the BinckBank app receiving particular praise. This is the ninth year in which Netprofiler has conducted the Internet Broker survey, and the eighth year in which BinckBank has won the title of ‘Best Broker Overall’. Both ‘Binck Fundcoach’ and ‘Binck Forward’ received a positive review in the survey of portfolio management conducted by Beleggingsmatch. Binck Italy put in a fine showing at the Investing & Trading Forum in Rimini and won an award for the best broker for investment in depositary receipts and structured products. BinckBank also won the Cashcow Award 2017 for the best online asset manager and BinckBank France won first prize for best customer service in the ‘online brokerage’ category.

In the first half of 2017, BinckBank pursued a range of activities designed to help its customers grow their assets. In cooperation with the FD Media Group, BinckBank hosted the first Personal Finance Day in the Netherlands, which was a resounding success. The new trading websites have also been very well-received. In the second half of 2017, BinckBank launched a fully redesigned ProTrader (360) as state-of-the-art trading application. Also in the past year, BinckBank has once again devoted a great deal of attention to education and personal contact with its customers in the form of weekly webinars, national customer meetings, and trading sessions.

ALEX ASSET MANAGEMENTIn 2017, Alex Asset Management once again saw an outflow of customer funds. The managed assets for Alex Asset Management fell to € 1.0 billion in 2017. In early 2017 BinckBank reached agreement with the VEB (Association of Stockholders) and Vermogensmonitor on the settlement of complaints from members and clients about the information provided by Alex Asset Management over the period of 2012-2014. The VEB and Vermogensmonitor will be placed in a position to offer compensation to clients who lodged complaints and meet specific criteria. This should not, however, be taken to mean that Alex Asset Management recognises any form of culpability of liability. The complaints of the customers of Vermogens monitor have been completely resolved, and the complaints of the members of the VEB are expected to be completely resolved in the first half of 2018. Although the performance of Alex Asset Management has improved considerably in recent years, we have still suffered some reputational damage. The ongoing drain of assets under management from Alex Asset Management remains our biggest challenge for meeting our strategic growth target for assets under management. Over 2017, the inflow of assets from the newly launched products (Binck Comfort, Binck Forward, Binck Pension) was not sufficient to fully offset the outflow of assets from Alex Asset Management, so on balance there was a negative movement in the total assets under management, one of our most important strategic pillars. Putting a stop to the drain of assets from Alex Asset Management will have BinckBank’s full attention in 2018.

FOCUS ON CORE ACTIVITIESAs part of its new strategy BinckBank has already stated that it will continue to concentrate on its core activities and over the past years has initiated a process aimed at increasing the focus on the retail business and the distribution role that BinckBank plays in it.

In this context BinckBank sold its interest in BeFrank in 2014 and began scaling down its services for BPO customers. At the end of 2017 agreements were reached with all four BPO customers on the scaling down of the services and in the case of two customers services have now been discontinued. Services for the remaining two BPO customers are expected to be terminated completely in the second half of 2018, thereby enabling the BPO activities to be phased out.

In October 2016 the shareholders of TOM Holding N.V. announced that they were seeking a buyer for the trading platform. After discussions at the end of 2016 and the beginning of 2017 failed to produce a sale, the TOM service was wound down in 2017 and the business activities were discontinued. Euronext’s claim against BinckBank and TOM Holding N.V. in respect of the TOM activities was averted in 2017 without any outflow of funds.

In October 2017, BinckBank reached agreement with Topicus Finance Holding BV on the sale of the shares of Able Holding B.V. Able was a wholly-owned subsidiary of BinckBank developing asset management, savings and investment applications for banks and insurers. These activities have not been part of BinckBank’s core activities since 2013.

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On 19 January 2018 BinckBank announced that it wished to sell its 60% holding in Think ETF Asset Management B.V. (Think) to Van Eck Associates Corporation. The sale is expected to be completed at the end of the first quarter of 2018. After the sale of Think ETF Asset Management B.V. BinckBank will be able to focus fully on the relaunch of its retail activities.

AGILE WORKING METHODS AND INFORMATION TECHNOLOGY (IT)Over the past year, investments were made to set up multidisciplinary customer teams who would carry out customer-focused development work. The Agile working method was also implemented in the organisation. The frequency of software releases was increased, so that newly developed functionalities can be put into service faster. As good service and systems are important to our customers, there was once again a strong focus on the further improvement of our IT systems. BinckBank invests continuously in futureproofing its IT architecture and the quality of the data used in the organisation. Over the past year, investments were made in new smaller and more environmentally friendly data centres, thereby reducing operating costs, improving performance, and further reducing energy consumption. Work also continued on the reprogramming of the IT structures in a new, modern software language, a more modular structure of the software platform, and the building of ‘Application Programming Interfaces’ (APIs) to enable third parties to access our platform.

LEGISLATION AND REGULATIONSBinckBank devoted a great deal of time and energy to the implementation of new laws and regulations in 2017. The largest projects among these were MiFID II and PRIIPs. MiFID II (Markets in Financial Instruments Directive II) is a revised version of the European MiFID directive previously introduced in 2007, and came into force on 3 January 2018. The aim of MiFID II is to make European financial markets more efficient and transparent and to increase investor protection. PRIIPs is a European regulation that came into force on 1 January 2018 with the aim of creating a coherent set of rules for the provision of information on the sale of packaged investment products to consumers. The aim is to harmonise the rules on sales of packaged investment products and the associated information so as to help investors understand and compare products better. The information must be provided in the form of a ‘Key Information Document’ (KID). For BinckBank this means that customers must be provided with appropriate documentation for the products within the scope of PRIIPs.

BALANCE SHEET COMPOSITIONBinckBank changed the balance sheet composition in 2016 and 2017, by investing in a residential mortgage portfolio which stood at € 737 million as at 31 December 2017. The mortgage portfolio has on average a longer interest rate maturity than the investments in the bond portfolio. As a result, the interest rate typical duration of the BinckBank balance sheet has changed and the interest rate risk has increased. In the second half of 2017, BinckBank entered into interest rate swaps to mitigate the increased interest rate risk. On balance, for a portion of the mortgage portfolio the relatively long interest rate is swapped for a shorter variable interest rate. By growing the residential mortgage portfolio BinckBank has largely succeeded in compensating the revenues on the assets side of the balance sheet. Net interest income rose by 14% in the year under review, which can be attributed mainly to the mortgage portfolio and was achieved despite the generally low interest rates on the money and capital markets. The investments in mortgages are part of the strategic objective of generating a more balanced income flow.

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NOTES TO THE CONSOLIDATED KEY FIGURES FOR 2017

Stable full year result in 2017 The net result under IFRS increased compared to the previous year and amounted to € 8.5 million (2016: € 4.6 million). The adjusted net result for 2017 was € 34.9 million, representing adjusted net earnings of € 0.52 per share. The adjusted net result was therefore higher than the result of € 30.5 million (€ 0.45 per share) recorded in 2016.

Income from operating activities in 2017 remained almost the same as in 2016 (+1%). BinckBank achieved higher net interest income overall, mainly due to a growing proportion of investments in Dutch residential mortgages. On the other hand, there was a decrease in net commission income of € 3.2 million (-3%) in 2017. The decline in net commission income was due particularly to lower income from Alex Asset Management and a decrease in income from BPO services. In the fourth quarter of 2017 our customers once again conducted more transactions (+24%) compared with the previous quarter, resulting in an increase of € 5.3 million in net commission income (+23%). This figure for commission income also includes the 2017 performance incentive of € 1.9 million for Alex Asset Management. Overall, customers have been withdrawing assets from Alex Asset Management. Whereas initially there was a clear reduction in the outflow in the second quarter of 2017 (as compared to the first quarter), this reduction did not continue in the second half of 2017. The outflow in recent quarters has been between € 60 million and € 70 million, and was € 350 million on the whole year for 2017 (FY16: € 227 million). The income from the turbos falls under other income from operating activities, and rose by € 3.2 million over 2017 (+125% as compared to 2016). Transaction numbers, and hence the financing level, have visibly increased due to the abolition of the transaction commission on Binck turbos.

Net interest income

x €

mill

ion

Interest generating assets

0

1,000

2,000

3,000

4,000

EffectenkredietenHypothekenportefeuillesObligatieportefeuillesKasmiddelen en bankiers

201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562

x €

milj

oen

Totale gecorrigeerde operationele lasten

0

50

100

150

Other operating expensesDepreciation and amortisationEmployee expenses

201620152014

53,056,6 51,6

5,8

50,1

6,2

57,1

4,7

60,3

108,9119,9 116,6

Collaterised lending

Mortgage portfolio

Investment portfolio

Cash and banks

x €

mill

ion


0

1,000

2,000

3,000

4,000

HypothekenportefeuillesObligatieportefeuillesKasmiddelen en bankiers

201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562


Mortgage portfolio

Investment portfolioCash and banks

x €

mill

ion

0

10

20

30

40

201720162015

26.330.0

25.7

Net fee and commission income

x €

mill

ion

0

30

60

90

120

150

201720162015

109.1 105.9

131.5

x €

mill

ion

Total adjusted operating expenses

0

50

100

150

Overige operationele lastenAfschrijvingenPersoneelskosten

201720162015

53.4 53.0

5.7

49.8

5.3

61.7

108.9120.0

51.6

4.7

60,3

116.6

Net interest income

x €

mill

ion


0

1,000

2,000

3,000

4,000


201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562

x €

milj

oen


0

50

100

150


201620152014

53,056,6 51,6

5,8

50,1

6,2

57,1

4,7

60,3

108,9119,9 116,6


Mortgage portfolio


Cash and banks

x €

mill

ion


0

1,000

2,000

3,000

4,000


201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562


Mortgage portfolio


x €

mill

ion

0

10

20

30

40

201720162015

26.330.0

25.7


x €

mill

ion

0

30

60

90

120

150

201720162015

109.1 105.9

131.5

x €

mill

ion


0

50

100

150


201720162015

53.4 53.0

5.7

49.8

5.3

61.7

108.9120.0

51.6

4.7

60,3

116.6

Net interest income

x €

mill

ion


0

1,000

2,000

3,000

4,000


201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562

x €

milj

oen


0

50

100

150


201620152014

53,056,6 51,6

5,8

50,1

6,2

57,1

4,7

60,3

108,9119,9 116,6


Mortgage portfolio


Cash and banks

x €

mill

ion


0

1,000

2,000

3,000

4,000


201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562


Mortgage portfolio


x €

mill

ion

0

10

20

30

40

201720162015

26.330.0

25.7


x €

mill

ion

0

30

60

90

120

150

201720162015

109.1 105.9

131.5

x €

mill

ion


0

50

100

150


201720162015

53.4 53.0

5.7

49.8

5.3

61.7

108.9120.0

51.6

4.7

60,3

116.6

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Total adjusted operating expenses rose by 3% in 2017 compared with the previous year, from € 116.6 million to € 120.1 million. Personnel costs rose by 3% particularly as a result of the annual salary indexation. The adjusted amortisation rose slightly compared with the previous year (+2%). The other expenses rose by € 1.4 million (+2%) compared with 2016. This was mainly due to marketing campaigns for the new products (+ € 1.2 million), the service costs on the expanded mortgage portfolios (+€ 1.6 million), and additional costs for the rollout of the new strategy and implementation of laws and regulations. The other costs, such as IT and external consulting costs, declined overall as a result of cost-cutting measures.

Net interest income

x €

mill

ion


0

1,000

2,000

3,000

4,000


201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562x

€ m

iljoe

n


0

50

100

150


201620152014

53,056,6 51,6

5,8

50,1

6,2

57,1

4,7

60,3

108,9119,9 116,6


Mortgage portfolio


Cash and banks

x €

mill

ion


0

1,000

2,000

3,000

4,000


201720162015357

982

1,981

502

1,514

520438

1,138

1,128

737

562


Mortgage portfolio


x €

mill

ion

0

10

20

30

40

201720162015

26.330.0

25.7


x €

mill

ion

0

30

60

90

120

150

201720162015

109.1 105.9

131.5x

€ m

illio

n


0

50

100

150


201720162015

53.4 53.0

5.7

49.8

5.3

61.7

108.9120.0

51.6

4.7

60,3

116.6

The tax credit from adjusted taxes for 2017 came to € 4.7 million. The increase of € 2.4 million compared to 2016 is mainly due to a reassessment of deferred taxes related to consolidated companies and associates, resulting in a one-off tax credit of € 2.4 million in the third quarter.

Results from associates in 2017 amounted to € 0.9 million (2016: -/- € 2.8 million). This positive result includes the book profit of € 1.9 million on the sale of Able Holding B.V. in 2017 and the operating income of the associate Tom Holding N.V. The valuation of Tom Holding N.V. in 2017 was based on the expected distribution after completion of the liquidation.

RECONCILIATION OF ADJUSTED NET RESULT TO THE IFRS RESULTThe table below presents the reconciliation of the adjusted net result to the IFRS result. Compared with the IFRS results, the total operating expenses and taxes have been adjusted for IFRS amortisation and the tax savings on the difference between the fiscal and commercial amortisation of the intangible assets acquired and goodwill paid on the acquisition of Alex.

(amounts in € 000’s) 2017 2016

Adjusted result after taxes 34,443 30,543

Adjusted IFRS amortisation (21,515) (21,515)

Adjustment tax benefit resulting from the difference between commercial and fiscal amortisation (4,407) (4,407)

Net result in accordance with IFRS 8,521 4,621

The intangible assets, excluding the goodwill relating to the acquisition of Alex Beleggersbank, were amortised in full at the end of 2017. Consequently, the adjustment to reconcile the IFRS result to the adjusted result will disappear entirely from 2018 onwards. Furthermore, this will affect the fiscal result, where amortisation of the intangible assets including goodwill led to differences between the IFRS and fiscal ledgers. Because of this, the deduction of the amortisation of intangible assets will cease and the tax charge will increase compared with the IFRS result.



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EARNINGS MODEL

BinckBank’s income is generated through interest rate operations and commission operations (net commission income). The summary below shows the earnings model for the interest rate and commission operations with the underlying drivers.

Positive interest on cash and cash equivalents

Interest income

Interest expense

NET INTEREST INCOME±20% of total income

Interest received on investment portfolio

Interest received on mortgage receivables

Interest received on collateralised lending

Interest paid on funds entrusted

Interest paid on interest rate swaps

Negative interest on cash and cash equivalents

Number of transactionsTransaction based

net commission income

Asset management fees

Other net fee and commission income

NET FEE AND COMMISSION INCOME

±70% of total income

Average revenue per transaction

Assets under management

Asset management fee and performance fee

Service fees, BPO fees,Securities lending and Other

Income from Binck turbo

Income from IT-services (Able & BPO)

Result fromfinancial instrumentsOTHER INCOME

FROM OPERATING ACTIVITIES

±10% of total income Other income

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INTEREST RATE OPERATIONS (NET INTEREST INCOME)BinckBank has a liquidity surplus because customers keep a cash amount as part of their investments. This means that customers’ investment and savings accounts contain a cash balance shown in the balance sheet under ‘funds entrusted’. BinckBank holds some of the funds entrusted as liquid assets for operational funding. BinckBank also uses some of the funds entrusted to finance customers’ collateralised loans. BinckBank invests the bulk of the funds entrusted in the investment portfolio consisting of bonds and Dutch residential mortgages. Taken together these components generate interest income for BinckBank. The interest charges are determined by the funds entrusted that BinckBank holds for its customers, the interest charges on cash positions, and credit interest payments on securities and savings accounts. The net interest income comprises interest income less interest charges.

COMMISSION OPERATIONS (NET FEE AND COMMISSION INCOME)The net fee and commission income consists of transaction-related commission income, recurring asset management fees, and other commission income. The transaction-related commission income is determined by the volume of trans actions and the average revenue per transaction. The transaction volume that BinckBank processes for its customers depends on the number of customers that it has (the number of securities accounts) and the level of activity among these customers. The level of activity is determined by investor sentiment, which to a large extent depends in turn on the volatility and direction (rise or fall) of financial markets. The average income per transaction depends on the pricing structure used by BinckBank, the value of the securities being traded, and the exchange & clearing costs that BinckBank is charged for the settlement of the transaction. The recurring asset management fee is determined by the level of capital that BinckBank manages for its customers, the service fee, and possible performance incentive that it charges. The other commission income consists of the ongoing payments for various services. Their level is determined by the number of underlying service contracts, the number of concluded subscriptions, and the volume of assets under administration.


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STRENGTHS (INTERNAL) WEAKNESSES (INTERNAL)

OPPORTUNITIES (EXTERNAL) THREATS (EXTERNAL)


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STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS

(SWOT ANALYSIS)

BinckBank performs a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to map out the characteristics of the organisation and its environment. The SWOT analysis is taken as a basis for the development of BinckBank’s strategy. The strengths and weaknesses reflect the internal elements. The opportunities and threats indicate external developments, events and outside influences that affect BinckBank.

The following table shows the key internal and external elements:

• Strong customer base in four European countries.• Strong brand name and good distribution

capabilities for new and current investment and savings products.

• High service level Customers appreciate our proactive and fast service.

• Strong customer intimacy created by providing service through local branches.

• Local tax compliance incorporated into the system and component of local customer service.

• Robust financial position and conservative risk monitoring.

• Central back office and IT infrastructure with ample expertise and knowledge of securities transactions.

• Consumers are also becoming increasingly aware that they need to take a hands-on approach to accumulating private capital and providing for themselves in later life.

• Technological developments present opportunities to offer new investment and savings services that cater to customers’ needs.

• Passive investment (ETF/Trackers) is gaining in popularity.

• Potential of generating extra revenue on funds entrusted by customers as soon as the interest rate on the money and capital markets goes up.

• New legislation and regulations, such as PSD2, offers opportunities for further expansion of the business model in the foreseeable future.

• High dependence on volatile transaction income.• Relatively small group of very active customers

within online brokerage.• High fixed cost base (governance and

infrastructure).• Maintenance projects and projects for laws and

regulations call for a lot of IT capacity.• Still not big enough to maximise benefits of scale.• Outflow of managed assets from Alex Asset

Management.

• Falling trading volumes, increasing competition for ‘self-investment’. The online brokerage market is undergoing a significant change, by which brokerage is becoming a commodity and customers are increasingly unwilling to pay extra for good service.

• The fact that some small new competitors have less legacy to deal with means that they have a shorter time to market for new products and services.

• Absence of a level playing field in the market.• Consistently negative interest rates on money

and capital markets.• Enhanced risk of a rising cost base caused by

increasing complexity of legislation and regulations (internal control and compliance costs).


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OUTLOOK AND OBJECTIVES

STRATEGYThe strategic transformation of BinckBank, which also focusses on long-term value creation, consists of three phases.In 2017 the focus was on the second phase: ReDesign Binck. ReDesign Binck is about developing new products and services aimed at seizing opportunities in the market. The third phase is Relaunch Binck. In this final phase (beginning 2018), the new products and services must contribute favourably to the results in order to achieve the intended new growth phase. Although the strategic transformation is (largely) on schedule and we are well positioned with our new products for a relaunch of BinckBank, the negative interest rates on the money and capital markets continue to weigh heavily on net interest income and market volumes are still exhibiting a downward trend (partly as a result of changing trading behaviour among customers) that is putting pressure on net commission incomes. The increased and persistent regulatory pressure is putting upward pressure on costs. The major projects in this context will be largely completed in 2018 but will continue to impact costs going forward. The outflow at Alex Asset Management is continuing longer than expected, causing BinckBank to incur a delay in growth in a major pillar of its earnings model, ‘assets under management’. In addition, the fiscal amortisation of the intangible assets and goodwill acquired with the acquisition of Alex Vermogensbank will cease, making it difficult to achieve earnings growth in the short term and a return to historical profit levels. The 2018 and 2019 financial years will mainly focus on the commercial roll-out of the new propositions and making the organisation more effective and efficient.

THINK ETF ASSET MANAGEMENT B.V.On 19 January 2018 BinckBank announced that it was selling its 60% holding in Think ETF Asset Management B.V. (Think) to Van Eck Associates Corporation. The sale is expected to be completed at the end of the first quarter of 2018. After the sale of Think ETF Asset Management B.V. BinckBank will be able to focus fully on the relaunch of its retail activities.

FISCAL AMORTISATION ALEX VERMOGENSBANKBinckBank acquired ‘Alex Vermogensbank’ from Rabobank for € 391.4 million in 2008 by means of an asset-liability trans action. This amount was subject to straight-line amortisation in ten years for tax purposes. This enabled BinckBank to realise a tax benefit for its shareholders from the asset-liability transaction. In the period from 2008 to 2017 BinckBank enjoyed a total tax benefit of € 97.8 million (25% of € 391.4 million), which is € 9.8 million a year. 2017 was the final year in which BinckBank could charge amortisation expenses resulting from the acquisition of Alex Vermogensbank against taxable profits and realise a tax benefit.

FINANCIAL OUTLOOKBinckBank’s result depends heavily on external market factors and its customers’ behaviour. The volatility and direction of the stock exchange are strong determining factors here, as are the interest rates on the money and capital markets. This is unpredictable and BinckBank therefore does not make any specific projections.


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OBJECTIVESIn 2014 BinckBank defined medium-term targets for the end of 2018. The achievement of these targets at the end of 2017 is set out in the table below. It can be concluded that the targets for the end of 2018 with regard to assets under administration at the end of 2018 will probably be achieved, achieved and that, in view of the developments over the past three years, the other targets are not expected to be met in 2018.

TERM TARGETS 2018 TARGET 2018REALISATION YEAR-END 2017

REALISATION YEAR-END 2016

REALISATION YEAR-END 2015

Customer satisfaction >=8 weighted-average 7.5 weighted-average 7.3 weighted-average 7.3 weighted-average

Number of transactions 11.0 million 7.7 million 7.7 million 9.3 million

Assets under administration € 21.0 billion € 26.0 billion € 22.8 billion € 20.6 billion

Assets under management € 3.5 billion € 1.1 billion € 1.3 billion € 1.7 billion

Cost/income ratio (excluding IFRS amortisation)

<65% 81% 79% 64%

More balanced income flow >66.6% 39.4% 35.6% 33.8%

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HUMAN RESOURCES

INTRODUCTIONBinckBank is a successful international business bursting with new initiatives, a bank that creates a pleasant and informal atmosphere where its staff focus on customer satisfaction. Every year, BinckBank welcomes ambitious, enterprising people who want to grow further in their careers. They are decisive in BinckBank’s success. At the end of 2017, the average age of our employees was 37.

In its 17 years, BinckBank has grown into a company with a total of 579 FTEs in the Netherlands, Belgium, France, Italy, and Spain. Any time BinckBank takes on a new hire, we take great pains to ensure that the employee fits into the organisation, embraces our culture, and understands our people. Our core values Empower and guide, Build trust, Be engaged, Exceed expectations, and Be a genius form the basis for the culture and contribute to the ambitions and long-term value creation of the organisation.

Number of FTE’s by age bracket

0

50

100

150

200

250

300

2017

2016

2015

>5545-5435-4425-34<24

36 3836 3731

259

267

187

180

123

35

228

174

104

120

Male/female ratio

women

159

538 men

Total 2016

697

vrouwman

Total 2017

631

women

149

482men

Spanje

Italie

Frankrijk

Belgie

Nederland

Totaal 2017

631

vrouwen

149

482mannen

Cost/income ratio

0%

20%

40%

60%

80%

100%

201720162015

64%

79% 81%

Number of FTE’s by department

0

50

100

150

200

250

300

2017

2016

2015Other

supportOperationsAbleICTretail

267

265

250

154

195

190

79 067 55 4254 79 7781

2017

2016

2015

Aantal FTE’s per land

Spanje

Italië

Frankrijk

België

Nederland

539

3619

634

36

4

541

3621642

40

4

472

3723579

42

5


Number of FTE’s per country

0

100

200

300

400

500

600

700

SpanjeItalieFrankrijkBelgieNederland

201720162015

250

350

450

550

650


201720162015

Spain

Italy

France

Belgium

Netherlands

Total 2016

642

Spanje

Italie

Frankrijk

Belgie

Nederland

Total 2017

579

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750

201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

21642

4

23579 4

539

19634

43636

541

3640

475

3740


0

50

100

150

200

250

300

2017

2016

2015

>5545-5435-4425-34<24

36 3836 3731

259

267

187

180

123

35

228

174

104

120

Male/female ratio

women

159

538 men

Total 2016

697

vrouwman

Total 2017

631

women

149

482men

Spanje

Italie

Frankrijk

Belgie

Nederland

Totaal 2017

631

vrouwen

149

482mannen

Cost/income ratio

0%

20%

40%

60%

80%

100%

201720162015

64%

79% 81%


0

50

100

150

200

250

300

2017

2016

2015Other


267

265

250

154

195

190

79 067 55 4254 79 7781

2017

2016

2015


Spanje

Italië

Frankrijk

België

Nederland

539

3619

634

36

4

541

3621642

40

4

472

3723579

42

5



0

100

200

300

400

500

600

700


201720162015

250

350

450

550

650


201720162015

Spain

Italy

France

Belgium

Netherlands

Total 2016

642

Spanje

Italie

Frankrijk

Belgie

Nederland

Total 2017

579

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750

201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

21642

4

23579 4

539

19634

43636

541

3640

475

3740


0

50

100

150

200

250

300

2017

2016

2015

>5545-5435-4425-34<24

36 3836 3731

259

267

187

180

123

35

228

174

104

120

Male/female ratio

women

159

538 men

Total 2016

697

vrouwman

Total 2017

631

women

149

482men

Spanje

Italie

Frankrijk

Belgie

Nederland

Totaal 2017

631

vrouwen

149

482mannen

Cost/income ratio

0%

20%

40%

60%

80%

100%

201720162015

64%

79% 81%


0

50

100

150

200

250

300

2017

2016

2015Other


267

265

250

154

195

190

79 067 55 4254 79 7781

2017

2016

2015


Spanje

Italië

Frankrijk

België

Nederland

539

3619

634

36

4

541

3621642

40

4

472

3723579

42

5



0

100

200

300

400

500

600

700


201720162015

250

350

450

550

650


201720162015

Spain

Italy

France

Belgium

Netherlands

Total 2016

642

Spanje

Italie

Frankrijk

Belgie

Nederland

Total 2017

579

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750

201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

21642

4

23579 4

539

19634

43636

541

3640

475

3740


0

50

100

150

200

250

300

2017

2016

2015

>5545-5435-4425-34<24

36 3836 3731

259

267

187

180

123

35

228

174

104

120

Male/female ratio

women

159

538 men

Total 2016

697

vrouwman

Total 2017

631

women

149

482men

Spanje

Italie

Frankrijk

Belgie

Nederland

Totaal 2017

631

vrouwen

149

482mannen

Cost/income ratio

0%

20%

40%

60%

80%

100%

201720162015

64%

79% 81%


0

50

100

150

200

250

300

2017

2016

2015Other


267

265

250

154

195

190

79 067 55 4254 79 7781

2017

2016

2015


Spanje

Italië

Frankrijk

België

Nederland

539

3619

634

36

4

541

3621642

40

4

472

3723579

42

5



0

100

200

300

400

500

600

700


201720162015

250

350

450

550

650


201720162015

Spain

Italy

France

Belgium

Netherlands

Total 2016

642

Spanje

Italie

Frankrijk

Belgie

Nederland

Total 2017

579

Spanje

Italië

Frankrijk

België

Nederland

5413621

642

404

4723723

579

425

0

250

500

750

201720162015

5393619 634

364

Spain

Italy

France

Belgium

Netherlands

21642

4

23579 4

539

19634

43636

541

3640

475

3740

RECRUITMENTMany employees choose BinckBank for the ambitions and the challenges. The ambitions of the company offer opportunities for knowledge development, growth opportunities, and room for individual contributions and ideas. Along with the involvement of the business and our HR advisors, one of the most important tools in selecting the right people is the ‘Working at Binck’ website. This site underwent a full makeover in 2017, and has new content and visual material effectively reflecting today’s atmosphere in the organisation. The site is offered in four languages (Dutch, English, French, and Italian).


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The shortage on the labour market is expected to continue into the coming years for certain positions. This is why in 2017 BinckBank took steps to further professionalise its recruitment & selection, in part by assigning more budget to recruitment and allowing the recruitment to take place in a more targeted manner through the use of new techniques. In addition, several programmes were intiated to encourage employee education an training. There is also a referral program to generate more applications.

EDUCATIONBecause competent, motivated, and satisfied employees are vital to BinckBank’s success, BinckBank invests in their knowledge, professionalism, and skills on an ongoing basis. In 2017, all employees were offered a wide range of online and other training facilities to improve their knowledge and skills. To advance their personal growth even further, more than half of our staff have taken an external or online course beyond the internal training programmes offered. To bring the goals of the organisation to the attention of all employees and ensure that they understand the ambitions that BinckBank strives to achieve, the executive board hosted a number of strategy sessions in the Netherlands and elsewhere in 2017.

Training our staff was the focus of a great deal of our attention in 2017. One of the most important aspects of the training of our staff was the development and compilation of the MiFID II training courses. Alongside the development of individual and team training, management development tracks were also part of this development. In recent years, BinckBank has invested a great deal of time and money in Lean Six Sigma training programmes. With so many employees having been trained in this methodology, the executive board and senior management considered it a good idea to implement Lean Six Sigma in the everyday working processes. Four projects were identified as interesting to staff for this purpose and that would also fall under the MiFID rules and guidelines, and as such would contribute to the strategy.

When BinckBank sees that an ambitious and enterprising employee is ready for the next step in his or her career, it is extremely important to offer that talent opportunities to grow within the organisation. With this focus, over 70 employees moved into new positions within BinckBank in 2017.

Knowing that in the coming years the priorities of both new and existing employees will continue to shift towards personal growth and development, BinckBank will continue to be active in focusing on personal development and offering growth opportunities. With a continual focus on training policy, we will keep the attention on staying an attractive employer. Just as in 2017, all our branches, including those in Belgium, Spain, Italy, and France will be part of this process.

EMPLOYEE SATISFACTION SURVEY (FABBS)In 2017, BinckBank completed the employee satisfaction survey FABBS (‘For a Better Binck Survey’): a modern, transparent survey geared to BinckBank’s plans and ambitions.

The survey was held among staff in all countries and 79% of all staff completed the questionnaire which amongst others covered important themes, plans, ambitions, and the organisational culture.

Our organisation is big enough to offer sufficient challenges to ambitious, talented people, yet at the same time is small enough to allow an individual to make a difference. No one is alone in this: working together to be a better bank for our customers is our fundamental principle. Our challenge is establishing the cooperation between the individual departments and countries. The result of the FABBS showed that our employees feel this is an area that demands continuous attention.

Throughout the organisation, follow-up plans are emerging. We will see to it that these plans wil receive sufficient attention in the coming years. Likewise, internal communication will also play a major role in guaranteeing the engagement of employees. The FABBS will be repeated in 2018.

VITALITYThe sick leave in 2017 was 3.27%. Compared to a year earlier, this percentage increased by 0.53% (2.74% in 2016). This percentage includes several cases of long-term illness for which an reintegration process is ongoing. To help managers in their handling of cases of long-term illness in their department, we have facilitated a number of sessions with the health and safety service.

Alongside the assistance provided to the management, over 2017 extra attention was given to health in the form of sporting activities, nutrition, and stress awareness.


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The cooperation with the Bootcamp Club also contributed to the organisation of sporting activities in 2017. Bootcamp trainings are organised at various times two days per week.

There was also added focus on the nutrition component, in the form of workshops on nutrition and a look at providing a healthier menu in the company restaurant. In addition, all employees were given the opportunity in 2017 for a periodic medical exam. In 2018, BinckBank will expand the program as a component of the health and safety policy, which will also involve a change in the catering concept for evening meals. Healthy and fit employees are a must for a company with big ambitions.

Alongside healthy and fit employees, the BinckBank health programme also fosters team spirit, cooperation, and fun, all important points for attention that are also on the management’s agenda for the coming years. With this in mind, in 2017 BinckBank leaned towards organising events of informal nature, like the ‘Binckspiration Session’ with Maarten Tjallingi, which highlighted mental strength, commitment, and perseverance. But also the Friday afternoon drinks in the bar and special theme parties were on the agenda to increase team spirit and cooperation.

Following on from the results of the risk inventory and evaluation (RIE) in 2016, a number of stress awareness sessions were given in 2017.

To facilitate working parents during the two strikes by teachers in regular primary education, BinckBank organised a ‘Kidsday’ twice in 2017. Employees were invited to bring their children to work for an engaging children’s programme in the office.

CONSULTATION WITH THE WORKS COUNCILThe composition of the Works Council changed in 2017 due to the Works Council elections. As of the end of 2017, the Works Council consists of ten members. The executive board and the Works Council held regular formal and informal meetings. These meetings were described as pleasant, informative, and transparent.

In 2017, the following projects were work done or completed in collaboration with the Works Council:

• Extension of pension contract• Implementation of changes in disability legislation• Sale of Able Holding B.V.• Phase-out of TOM services• Risk inventory & evaluation• New remuneration policy proposal

The board once again looks forward to a constructive partnership with the Works Council in 2018.

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CORPORATE SOCIAL RESPONSIBILITY

INTRODUCTIONOur business activities are first and foremost about achieving added value for our customers. BinckBank strives to provide the finest quality of online services in investment, asset management, and savings to help customers achieve their ambitions and the financial goals associated with them. From this position, our role in society and our primary activities are in line with each other. We regard concern for the social effects of the company’s operations as a fundamental reason for our business’s existence. It is an implicit part of our corporate social responsibility that BinckBank continually consider the impact of our services and operations on a broader environment. This approach contributes to our overarching objective: creating trust among our customers and realising long-term added value for our customers and therefore for our shareholders.

APPLICATION OF NATIONAL AND INTERNATIONAL FRAMEWORKSBinckBank applies the guidelines formulated by the Dutch Banking Association as the starting point for its corporate social responsibility. These guidelines, based in part on the OECD guidelines, are embedded in the ‘Future-oriented banking’ package, which also includes principles of the Banking Code and the Social Charter of the banking sector. Within BinckBank, these guidelines are interpreted and applied in accordance with our business ideals. A bank’s social status involves important issues concerning the interests of customers in the context of the duty of care, risk management, governance, and remuneration. In addition to the aforementioned guidelines, BinckBank also endorses the principles of the Corporate Governance Code and adheres to the principles of a restrained remuneration policy.

BinckBank operates in a well-organised environment with a geographical footprint in countries within the European Union. BinckBank is only affected to a limited extent by current and international issues concerning human rights, income equality, working conditions, and the scarcity of resources. The principles referred to above, including (for example) the OECD guidelines, but also the UN Global Compact, the Equator Principles and the Principles for Responsible Investment (PRI), only apply to BinckBank to a limited degree.

The Disclosure of non-financial information decree, which implements EU directive 2014/95/EU, obliges BinckBank to disclose information in regard to certain non-financial subjects and diversity.

The business model is described in brief in the information provided in the previous sections ‘Who we are’ and ‘What we do’, in combination with the earnings model and SWOT analysis in the report of the executive board. The risks associated with the business model are set out in the SWOT analysis, but in addition are also explained in both financial and non -financial terms in the Risk Management section. As has been noted previously, the confidence of the customer is an important factor in our business activities, and we monitor this continuously by means of customer satisfaction assessments.

BinckBank is not directly involved in the financing of enterprises, and as such can exert little influence on environmental aspects; consequently, BinckBank has no particular policy on the environment. BinckBank is a proponent of sustainable investment and is a member of the VBDO (Association of Investors for Sustainable Development). We also offer customers as much information as possible about sustainable investments on our websites, particularly about investing in funds. Environmental measures relating to our own operations are described elsewhere in this chapter.


Social and personnel matters are described in the chapter on Human Resources. BinckBank considers it important that the managers and employees of the bank have all relevant knowledge and are paid appropriately for it, and that they work in a safe and personal work environment. This helps to fully utilise the available talent. With regard to diversity, our target is for at least 30% of the seats on the executive board and the supervisory board be held by women and at least 30% by men. Although at present there is no legally mandated target, BinckBank strives for an equal balance of men and women on the boards. The supervisory board is currently made up of three women and two men, meaning 60% women and thus meeting the aforesaid target figure for 2017. The executive board of BinckBank is made up of three men. Here, the target figure was not met. Efforts will of course be made to achieve a more balanced composition when filling any vacancies for directors that arise.

Information in regard to respecting human rights and fighting corruption and bribery is provided below, in the chapter on Corporate Social Responsibility

SCOPEBinckBank breaks CSR issues into three categories:1. Customer value & dialogue2. Business operations3. Sustainable products & services

Our most important stakeholders are customers, employees, and shareholders, in which the regulators, key partners, and vendors occupy the periphery of our financial ecosystem. The primary changes in this can be correlated with the introduction of MiFID II in the interests of protecting the position of the private investor. Relevant developments in this area include the product approval process and the defining of suitability of products for investors. Requirements are also consistently increasing in the areas of privacy of customer data and security of ICT systems. All this means that customer care, privacy, and security are our top priorities.

CUSTOMER VALUE & DIALOGUE BUSINESS OPERATIONS SUSTAINABLE PRODUCTS & SERVICES

1 Customer satisfaction 6 Risk management 14 Responsible credit policy

2 Financial education 7 Corporate governance 15 Sustainable investment

3 Customer services and compliant management

8 Tax policy 16 Conservative investment policy

4 Privacy and security 9 Compliance, compliance with laws and regulations

17 Transparency on costs and conditions

5 Platform stability 10 Human resources 18 CSR projects and donations

11 Environmental care

12 Human rights and labour conditions

13 Corruption and bribery

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CUSTOMERS VALUE & DIALOGUE 1 CUSTOMER SATISFACTION

Customer satisfaction is the main KPI, which is why it is embedded in our strategic medium-term goals. BinckBank sets out to continuously exceed its customers’ expectations through innovation and aspires to be the bank with the highest customer satisfaction rating. BinckBank holds a quarterly survey among different clientele groups to measure their level of satisfaction. These insights make it possible to make any necessary adjustments in areas highlighted by customers as having room for improvement.

In 2017, BinckBank set up an in-house UX centre with the object of better mapping out customer behaviour. This is entirely compatible with the iterative Agile work approach, which involves the incremental refinement of the services on the basis of customer feedback.

BinckBank participated in the banking sector Confidence Monitor for the first time in 2017. BinckBank’s results in the Confidence Monitor 2017 were higher than the sector average. It is striking to note that BinckBank’s customers actually have a lower than average confidence in the sector in general, which means that they express a higher than average confidence in BinckBank as an institution in that sector. BinckBank will also be participating in this large-scale survey in 2018.

Openness and honesty are the values that BinckBank has cherished from its very beginnings. And its newest services under Laten Beleggen are no exception. Here, as always, BinckBank provides clear descriptions, realistic expectations, and transparency, not only in terms of costs but in the tracking of the movements in your portfolio.

2 FINANCIAL EDUCATION BinckBank looks to help its customers to make better decisions in order to achieve their financial aspirations. Financial education remains one of BinckBank’s key focus areas. BinckBank offers its customers education products such as the Binck Investors’ Day, online seminars, online training modules, and masterclasses. In 2017 the Academy in the Netherlands welcomed over 25,000 participants via webinars, and BinckTV was launched in Italy and France. 3 CUSTOMER SERVICE AND COMPLAINT MANAGEMENT

Ever since its incorporation, a top-quality customer service has been one of the aspects on which BinckBank stands out from its competitors. The customer services department plays an important role in this respect. To guarantee that quality, BinckBank continuously invests in on-the-job training and coaching. That’s one of the reasons why in 2017, BinckBank won first prize for best customer service in the online brokerage category in France.

4 PRIVACY AND SECURITY Privacy and online security are intrinsic aspects of BinckBank’s service. BinckBank does everything possible to protect personal data in accordance with the applicable privacy legislation. The subject of internet security is gaining more and more public attention, also regarding measures taken by consumers themselves to protect their computers and smart-phones. In this context BinckBank informs its customers about the initiative of www.veiligbankieren.nl. Visitors to this website are given information and methods they can use to secure their PC and mobile environments. BinckBank has regular consultations with other NVB member institutions and the National Cyber Security Centre on the threats to privacy and security posed by digital attacks. Internally, BinckBank has established a Cyber Incident Response Team that actively monitors threats and responds with mitigation measures in the event of a cyber attack against BinckBank.

5 PLATFORM STABILITY BinckBank invests continuously in the stability of the various trading platforms. BinckBank’s trading platform has proven itself over time by coping with all peak periods without any significant problems. The uptime KPI’s are defined annually, differentiating between availability during and outside trading hours. Planned maintenance is always performed outside trading times. The system availability rate during trading hours in 2017 was 99.76%. BinckBank has set up a fully equipped disaster recovery environment for Business Continuity purposes. There is an annual fall-back test to check the transition from the production environment to the fall-back environment.

http://www.veiligbankieren.nl


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BUSINESS OPERATIONS 6 7 8 9 10

Reference is made to the relevant chapters of this report for a description of risk management, corporate governance, tax policy, compliance , compliance with laws and regulations and human resources.

11 ENVIRONMENTAL CARE BinckBank’s ecological footprint is limited to its head office in Amsterdam and our branches in Belgium, France, Italy, and Spain.

In 2017, BinckBank migrated its data centres to a new environment realising a reduction in our energy consumption of 50 percent. BinckBank has moved its hosting of the data centres to smaller spaces at the same vendors, both of which are ISO 14001-certified, and one of which is also certified for ISO 50001 (energy management).

For the power needs at its head office, BinckBank uses certified green energy (hydroelectric), and we generate 35,000 kW through solar panels on the roof of our building. Our head office has an energy label of A, thanks to insulation and high-tech glass with a special heat-reflective metal coating.

The cooling (not only for our office areas but for our computers and servers) is sourced from Nuon’s district cooling centre, which collects cold water from the depths of De Nieuwe Meer, a nearby lake; which is then routed to our offices in Amsterdam’s Zuidas business district, after which it is returned to the surface of the lake, restoring it to its natural state. This system reduces CO2 emissions by approximately 75% as compared to conventional cooling systems.

Our printers print with solid inks, which produce 90% less waste than laser printers of the same capacity. Solid Ink Printers are also more environmentally friendly when you consider the life cycle of the printer, from production and use to the moment the printer is recycled. Over that life cycle, they use 30% less energy and produce 30% less CO2 than comparable laser printers.

12 HUMAN RIGHTS AND LABOUR CONDITIONS BinckBank’s geographic footprint is limited to its head office in Amsterdam and its branches in Belgium, France, Italy, and Spain. There are no special circumstances concerning human rights and labour conditions in any of our offices.

13 CORRUPTION AND BRIBERYBinckBank has set up internal procedures to prevent corruption and bribery. Our personnel must exhibit complete integrity with respect to positions of power and always act within the limits of the law. All forms of corruption and bribery are strictly forbidden. The Governance, Risk & Compliance (GRC) department monitors the correct application of these procedures. In the past year, the bank has had no instances of corruption or bribery.

SUSTAINABLE PRODUCTS & SERVICES 14 RESPONSIBLE CREDIT POLICYOne of the forms of credit that BinckBank offers to its customers is collateralised loans. This is a collateralised continuous credit facility that may only be used to purchase securities. Customers can opt for a separate contract to make use of this credit facility. BinckBank has capped the advance rates in order to prevent overlending among its customers. The maximum amount of the collateralised loan is determined by the customer’s risk appetite and BinckBank’s willingness to provide loans against collateral. BinckBank’s willingness to issue credit depends on the customer’s investment portfolio, and adapts to price changes and movements in the portfolio. Setting an upper limit is intended to prevent customers from accruing irresponsibly high debts towards BinckBank.

BinckBank also actively invests in the financing of Dutch residential mortgage loans. Credit risk acceptance and management has been outsourced to Dynamic Credit and is monitored on the basis of the comprehensive data on the mortgage portfolio issued in accordance with the requisite prevailing statutory requirements. BinckBank has issued responsible acceptance criteria.


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15 SUSTAINABLE INVESTMENT Within its investment policy for Alex Asset Management, BinckBank operates exclusion criteria for companies that do not satisfy the UN Global Compact guidelines. In a collaborative effort with Sustainalytics, Alex Asset Management screens on a quarterly basis the universe of shares in which the model invests. The purpose of this screening is to avoid investing in companies that fail to act in keeping with the principles of the UN Global Compact.

BinckBank was the first bank to add the Morningstar Sustainability Rating to investment funds and ETFs with Binck Fundcoach. This sustainability indicator is one of the tools that BinckBank is using to help its customers select sustainable investments.

16 CONSERVATIVE INVESTMENT POLICY BinckBank pursues a conservative financial policy and takes a cautious approach to the investing of customer funds entrusted. Funds entrusted, which are not used for collateralised loans, are partly held in cash with the remainder being invested through the investment portfolio (consisting of bonds and Dutch residential mortgage loans). Lending is conducted in a responsible manner in accordance with the established risk appetite.

17 TRANSPARENCY ON COSTS AND CONDITIONS BinckBank strives for transparency in the pricing model for its customers so they can determine in upfront what BinckBank’s services cost and establish afterwards what they have paid for them. One of BinckBank’s priorities is for its customers to properly understand how the cost structure of products is derived and that the explicit transaction costs are just one element of this structure; others include the interest rate and the spread. One of the best examples is the Binck turbo, for which BinckBank has eliminated the transaction costs; the explanation being that as issuer, BinckBank earns its income based on the financing level, as a result of which it as provider can factor out the transaction costs. Another example from 2017 is that BinckBank investors have been able to profit from lending out their securities. Securities lending for a fee is not new in itself, but BinckBank is allowing its customers to enjoy the revenues from this lending activity. Other parties in the banking sector have been lending their customers’ securities, but keeping the revenues for themselves. BinckBank only lends securities with the explicit permission of the customer, and then, after deduction of administrative costs, splits the revenues with the customer evenly. In 2018, BinckBank will continue to pursue the initiatives needed to make investment more accessible to the customer and protect its customers’ interests.

18 CSR PROJECTS AND DONATIONS In terms of social projects and donations, BinckBank supports the IEX Schools Competition, an investment competition that is included in the economics lessons at the upper level of senior secondary and pre-university education. This reflects the importance that BinckBank ascribes to financial education.


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TAX POLICY

INTRODUCTIONBinckBank regards compliance with its tax obligations as part of the process of long-term value creation for all stakeholders. Transparency is one of the key elements in the current social discussion on CSR. BinckBank concurs with this discussion and thus explains its tax policy in this part of the report. The income tax paid by BinckBank for each geographic segment is also demonstrated by means of the country-by-country overview in the Corporation Tax section.

TAX POLICYBinckBank’s customers are primarily looking for a secure, reliable, and operationally efficient banking and broker institution. BinckBank’s positioning as a provider of financial services is therefore geared towards a low risk appetite in its policy and operational decisions relating to tax affairs. BinckBank aims to avoid any risks by adopting tax stances that could adversely affect the tax position or reputation of BinckBank and/or its customers.

BinckBank strives to comply with all relevant national and international tax rules and legislation, taking account of the intention of the legislature and best-practice guidelines, such as the OECD Guidelines for Multinational Enterprises, in order to adequately monitor the tax position and pay taxes on time. BinckBank is assisted by accredited tax consultants in all countries where it operates. It is BinckBank’s position that a reasonable application of the law does not involve aiming for an artificial reduction of the effective tax burden, for instance by means of tax avoidance through tax havens. The publication of the Panama Papers and the Paradise Papers have increased social awareness in this area. At the same time, it is in the interest of the continuity and value of the business to optimise the tax position in this context. BinckBank also has a responsibility in this regard towards shareholders to improve shareholder value, bearing in mind that taxation is a derivative of business operations. If BinckBank believes that it can take advantage of a tax facility, this will be agreed in advance with the Dutch Tax and Customs Administration. One example of this is the advance tax ruling that BinckBank has obtained from the Dutch Tax and Customs Administration on the application of the innovation box to the income attributable to the innovative trading platform that BinckBank has developed for private investors.

BinckBank’s tax position is in keeping with its business operations and reflects its business strategy and the geographic distribution of its activities. BinckBank has considered the OECD’s definitive action reports on the ‘Action Plan on Base Erosion and Profit Shifting’ (BEPS) project and similar EU Anti-tax avoidance programmes. Given that BinckBank’s tax position is in keeping with its business operations in various countries and that it does not use any aggressive and socially criticised tax structures and tax havens, BinckBank believes that the BEPS action report and the ATA programme will have a limited impact on it.

For the purpose of transfer pricing (the pricing of international transactions at a multinational), BinckBank uses the Master/Local File principles, which have been coordinated with the Dutch Tax and Customs Administration by means of a bilateral Advance Pricing Agreement (APA) and unilateral APA. An agreement has been reached by which the Transactional Net Margin Method (TNMM) is used to calculate transfer pricing, with gross operating revenue as the profit indicator. The profit margin of the foreign branch is established as a fixed percentage of the ‘net fee and commission income’ and all other income and expenses will be borne by the head office in the Netherlands. For branch offices that do not generate local income, it has been agreed with the Dutch Tax and Customs Administration that under the unilateral APA the cost-plus basis is the most suitable method for transfer pricing.


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BinckBank practises transparency towards the tax authorities in all countries where it operates. This means that BinckBank provides all relevant and requested information on tax affairs in order to facilitate a reasonable assessment of its tax position. If necessary, and where practical, discussion items are agreed as far as possible in advance with the relevant tax authority. This limits the possibility of subsequent differences in opinion and any later adjustments. Ultimately this gives BinckBank more clarity and certainty about tax positions. In the context of horizontal monitoring, BinckBank has entered into a covenant in the Netherlands with the Dutch Tax and Customs Administration. The Dutch Tax and Customs Administration wishes to use horizontal monitoring to place even greater emphasis on cooperation between equals in monitoring. This means that when a need arises for coordination between BinckBank and the Dutch Tax and Customs Administration, this happens beforehand instead of having subsequent audits. When the Tax and Customs Administration enter into this type of agreement, they do so on the basis of transparency, understanding, and mutual trust. For us as taxpayer, that means that attention is paid to implementing a solid tax control framework. BinckBank is very well aware of this and acts accordingly.

TAXATION AND CUSTOMERSBinckBank provides investment services to many customers in various countries that are subject to different local tax systems. In its role as broker, BinckBank assumes an active role in certain tax payments. BinckBank has set up adequate processes in this role for prompt and correct payments to be made in the various countries. The customers are first and foremost responsible for their own tax obligations. BinckBank does not provide any tax advice to its customers.

BinckBank is obliged to issue certain information about savings and securities products to the Dutch Tax and Customs Administration. This information is used for purposes such as pre-completing the income tax returns of Dutch taxpayers, which makes it easier to file the income tax return. The information is also used to counteract tax evasion (in the form of undeclared savings, for example) in the context of the Common Reporting Standard (CRS). Under the CRS BinckBank has been obliged since 1 January 2016 to establish whether customers are tax residents of countries other than the Netherlands. Together with the account information the Dutch Tax and Customs Administration share this information with the tax authorities of participating countries. Conversely, the Dutch Tax and Customs Administration receive information from the participating countries about residents of the Netherlands who keep bank and/or securities accounts in those countries.

CURRENT TAXThe tax burden shown in the financial statements relates only to current tax. The effective tax burden is the reported tax expense as a percentage of the result before tax. The differences between accounting and tax rules give rise to an effective tax burden that differs from the nominal tax rate. On a consolidated basis, in 2017 BinckBank’s shows a tax credit of 3.3% of the operating result (2016: 31.6% tax burden) which is lower than the nominal tax rate. The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows:

(amounts in € 000’s)2017

AMOUNT2017

PERCENTAGE2016

AMOUNT2016

PERCENTAGE

Nominal tax rate 2,062 25.0% 1,689 25.0%

Effect of different (foreign) tax rate 66 0.8% 45 0.7%

Effect of substantial holding exemptions (216) -2.6% 705 10.4%

Effect of tax facilities (2,256) -27.4% (155) -2.3%

Other effects 70 0.9% (150) -2.2%

Total tax effect (274) -3.3% 2,134 31.6%

Fiscal benefits resulting from differences between commercial and fiscal amortisation (4,407) (4,407)

Adjusted taxes (4,681) (2,273)


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The lower tax burden in relation to the nominal tax rate can be explained as follows:

• Holding exemptions ensure there is no double taxation of holding results.• The effect of the tax facilities includes the benefits derived from the settlement reached between BinckBank and its

subsidiaries with the Dutch Tax and Customs Administration on the application of the Innovation Box. Additionally, the tax facilities include a liquidation loss from the cumulative losses in the participation TOM Holding N.V., which after liquidation can be deducted from the taxable profit of BinckBank N.V. The liquidation of TOM Holding N.V. is expected to be completed in 2018.

• Any deferred tax assets and liabilities.• Other tax effects that can cause differences are adjustments in respect of prior financial years, expenses that are not

tax deductible, such as the shares issued to personnel under the remuneration policy.

The tax burden and the effective tax rate breakdown by the various BinckBank branch offices is as follows:

COUNTRY-BY-COUNTRY REPORTING OVERVIEW 2017

(amounts in € 000’s)

JURIS-DICTION

MOST IMPORTANT COMPANY ACTIVITY FTE

OPERATING RESULT

BEFORE TAXCORPORATE

TAXTAX

BURDEN

Netherlands BinckBank N.V.online broker, asset management, subsidiaries

475 7,519 (521) -6.9%

Belgium Binck Belgium branch online broker, asset management 40 341 80 23.5%

France Binck France branch online broker 37 217 70 32.3%

Italy Binck Italy branch online broker 23 97 72 74.2%

Spain Binck Spain branch sales office 4 73 25 34.2%

Total 579 8,247 (274) -3.3%

The effective tax burden in the Netherlands is, at -6.9%, lower than the nominal tax rate of 25%, primarily as a result of a liquidation loss from the cumulative losses in the participation TOM Holding N.V., which after liquidation can be deducted from the taxable profit of BinckBank N.V. The liquidation of TOM Holding N.V. is expected to be completed in 2018. Additionally, the application of the innovation box, non-deductible costs, and differences between fiscal and accounting depreciation periods for assets have an impact on the rate.

The effective tax rate for BinckBank Belgium is 23.5%, whilst the nominal tax rate is 33.99%. The lower effective tax burden is largely due to the retroactive settlement of prior years notional interest rate deduction under the Belgian tax regime.

The effective tax rate for BinckBank France is 32.3%, whilst the nominal tax rate is 33.33%, which is in line with the nominal tax rate.

The effective tax rate for BinckBank Italy is 74.2%. Corporation tax in Italy consists of two components, each with a different basis: the IRES and the regional IRAP. The IRES is a tax on taxable profit and amounts to 27.5%. The IRAP is a regional tax which is not charged over taxable profit but over production activities, and amounts to 5.57%.

The effective tax rate for BinckBank Spain is 34.2%, which is in line with the nominal tax rate of 30%.


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FISCAL DEVELOPMENTSAs a member of the finance sector BinckBank constantly faces the impact of new tax legislation.

Belgium, for example, introduced new tax legislation in 2018 levying tax on private individuals holding assets in a securities account. This new tax, which the government hopes will bring in € 254 million in new tax revenue, has become known as the ‘effectentaks’. Any private individual with a securities account with a value of € 500 thousand or more must now pay a tax of 0.15% on the securities account. However, the basis for the tax raises certain questions. The tax applies only to private individuals. If a private individual holds their securities in a company, these securities are not subject to the tax. Furthermore the tax is levied only on listed securities, and so other assets such as nonlisted securities, real estate, art, etc., are exempt. The tax does, however, impose an additional administrative burden on the banks, in the form of the obligation to register, withhold, and pay the tax. At the same time, the exchange tax, the tax that investors pay on purchases and sales of shares or bonds, is once again being increased. The tax on shares is going up from 0.27 to 0.35 percent, and the tax on bonds is going up from 0.09 to 0.12 percent.

Meanwhile, in many other countries we see that the corporation tax rates are being lowered (in stages) with the express intention of improving the investment climate for foreign businesses. In addition to the Netherlands, Belgium and France have announced their own reductions.

There were also various legislative initiatives at national and European level, such as the previously described BEPS action reports, ATA programme and CRS. The EU is also working on the introduction of a common profit tax: the Common Consolidated Corporate Tax Base (CCCTB). These initiatives have arisen from the growing attention paid to the taxation of multinationals.

In February 2013 the European Commission made new proposals for the introduction of a tax on financial transactions, the Financial Transaction Tax (FTT). Ten Member States have joined forces to give shape to this collaboration. The idea behind this tax is for the financial sector to give money back to society following the 2008 financial crisis. This tax would also impose restrictions on high-frequency trading. No agreement had yet been reached on the introduction of the FTT at the end of 2017. The scope and date of the introduction of the FTT depends on the negotiations between the participating States, the European Council, consultations with other EU institutions and the subsequent conversion into local legislation. Depending on its ultimate form, the introduction of an FTT in the Netherlands or in other countries could have a seriously adverse effect on BinckBank’s results and activities.

C O R P O R A T E

G O V E R N A N C E

CORPORATE GOVERNANCE

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BinckBank is a listed public limited company under Dutch law. The executive board is responsible for managing the company. The supervisory board is charged with the supervision of the policy of the executive board and the general developments at the company and its affiliated entities. The supervisory board advises the executive board in the exercise of its duties. The executive board and the supervisory board are directly accountable to the company’s General Meeting. BinckBank’s executive board and the supervisory board are jointly responsible for the bank’s corporate governance structure. Good corporate governance is a precondition for the efficient and effective realisation of set goals, ensures adequate control of risks, and ensures informed judgments can be made regarding the interests of all of BinckBank’s stakeholders, such as shareholders, employees, and customers. Within this framework, BinckBank applies the principles of both ‘Future-oriented banking’ and the Dutch Corporate Governance Code.

A comprehensive overview the application of the Corporate Governance Code is also published at www.binck.com.

Future-oriented bankingAt the end of 2014, the Dutch Banking Association (Nederlandse Vereniging van Banken, NVB) presented a package entitled ‘Future-oriented banking’, in which banks jointly set out their intention to pursue service-oriented and sustainable banking activities. The package consists of a social charter, the Banking Code and rules of conduct.

SOCIAL CHARTERSociety must be able to rely on a stable, service-oriented, and reliable banking industry which offers products and services in line with the often widely divergent wishes of consumers, businesses, institutions, and governments. This attaches requirements to the competencies of banks to realise promises and expectations. It is necessary to create market conditions that ensure healthy competition based on a varied banking landscape and provide a sufficiently diversified offer, for example, in terms of the type of activities and services, forms of undertakings, and geographical range. In a shared struggle for a stable, service-oriented, and reliable banking industry, the Social Charter is based on the following assumptions:

• The banking industry is pluriform and offers customers a wide choice.• Banks are reliable, service-oriented, and transparent.• Bank employees are ethical, expert, and professional, and ensure that customers and other stakeholders are treated

with care.• Banks have a social responsibility to contribute to a sustainable economy.

BANKING CODEThe Banking Code applies to all activities performed in or directed towards the Netherlands by banks established in the Netherlands and licensed by the Nederlandsche Bank pursuant to Section 2:11 of the Financial Supervision Act. In the event of overlap or contradiction with international legislation or the policy of regulators, this prevails over self-regulation such as the Banking Code. The Banking Code is designed – along with the Social Charter, the bankers’ oath, rules of conduct, and disciplinary scheme – to make a major contribution to public trust in banks and their role in the community. Consequently, the principles in the Banking Code emphasise the importance of sound and ethical operation by banks and set this out in the principles for the executive board and supervisory board, proper risk management, thorough audit processes, and a sound, balanced, and sustainable remuneration policy. Compliance with the Banking Code is monitored by an independent Banking Code Monitoring Committee.

http://www.binck.com

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The main task of the Banking Code Monitoring Committee is to monitor compliance with the Banking Code on the basis of the ‘comply or explain’ principle. In doing so, the committee can flag up any ambiguities and imbalances in the Banking Code, and make recommendations about possible adjustments. The Monitoring Committee will in any case issue a publicly available annual report. The revised Banking Code came into effect on 1 January 2015. The Banking Code does not stand alone but is part of the full set of national and international regulations, case law, and self-regulation. When applying its principles, a bank will take this national and international context, the social environment in which it operates, and the specific characteristics of the individual bank and group, if it is part of one, into account. The principles in the Banking Code pertain to: (i) sound and ethical operations, (ii) performance of the supervisory board, (iii) performance of the executive board, (iv) the risk policy, (v) the audit function, and (vi) the remuneration policy.

RULES OF CONDUCTAlong with the introduction of a Social Charter and updating the Banking Code, the bankers’ oath has also been implemented for all employees working in the Netherlands. Everyone working in the banking industry is bound by the rules of conduct attached to this statement for the ethical and careful performance of his/her position. Employees have personal responsibility for complying with those rules of conduct and can be held accountable for non-compliance and, if necessary, face disciplinary action. New employees must take the oath within three months of being appointed to the job. Employees who have taken the oath automatically endorse the code of conduct for bank employees and must comply with disciplinary rules.

The disciplinary rules apply to individual employees. Anyone discovering an infringement of the code of conduct may file a complaint with the Foundation for Banking Ethics Enforcement (FBEE) (Stichting Tuchtrecht Banken). This foundation assesses the content of the complaint in light of the Disciplinary Regulation for the Banking Sector. When conducting disciplinary proceedings, the foundation receives support from the independent institute DSI, whose activities since 1999 include screening employees in the financial sector, keeping registers of recognised financial experts, and settling disputes concerning investments between financial companies.

Dutch Corporate Governance CodeThe Dutch Corporate Governance Code (hereinafter, ‘the Code’) is an important code for good business conduct for Dutch listed companies. The Code is self-regulatory in nature, and is based on the principle known as ‘apply or explain’. The duty of the Corporate Governance Code Monitoring Committee (‘the Committee’) is to encourage the topicality and usefulness of the Code, as well as to monitor compliance with the Code by Dutch listed companies.

The Corporate Governance Code sets out principles and best practice provisions that regulate the relationships between the executive board, the supervisory board, and the general meeting. The principles can be understood as broadly supported general conceptions of good corporate governance. The principles are expressed in concrete best practice provisions.

On 7 September 2017, with the publication of the designation order in the Bulletin of Acts and Decrees, the Corporate Governance Code as revised in 2016 became law, to go into effect as of 1 January 2018. The result of this implementation is that Dutch listed companies are expected to account for their compliance with the revised Corporate Governance Code in the management reporting on 2017.

The broad outlines of the company’s corporate governance must be explained each year in a separate section of the management report, partly by reference to the principles of the Code. This section must also expressly state the extent to which the best practice provisions in the Code are being observed, and where this is not the case, why and to what extent the provisions are not applied. This ‘comply or explain’ principle has a basis in the law. When the company deviates from the best practice provisions it must explain the nature of and the reasons for the deviation. If the deviation is temporary and lasts longer than one financial year, the explanation must indicate when the company intends to comply with the best practice. Where appropriate, a description must be provided of the alternative measure implemented and an explanation of how that measure will achieve the objective of the best practice, or a clarification of how the measure contributes towards a good corporate governance structure of the company.

The provision in this section and the statements regarding the key features of the company’s management and control systems in relation to financial reporting as included in the management’s in control statement can also be described as the corporate governance statement mentioned in Section 2:391(5) of the Dutch Civil Code.


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Legal structure BinckBank is a public limited company listed on Euronext Amsterdam with branches in Belgium, France, Italy, and Spain. BinckBank adopted a two-tier board structure in 2012. BinckBank has a number of Dutch subsidiaries and associates.

STICHTING PRIORITEIT50 priority shares

TOM Holding N.V.(in liquidation)

Think ETF Asset Management B.V.

BewaarbedrijfBinckBank B.V.

25,5% 60% 100%

At 31 december 2017

BinckBank N.V.Belgium Branch

BinckBank N.V.France Branch

BinckBank N.V.Italy Branch

BinckBank N.V.Spain Branch

BinckBank N.V.

Shares, issue of shares, voting rights, and shareholder structure SHARESThe company’s authorised share capital amounts to € 10,000,005, divided into 100,000,000 ordinary shares and 50 priority shares each with a nominal value of € 0.10. BinckBank’s issued capital consists of 67,500,000 ordinary, listed shares and 50 priority shares. The priority shares represent 0.00007% of the issued capital, are unlisted registered shares and are held by Stichting Prioriteit Binck (hereinafter, ‘the Foundation’). The priority shares confer special control rights, as stipulated in the company’s articles of association. The company’s articles of association are available on our website: www.binck.com. Further details regarding the position of Stichting Prioriteit are given below in this section. No depositary receipts are issued for BinckBank shares.


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ISSUE OF SHARESThe general meeting adopts resolutions with regard to the issuance of shares and may grant this authority to another company body for a period of up to five years. On the issuance of ordinary shares, each shareholder has a preference right in the amount of his or her total number of shares held, subject to legal provisions. No preferential rights exist on shares issued; a) to employees of the company or a group company; or b) against payment other than in cash.

The preferential rights may be limited or excluded by resolution of the general meeting. The preferential rights may also be limited or excluded by the above-mentioned other company bodies if these have been granted the authority to limit or exclude the preferential rights by resolution of the general meeting for a period of up to five years. A resolution by the general meeting to limit or exclude the preferential rights or to grant or withdraw the authority to take such action requires a majority of at least two-thirds of the votes cast if less than half of the issued capital is represented at the GM. Such resolutions may only be adopted by the general meeting if proposed by the Foundation. Resolutions by the executive board regarding the issuance of shares are subject to approval by the supervisory board.

VOTING RIGHTSEach BinckBank share entitles its holder to cast one vote. All resolutions shall be carried by an ordinary majority of the votes cast, unless a larger majority is required by law or the Articles of Association. BinckBank uses a registration date in accordance with the Shareholders’ Rights Act (Wet aandeelhoudersrechten).

SHAREHOLDER STRUCTUREPage 18 of this Annual Report includes a list of the shareholders who disclosed a holding in BinckBank pursuant to Section 5.3 of the Financial Supervision Act. No shareholder agreements have been concluded between BinckBank and the major shareholders concerned.

Anti-takeover defences The Foundation has a role in many important resolutions pursuant to the articles of association. The Foundation holds 50 BinckBank priority shares. The authorities of the Foundation consist of the initiation of specific resolutions of the GM and the granting of prior approval to the resolutions described below. The Foundation also has direct powers, including setting the number of executive and supervisory directors. In short, the objective of the Foundation is to shield the management and the course of events at BinckBank from influences which might negatively affect the independence of the company and its affiliated companies, and to promote a positive course of events in said management.

The board of the Foundation has three members. Member A is appointed by the supervisory board of BinckBank, member B is appointed by the executive board of BinckBank and member C is appointed by members A and B together. Mr J.W.T. van der Steen (chairman of the supervisory board), Mr V.J.J. Germyns (chairman of the executive board) and Ms C.J. van der Weerdt-Norder (supervisory board member) currently act as members A, B, and C of the board of the Foundation.

The supervisory board and the executive board see no reason to initiate any limitation and/or removal of the powers of the Foundation. The supervisory board and the executive board believe that maintaining the position of the Foundation is beneficial to the continuity of BinckBank and the policies pursued by the bank in the short and long term, subject to careful consideration of the interests of those involved in the company. The powers of the Foundation form an integral part of the articles of association of the company. With due observance of its objectives under the articles of association, the Foundation is obliged when exercising its powers to protect the interests of the company and its affiliated companies, and in doing so to consider the legitimate interests of those involved in the company. The manner in which the Foundation exercises its powers will depend on the actual facts and circumstances of the individual case.


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Executive Board BinckBank has a two-tier board system, meaning that management and supervision are assigned to the BinckBank executive board and supervisory board respectively. BinckBank believes that this structure promotes a system of adequate checks and balances, in which the executive board is responsible for the day-to-day management of the company and the realisation of the company’s short-term and medium-term targets, while the supervisory board supervises the executive board and has an advisory role.

DUTY OF THE EXECUTIVE BOARDSubject to the limitations stated in the articles of association, the executive board is charged with the management of the company.

REGULATIONS FOR THE APPOINTMENT, SUSPENSION, AND DISMISSAL OF THE EXECUTIVE BOARD MEMBERSThe executive directors of BinckBank are appointed by the supervisory board in accordance with the provisions of the articles of association on the basis of a non-binding nomination by the Foundation. An executive director is appointed or reappointed for a term commencing on the date of their (re)appointment and ending at the end of the general meeting held in the fourth calendar year after the calendar year in which they were appointed/reappointed, or at such time as is determined at the time of their appointment/reappointment, if earlier. Executive directors may be suspended or dismissed by the supervisory board at any time. The supervisory board shall not dismiss a member of the executive board without taking advice from the general meeting regarding the dismissal.

PERMANENT EDUCATIONBinckBank has a permanent education programme for its executive directors. The permanent education programme consists of the following various training programmes and courses intended to maintain the level of expertise of executive directors and improve this where necessary. Evert-Jan Kooistra is a certified public accountant. Evert-Jan Kooistra is a chartered accountant and as such falls under the permanent education scheme of the NBA. Evert-Jan Kooistra fulfilled his permanent education obligations in 2017. In 2017, Vincent Germyns completed the ‘Management & Leadership’ training at Euromoney. Evert-Jan Kooistra completed the four-day programme ‘Professional Future Strategist’ at Nyenrode Business University. Steven Clausing completed the five-day programme ‘Leading Businesses into the Future’ at London Business School.

TASK OF THE SUPERVISORY BOARDThe supervisory board is charged with the supervision of the policy of the executive board and the general developments at the company and its business. The supervisory board highly values close involvement with the company’s development. In the exercise of its duties, the supervisory board focuses on the interests of the company and its affiliated companies, taking the interests of those involved in the company into consideration. It also considers the social aspects of doing business that are relevant to the company. The supervisory board also advises the executive board. The supervisory board is further charged with all duties assigned to it by law and under the articles of association. Certain key resolutions are subject to the approval of the supervisory board.

Other than under the provision of Article 21 sub 7 of the articles of association, supervisory directors of BinckBank are appointed by the general meeting on the basis of nomination by the supervisory board. The general meeting and the works council may recommend candidates to the supervisory board for nomination as a supervisory director. For one-third of the number of supervisory directors, the supervisory board will nominate a person recommended by the works council, unless the supervisory board objects to the recommendation on the grounds that it does not consider the recommended candidate to be suitable to act as a supervisory director, or that the composition of the supervisory board would not be appropriate if the recommendation were to be adopted. A supervisory director may be suspended by the supervisory board. The Enterprise Division of the Amsterdam Court of Appeal may dismiss a supervisory director on the conditions stated in the articles of association. The general meeting can withdraw its confidence in the supervisory board. A resolution of no confidence by the general meeting will result in the immediate dismissal of all members of the supervisory board.

A supervisory director is appointed or reappointed for a term commencing on the date of their appointment/reappoint-ment and ending at the end of the annual general meeting held in the fourth calendar year after the calendar year in which they were appointed/reappointed, or at such time as is determined at the time of their appointment/reappointment, if earlier.


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General Meeting (GM) The general meeting has the powers vested in it by law and under the articles of association. The Foundation has an important role with reference to the powers of the general meeting in many cases. A general meeting is held at least once a year. The most important powers of the general meeting concern the adoption of the financial statements, the establishment of dividend and other distributions, the granting of discharge of responsibility to the executive board for its policy and to the supervisory board for its supervision, the setting of the remuneration of the executive board and the remuneration of the supervisory directors, amendments to the articles of association and all the other powers vested in it by law and the company’s articles of association.

Compliance with the CodeBinckBank follows the best practice provisions set out in the Corporate Governance Code, with the exception of the best practice provisions indicated below.

REMUNERATION OF EXECUTIVE BOARDUnder the best practice provisions 3.4 and 3.4.1 of the Corporate Governance Code, the supervisory board must account for the implementation of the remuneration policy in a transparent manner. BinckBank applies best practice provisions 3.1 and 3.4.1 of the Corporate Governance Code, if and to the extent that publication does not concern commercially sensitive information, in other words, financial, and commercial targets. The executive board and supervisory board of BinckBank take the view that the provision of such information is not in the interests of the company and its stakeholders. The same applies to the main elements of the contract between a director and the company, which according to best practice provision 3.4.2 of the Code should be published without delay after the contract is concluded, to the extent that these elements concern market-sensitive information. Moreover, specific information mentioned in the applicable remuneration policy is published afterwards. The supervisory board therefore gives account to the general meeting with regard to its assessment of the performance of the executive board.

According to best practice provision 3.1.2 of the Code, shares granted to executive directors without financial consideration must be retained for a period of at least five years. BinckBank complies with best practice provision 3.1.2 of the Code to the extent that calculated from the date the shares are awarded unconditionally but BinckBank shares have to be retained for a period of two years (instead of five years). With this shorter retention period of two years, BinckBank complies with the regulations for a variable remuneration as specified in the Regulation on Sound Remuneration Policies under the Wft 2014. In BinckBank’s opinion, the conditional allocation of a material part of a variable remuneration (as stated in the Regulation on Sound Remuneration Policy under the Wft 2014) in combination with the stated retention period of two years is sufficient to meet the objective of a long-term commitment to the company and its associated business.

BALANCED COMPOSITION OF EXECUTIVE BOARD AND SUPERVISORY BOARDAn executive or supervisory board of a large company has a balanced composition if at least 30% of the members are female and at least 30% are male. The supervisory board is made up of 60% female supervisory directors, so its composition can be considered balanced. The seats on the board of BinckBank are currently not evenly balanced. Efforts will of course be made to achieve a more balanced composition when filling any vacancies for directors that arise.


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DECREE IMPLEMENTING ARTICLE 10 OF THE TAKEOVER DIRECTIVE

Under Article 10 of the Takeover Directive, BinckBank is obliged to include the following information in its annual report:

a. An overview of the company’s capital structure is included on pages 49 and 50 of this annual report. This explains the various types of shares and the rights attached thereto (including special control rights), the obligations, and the percentage of issued capital represented by each type of share;

b. The company has not imposed any restrictions on the transfer of shares;c. Shareholdings in the company which have to be reported pursuant to Section 5.3 Wft are listed on page 18 of this

annual report;d. Special control rights attached to shares held by the Foundation are stated on pages 49 and 50 of the annual report;e. Control of the scheme whereby rights are allocated to employees to take or receive shares in the capital of the

company or a subsidiary company is exercised by the IAD and the Compliance department;f. No restrictions apply to the voting rights attached to the company’s shares. No share certificates are issued;g. The company is only aware of a restriction regarding the transfer of BinckBank shares that arises as a result of the

remuneration policy in force and similar restrictions applying to other employees of BinckBank; h. The procedures for appointing and dismissing supervisory and executive directors and the regulations applying to

amendments to the articles of association are established in the company’s articles of association and are described in general terms on page 110 of the annual report. For the full text of the articles of association, see www.binck.com;

i. The powers of the executive board with particular reference to the issuance of the company’s shares and the repurchase of shares by the company are described on pages 49 and 50 of the annual report. For further information, see the company’s articles of association and the minutes of the general meeting at www.binck.com;

j. The service agreement concluded with SNS Bank N.V. on 30 September 2010 states that the agreement can be terminated with immediate effect in the event of a specifically described change of control at BinckBank; The service agreement concluded with BeFrank in 2014 states that in case of a specifically described change of control at BinckBank to which BeFrank has serious objections that are reasonable and objectively substantiated the service agreement may be cancelled with a notice period of 3 months.

k. Information on severance arrangements with executive directors (insofar as applicable) is provided in the Remuneration Report for 2017.

Conclusion: BinckBank complies with virtually all the provisions of the Corporate Governance Code and the Banking Code. Any irregularities have been explained and substantiated.

www.binck.com

www.binck.com

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BinckBank’s approach to risk management is in keeping with its character and scale. BinckBank consciously operates a conservative risk profile in order to maximally mitigate the impact of unexpected events on its solvency, liquidity, results, and reputation. Policy, a risk management framework that is the object of ongoing improvement, and supporting systems are devoted to anticipating risks and prevent or limiting them wherever possible. Clear choices and the proper anchoring of risk management at every level of the organisation play an important role in this respect.

Risk governanceEfficient and effective risk management is vital to the pursuance of BinckBank’s strategy. The risk management framework with the accompanying policy and systems is continuously improved and adapted to changes in the external setting and the internal organisation. Operational control measures have been described in detail and the effectiveness of these measures is periodically assessed.

GOVERNANCE STRUCTURE & THREE LINES OF DEFENCEBinckBank operates according to the Three Lines of Defence principle (3LoD). In this model, the line management (the business) is responsible for organisation, monitoring and risk management of the internal processes. The business is supported by the second line, which defines the frameworks, gives advice, and monitors whether the business is actually taking its responsibilities. The third line (the audit function) independently evaluates the performance of the first and second lines. The supervisory board is responsible for the oversight of the executive board, and is advised in this by the audit committee, the risk and product development committee, and the remuneration committee.

The executive board has the final responsibility for risk management within the bank. It is supported in this by risk committees, each of which includes members of the first and second lines. The third line does not have fixed representation on the risk committees but may always take part in deliberations.

The executive board conducts an annual inventory of the risks and formulates, where necessary, measures to bring the consequences into line with the risk appetite. The executive board formulates an opinion on the achievement of the strategic objectives and the risk management, and can draw on a number of resources to do this, including monthly and quarterly business reporting, second-line risk reporting, self-assessments of the risk committees, and internal audit reports. For more information about risk governance, reference is made to the Risk Management chapter of the financial statements, in the explanation in note 40.

Risk appetiteRisk appetite involves a balance between risk and return and is a core element of BinckBank’s business operations. Each year we evaluate our risk appetite, which we then document in a risk appetite statement with both qualitative and quantitative elements. The statement is drafted by the executive board and subject to the approval of the supervisory board.

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The most important principles on which we base our risk appetite and which create the solid framework within which we operate are:

• BinckBank acts in the interest of customers and other stakeholders of the Bank in a balanced way.• BinckBank operates according to high moral, ethical & duty of care standards.• BinckBank does not take risks with funds entrusted by clients that compromise our reliability.• BinckBank operates in a compliant manner within the boundaries of the laws and regulations.• BinckBank is committed to act with integrity with respect to tax (related) matters.• BinckBank discloses information to stakeholders in a consistent & transparent manner.• BinckBank provides a safe and healthy working environment. Employees are treated with dignity and respect.• BinckBank strictly avoids practices that do not display our core values and may damage BinckBank’s reputation.

The risk appetite is monitored by means of a risk dashboard. This sets quantitative standards in order to assess whether BinckBank has remained within its own risk appetite. Key Risk Indicators (KRI) and Key Performance Indicators (KPI) are included in this dashboard and represent BinckBank’s risk profile as closely as possible. Monthly monitoring in the governance committees makes it possible to make timely adjustments and keep the current risk profile within accepted risk appetite parameters.

BinckBank operates in a dynamic and complex environment. BinckBank conducts its business on the basis of an appropriate balance between risk and return, and strives to accept risks in a conscious and responsible way. As with any bank, our business model is essentially based on taking well-considered risks. Although BinckBank strives for a moderate risk profile, there can be times when for various reasons it is appropriate to accept a higher risk, either temporarily or for a longer term.

Risk management and significant developments in 2017Both the changing external environment in which BinckBank operates, including persistently low interest rates, rapid technological developments, cybercrime, changing legislation & regulations, etc., as well as internal factors such as the flexibility and freedom to act that the organisation needs to successfully implement the strategic transformation and diversification of the business model, had their influence on the risk profile of BinckBank and the risk-related subjects that received the bank’s primary attention.

STRATEGIC AND BUSINESS RISKThe strategic risk is defined as exposure to a strategy that proves not effective, as a result of which the business objectives are not met and/or damage to reputation arises. For BinckBank, the trust of the customer and other stakeholders is essential and BinckBank therefore strives to minimise risks that could damage its reputation as far as possible.

The business risk as a component of the strategic risk manifests itself as the sustainability of the earning model as a result of changing conditions in the competitive field, legislative and regulatory changes, changes in the money and capital markets, and technological developments.

Business risk is expressed primarily in structurally rising costs, falling revenues, and diminishing profitability as a result. BinckBank’s business risk is high. BinckBank operates in a market with stiff competition, extremely low interest rates, rapid changes in technology, and new and complex legislation and regulations that are still being implemented.

Staying commercially competitive requires BinckBank to be continually evaluating and updating its earnings model to the changing market conditions. In the past year, we launched a large number of new products and services designed to reduce the business risk, lowered the exchange costs and clearing costs by routing customer orders more precisely, and adjusted the earnings model on certain products. Examples include the launch of ‘Binck Laten Beleggen’ in Belgium and the Netherlands, the launch of ‘Binck Forward’ and ‘Binck Pensioen’ on the basis of Fintech company Pritle’s IT platform, and the zero-fee trading for the Binck turbo. In October 2017, BinckBank adjusted its earnings model on the Binck turbo from a rate-driven transactional model to a more stable earning model based on the outstanding financing level. Customers of BinckBank now pay no transaction fees, and this has made this product very competitive. BinckBank has also adjusted its investment policy, and will be investing more in Dutch residential mortgages to bring growth back into interest rate operations.

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To remain able to quickly and adequately respond to the changing landscape of customer needs, BinckBank has implemented an Agile transformation within its organisation. For this and other reasons, time to market has been reduced and the products now better meet the customers’ needs. SOLVENCY RISKThe minimum amount of capital to be held is calculated using the standardised method and internally developed models. The available capital at BinckBank exceeds the minimum that must be held in accordance with the models. BinckBank’s minimum capital requirement in this area translates to a capital ratio of 18.5% on the basis of fully in-phase capital conservation buffers. As at 31 December 2017, BinckBank had a comfortable capital ratio of 30.8% (2016: 31.9%) and thus easily complies with the desired risk profile.

CREDIT AND COUNTERPARTY RISKCredit risk is the risk of a counterparty and/or issuing institution that is involved in the trade or issue of a financial instrument defaulting on an obligation and thus harming BinckBank financially. Credit risk within BinckBank is broken down into risks on investments and cash, mortgage receivables, collateralised loans, margin, and counterparty risk.

• Credit risk in the investment portfolio is kept to a minimum and all exposure is prudent and in accordance with the established risk appetite. Investment portfolio purchases must have a long-term credit rating of at least single A (Fitch or equivalent). BinckBank limits the credit risk in its own portfolio by aiming for adequate diversification in its investments through limits on each individual investment.

• Further, BinckBank wishes to avoid a situation in which it has an uncovered credit exposure to its customers and thus runs a credit risk in respect of its customers. BinckBank can limit the credit risk in respect of its customers by continuously monitoring loans provided and the collateral received.

• For BinckBank, counterparty risk is the risk it incurs on counterparties in financial transactions itself, after a price has been agreed but the transaction has not yet actually been settled. If the counterparty defaults, BinckBank is exposed to the risk that a similar transaction can be effected only on less favourable terms.

The risk profile in regard to the credit risk was increased in 2017 to a limited degree because the volume of the mortgage portfolio, consisting of Dutch residential mortgages, increased from €521 million at the end of 2016 to over €737 million at the end of 2017.

Partly as a result of the ECB’s asset purchase programme, it has become increasingly difficult to invest in short-term bonds with a positive yield. As a result, the bulk of the assets entrusted to us is being held in cash with the central banks. Because of this, at the end of 2017 the investment portfolio itself consists largely of investment-grade bonds of European banks. In order to better control the changing risk profile, the Financial Risk Management department was further expanded in 2017 and the policy and the rigorousness of the financial risk monitoring was increased.

COLLATERLISED LENDINGBinckBank offers various forms of lending against securities collateral. This collateralised lending can be used to cover margins requirements or for the purchase of securities. In both cases BinckBank runs a (potential) credit risk on the customer. Due to the nature of the collateralised loans and the cover of the collateral received, the credit risk is limited.

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MORTGAGESBinckBank began investing in the financing of Dutch residential mortgage loans in 2016. It acts as the lender in a collective structure in which the marketing, sales, administration, and management are provided by Dynamic Credit, an AFM-licensed service provider. These mortgages are issued in accordance with strict acceptance criteria. BinckBank has also purchased an existing residential mortgages portfolio from Obvion, in which strict credit quality standards have been set. Given below is an overview of the quality of both mortgage portfolios based on the loan-to-value (LTV) ratio.

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IMPAIRED LOANSImpaired loans are those for which a provision has been raised. At year-end 2017, 0.08% of the credit portfolio consisted of impaired loans. (2016:0.07%). A provision of 63% was created for this purpose (2016: 80%). This takes the specific provisions to €507 thousand (€671 thousand including Incurred But Not Reported). For more information about credit risk, see the Risk Management chapter of the financial statements, in the explanation in note 40.

LIQUIDITY RISKBinckBank takes a careful approach to the liquidity risk and strives for solid liquidity buffers. In 2017, we maintained our robust liquidity buffer both in terms of size and composition as appropriate to our risk profile and risk appetite. At the end of 2017, the total liquidity buffer was €1.3 billion (2016: €1.6 billion), with a liquidity coverage ratio of 987% (2016: 922%).

Procedures, processes, and reporting pertaining to liquidity management are set out in our internal liquidity adequacy assessment process (ILAAP), which is evaluated annually by the regulatory authority. Our 2017 ILAAP was evaluated as adequate in both qualitative and quantitative terms. We further refined our liquidity stress scenarios in 2017, taking into account structural changes relating to the expansion of the financing of mortgages. Results of these scenarios are discussed monthly by ALCO. The results of the stress tests showed that BinckBank structurally capable of coping with acute and maintained liquidity stress.

The persistently low interest rate level in the Eurozone puts pressure on BinckBank’s earnings model and presents a challenge in areas such as balance sheet management, interest rate risk, and finding acceptable investments for the investment portfolio. The ECB’s asset purchase programme is continuing to push prices up and reduce returns of bonds included in BinckBank’s investment policy. The scarcity of bonds to be found for the investment portfolio that fit BinckBank’s desired risk/return profile drove Binckbank’s liquidity position up further in 2017. While the structurally ample liquidity position provides a sizeable buffer for the liquidity risk, it also puts pressure on the interest rate results, being that BinckBank maintains the liquidity on its account with De Nederlandsche Bank, and as a result must make interest-rate payments of 40 basis points on this. The interest rate charges for maintaining liquidity on the account with De Nederlandsche Bank was €5.7 million in 2017 as compared to €3.2 million in 2016. This is why in 2017 the Asset & Liability Committee (ALCO) devoted extra attention each month to the investment policy and liquidity management. Choices have been made in the investment policy whereby the investment mandate has been broadened to improve revenues without compromising the risk appetite. In addition, the decision was made to expand the mandate for investments in Dutch residential mortgages from €500 million to €800 million in order to invest a portion of these surplus liquidities in profitable Dutch residential mortgages. To prevent the liquidity buffer from increasing, well-considered choices must be made at all times when compiling the balance sheet.

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INTEREST RATE RISKInterest rate risk relates to the sensitivity of the interest rate result and/or the market value of the bank to interest rate movements. When there is movement in the yield curve, interest cash flows, and/or the net present value change accordingly. Interest rate movements can thus affect both the interest rate result and the bank’s market value. BinckBank pursues a prudent interest rate risk policy, considering both the short-term interest and the long-term interest rate risk.

The short-term interest risk is addressed from an Earnings-at-Risk perspective. The earnings-at-risk analysis studies the sensitivity of the one-year and two-year interest rate result among several interest rate scenarios. For the long-term interest rate risk, it is mainly the economic value calculation that is used. This calculation considers the change in value of assets and liabilities as a result of interest rate movements.

In 2017, the continuation of the European Central Bank’s buying programme led to a continuation of the extremely low short-term market interest rates and further pressure on the interest-rate revenues from BinckBank’s short-term and liquidity exposure. The falling revenues from the investment portfolio were partially compensated by further investments in Dutch residential mortgages. Because these have longer periods than the investment portfolio, the interest rate risk profile was adjusted in 2017.

As a result of investments in Dutch residential mortgages, the composition of the balance sheet changed. The balance sheet became more interest rate-sensitive because some of the assets are now exposed for longer periods. To address the increased balance sheet risks BinckBank introduced improvements in its internal controls.

In the area of interest rate risk management, aspects such as the interest rate risk modelling and interest rate risk reporting have been further expanded. Additionally, a hedge structure has now been implemented to use interest rate swaps to hedge the interest rate risk where necessary. An interest rate risk committee has been set up. Additionally, the treasury, finance, and risk management functions have been enhanced and Internal Liquidity Adequacy Assessment process (ILAAP) and Internal Capital Assessment Process (ICAAP) have been expanded with relevant risk-related and other analyses pertaining to mortgages. These internal measures ensure that BinckBank is in a position to control the changing interest rate risk profile and continue to adapt to the changing landscape of regulations pertaining to interest rate risk management.

MARKET RISKThe market risk at BinckBank is expressed in the currency risk. Currency risk is the risk presented by movements in the value of items denominated in foreign currencies due to movements in exchange rates and its effect on BinckBank’s capital and/or results. The policy is not to take active foreign-exchange trading positions. Currency positions can therefore arise only as a result of the facilitation of customer transactions. Such currency positions are hedged the same day. The remaining net overnight positions are hedged on the next trading day and do not exceed €150 thousand on average. BinckBank considers this to be accepted risk.

OPERATIONAL RISKOperational risk is the risk of losses being caused by inadequate or deficient internal processes and systems, human error, or external events. Due to the nature of its business activities, BinckBank has a high inherent operational risk. Operational risk is determined by various factors including the large number of complex administrative entries that must be processed on a daily basis. Another important aspect of the operational risk is that communication with the customer and third parties (stock exchanges) is primarily via the internet or telephone. For this and other reasons, there is a high dependence on ICT and external connections. As a result, BinckBank is inherently sensitive to ICT disruptions. As BinckBank continues to focus on innovating and improving the services, we are making changes and improvements to the systems on an ongoing basis.

A framework of processes, systems, and accompanying control measures has been established to consistently control operational risks. Together with a clear organisational structure within the 3LoD model, this forms the basis for the design of the internal control system. BinckBank runs risk management processes through the first-line departments. Risk management in the second line of defence has a coordinating, advisory, and controlling role to safeguard the correct functioning of the first-line risk management processes. The Internal Audit Department (IAD) forms the third line of defence that provides additional security to the executive board and the supervisory board by means of a risk-based approach.

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Despite the large number of risk-mitigating measures in the risk management framework, it is still possible for BinckBank to be faced with incidents that can lead to an operational loss. BinckBank is insured with third parties for certain types of operational loss. This insurance includes policies for directors’ and officers’ liability, corporate liability, professional liability, inventory, reinstatement costs, and trading loss.

Being that BinckBank is in the midst of a strategic transformation, a number of change projects are being implemented with a focus on product innovation, operational excellence, and changing legislation and regulations. It is essential for BinckBank to adequately control the risks during the implementation of these projects.

The new BinckBank strategy calls for the introduction of new products and services compatible with the projects and changes in the organisation. The new services, change projects, and organisational changes (Change the Business) are happening in parallel with the activities already being implemented with respect to the day-to-day affairs (Run the Business). Shareholders and customers have high expectations with regard to the speed at which BinckBank needs to complete the strategic transformation. Additionally, there have been changes on the legislative and regulatory side implemented in 2017 with a big impact; these were needed to ensure that BinckBank continues to be in compliance with new legislation and regulations. Our personnel are also ambitious in setting and achieving their targets. With all this, BinckBank runs the risk of the organisation becoming overburdened. In this phase of change, risk management and attention to the organisational fitness are of great importance. Over 2017, the executive board and senior management devoted a great deal of attention to preventing ‘overheating’ of the organisation, in part by closely monitoring the short and long-term priorities.

Implementation of the operational excellence strategy continued in 2017 and is leading towards a reduction of the operational risk profile. As product innovation is an essential element of BinckBank’s strategy, it is vital that all departments involved in change management collaborate in an efficient and effective manner. BinckBank’s Agile transformation, initiated in 2017, also makes a contribution to this. In the context of risk management within projects, there are also multidisciplinary collaborations as part of the change & product approval process.

Partly as a result of various process optimisations, the Risk & Control Framework was reviewed in 2017 and comprehen-sively rationalised with the object of maintaining an integrated and simplified risk framework. This further increased the focus on key risks and key controls.

In 2017, BinckBank devoted attention to reducing the operational risk profile. In the wake of the decision to phase out the TOM activities, an operational risk emerged in regard to the derivatives positions listed on TOM (Open Interest). Derivatives positions of the BinckBank customers on TOM in a total value of €10 billion had to be migrated from clearing company ICE to LCH Clearnet. The migration, which demanded a collective effort of all parties involved in TOM, went off without a hitch.

ICT and information securitySince the business activities of BinckBank depend heavily on ICT, a significant proportion of the operational risk concerns ICT risk. Deficiencies in ICT can constitute a significant threat to critical business processes and customer services. To reduce this risk, specific control measures have been implemented. These include measures in the areas of IT administration, software development, and cybersecurity.

Information security is regarded as a company-wide responsibility to protect customer and commercial information. BinckBank does everything possible to protect personal data in accordance with the application privacy legislation. The first line of defence is responsible for the security of BinckBank’s systems, applications and data. The second line is responsible for formulating the strategic information security policy and the risk management framework, and monitors the correct implementation of this policy. Taking the appropriate measures based on targeted risk assessments for business and IT processes guarantees that the data of our customers and our commercial data are properly protected.

In 2017, BinckBank invested in new data centres, resulting in improvements of performance and uptime of the IT platform. Backup and recovery options were also improved in the process, and BinckBank has succeeded in reducing its recovery time. Along with setting up new data centres, capacity has also been devoted to phasing out legacy systems in the architecture of software applications and replacing outdated software code.

Good progress has also been made on the phasing out of the BPO platform. Agreements have now been reached with all four BPO customers on the scaling down of the services and in the case of two of the four BPO customers services have now been discontinued. Services for the other two are expected to be terminated completely in the second half of 2018, after which the BPO activities can be closed down. The phaseout of the platform will further reduce the operational risk, because as from the start of 2019 BinckBank will only need to maintain a single IT (retail) platform.

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In 2017 there was a clear increase across the entire industry in phishing and spearphishing attacks, ransomware, Advanced Persistent Threats, DDoS attacks, and data leaks. Cybercrime is something that can hit the trust and confidence in our bank and our reputation. In 2017 BinckBank devoted extra attention to identifying and mitigating these risks. With the improvements made in protection, detection, and response measures, BinckBank is now able to prevent or detect as many attacks as possible and respond to them adequately. This has increased BinckBank’s cyber resilience, and we will continue to act on the risks so that we remain resilient into the future.

Business Continuity Management (BCM)The continuous availability of critical services and the security of customers, visitors, and employees are of the highest importance to BinckBank. In order to ensure the availability of its critical services, BinckBank has implemented a BCM process. BCM forms part of the overall risk management framework. The business continuity council meets at least twice per year. In the event of a disaster, this council also acts as the crisis team and operates on the basis of a clearly defined and tested crisis management process.

BinckBank invests continuously in the stability of the various trading platforms. The uptime KPIs are defined annually, differentiating between availability during and outside trading hours. Planned maintenance is always performed outside trading hours.

BinckBank has set up a fully equipped disaster recovery environment for Business Continuity purposes. This fall-back environment runs actively in parallel with the primary production environment, which alongside the continuity also enhances the processing capacity. There is an annual fall-back test to check the transition from the production environment to the fall-back environment. As well as the fall-back facilities for the IT infrastructure, a new fall-back location with an office facility was taken into use during the year under review.

FINANCIAL REPORTING RISKThe financial reporting risk is the risk of BinckBank failing to satisfy the legislation and regulations with regard to reports under the heading of financial reporting and the provision of information to the market, governments, and regulatory authorities. BinckBank endorses the importance of providing accurate, timely, and comprehensive reports to the market, governments, and regulators. At all levels of external reporting, from regulator reports and financial statements to tax reports, there has in recent years been an increase in demand for information, data points, and detailed reports and demand is expected to rise even more so in the coming years. In all areas of the reporting function, BinckBank draws on the expertise of internal specialists. In addition, external advisers are brought in where needed to support internal specialists in certain areas. BinckBank has established stringent standards with regard to the timeliness and accuracy of the reports in order to meet the external requirements. Compliance with these standards is monitored monthly. Monitoring the adequacy of the external financial reports is the responsibility of the accounting committee and the audit committee.

COMPLIANCE RISKCompliance risk is the risk of financial losses and/or damage to reputation as a result of not adequately complying with applicable legislation and regulations, internal policy and codes of conduct, BinckBank’s values, and the standards generally accepted within the market. BinckBank places a high priority on integrity and reliability, and emphasises this by several means, including its code of conduct, house rules, insider trading regulations, and whistle-blower’s scheme.

The regulation in the financial sector is changing constantly. Alongside new and updated regulations of the European Banking Authority (EBA) and the Basel Committee in areas such as the standardised approach to credit risk, interest rate risk, resolution planning, and reporting requirements, the regulatory authority is exerting more and more pressure on banks. The complexity and costs of staying in compliance with the continually changing regulations are high. BinckBank strives to comply with all existing, changing, and new legislation and regulations in a commercially responsible manner.

In 2017, BinckBank took further steps to embed the systematic integrity risk analysis (SIRA) in the integrated control framework. The purpose of the SIRA is to acquire a comprehensive understanding on an on-going basis of the integrity risks that BinckBank faces.

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The following areas are important to BinckBank:

Duty of care: BinckBank wants to offer transparent and honest products that deliver added value to our customers. The starting point of any evaluation of new and/or existing products is the interest of the customer. Our employees put the customer interest first in all their actions. For example, customer communication and advertising messages are drafted in plain language so that customers cannot be misled, and we continue to devote resources to investment education for our customers on an ongoing basis.

Customer integrity: Preventing integrity risks such as money laundering, the financing of terrorism, and fraud is a challenge for the financial sector. BinckBank offers no payment services, which reduces the risk of such activities. By getting to know our customers well through measures like client due diligence (CDD) and continually monitoring customer transactions, we are able to keep BinckBank from becoming involved in undesired activities and protect our reputation. Our investment services offer the possibility of market abuse. Using advanced systems, BinckBank monitors investment transactions to mitigate the risk of market manipulation or conflicts of interest.

Protection of personal data: BinckBank handles all personal data of employees, customers, and other associates with care, so that they can rest assured that the privacy of their personal data is guaranteed. In 2017, BinckBank appointed a Data Protection Officer with responsibility for the internal monitoring of compliance with privacy laws. This officer serves as the point of contact for the Dutch Data Protection Authority. In 2017, the implementation of the General Data Protection Regulation (GDPR) began. This regulation goes into force as of 25 May 2018.

REGULATORY PROJECTS IN 2017:• The implementation of the Markets in Financial Instruments Directive/Regulation (MiFID II/MiFIR), which has been in

force since 3 January 2018, has had a major impact on the organisation. The aim of MiFID II is to increase investor protection and to make European financial markets more efficient and transparent. An aspect of the implementation of MiFID II is strengthening product governance. With that in mind, all investment products and services of BinckBank are evaluated thoroughly on the basis of the MiFID II criteria. Further, policy documents, processes, and systems were updated for the new regulations in 2017. BinckBank employees were also given the necessary training to enable them to meet the new requirements of professionalism going into effect on 3 January 2018.

• As from 1 January 2018 the European regulation PRIIPs (Packaged Retail Investment & Insurance-based investment Products) applies for a large number of investment products and insurance products with an investment component. BinckBank prepared for this in 2017 by providing its customers with an Essential Information Document (EiD) containing the required product information.

• In 2017, BinckBank prepared the implementation of the fourth Anti-Money Laundering Directive (AMLD IV). The implementation into Dutch national legislation and regulations was to be completed in June 2017, but was postponed to 2018. Under the new European directive, the requirements for banks are being further tightened with the objective of dealing with the threat of money laundering and the financing of terrorism.

• BinckBank has taken further steps for the gradual implementation of the European Market Infrastructure Regulation (EMIR).

The compliance risk and control framework was fundamentally revised in 2017 as a component of BinckBank’s integrated non-financial risk framework. Uniform (key) risks and controls are identified on all subject areas. The changes dictated by the implementation of MiFID II were also taken into account. This further strengthens the central monitoring role of the compliance function.

HANDLING OF LEGAL CLAIMSIn January 2017 we reached agreement with the VEB (Association of Stockholders) and the Vermogensmonitor on the settlement of existing complaints for members and customers. During 2017, the agreements reached were implemented. The agreement with Vermogensmonitor has been fully implemented, and the resolution of the agreement with the VEB is at an advanced stage.

The District Court of The Hague’s judgment rendered on 22 July 2015 in the case filed by Euronext N.V. and Euronext Amsterdam N.V. against a number of parties including BinckBank N.V. has been resolved without any additional outflow of funds.

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Capital managementBinckBank’s capital requirement is determined on the basis of the risk appetite and strategy, taking into account the expectations and requirements of external stakeholders. The capital adequacy is monitored constantly and compared with the risk appetite and strategy. The current and future capital adequacy is discussed monthly in the ALCO, where resolutions can be made for taking corrective steps. A capital and funding plan drawn up once a year contains information about the strategic and tactical principles, as well as projections of the expected movements in the capital position. This plan is included in the ICAAP documentation.

The regulatory authority DNB (De Nederlandsche Bank) periodically evaluates the capital adequacy via the Supervisory Review and Evaluation Process (SREP) and sets SREP requirements based on that evaluation. For BinckBank, DNB requires an SREP-minimum Total SREP Capital Ratio (TSCR) of 17.875%. This requirement is intended to not only cover the pillar I risk types but our entire risk profile. At its current 30.8%, our TSCR is currently well above the SREP requirement. In addition, capital must be maintained for the supplemental CRD capital buffers, being the capital conservation buffer and counter-cyclical capital buffer. As an internal capital requirement, BinckBank adheres to a Total Capital Ratio (TCR) including full phase-in of the capital buffers of at least 18.5%.

The leverage ratio at the end of 2017 was 6.6% (end of 2016: 6.7%), which is somewhat high in comparison to other Dutch banks. Our leverage ratio is considerably higher than the minimum CRR requirement of 3%.

DEVELOPMENTS IN REGULATIONS CONCERNING CAPITALSince the financial crisis, various measures have been taken to prevent banks from experiencing financial difficulties again in future. These measures include more stringent requirements regarding the size and quality of own funds that banks should hold and radical changes have also been made to the supervision of banks. In 2016, a start was made with phasing in the capital conservation buffer and countercyclical buffer In addition, further measures have been proposed to improve the resolvability of a bank should it nevertheless encounter problems despite these precautions. These include proposals for an MREL (Minimum Requirement for own funds and Eligible Liabilities) and TLAC (Total Loss Absorbing Capacity). Bail-in-able debt capital plays an important role in these proposals.

As the next step, in December 2017 the Basel Committee established definitive standards for the improvement of the robustness and risk sensitivity of the standardised approaches for credit risk and operational risk, which will make comparison between the capital ratios of banks easier. There were also limitations set on the use of internally modelled approaches, and definitive rules established for the leverage ratio. The risk weightings of various assets were increased, with the result that in the foreseeable future banks will have to maintain even more capital.

Because the eventual implementation of the rules through European regulations will be decisive for the European banks, it is very difficult at this stage to estimate the extent of their impact.

Liquidity managementLiquidity risk is the risk that BinckBank will not be able to meet its payment obligations. BinckBank adopts a prudent policy with regard to liquidity risk that is designed to ensure that demand by its customers for their cash can be met at all times. There were no materially significant liquidity incidents in the reporting year 2017.

The most important objective of our liquidity risk management is to ensure that the bank is capable of retaining or generating sufficient cash liquidity to meet its payment obligations completely as soon as they are payable, at acceptable conditions. Because liquidity risk can theoretically threaten the continuity of the bank, we have set our tolerance for the liquidity risk at low. One of the most important elements of our approach to liquidity risk management is maintaining stakeholder confidence in the solidity of the bank. The policy for the measurement, monitoring, and control of liquidity risks within BinckBank is defined in the liquidity evaluation Internal Liquidity Adequacy Assessment process (ILAAP), which is updated annually and evaluated by the regulatory authority.

BinckBank has no need for external funding and considers the funds entrusted as a stable source of funding. Nonetheless, the share of customer deposits in our financing base is the biggest liquidity risk to which we are exposed. Although the assets entrusted to us have over the years proved to be relatively price-inelastic and stable, there are potential outflow risks in their payable on demand nature, especially for the deposits not covered by a deposit guarantee system (DGS).

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IN CONTROL STATEMENT

In the risk management chapter of the annual report and note 40 to the annual report, we have given a detailed description of our risks and our risk management framework.

Our internal risk management and control systems are based on a risk-identification process combination with a fixed set of detection, prevention, and control measures. This provides reasonable assurances that the financial reports do not contain any material misstatement and that the internal risk management and control systems related to the financial reporting risks have operated effectively during the year under review.

STATEMENT OF THE EXECUTIVE BOARDIn accordance with section 5:25c of the Financial Supervision Act (Wft) and best practice provision 1.4.3 of the Corporate Governance Code, we state that according to the best of our knowledge:

1. the financial statements present a true and fair view of the assets, the liabilities, the financial position, and the profit of BinckBank N.V. and the companies included in the consolidation;

2. that the report of the executive board gives a true and fair view of the situation as at 31 December 2017, the course of business during the financial year of BinckBank N.V. and its affiliated companies, whose data have been included in its financial statements, and that the annual report describes the essential risks faced by BinckBank N.V.;

3. the management statement provides a sufficient degree of insight into the shortcomings in the functioning of the internal risk management and control systems;

4. the aforesaid systems offer a reasonable degree of certainty that the financial reporting does not contain any material inaccuracies;

5. in view of the current situation, drafting the financial reporting on a going concern basis is justified; and6. the report states the material risks and uncertainties relevant to the expectation of continuity of the company for a

period of twelve months after the drafting of the report.

Our internal risk management and control systems cannot, however, provide absolute certainty that the strategic and financial targets will be achieved, or that the legislation and regulations will be complied with at all times. Furthermore, risk management and control systems cannot prevent all human errors or errors of assessment nor are these systems able to withstand situations in which employees collude together and in which the integrity and reliability of employees cannot be guaranteed. The acceptance of risk and implementation of control measures is always subject to cost/benefit considerations, and is an inherent part of entrepreneurial activity. We continue to strive to further improve and optimise our internal risk management and control procedures.

Without prejudice to our statement, we would like to refer to the weaknesses and threats as described in the SWOT analysis of the report of the executive board.


The executive boardVincent Germyns, Chairman of the executive boardEvert-Jan Kooistra, member of the board (CFRO) Steven Clausing, member of the board (COO)

R E P O R T O F

T H E S U P E R V I S O R Y

B O A R DFrom left to right: Carla van der Weerdt-Norder, Arjen Soederhuizen, Marijn Pijnenborg, Hanny Kemna and John van der Steen.

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R E P O R T O F

T H E S U P E R V I S O R Y

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MESSAGE FROM THE CHAIRMAN OF THE SUPERVISORY BOARD

Dear reader,

We hereby present the report of the supervisory board for 2017.

The year 2017 has been marked by the building of new products and services which are aligned and give substance to the new strategy announced in 2015 (ReThink Binck). The new strategy offers a solid basis for a more diversified and future-proof income flow aimed at achieving sustainable growth. The bank’s investment policy was further implemented in 2017 through additional investments in mortgages.

In 2018, the products and services launched this past year will be further improved and expanded, and we expect to reap the first rewards of the investments in the new strategy. In addition, we will continue pursuing cost-control measures, but with an increased focus on the core activities of the enterprise. This increased focus was visible in 2017 with the sale of subsidiary Able, the announced sale of Think ETF Asset Management and the phase-out of the Business Process Outsourcing services.

During the 2017 financial year the supervisory board held regular meetings amongst themselves and also met with the executive board multiple times. In the past year Mr Deuzeman stepped down as member of the supervisory board and Ms Pijnenborg was appointed to the supervisory board.

The annual accounts have been audited by Deloitte Accountants B.V. (Deloitte) and given an unconditional audit opinion. The unconditional audit opinion is given on pages 196 to 200.

We would like to express our appreciation to the executive board and all employees for their efforts and commitment in 2017.


J.W.T. van der SteenChairman of the supervisory board

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DUTIES OF THESUPERVISORY BOARD

The supervisory board is charged with the supervision of the executive board’s policy of long-term value creation and the general developments at the company and its business. The supervisory board oversees the internal audit function and the compliance with procedures to report abuses, irregularities, and suspicions thereof. In the exercise of its duties, the supervisory board focuses on the interests of the company and its affiliated companies, taking the interests of those involved in the company into consideration. The supervisory board is also involved in the social aspects of business operations relevant to the company. The supervisory board also advises the executive board. The supervisory board is further charged with all duties assigned to it by law and under the articles of association. Certain key resolutions of the executive board are subject to the approval of the supervisory board.


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COMPOSITION OF THESUPERVISORY BOARD

COMPOSITIONThe composition of the supervisory board is currently as follows:

• J.W.T. van der Steen (chairman)• Ms C.J. van der Weerdt-Norder (vice-chairman)• Ms J.M.A. Kemna• A. Soederhuizen• Ms M. Pijnenborg.

The information identified in best practice provision 2.1.2 of the Corporate Governance Code concerning the members of the supervisory board is provided on pages 82 to 84.

Having been a member of the supervisory board for 10 years, Mr Deuzeman stepped down immediately following the annual general meeting in 2017. Not least in view of current public opinion on the maximum term of office for supervisory directors, Mr Deuzeman believes that the time has come to introduce new blood. At the 2017 annual general meeting Ms M. Pijnenborg (1970) was appointed to the supervisory board. Ms Pijnenborg’s background is in online consumer services. During the general meeting in 2018, Mr Van der Steen, Ms Van der Weerdt-Norder and Ms Kemna will be nominated for reappointment to the supervisory board. Ms Van der Weerdt-Norder will be nominated in this regard by the Works Council on the basis of an enhanced recommendation of the Works Council. Assuming these nominations are accepted, the supervisory board will consist of a total of five members, being: Mr Van der Steen (chairman), Ms Van der Weerdt-Norder (vice-chairman), Ms Kemna, Mr Soederhuizen and Ms Pijnenborg.

INDEPENDENCEThe composition of the supervisory board is such that the supervisory directors can operate independently within the framework of the profile description of the supervisory board, whether in relation to each other, the executive board or any other particular interest. The supervisory board meets the requirements of independence as defined in best practice clauses 2.1.7 to 2.1.9 of the Corporate Governance Code.


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MEETINGS OF THESUPERVISORY BOARD AND SUBCOMMITTEES IN 2018

MEETINGS OF THE SUPERVISORY BOARD FREQUENCYThe supervisory board held its regular combined meetings with the executive board in attendance on six occasions in 2017. The meetings were spread over the year. In addition, the chairman, and on certain occasions other members of the supervisory board, held frequent informal discussions with the executive directors and other members of the organisation. The supervisory board also met a further four times in its own meetings in 2017. The number of meetings illustrates the close involvement of the supervisory board with the company. The supervisory board will pursue a comparable schedule of meetings in 2018.

ATTENDANCEThe supervisory directors each attended essentially all meetings. Instances of absence remained limited to prevention due to circumstances beyond the member’s control. The availability of the supervisory directors and the executive board for interim consultation was good. The attendance percentage of the individual supervisory directors at the meetings in 2017 was as follows:

J.W.T. van der Steen 100%Ms C.J. van der Weerdt-Norder 100%Ms J.M.A. Kemna 100%A. Soederhuizen 100%Ms M. Pijnenborg 100%

SUBJECTS

GENERALThe agendas for the meetings of the supervisory board covered virtually all aspects of the company’s business. Subjects including the following were discussed during the meetings: the strategy for long-term value creation, the culture within the organisation, the interests of the various stakeholders, the principal risks associated with the enterprise and the risk appetite, innovation, potential acquisitions, the results of the executive board’s evaluation of the design and operation of the internal risk management and control systems, and significant changes to them. Attention was also devoted to matters such as staffing, legislation and regulations, the budget, and internal and external financial quarterly, half-yearly, and annual reports. Recurring and mandatory items such as the regular progress reports were also dealt with in the meetings of the supervisory board.

SPECIFICSpecific items addressed in 2017 included the following subjects:

Strategy and long-term value creationIn 2017, the supervisory board continued to uphold its responsibility to be involved in the implementation and monitoring of the company’s strategy as presented in November 2015 at the BinckBank Capital Markets Day (ReThink Binck). The emphasis in 2017 was on the implementation progress and quality of the new products and services (ReDesign Binck). The acquisition of fintech company Pritle should be viewed in this perspective. The new strategy is intended to provide a response to the challenges that the business faces in the longer term.


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For long-term value creation, further diversification of sources of income, products, and services is desired, and the refined strategy addresses this. In 2018, the launch of the announced products and services supporting the strategy must be implemented and making a positive contribution to the results (Relaunch Binck). The supervisory board has spoken with the executive board about the options for accelerating the ‘relaunch’ phase of the transformation by partnering with other parties and achieving economies of scale in the process. This could create a better position for BinckBank in the event of a potential consolidation within the sector, and keep focus on value creation for the long term.

The company’s capital policy is closely linked to its strategy and risk appetite. In 2017, the risk appetite was assessed and approved by the supervisory board. This policy including the related dividend policy formed another item of the supervisory board’s agenda. As part of the capital policy, the Supervisory Board has also been involved in the Treasury investments in mortgages, the underlying balance sheet development plan, and the accompanying control framework. The goal of this investment in mortgages is to generate stable interest earnings within the risk appetite as approved by the supervisory board.

Competitive positionVarious aspects and facets of the business’s competitive position were assessed during the supervisory board meetings. The goal is to transform the business in a manner that sufficiently guarantees value creation for the long term. A diversification of sources of income, products, and services will play an important role in this. In this regard not only the competitive position of new propositions is relevant, but also the competitive positions of the existing propositions, which are clearly still the most important sources of income sources.

Remuneration policyThe remuneration policy is in line with the amended legal requirements and provides a solid basis for attracting and retaining qualified directors. The variable pay component has been limited to the legal maximum. Previously granted variable pay components were also reassessed.

Achievement of executive board targets in 2017The supervisory board fulfilled its responsibility for determining the targets of the executive board and their achievement in 2017. The targets for the executive board were selected carefully. The supervisory board considers it important that the targets established be as objectively quantifiable as possible. The supervisory board has also held discussions with the individual executive directors regarding their ambitions for the future, and where possible incorporated them into the personal targets for 2018.

Cultural programmeThe company’s culture was discussed with the supervisory board. The correct culture is an important foundation for future-proof development of the company and the successful implementation of the new strategy (ReThink Binck). The culture provides a clear guideline for the organisation’s conduct and attitude. In 2017 the supervisory board was closely involved in and devoted quite som time to discussions relating to the culture of the company and the related the core values. As part of the ‘Reconnect’ culture program, there were interactive sessions at all levels of the company, and their results were evaluated. Aspects in need of improvement will be the object of an improvement process.

2018 BudgetThe 2018 budget was comprehensively discussed during the meetings of the supervisory board. The transition to more diversified sources of revenue will also affect the budget and related objectives in 2018. At the same time there needs to be more focus on cost trends.

Evaluations of the supervisory board and executive boardThe annual evaluations of the supervisory board and the executive board prescribed under best practice 2.2.8 of the Corporate Governance Code took place in 2017. The evaluation of the executive board was conducted on the basis of individual interviews. The conclusions were discussed with the relevant bodies and the individual members and incorporated in collective and personal goals for those involved. In 2017 the executive directors continued their individual commitment to acquire BinckBank shares during their term of office, after the publication of the quarterly figures, as published in the press release issued on 25 April 2016. The evaluation of the supervisory board was conducted on the basis of a question-naire completed by all members and a subsequent panel discussion of the responses. This evaluation is set out in a report.


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Subsidiaries and associatesDuring the meetings of the supervisory board attention was paid to the subsidiaries and associates, also in the light of the strategic objectives. The question of whether these companies have added value for the long-term value creation, and if so what that value is, was covered. Based on this approach, subsidiary Able was sold in 2017 and liquidation of the participation in TOM Holding N.V. was initiated.

The relationship with the works councilThe supervisory board attaches importance to maintaining a transparent, proactive and constructive relationship with the Works Council. It is, of course, the Works Council that constitutes the representation of the employees who must ultimately deliver the results. Partly because BinckBank qualifies as a two-tier board company, the involvement of the Works Council on certain issues is considered fundamental in the eyes of the legislator. During the year under review regular talks were held with representatives of the supervisory board and the works council. The cooperation is proceeding satisfactorily.

Shareholder relationsIn 2017, the relationship with shareholders and potential shareholders was less frequently addressed in periodic roadshows and conferences. This is appropriate to the current phase in the implementation of the strategic transformation (ReDesign Binck.). During the meetings, presentations were given on the basis of public information, and the results were discussed with the supervisory board. During the meetings, presentations are given based on publicly available information, the results of which have been discussed with the Supervisory Board.

Meetings of the audit committee in 2017The supervisory board has appointed an audit committee from among its members. Ms Van der Weerdt-Norder was appointed chairwoman of the audit committee effective October 2014. After the end of the general meeting of shareholders in 2017, Mr Deuzeman stepped down as supervisory board member, and consequently also as member of the audit committee. The other members of the audit committee are Mr van der Steen and Mr Soederhuizen. The meetings were attended by the members of the audit committee and Mr Germyns (chairman of the executive board) and Mr Kooistra (CFRO), the IAD manager and the Governance, Risk & Compliance manager.

The audit committee meets the applicable independence requirements and has sufficient members with the required financial expertise. The audit Committee met four times in 2017, spread over the year. All meetings were attended by the chairman of the executive board and the CFRO of BinckBank. The audit committee also met with the external and internal auditors without the presence of the executive board.

Supervision of the provision of financial information by the company is the responsibility of the supervisory board. The audit committee is responsible for overseeing the design, continuity, and functioning of the system of internal control and risk management measures, for monitoring the implementation of recommendations by the external auditor and the IAD and for the functioning of the IAD. During its regular review of the annual and half-yearly results the audit committee satisfied itself that the figures had been approved by the external auditor without significant changes, and no unforeseen circumstances were brought to its attention.

The audits conducted by the IAD and their resulting findings and recommendations were addressed during the meetings of the audit committee. On the basis of analysis of the various risk categories summarised in the IAD management letter, the IAD generally assessed the design, continuity, and functioning of the internal control measures.

Special attention was devoted to the foreign branches, information security, new laws and regulations (including Anti Market Abuse, MiFID II, Anti Money Laundering, GDPR, SIRA), regulatory reporting, strategic projects, and governance. In a large number of audits, risk management was assessed as adequate. In the areas the IAD evaluated as ‘needs improvement’, appropriate steps have either already been taken or are in development, so the internal control can be qualified as adequate.

In addition to the discussion of internal and external audits, Compliance was a standing agenda item at every meeting. This always included a review of the current developments and situation regarding Compliance. In the multiple meetings of the audit committee, the manager for Governance, Risk & Compliance reported on subjects such as duty of care, anti-money laundering, anti-market abuse, fraud, privacy, and conflicts of interest.


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During the course of the year, the audit committee devoted attention to the Regulatory Reporting Framework, the rollout of IFRS 9, the Tax Framework, the whistle-blower’s scheme, and the impairment test and its results. The audit committee also evaluated the external auditor’s performance, as well as the policy for non-audit services, and discussed the establishment of the independence of the external auditor. Discussions were held about the contact with and reports to DNB and the Netherlands Authority for the Financial Markets. The audit committee also carried out a self-assessment facilitated by the IAD manager. The general opinion was good, but the audit committee identified a number of points to be addressed, such as the segregation of duties between the audit committee and the risk and product development committee.

Deloitte was first appointed as the external auditor of BinckBank in the general meeting of 22 April 2014. In the general meetings of 25 April 2016 and 24 April 2017, Deloitte was reappointed for the reporting years 2017 and 2018. The auditor is appointed for the purpose of auditing the financial statements of BinckBank N.V. In accordance with the current rules of the Netherlands Institute of Chartered Accountants (NBA) governing independence, BinckBank’s external auditor only carries out the audit and does not provide any advisory services.

Meetings of the risk and product development committee in 2017The supervisory board has appointed a risk and product development committee (RPC) from among its members. The RPC held four regular and four additional meetings in 2017. The RPC currently consists of Mr Soederhuizen (chairman), Ms Van der Weerdt-Norder, Ms Kemna and Ms Pijnenborg.

The RPC’s tasks include advising the supervisory board on the details of the company’s risk profile and the risk appetite. The RPC also oversees management of all relevant risks, including the strategic risk, the financial risks, and non-financial risks. The customer interest and duty of care towards the customer in respect of new and existing products and services are topics regularly on the committee’s agenda. The RPC also monitors the adequacy of the company’s capital and liquidity.

For the purposes fulfilling its role, the committee receives information in each meeting from the departments: Legal, Treasury, and the second-line department Governance, Risk & Compliance (GRC). The Treasury department informs the committee concerning solvency and liquidity and their impact on the company during times of stress; this department also informs the committee of the composition of the investment portfolio. Legal informs the committee about the receipt or resolution of any claims. GRC informs the RPC in every meeting about the subjects discussed in the various risk committees within the organisation, in part on the basis of the risk reporting drafted each quarter. This report covers the risk profile, in part on the basis of the defined risk appetite. This information allows the committee to identify any changes in the bank’s risk profile in a timely manner.

Among the topics addressed in the meetings was the Change & Product Approvals. This is an approval process that must be followed before a new product can be introduced or a change can be implemented. This implies that new products and services pass muster in the RPC. 2017 saw the discussion in the RPC of a number of new products, such as Binck Forward (formerly Pritle) and the new asset management product Binck Comfort. The expansion of the mortgage portfolio on BinckBank’s balance sheet and the annual updates of the ICAAP, ILAAP, and recovery plan were also subjects of attention. In klantbelangresponse to the increasing demands in the area of Privacy and Cyber Security, the roadmaps formulated for this purpose were examined.

Remuneration committee in 2017The remuneration committee, as referred to in the Regulation on Sound Remuneration Policy under the Wft 2014, is responsible for preparing the supervisory board’s resolutions regarding remuneration, including those remunerations affecting the risks and the risk management of BinckBank. The remuneration committee conducts all preparatory work for the supervisory board with regard to the selection and appointments of directors and supervisory directors. For the supervisory board, the remuneration committee’s members are currently Ms Kemna (chairwoman), Mr Van der Steen and Ms Pijnenborg. The chairman of the executive board and the manager of Human Resources also sit on the remuneration committee.

When ruling on these resolutions, the remuneration committee takes into account the long-term interests of the shareholders, investors, and all other stakeholders of BinckBank. The chairman of the executive board provides the remuneration committee with information. The committee is also informed and advised by the control committee, consisting of the Human Resources manager, the manager of Governance, Risk & Compliance, and a legal expert. The remuneration committee is independent and has sufficient expertise with reference to the remuneration policy, the remuneration culture and the circumstances and motivations whereby undesirable incentives to make decisions that conflict with the conservative management of risk, capital, and liquidity could arise.


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During the year, the items of attention for the remuneration committee included the evaluation and remuneration of the Identified Staff and the executive board, the pension system and various issues relating to the remuneration policy. At each meeting of the remuneration committee, the manager of Human Resources presented a report on developments at BinckBank with respect to issues such as employee satisfaction, internal and external training, recruitment and selection, and changes to the pension system and employment law.

The remuneration committee met on five occasions in 2017. The remuneration committee held one meeting in 2017 with the control committee and without the presence of the executive board.


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SUMMARY OF THE REMUNERATION REPORT OF THE SUPERVISORY BOARD

OF BINCKBANK ON FINANCIAL YEAR 2017

GeneralBest practice provision 3.4.1 of the Corporate Governance Code stipulates that information must be included in the remuneration report pertaining to the manner in which the remuneration policy of the preceding year has been implemented and the way in which the performance of the remuneration policy contributes to long-term value creation. The full remuneration report for calendar year 2017 and the report on the remuneration policy for identified staff can be found on www.binck.com.

The BinckBank Remuneration Policy comprises the following remuneration components:a. Fixed gross annual salaryb. Variable compensationc. Pension scheme and WIA insuranced. Car lease scheme and mobile telephone reimbursement

A description of each element in the BinckBank Remuneration Policy and the way in which it was implemented by the supervisory board during the calendar year 2017 is given below.

A. FIXED GROSS ANNUAL SALARYThe fixed gross basic annual salary is set as follows:V.J.J. Germyns € 629,800.E.J.M. Kooistra € 563,500.S.J. Clausing € 509,800.

The amounts above include pension compensation.

B. VARIABLE REMUNERATIONImplementation of BinckBank Remuneration PolicyEach year, at the end of the financial year, the remuneration committee agrees on the performance targets for the new year with the executive board. After the end of the year, the supervisory board determines whether the executive board can be eligible for conditional or final allocation of the variable remuneration and payment of the variable remuneration over the calendar year in question.

Financial targets (50% of the total score)The following key financial targets have been defined for 2017:• Adjusted net earnings per share• Limitation of operating losses• Cost/income ratio• Balanced income flow

A total of 82% of the financial objectives were met.

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Qualitative and quantitative (non-financial) targets (50% of the total score)The following key non-financial targets have been defined for 2017:• Customer satisfaction• Assets under management• Assets under administration• Number of transactions• Availability of trading platforms• Employee satisfaction

A total of 39.3% of the non-financial objectives were met.

Conclusion:In view of the above, the objectives have been realised in total for 60.6%. The supervisory board has determined this as such and has used it as the basis for the calculation of the performance-related remuneration. There were no grounds for differentiation between the individual directors.

The executive board decided, in consultation with the supervisory board, to waive the half of variable remuneration for executive board and identified staff.

C. PENSION SCHEME AND STATUTORY DISABILITY INSURANCEPension schemeBinckBank pays the pension contribution based on the executive director’s age to the executive director’s pension insurer for the maximum pensionable salary of € 100,000. The remaining contribution, for the salary in excess of € 100,000, is made available to the executive director as pension compensation.

Statutory disability insuranceThe extended insurance under the WGA (Partial Capability for Work Act) covers up to a maximum of 70% of the salary threshold under the WIA (Work and Income (Capacity for Work) Act). The premium is 0.411%, of which BinckBank pays half. BinckBank pays 50% of the premium for WIA exess insurance, which entitles the insured person to receive a maximum of 70% of their last-earned salary. The premium is 2.457% of the insured sum per year. Executive directors participated in this scheme in 2017. Mr Clausing works under a ‘contract of services’ which stipulates a notice period of six months. As an additional supplement for him, WIA gap insurance was contracted for the following 18 months, in the event that his contract is cancelled due to occupational disability. This puts him under conditions equivalent to the same conditions applicable to the other executive directors.

D. CAR LEASE SCHEME AND MOBILE TELEPHONE REIMBURSEMENTExecutive directors participate in the relevant BinckBank car lease scheme and are reimbursed for mobile telephone costs.

RENUMERATION OF THE EXECUTIVE BOARD 2017

Fixed gross annual salary

Pension contribution

Perfor-mance- related

rewards 2016

Total remunera-

tion (fixed + variable)

Variable as % of

fixed remuner-

ation

BinckBank sharehold-ing at year-

end 2016

of which, shares in

lock-up period

Shares yet to be received from

previous financial years*

V.J.J. Germyns € 629,800 € 9,927 € 38,193 € 677,920 6.1% 88,828 21,494 11,379

E.J.M. Kooistra € 563,500 € 20,327 € 34,172 € 617,999 6.1% 116,177 25,005 10,907

S.J. Clausing € 509,800 € 12,096 € 30,916 € 552,812 6.1% 23,904 2,405 2,229

Total € 1,703,100 € 42,350 € 103,281 € 1,848,731 228,909 48,904 24,515

* Shares still to be received from previous financial years are subject to a reassessment of the performance achieved in performance year in question.


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RENUMERATION OF THE EXECUTIVE BOARD 2016

Fixed gross annual salary

Pension contribution

Perfor-mance- related

rewards 2016

Total remunera-

tion (fixed + variable)

Variable as % of

fixed remuner-

ation

BinckBank sharehold-ing at year-

end 2016

of which, shares in

lock-up period

Shares yet to be received from

previous financial years*

V.J.J. Germyns € 629,800 € 9,679 € 43,785 € 683,264 7.0% 57,530 20,388 16,456

E.J.M. Kooistra € 563,500 € 20,327 € 39,176 € 623,003 7.0% 88,827 28,062 16,799

S.J. Clausing € 509,800 € 10,011 € 35,443 € 555,254 7.0% 9,076 261 260

Total € 1,703,100 € 40,017 € 118,404 € 1,861,521 155,253 48,711 33,515

* Shares still to be received from previous financial years are subject to a reassessment of the performance achieved in performance year in question.

OVERVIEW OF THE APPOINTMENT OF THE EXECUTIVE DIRECTORSDate of

(re)appointmentDate of

contract expiry

V.J.J. Germyns 22-4-2014 AV 2018

E.J.M. Kooistra 25-4-2016 AV 2020

S.J. Clausing 30-10-2015 AV 2019

LOANS EXTENDED TO EXECUTIVE DIRECTORS Executive directors can make use of a collateralised lending facility in accordance with the conditions applicable to the personnel. In 2017, none of the executive directors made use of this facility. No other loans were extended to executive directors.

REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD AND COMMITTEES IN 2017 The annual General Meetings of Shareholders in 2010 and 2011 resolved to apply the following gross remuneration for members of the supervisory board and its subcommittees:

ANNUAL REMUNERATION OF THE SUPERVISORY BOARD:

chairman of the supervisory board € 40,000

supervisory directors € 26,000

ANNUAL REMUNERATION FOR COMMITTEE MEMBERS:

chairman of the audit committee € 8,000

members of the audit committee € 6,000

chairman of the risk and product development committee € 8,000

members of the risk and product development committee € 6,000

chairman of the remuneration committee € 8,000

members of the remuneration committee € 6,000

The remuneration awarded to supervisory directors was in accordance with the above. The tables below give an overview of the remuneration of the supervisory board, the audit committee, the risk and product development committee, and the remuneration committee. An overview of the remaining terms of appointment for the individual supervisory directors is also presented.


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REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD 2017Fixed

renumerationmember SB

Fixed renumeration

member AC

Fixed renumerationmember RPC

Fixed renumeration

member RemCo Total

L. Deuzeman € 8,233 € 1,900 € 2,533 - € 12,666

Ms C.J. van der Weerdt-Norder € 26,000 € 8,000 € 6,000 - € 40,000

Ms J.M.A. Kemna € 26,000 - € 6,000 € 8,000 € 40,000

J.W.T. van der Steen € 40,000 € 6,000 - € 6,000 € 52,000

A. Soederhuizen € 26,000 € 4,500 € 7,500 € 1,500 € 39,500

Ms M. Pijnenborg € 19,500 - € 4,500 € ,500 € 28,500

Total € 145,733 € 20,400 € 26,533 € 20,000 € 212,666

REMUNERATION OF MEMBERS OF THE SUPERVISORY BOARD 2016Fixed

renumerationmember SB

Fixed renumeration

member AC

Fixed renumerationmember RPC

Fixed renumeration

member RemCo Total

L. Deuzeman € 26,000 € 6,000 € 8,000 - € 40,000

Ms C.J. van der Weerdt-Norder € 26,000 € 8,000 € 6,000 - € 40,000

Ms J.M.A. Kemna € 26,000 - € 6,000 € 8,000 € 40,000

J.W.T. van der Steen € 40,000 € 6,000 - € 6,000 € 52,000

A. Soederhuizen € 26,000 - € 6,000 € 6,000 € 38,000

Total € 144,000 € 20,000 € 26,000 € 20,000 € 210,000

OVERVIEW OF TERMS OF APPOINTMENT OF MEMBERS OF THE SUPERVISORY BOARDDate of

(re)appointmentDate of

contract expiry

Ms C.J. van der Weerdt-Norder 18-9-2014 GM 2018

Ms J.M.A. Kemna 18-9-2014 GM 2018

J.W.T. van der Steen 18-9-2014 GM 2018

A. Soederhuizen 30-10-2015 GM 2019

Ms M. Pijnenborg 24-4-2017 GM 2021


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FINANCIAL STATEMENTS AND DIVIDEND

The Supervisory Board discussed the 2017 financial statements with the management board and Deloitte Accountants B.V. (the external auditor) and approved the statements during the meeting of 8 March 2018. Deloitte Accountants B.V. issued an unqualified audit opinion. The financial statements will be submitted to the General Meeting for adoption on 24 April 2018. BinckBank intends to pay a final dividend of € 0.23 in keeping with the dividend policy. The calculation of the payable dividend meets the requirements of CRD IV (EU/2013/36) and CRR (EU/2013/575) and the related legislation, as well as the recommendation of the European Central Bank (ECB/2017/44). The 2017 net result is insufficient for payment of the final dividend from the current year’s profit. The proposed dividend payment will therefore be drawn in part from retained earnings. Subject to the approval of the general meeting on 24 April 2018, the share will be listed ex-dividend on 26 April 2018. The final dividend will be paid on 03 May 2018.

The board of supervisory directors

J.W.T. van der Steen (chairman)Ms C.J. van der Weerdt-Norder (vice-chairman)Ms J.M.A. KemnaA. SoederhuizenMs M. Pijnenborg

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Members of the executive board

Chairman of the executive boardVINCENT GERMYNS – 1973 – BELGIAN NATIONALITY

Vincent was appointed director under the articles of association during the general meeting of 22 April 2014. The supervisory board officially appointed him as chairman of the executive board of BinckBank on 11 June 2015. In his role as chairman of the executive board Vincent concentrates first and foremost on the pursuit of the strategy and growth in turnover. During his career at BinckBank Vincent has headed BinckBank’s international expansion. He was responsible for the start-up of the Belgian branch and for the management of all branches abroad. Vincent’s education included studies at the Royal Military Academy (Brussels, Belgium) and the KU Leuven (Belgium). Earlier on in his career he worked at KBC Asset Management in Belgium.

Member of the executive board, chief operating officerSTEVEN CLAUSING – 1971 – DUTCH NATIONALITY

Steven was appointed director (chief operating officer) of BinckBank at the extraordinary general meeting of 30 October 2015. Steven is a Technical Industrial Engineer (TU Eindhoven) and also holds a Master’s degree in Finance (TIAS business school, Tilburg) and an Executive Master’s in Internal Auditing (Erasmus University, Rotterdam). Steven began his education and career in the Royal Dutch Navy and was primarily involved in improving operations. He joined ABN AMRO Bank in 1998, where he held both commercial and internally focussed positions. In 2008 he took up a position at RBS, where he moved in 2011 from the position of head of Internal Audit of the business unit ‘international payments’ to Risk Management. In that post he focused chiefly on the assessment of worldwide transition management. He joined BinckBank as head of Risk Management in March 2013.In that position he played a prominent role in various sub-committees of the executive board and the supervisory board. In his role as COO, Steven has product development, user experience, data & analytics, investement management and ICT as primary focus areas.

Member of the executive board, chief financial & risk officer EVERT-JAN KOOISTRA – 1968 – DUTCH NATIONALITY

Evert-Jan has been a member of the board of BinckBank and chief financial and risk officer (CFRO) since 2008. Evert-Jan was reappointed by the supervisory board during the general meeting of 25 April 2016. He is responsible for finance & control, operations, governance, risk, compliance and treasury & ALM. Evert-Jan studied Business Economics at the Erasmus University in Rotterdam and is a chartered accountant. He has a twenty four year track record in the financial sector, at companies including PriceWaterhouseCoopers and Shell. His most recent position was as financial director of the American International Game Technology.


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Members of the Supervisory Board

JOHN VAN DER STEEN1954 – Dutch nationality

Mr J.W.T. van der Steen was appointed as a member of the supervisory of BinckBank at the extraordinary general meeting on 18 September 2014 for a term of four years. Mr Van der Steen is Chairman of the supervisory board and member of the remuneration committee and audit committee.In his most recent position, Mr Van der Steen was Chairman of Global Accounts at Aon, where together with his team he was responsible for Aon’s 1,500 largest clients worldwide. The primary tasks of his team were risk management and risk transfer services for financial institutions, industrial enterprises and service providers with a global footprint. Mr Van der Steen was also chairman of Aon Holdings B.V., the holding company for Aon’s businesses in Europe, the Middle East & Africa (EMEA) and Asia, and member of the worldwide Executive Committee ARS in Chicago. Mr Van der Steen began his career at ING Bank N.V. In 2001 he moved to Aon where he was CEO and chairman of Aon’s board of directors in the Netherlands, Belgium and Luxembourg until 2006.

In 2006, Mr Van der Steen took the position of Chief Commercial Officer at Aon EMEA (12,000 FTE). Until 2010 he was also a supervisory director of Aon Switzerland (as chairman), Germany, Norway and Belgium. He was then appointed as chairman of Global Accounts at Aon. Since 1 May 2014, Mr Van der Steen has been a consultant for Aon Global Accounts.Mr Van der Steen is connected to RAI Holding B.V. as a member and deputy chairman of the supervisory board and as chairman of the Audit Committee. He is also the managing director and major shareholder of Ansteen Holding B.V. and Ansteen B.V. At the beginning of 2015 Mr Van der Steen was appointed as chairman of the supervisory board of Princess Sportsgear & Traveller B.V.At the end of 2016 he was appointed executive director of Stadhold Insurances Luxembourg S.A. Mr Van Der Steen is also a Global Accounts advisor for Aon Groep Nederland B.V., member of the Aegon The Hague association, and a member of the board of the foundation for the donors of the Royal Concertgebouw Orchestra.

Number of BinckBank shares held on 31 December 2017: 0

CARLA VAN DER WEERDT-NORDER1964 – Dutch nationality

Ms C.J. van der Weerdt-Norder was appointed as a member of the supervisory board of BinckBank at the Extraordinary General Meeting on 18 September 2014 for a term of four years. Ms Van der Weerdt-Norder is chairwoman of the audit committee and a member of the risk and product development committee.Ms Van de Weerdt-Norder is a business administrator and registered accountant. She began her career in a sales position at IBM, after which she held various positions at ABN AMRO in Risk Management and Finance. Her last position at ABN AMRO was CFO/COO of the Business Unit Global Transaction Banking.Since 2008 Ms Van der Weerdt-Norder has been director and owner of Accent Organisatie Advies B.V., an organisation of 14 organisational advisors specialising in the fields of risk management and finance.Ms Van der Weerdt-Norder is a supervisory director and chairwoman of the Audit & Risk Committee for Triodos Bank N.V.She is also a member of the Supervisory Board of DWS Zorgverzekeraar, Habion and Hogeschool InHolland. Ms Van der Weerdt-Norder is also a member of the Advisory Board at the District Court of Gelderland.


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MARIJN PIJNENBORG1970 – Dutch nationality

Ms M. Pijnenborg was appointed as a member of the supervisory board of BinckBank during the general meeting of 24 April 2017 for a period of four years. Ms Pijnenborg is a member of the remuneration committee and the risk and product committee.Ms Pijnenborg is an entrepreneur and investor specialising in online services. In this capacity she is currently director and founder of solvo bv. The solvo network consists of the medical platforms Gezondheidsplein.nl, dokterdokter.nl, ziekenhuis.nl and solvo.nl. Before this she was associated with iens.nl as a member of the Supervisory Board, where she supervised the merger between IENS and Seatme.Before her independent entrepreneurship, Ms Pijnenborg started her career as internet manager at Rabobank, after which she was responsible for the implementation of various internet projects as manager new media at ING.In 2000 she was founder of Freeler, the first free internet service provider with 600,000 customers after six months.Ms Pijnenborg is also an investor and founder of Borales B.V. and (co-) founder of the renowned portals auto.nl and Funda.Ms Pijnenborg carries out activities for MK24, as a board member. MK24 provides arts education in Amsterdam in the field of visual arts and multimedia by offering education and courses.

Number of BinckBank shares on 31 December 2017: 0

HANNY KEMNA1960 – Dutch nationality

Ms J.M.A. Kemna was appointed as a member of the supervisory board of BinckBank at the extraordinary general meeting on 18 September 2014 for a term of four years. Ms Kemna is chairwoman of the remuneration committee and a member of the risk and product development committee.Ms Kemna has worked as a programmer and systems analyst, and later as a quality assurance manager, developing, testing, and implementing IT systems. At Ernst & Young she worked in the financial sector in the position of IT auditor. Ms Kemna was also responsible for various internal strategic IT projects at EY, for which she spent some time working in the USA.In 1999 Ms Kemna became a partner at Ernst & Young Accountants, with final responsibility for audits of the quality of IT, euro conversions, security projects, and institutional governance programmes. At the beginning of 2005 Ms Kemna was asked to take on the leadership of the IT Risk and Assurance services for EY CIS (at its office in Moscow, Russia). She held this

position until July 2008.She then accepted a position as managing partner of IT Risk and Assurance for EY EMEIA FSO, the international division of EY in Europe focusing on services to the financial sector. In the summer of 2013 Ms Kemna decided to return to the Netherlands and to end her career at EY in early 2014. Ms Kemna is affiliated with cooperative Menzis N.V. as member of the supervisory board and chairwoman of the Governance, Risk and Compliance committee. She is also a member of the supervisory council of Nictiz, the Netherlands institute for ICT in the healthcare sector. She is external member of the audit committee of the Ministry of Security & Justice, and member of the Advisory Committee for the Tax Authorities Financial Control Framework for the Ministry of Finance. Since 1 January 2016, she has served as a supervisory board member of pension administrator MN Services N.V. Since the end of 2017, Ms Kemna has also been a member of the supervisory board of the Stichting stimulerings-fonds Nederlandse gemeenten.Ms Kemna is an independent advisor and director/major shareholder of JMA Kemna Beheer BV and JMA Kemna BV.



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ARJEN SOEDERHUIZEN1965 – Dutch nationality

Mr A. Soederhuizen was appointed as a member of the supervisory board of BinckBank at the extraordinary general meeting on 30 October 2015 for a term of four years. Mr Soederhuizen is chairman of the risk and product development committee and a member of the audit committee.Mr Soederhuizen (business economist) began his career in 1991 as a management trainee at ABN AMRO. After three years as a shares analyst for ABN AMRO’s investment banking arm, in 1994 he switched to the bank’s asset management business unit (ABN AMRO Asset Management). At ABN AMRO Asset Management he held both commercial and purely investment positions. Between 1994 and 1998 he was responsible for all institutional clients in the Middle East, Africa, Latin America, and Spain. From 1998 to 2004, he headed an investment division of twenty quantitative investment specialists.In 2004, Mr Soederhuizen was appointed CEO of ABN AMRO Asset Management Nederland B.V. In that position he was ultimately responsible for all of ABN AMRO Bank N.V’s asset management activities on the Dutch market.After the takeover of ABN AMRO Bank N.V. by a banking consortium, Mr Soederhuizen oversaw the legal-technical process of integrating AAAM NL into Fortis Investment Management, after which he ultimately decided against continuing his career with Fortis Investment Management. In 2009, Mr Soederhuizen was invited to take an interim position at PGGM. He held that position for two and a half years as a member of the asset management team and CIO for private markets.After that he held the positions of advisor of ABN AMRO Pensioen Fonds and interim CIO at the same fund from 2013-2014.Since 2014, Mr Soederhuizen has held an ancillary position with the ABN AMRO pension fund. He is a member of the asset management and balance sheet management committee. Mr Soederhuizen’s ancillary position encompasses a commitment of approximately 16 days per year.Mr Soederhuizen has been a member of the Advisory Committee for Amundi Asset Management in the Netherlands since 1 July 2016. He spends approximately eight days a year on this ancillary position.


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TABLE OF CONTENTS FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS 88Consolidated statement of financial position 89Consolidated income statement 90Consolidated statement of comprehensive income 91Consolidated statement of cash flows 92Consolidated statement of changes in equity 94

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 95

NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION 111

NOTES TO THE CONSOLIDATED INCOME STATEMENT 127

OTHER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 135

COMPANY FINANCIAL STATEMENTS 174Company balance sheet 175Compant income statements 176

NOTES TO THE COMPANY FINANCIAL STATEMENTS 177

NOTES TO THE COMPANY BALANCE SHEET 178

NOTES TO THE COMPANY INCOME STATEMENT 188

OTHER INFORMATION 196Independent auditor’s report 196Provisions of the Articles of Association regarding priority shares (Articles 15 and 21) 201Provisions of the Articles of Association regarding profit appropriation (Article 32) 202

C O N S O L I D A T E D

F I N A N C I A L

S T A T E M E N T S

FINANCIAL STATEMENTS

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Consolidated statement of financial position(amounts in € 000’s) Note 2017 2016

ASSETS

Cash and balances at central banks 6 1,003,673 854,230

Banks 7 133,968 127,755

Derivatives 8 37,418 20,393

Financial assets designated at fair value through profit and loss 9 16,613 9,499

Available-for-sale financial assets 10 787,743 724,398

Held-to-maturity financial assets 11 340,179 790,021

Loans and receivables 12 1,297,830 958,329

Associates 13 485 -

Intangible assets 14 157,950 168,260

Property, plant and equipment 15 33,969 35,128

Current tax assets 16 16,725 12,270

Deferred tax assets 17 6,279 1,048

Other assets 18 58,754 63,451

Prepayments and accrued income 19 32,475 35,479

Total assets 3,924,061 3,800,261

LIABILITIES

Banks 7 2,538 2,017

Derivatives 8 37,055 20,428

Financial liabilities designated at fair value through profit and loss 9 231 1,018

Funds entrusted 20 3,383,383 3,308,829

Provisions 21 8,134 8,891

Current tax liabilities 16 10 10

Deferred tax liabilities 17 36,443 31,982

Other liabilities 22 52,084 19,841

Accruals and deferred income 23 9,294 10,293

Total liabilities 3,529,172 3,403,309

Equity attributable to:

Owners of the parent 24 393,956 395,569

Non-controlling interests 24 933 1,383

Total equity 394,889 396,952

Total equity and liabilities 3,924,061 3,800,261


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Consolidated income statement(amounts in € 000’s) Note 2017 2016

INCOME

Interest income 36,439 30,123

Interest expense (6,400) (3,798)

Net interest income 25 30,039 26,325

Fees and commission income 124,839 129,547

Fees and commission expense (18,981) (20,471)

Net fees and commission income 26 105,858 109,076

Other income 27 7,014 9,910

Result from financial instruments 28 6,150 2,530

Impairment of financial instruments 29 (92) (116)

Total income from operating activities 148,969 147,725

EXPENSES

Employee expenses 30 53,048 51,635

Depreciation and amortisation 31 26,792 26,215

Other operating expenses 32 61,746 60,299

Total operating expenses 141,586 138,149

Result from operating activities 7,383 9,576

Share in the results of associates 864 (2,821)

Result before tax 8,247 6,755

Income tax 16 274 (2,134)

Net result 8,521 4,621

Net result attributable to:

Owners of the parent 8,971 4,534

Non-controlling interests (450) 87

Net result 8,521 4,621

Basic and diluted earnings per share (in €) 33 0.13 0.07


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Consolidated statement of comprehensive income(amounts in € 000’s) Note 2017 2016

Net result from income statement 8,521 4,621

Other comprehensive income recognised through profit and loss on realisation

Net gain/(loss) on available-for-sale financial assets 24 (645) (708)

Gains and losses realised through the profit and loss 24 - 66

Income tax relating to components of other comprehensive income 24 116 137

Other comprehensive income, net of tax (529) (505)

Total comprehensive income, net of tax 7,992 4,116

BinckBank N.V. has no other comprehensive income that will not be recognised through profit and loss on realisation.

Result attributable to:

Owners of the parent 8,442 4,029

Non-controlling interests 24 (450) 87

Total realised and unrealised results, net of tax 7,992 4,116


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Consolidated statement of cash flows(amounts in € 000’s) Note 2017 2016

CASH FLOWS FROM OPERATIONS

Net result for the year 8,521 4,621

Adjustments for:

Amortisation of intangible assets and depreciation of property, plant and equipment 14,15 26,792 26,215

Provisions 21 (757) 1,007

Amoratisation premiums and discounts and foreign currency translation on available-for-sale financial assets 10 21,908 14,186

Amortisation premiums and discounts and foreign currency translation on held-to-maturity financial assets 11 24,793 3,522

Amortisation premiums and discounts on loans and receivables 11 4,845 2,279

Impairment losses on loans and receivables 12 52 (7)

Movements in deferred tax 17 (654) 4,318

Share in the results of associates 13 1,019 2,821

Other movements (752) (1,389)

Movements in operating assets and liabilities:

Banks (assets) 7 4,132 (55)

Derivatives 8 (398) 46

Financial assets and liabilities at fair value through profit and loss 9 (7,901) 6,878

Loans and receivables 12 (344,398) (458,595)

Taxes, other assets, prepayments and accrued income 16,18,19 3,246 (30,030)

Banks (liabilities) 7 521 (21,565)

Funds entrusted 20 74,554 719,115

Tax liabilities, other liabilities, accruals and deferred income 16,22,23 31,244 (46,820)

Net cash flows from operating activities (153,233) 226,547

CASH FLOWS FROM INVESTING ACTIVITIES

Investments in available-for-sale financial assets 10 (334,023) (254,720)

Divestments and redemptions of available-for-sale financial assets 10 248,125 682,615

Investments in held-to-maturity financial assets 11 (74,558) (106,018)

Divestments and redemptions of held-to-maturity financial assets 11 499,607 125,959

Investments in associates 13 (1,504) (1,594)

Divestments subsidiaries 35 3,060 -

Investments in intangible assets 14 (8,187) (386)

Divestments in intangible assets 14 123 -

Investments in property, plant and equipment 15 (3,818) (3,827)

Divestments in property, plant and equipment 15 1,093 -

Net cash flows from investing activities 329,918 442,029


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Consolidated statement of cash flows (continued)(amounts in € 000’s) Note 2017 2016

CASH FLOWS FROM FINANCING ACTIVITIES

Share buy-back 24 - (24,950)

Dividends paid:

Final dividend prior year 34 (12,679) (17,199)

Interim dividend current year 34 (2,002) (2,657)

Net cash flows from financing activities (14,681) (44,806)

Net cash flows 162,004 623,770

Opening balance of cash and cash equivalents 977,853 352,532

Net cash flows 162,004 623,770

Effect of exchange rate changes on cash and cash equivalents (2,216) 1,551

Closing balance of cash and cash equivalents 1,137,641 977,853

The cash and cash equivalents presented in the consolidated statement of cash flows are included in the consolidated balance sheet under the following headings at the amounts stated below:

Cash and balances at central banks 6 1,003,673 854,230

Banks 7 133,968 127,755

Banks – non-cash equivalents 7 - (4,132)

Total cash equivalents 1,137,641 977,853

Cash flows from operating activities includes the following items:

Tax paid (4,181) (6,459)

Interest received 39,948 36,863

Interest paid (6,371) (3,810)

Commission received 124,775 133,134

Commission paid (19,633) (20,248)


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Consolidated statement of changes in equity

(amounts in € 000’s) Note

Issuedshare

capital

Sharepremium

reserveTreasury

shares

Fairvalue

reserveRetainedearnings

Non- controlling

interestsTotal

equity

1 January 2017 7,100 361,379 (29,468) 1,021 55,537 1,383 396,952

Net result for the year - - - - 8,971 (450) 8,521

Other comprehensive income - - - (529) - - (529)

Total comprehensive income - - - (529) 8,971 (450) 7,992

Final dividend 2016 34 - - - - (12,679) - (12,679)

Interim dividend 2017 34 - - - - (2,002) - (2,002)

Grant of rights to shares 24 - - - - 92 - 92

Issue of shares to executiveboard and employees 24 - - 318 - (318) - -

Issue of shares to third parties 24 - - 5,340 - (806) - 4,534

Cancelled treasury shares 24 - - - - - - -

Share buy-back 24 (350) (17,814) 19,528 - (1,364) - -

31 December 2017 6,750 343,565 (4,282) 492 47,431 933 394,889

(amounts in € 000’s) Note

Issuedshare

capital

Sharepremium

reserveTreasury

shares

Fairvalue

reserveRetainedearnings

Non- controlling

interestsTotal

equity

1 January 2016 7,100 361,379 (4,979) 1,526 71,158 1,296 437,480

Net result for the year - - - - 4,534 87 4,621

Other comprehensive income - - - (505) - - (505)

Total comprehensive income - - - (505) 4,534 87 4,116

Final dividend 2015 34 - - - - (17,199) - (17,199)

Interim dividend 2016 34 - - - - (2,657) - (2,657)

Grant of rights to shares 24 - - - - 162 - 162

Issue of shares to executiveboard and employees 24 - - 461 - (461) - -

Cancelled treasury shares 24 - - (24,950) - - - (24,950)

Share buy-back 24 - - - - - -

31 December 2016 7,100 361,379 (29,468) 1,021 55,537 1,383 396,952


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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Company informationBinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law, whose shares are publicly traded. BinckBank has its registered office at Barbara Strozzilaan 310, 1083 HN, Amsterdam, and is registered with the Chamber of Commerce under number 33162223. BinckBank N.V. provides online brokerage services in financial instruments for private and professional investors. In addition to its brokerage services, BinckBank N.V. offers asset management services and savings products. ‘BinckBank’ hereinafter refers to BinckBank N.V. and to its various subsidiaries.

The consolidated company financial statements for BinckBank for the period ending on 31 December 2017 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 12 March 2018.

Executive board: Supervisory board:V.J.J. Germyns (chairman) J.W.T. van der Steen (chairman)E.J.M. Kooistra (CFRO) Ms C.J. van der Weerdt-Norder (vice-chairman)S.J. Clausing (COO) Ms J.M. Kemna A. Soederhuizen Ms M. Pijnenborg

2. General accounting principles2.1 PRESENTATION OF THE FINANCIAL STATEMENTSThe consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union (EU), hereinafter referred to as ‘IFRS-EU’.

The consolidated financial statements have been prepared on the basis of historical cost, with the exception of derivatives, financial assets and liabilities held for trading, and financial assets and liabilities recognised at fair value through profit and loss, all of which are recognised at fair value.

The financial statements are prepared on the basis of the going concern assumption. Unless otherwise stated, the consolidated financial statements are presented in euros, with all amounts rounded to the nearest thousand (€ 000’s). The figures stated in the tables are based on unrounded amounts, and therefore rounding differences may occur.

The presentation of the consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income, consolidated statement of cash flows, consolidated statement of changes in equity and notes may have been changed in order to provide better information or improve reconciliation with the current period.


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2.2 CHANGES IN ACCOUNTING PRINCIPLESThe accounting principles with regard to recognition and measurement are consistent with those applied in the previous year, with the exception of any changes as a result of the implications of new, amended or improved IFRS standards as described below or as a result of new activities.

In the current year, BinckBank has applied the new or amended IFRS standards and IFRIC interpretations effective for annual periods commencing on or after 1 January 2017. New or amended standards take effect for annual periods beginning on or after the date as stated by IFRS and after ratification by the EU, whereby earlier application is permitted in some cases. The new standards and amendments to standards that took effect in the current year have been incorporated in the existing reporting principles. None of the new standards and amendments had a significant influence on the financial position and results of BinckBank.

New standards, amendments of standards and interpretations, that have not yet taken effect or have not yet been ratified by the European Union are listed below. These standards have not yet been applied by BinckBank.

The list begins with the standards that are expected to have a significant impact on BinckBank and continues with the standards that are expected to have little or no impact on the financial position and results of BinckBank:

STANDARDS EXPECTED TO HAVE A SIGNIFICANT IMPACT ON BINCKBANK

NEW OR AMENDED STANDARDS EFFECTIVE FOR FINANCIAL YEARS BEGINNING ON OR AFTER 1 JANUARY 2018

IFRS 9 – Financial Instruments, classification, and measurement (and related sections of IFRS 7)

IFRS 9 Financial instrumentsIFRS 9 Financial instruments replaces IAS 39 Financial instruments: Recognition and Measurement and sets out requirements for the classification and measurement of financial assets and liabilities, impairment of financial assets, and micro hedge accounting. The new requirements take effect on 1 January 2018. The classification and measurement and impairment will be applied retrospectively by adjusting the opening balance and equity at 1 January 2018, without the adjustment of comparative figures. The implemen-tation of IFRS 9 will have an impact on equity and the net result and/or realised results and the disclosures.

Enhanced Disclosure Task Force (EDTF)The EDTF published a report on IFRS 9 in November 2015, with recommendations for disclosures that may be of value to interested parties in assessing the consequences of the changes on the application of the Expected Credit Loss (ECL) method. All disclosures prescribed by IFRS 9 will become compulsory for the financial statements for the financial year ending on 31 December 2018. IFRS 9 - programmeIn 2017 BinckBank continued with the implementation of the requirements under IFRS 9 in models, systems, processes and governance as far as relevant for the different portfolios and the impact determination. Besides this, BinckBank performed parallel runs to calculate the quantitative impact of IFRS 9. The governance structure of the IFRS 9 Program was set-up based on the three phases of IFRS 9: Classification and Measurement, Impairments and Hedge Accounting. Each workstream consists of experts from Finance, Risk, Treasury and other relevant departments. The Accounting Committee is the decision-making body.

Classification and measurement BinckBank has adopted the prescribed two-step approach to the classification and measurement of financial assets in one of the three categories (amortised cost, fair value through other comprehensive income (FVOCI), and fair value through profit and loss), namely:1. The Business Model test will be applied to determine how a portfolio of financial

instruments is managed as a whole; and2. The Solely Payments of Principal and Interest (SPPI) test will be applied to determine the

contractual cash flow characteristics of financial assets in the Business Model.

The financial assets available for sale will be reclassified to measurement at amortised cost,because the investment portfolio included in this group passes both the business test andthe SPPI test. As a result, equity will be adjusted for unrealised revaluation of this portfolio which is included in the fair value reserve.


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NEW OR AMENDED STANDARDS EFFECTIVE FOR FINANCIAL YEARS BEGINNING ON OR AFTER 1 JANUARY 2018 (CONTINUED)

IFRS 9 – Financial Instruments, classification, and measurement (and related sections of IFRS 7)(continued)

The fair value reserve as per 31 December 2017 amounted to € 0,5 million and equity will decrease with this amount. For all other financial assets and liabilities, the classification and measurement will remain the same as in accordance with IAS 39.

ImpairmentThe recognition and measurement of impairment is more future-oriented with IFRS 9, which is based on an expected credit loss (ECL) model, than IAS 39, which employs an incurred loss model. The ECL model applies to financial assets recognised at amortised cost or fair value through other comprehensive income (FVOCI), such as loans and receivables and bonds.

BinckBank has conducted the financial impact analysis of the levels of impairment within the context of the new ECL approach. The most important concepts and assumptions that will be essential to the new impairment model, such as the definition of significant deterioration and the approach to the determination of ECL have been determined.

BinckBank shall adopt the IFRS 9 three-stage approach to the determination of the expected credit losses:• Stage 1: 12 month ECL – performing assets

Financial instruments that have not had a significant increase in credit risk since initial recognition require a provision for expected credit losses associated with the probability of default events occurring within the next 12 months (12 month ECL).

• Stage 2: Lifetime ECL – under-performing assets In the event of a significant increase in credit risk since initial recognition, a provision is required for ECL resulting from all possible default events over the expected life of the financial instrument (‘Lifetime ECL’). Triggers to move to Stage 2 are defined depending on the type of asset/portfolio and are particularly based on period in arrears and credit rating. During the parallel runs that have been performed so far, the results have been analysed and on this basis calibration of the triggers will be further defined and tested.

• Stage 3: Lifelong ECL – non-performing assets Financial instruments will be classified into Stage 3 at the time of default. The objective is to align the standard definition of IFRS 9 with the internal definition of default within the context of risk management. Stage 3 requires a Lifetime ECL determination.

Based on the current values of the financial assets and the current parameters within the models the initial impact on application of the expected credit losses in accordance with IFRS 9 amounts at a maximum to € 2.0 million.

The total initial impact on equity of applying IFRS 9 as per 1 January 2018 because of classification and measurement and expected credit losses will not exceed a € 2.5 million decrease of equity.

In the current phase of market growth and improving business cycles, the first calculations of the expected credit losses presented a limited impact of IFRS 9 on the provisions. Therefore it could be questioned whether IFRS 9 offers a sufficient solution in anticipating future crises and provided sufficient buffers for future negative developments.

Hedge accountingThe objective of IFRS 9 is to simplify the general hedge accounting requirements. All micro hedge accounting strategies and the macro cash flow hedges fall within the scope of IFRS 9. Macro fair value hedging currently falls outside the scope of this IFRS 9. BinckBank applies macro fair value hedging and has opted to apply hedge accounting in accordance with IAS 39. Therefore, the implementation of IFRS 9 regarding hedge accounting will not impact the financial position and results of BinckBank.


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STANDARDS EXPECTED TO HAVE LITTLE OR NO IMPACT ON BINCKBANK


IFRS 15 – Revenue from contracts with customers

IFRS 15 contains the new guideline for the recognition of revenue from contracts with customers, with the intention of defining the revenue model and describing it in a standard. BinckBank performed an analysis to the existing and expected revenues from contracts with customers or other services. BinckBank mainly has short-term services where the service is delivered immediately and the earnings moment is achieved simultaneously. Therefore IFRS 15 will not have a significant impact on the result and financial position of BinckBank.

IFRS 2 – Clarifications of classification and measurement of share based payment transactions

This amendment clarifies the classification and measurement of share based payments. The clarification primarily relates to the manner in which vesting conditions affect the fair value of the transaction.

IFRS 4 – Insurance contracts instruments

This amendment pertains to an exemption for the application of IFRS 9 Financial instruments in combination with IFRS 4 Insurance contracts. As IFRS 4, Insurance contracts will not be applicable to BinckBank, this amendment is not relevant.

Annual improvement cycle IFRS Standards 2014-2016

This comprises multiple minor adjustments of existing standards to clarify the application. The amendments are not expected to have a significant impact on BinckBank.

IFRIC 22 – Foreign currency transactions and advance consideration

This amendment clarifies the accounting for transactions that include the receipt or payment of advance considerations processing of transactions in foreign currency. The amendment is expected to have no significant impact.

Adjustment of IAS 40 – Transfer of investment property

BinckBank holds no property investments and therefore the amendment is not expected to impact BinckBank.


IFRS 16 – Leases This new standard describes the treatment of financial and operating lease contracts. Under the new standard, an asset has to be recognised in the statement of financial position for both types of lease. A financial obligation also has to be recognised when payments are spread across multiple periods. BinckBank has several lease contracts for the operational activities and staff. As a result, the balance sheet will increase for the amount of these contracts. However, we expect that the adjustment of the balance sheet will not be significant compared to the current balance sheet total. The impact on BinckBank’s result is expected to be limited. The investigation into the impact of this new standard has yet to be completed.

IFRIC 23 - Incorporation of income tax uncertainty

This interpretation provides clarification of the processing and explanation of the effects of uncertainties in accounting for income tax. The standard requires a new analysis of the de-termination of the tax positions. The expected influence of the interpretation on the financial position and results of BinckBank is not expected to be significant.

IFRS 9: Amendment prepaymentfeatures with negative compensation

This amendment clarifies how to apply IFRS9 for prepayment features with negativecompensation in relation to the SPPI test. In specific transactions containing prepaymentfeatures the asset can pass the SPPI test and be measured at amortised cost. Given the specific assets involved, BinckBank expects no significant impact on the financial position and result of BinckBank as a result of this amendment.

IAS 28 – Amendment for long-term interests in associates and joint ventures

This amendment clarifies that for a long-term interest in an associate or joint venture towhich the equity method is not applied IFRS 9 should be applied and not IAS 28. BinckBankapplies the equity method and therefore this amendment has no impact on the financialposition and results of BinckBank.

Annual improvement cycle IFRS standards 2015-2017

This comprises multiple minor adjustments of existing standards to clarify the application. The amendments are not expected to have a significant impact on BinckBank.


IFRS 17 - Insurance contracts This new standard is applicable to organisations that issue insurance contracts andestablishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts. Because BinckBank is not issuing insurance contracts, this standard is not expected to be applicable to BinckBank.


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NEW OR AMENDED STANDARDS EFFECTIVE FOR FINANCIAL YEARS BEGINNING ON OR AFTER A DATE THAT IS NOT YET KNOWN

IFRS 10 and IAS 28: Amendment of standards to remove conflicting requirements

This amendment relates to the timing and extent of gain or loss recognition for transactions with an associate or joint venture. This amendment has no effect on the financial position and results of BinckBank. In connection with an investigation of the equity method, the IASB has suspended the effective date of this adjustment indefinitely.

IFRS 14 – Regulated activities As this standard is applicable to first time adopters of IFRS, it is not applicable to BinckBank.

2.3 SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATESThe preparation of the financial statements involves estimates and assumptions based on subjective presumptions and assessments. Situations are assessed on the basis of available financial data and information. These estimates may materially affect the size of the reported assets and liabilities and the contingent assets and liabilities on the date of the consolidated financial statements and the income and expenses reported for the period under review. While the management strives to make these estimates to the best of its ability, actual results may vary from these estimates.

The estimates and underlying assumptions are reviewed regularly. Revisions are recognised in the period in which the estimate is revised, or in the period of revision and future periods if the revision affects both the current and future reporting periods. The most significant assumptions for the future and other key sources of estimation uncertainty at balance sheet date that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are:

GOING CONCERNManagement of BinckBank has evaluated the bank’s ability to operate as a going concern is satisfied that the bank has adequate resources to continue its activities in the foreseeable future. Moreover, the management is not aware of any material uncertainties that may cast doubt upon BinckBank’s ability to continue as a going concern. The financial statements have therefore been prepared in accordance with the continuity principle.

CONSOLIDATION OF ASSOCIATES AND JOINT VENTURESThe consolidated financial statements are prepared on the basis of the consolidation of BinckBank and its associates and joint ventures. In determining whether associates and joint ventures should be consolidated, management has assessed whether there is de facto control as a result of decisive control, risk and reward regarding the variable results of the entity or influence over the appropriation of the results of the entity on the basis of current circumstances and insights, consistent with the conditions of IFRS 10.

FAIR VALUE OF FINANCIAL INSTRUMENTSWhere the fair value of financial assets and financial liabilities cannot be obtained from active markets, they are determined using valuation methods, including cash flow models or other valuation models. Observable market data is used as the input to these models wherever possible, but where this is not possible judgements are required in determining fair values. These judgements involve consideration of input factors such as liquidity risk, credit risk and volatility. Changes in assumptions regarding these factors can affect the fair value of financial instruments.

IMPAIRMENT OF AVAILABLE-FOR-SALE FINANCIAL ASSETS AND HELD-TO-MATURIT Y FINANCIAL ASSETSAn impairment provision is formed for available-for-sale financial assets and held-to-maturity financial assets when there are objective indications that BinckBank will not be able to collect all amounts that should be received under the original contractual conditions of the loan. An initial indication for impairment has occurred when over a longer period of time the fair value is substantially lower than the amortised cost. BinckBank makes individual estimates of the recoverable value, being the value of future cash flows and the costs of collection of the amounts receivable. When the financial assets meet the criteria for impairment then the amount written down is equal to the difference between the carrying amount and the recoverable value.

IMPAIRMENT OF LOANS AND RECEIVABLES An impairment provision is formed for loans and receivables when there are objective indications that BinckBank will not be able to collect all amounts under the original contractual conditions of the loan. Individual or collective estimates are then made of the recoverable amount of the loan, being the value of the future cash flows, the proceeds from liquidating the collateral net of transaction costs, and the costs of collecting the receivables.

The provision is formed in an amount equal to the difference between the carrying amount and the recoverable amount.


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IMPAIRMENT OF GOODWILLBinckBank performs an impairment test on the carrying amount of goodwill at least once a year. This involves estimating the value in use of the cash-generating units to which the goodwill is attributed. BinckBank estimates the value in use by estimating the expected future cash flows from the cash-generating unit and determining an appropriate discount rate for the calculation of the net present value of those cash flows.

FAIR VALUE OF IDENTIFIED INTANGIBLE ASSETS ACQUIRED THROUGH ACQUISITIONSBinckBank measures the value of the identifiable intangible assets acquired on the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and also determines the applicable discount rate. Where the royalty method is used, an estimate is also made of the appropriate royalty percentage. An impairment test is performed on each balance sheet date.

ECONOMIC LIFE OF INTANGIBLE ASSETS AND PROPERT Y, PLANT, AND EQUIPMENT BinckBank applies standard amortisation and depreciation periods for various groups of assets. BinckBank assesses each individual asset periodically to establish whether the standard amortisation or depreciation period still corresponds to the expected useful life of the asset concerned. Circumstances may occur during the use of the asset which may lead to a situation in which the standard period no longer corresponds to the actual useful life. As soon as a deviation is identified, the remaining carrying amount of the asset is written off over the revised remaining economic life on a straight-line basis.

DEFERRED TA X ASSETSDeferred tax assets are recognised if it is probable that future taxable profits will be generated which allow the deferred tax asset to be recovered.

PROVISIONS AND OFF BALANCE SHEET LIABILITIESProvisions and off balance sheet liabilities are determined based on available information and management estimates. The actual results may differ from these estimates.

3. Accounting principles used for consolidationThe consolidated financial statements consist of the financial statements of BinckBank and its subsidiaries on 31 December 2017. Control is achieved when BinckBank is exposed or entitled to variable returns due to its involvement in the investment and has the possibility of using its control of the investment to influence the returns.

BinckBank controls an investment only if:

• it has control of the investment (meaning that entitlements exist whereby it can directly influence the relevant operations of the investment)

• it is exposed or entitled to variable returns due to its involvement in the investment, and• it has the possibility of using its control of the investment to influence the returns.

If BinckBank does not hold a majority of the voting rights or equivalent entitlements with respect to an investment, it takes account of all the relevant facts and circumstances in order to assess whether it has control of the investment, including:

• contractual agreements with the other parties holding voting rights with respect to the investment• entitlements arising from other contractual arrangements and• potential voting rights. Consolidation of a subsidiary starts when BinckBank acquires control of the subsidiary and stops when control over the subsidiary ends. BinckBank reassesses whether it has control of an investment if there are indications from the facts and circumstances that one or more of the three elements of control have changed. Assets, liabilities, income and expense items of a subsidiary acquired or disposed of during the year are recognised in the financial statements from the date on which BinckBank acquires control until the date on which BinckBank ceases to have control.


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Profit or loss and every component of other comprehensive income (OCI) are allocated to the shareholders of the parent company of BinckBank and the non-controlling interests, even if this leads to non-controlling interests showing a negative balance. If necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those of BinckBank.

Transactions between BinckBank and its subsidiaries have taken place during the year. These intercompany transactions have been fully eliminated in the consolidated financial statements. Unrealised gains on transactions with investments and associates are eliminated in proportion to BinckBank’s interests in the companies concerned. Unrealised losses are also eliminated, except where the transactions indicate that the transferred asset has become impaired.

4. Accounting policies4.1 FOREIGN CURRENCY TRANSLATIONThe consolidated financial statements are denominated in euros, this being both the functional and reporting currency. Items recognised in the financial statements of each entity are measured on the basis of the relevant entity’s functional currency. Initial recognition of transactions in foreign currencies takes place at the functional currency’s exchange rate on the transaction date.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rates prevailing on the balance sheet date. Differences relating to movements in exchange rates are recognised in the income statement. Non-monetary items in foreign currencies measured against fair value are translated at the exchange rate at the moment the fair value is determined. Currency translation differences on non-monetary items carried at fair value through profit and loss are likewise recognised in the income statement. The results of financial transactions and costs are translated into euros at the exchange rate prevailing on the transaction date in the income statement.

4.2 FINANCIAL ASSETS AND LIABILITIESCLASSIFICATION AND MEASUREMENT OF FINANCIAL ASSETS AND LIABILITIES Financial assets and liabilities are classified in categories on the basis of the nature and purpose of the assets or liabilities. The following categories are used:

• Derivatives• Financial assets and liabilities at fair value through profit and loss• Available-for-sale financial assets• Held-to-maturity financial assets• Loans and receivables

Financial assets and liabilities bought and sold in accordance with standard market conventions are recognised on the transaction date of the relevant purchase or sale. Other financial assets and liabilities are recognised in the balance sheet at the time of acquisition.

On initial recognition, financial instruments may be assigned to a specific category, their accounting treatment being decided at the same time. Initial recognition of financial assets and liabilities is at fair value, including directly attributable transaction costs, except for derivatives and the category carried at fair value through profit and loss, where the transaction costs are charged directly to profit and loss.


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DerivativesIn the financial statements 2017 the category financial assets and liabilities held for trading has been renamed to Derivatives as this term better describes the nature and purpose of these instruments. Derivatives are financial instruments requiring only a limited net initial investment or none at all, with future settlement dependent on the underlying notional amount of the contract and movements in certain rates or prices (e.g. an interest rate or the price of a financial instrument). Derivatives are recognised at fair value and both unrealised and realised gains and losses are recognised directly in the income statement under Result from financial instruments.

Financial assets and liabilities at fair value through profit and loss An instrument is classified as carried at fair value through profit and loss if it is held for trading or if it was designated as such on initial recognition. BinckBank classifies financial assets and liabilities at fair value through profit and loss if it eliminates or substantially reduces inconsistencies in measurement and recognition which would otherwise arise on the recognition of assets or of income and expenses on a different basis. Financial instruments are recognised at fair value and both unrealised and realised gains and losses are recognised directly in the income statement under Result from financial instruments.

Available-for-sale financial assets Available-for-sale financial assets are financial assets that are designated as being available for sale or which are not included in one of the other categories. After initial recognition, available-for-sale financial assets are measured at fair value. Any gain or loss is shown, net of tax, as an unrealised result in the fair value reserve until the investment is derecognised or determined to be impaired. In that case, the cumulative gain or loss previously shown in equity is recognised in the income statement in the result from financial instruments.

Held-to-maturity financial assets Financial assets with fixed or determinable payments and a fixed maturity date are designated as investments to be held to maturity if BinckBank specifically intends to hold them until maturity and is in a position to do so. Held-to-maturity investments are recognised at amortised cost, measured using the effective interest method, less any impairment losses.

Loans and receivablesLoans and receivables are financial instruments with fixed or determinable payments that are not quoted in an active market. After initial recognition, the items are valued at amortised cost, using the effective interest method and less a provision for impairment, where relevant.

OFFSETTING FINANCIAL ASSETS AND LIABILITIESThe gross presentation of the financial assets and financial liabilities in the balance sheet is customary practice. Financial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when there is a legally enforceable right to set off the amounts and an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

An entity needs to possess a continuous legal and enforceable offsetting right to meet the offsetting criterion. Consequently, the offsetting right:

• may never be contingent on a future event; and• must be legally enforceable in all the following circumstances: - within the context of the normal course of business; - in the event of default; and - in the event of the insolvency or bankruptcy of the entity and of all counterparties.

IMPAIRMENT OF FINANCIAL ASSETS On a regular basis and at least at each balance sheet date, BinckBank assesses whether there is objective evidence, provided by one or more events, of impairment of a financial assets or group of financial assets. A loss from impairment is only recognised when there is an adverse effect on the future cash flows. BinckBank does not regard possible future events as objective indicators and such forecasts are accordingly not used as evidence of impairment of a financial asset or a portfolio of financial assets. Losses based on future events are not recognised, regardless of probability.


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Available-for-sale financial assets Investments in interest-bearing securities are assessed for impairment when there are objective indications of financial problems at the issuer or borrower, there is no longer an active market, or there are other such indications. When there are indications of impairment, the cumulative net loss previously recognised directly in equity is transferred from equity to the income statement under the impairments item. Any reversal of impairment losses in subsequent years relating to interest-bearing securities is recognised in the income statement if the increase in the fair value of the instrument can be objectively related to an event occurring after the previous impairment loss was recognised in the income statement.

Held-to-maturity financial assetsInvestments held to maturity are assessed for impairment on an individual basis and any impairment is determined on an individual basis as well. The impairment loss is determined as the difference between the carrying amount and the discounted future cash flows applying the original effective interest rate. The impairment loss is recognised in the income statements as impairment of financial instruments.

Loans and receivables BinckBank assesses whether there is objective evidence of impairment of the lending portfolio (including any related margin facilities, collateral, and guarantees). In the case of loans with collateral in the form of securities, there is an objective indication if the fair value of the collateral is lower than the carrying amount of the loan. Evidence that a loan or receivable is impaired is obtained via the group’s lending assessment process. This involves the assessment of customers’ creditworthiness as well as the assessment of the nature of customers’ investment transactions and monitoring of customer transactions and balances.

BinckBank carries out individual assessments of the receivables in the mortgage portfolio to identify any impairment. Situations in which the borrower states that he is in financial difficulty or when the conditions attached to the loan agreement are not met are objective indications of the impairment of these receivables. BinckBank regards arrears in interest and redemption of more than 90 days as an objective indication of impairment. An impairment management process has been implemented to manage any arrears and, in consultation with the borrower, arrive at a solution to so that the borrower can catch up with the arrears and make future payments with the least possible problems.

The amount of any impairment loss is measured as the difference between the loan’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the loan. In computing the present value of the estimated future cash flows from a financial asset for which securities collateral has been provided, consideration is taken of the cash flows that will arise on realisation of the securities collateral less the costs that will need to be incurred in obtaining and selling the securities. The loss is presented in the income statement in impairment of financial assets.

In the event of impairment, the impairment provision is increased by the amount of the impairment loss. The affected loans are written down only when all the necessary procedures have been completed and the amount of the loss has been determined. If, in a subsequent period, the amount of an impairment decreases and the decrease can be objectively related to an event occurring after the initial write-down, then the previously recognised impairment loss is reversed. Reversal of an impairment is recognised in the provision and in the income statement. Amounts subsequently collected after having been written off are credited to the income statement in Impairment of financial assets.

A collective credit loss provision is also formed for the loans and receivables. This collective provision relates to the expectation of losses in the earnings portfolio that have already been incurred but which have not yet been identified in the original assessments of credit losses or have been identified but have not resulted in raising an individual provision. The methodology for determining the amount of the provision is based on the probability of default, exposure at default and the loss identification period.

The methodology and the assumptions used in estimating future cash flows are regularly evaluated in order to reduce variances between estimated and actual losses.


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HEDGE ACCOUNTINGBased on the risk appetite, BinckBank decided to mitigate the interest rate risk of the balance sheet by entering into interest rate swaps. In this respect BinckBank applies hedge accounting. Within the hedge relationship, the interest rate swaps are designated as hedging instruments and certain cashflows of the mortgage receivables as hedged instrument. BinckBank determines and documents the hedge relationship at inception of the hedge. Furthermore BinckBank assesses hedge effectiveness both at inception and on continuous basis.

The change in valuation of the hedging instrument and of the hedged item are recognised in the income statement. When the hedge relationship is effective applying hedge accounting will result in an offsetting revaluation of the both instruments. As a result the ineffective part of the hedge remains reflected as result financial instruments in the income statement. The fair value hedge adjustment on the hedged item is presented on balance and is amortised during the weighted average tenor of the hedging instruments.

SECURITIES LENDING TRANSACTIONSSecurities lending and borrowing transactions are usually collateralised by securities or cash. The related securities in the borrowing or lending transaction are not recognised (borrowing transactions) or derecognised (lending transactions) on the balance sheet. The collateral received or paid as securities is not recognised respectively derecognised on the balance sheet. Collateral received or paid as cash is recognised in the balance sheet as cash advanced (included in due from banks and loans) or received (due to banks or due to customers). Interest received or paid are recognised on an effective interest basis and recorded as interest income or interest expense.

DERECOGNITION OF FINANCIAL ASSETS AND LIABILITIES A financial asset (or, when applicable, a component of a financial asset or part of a group of similar financial assets) is no longer recognised in the balance sheet if:

• BinckBank ceases to have a right to the cash flows from the asset; or• BinckBank retains the right to receive the cash flows from the asset but has entered into an obligation to pay them

to a third party in their entirety and without significant delay under the terms of a specific contract; and • BinckBank has transferred its rights to receive the cash flows from the asset and has either (a) largely transferred all

risks and rewards of ownership of the asset or (b) not largely transferred all risks and rewards of ownership of the asset, or retained them fully, but has transferred control of the asset.

If BinckBank has transferred its rights to receive the cash flows from an asset but has not largely transferred all risks and rewards of ownership of the asset or retained them fully and has not transferred control of the asset, that asset continues to be recognised for as long as BinckBank remains involved with the asset. Financial liabilities cease to be recognised in the balance sheet as soon as the performance relating to the obligation has been completed or the obligation has been removed or has expired.


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4.3 ACQUISITIONS AND GOODWILLAll acquisitions are accounted for using the acquisition method. The identifiable assets, equity, and liabilities of the acquired company or activities are recognised at fair value. Transaction costs associated with an acquisition are recognised directly in the income statement.

BinckBank measures the value of the identifiable intangible assets acquired through the acquisition of a company or business activities. The measurement is performed using cash flow models and/or royalty models. BinckBank makes assumptions and projections of future revenues and results in order to arrive at the cash flows and also determines the applicable discount rate. When the royalty method is used, an estimate is also made of the appropriate royalty percentage. Earn-out arrangements may be agreed as part of business acquisitions. BinckBank makes an estimate of the earn-out payments on the basis of the expected future results of the acquired companies or activities. These earn-out payments form part of the price paid for the acquired company or activities. An annual assessment is made to determine whether the earn-out obligation should be adjusted in the light of any changes to the development of the results. Adjustments to the earn-out calculations after completion of the acquisition are recognised directly in the income statement.

On initial recognition, goodwill acquired in a combination is measured as the difference between the acquisition price of the business combination and BinckBank’s share of the net fair value of the acquired company’s identifiable assets, liabilities, and contingent liabilities, if positive. Subsequently, goodwill is carried at cost less any cumulative impairment losses. A negative difference between acquisition price and fair value is expensed immediately. Adjustments to the fair value of acquired assets, equity, and liabilities measured at the time of acquisition that are identified before the end of the first reporting period after the business combination result in an adjustment of the goodwill. Adjustments identified at a later date are recognised in the income statement as either profit or loss. In the balance sheet, the goodwill is presented in the category intangible assets.

Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. For this impairment test, goodwill acquired in a business combination is allocated from the acquisition date to BinckBank’s cash-generating units or groups of cash-generating units that are expected to benefit from the synergy of the business combination. An impairment is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. If the recoverable amount is lower than the carrying amount, an impairment is recognised. Impairment of goodwill is not reversed.

A third-party interest in the acquired company is measured at either the fair value on the acquisition date or the proportional share in the identifiable assets and liabilities of the acquired company or activities.

Gains and losses on the disposal of a company or activity are measured as the difference between the proceeds from disposal and the carrying amount of the company or activity, including goodwill and currency translation reserve.

4.4 CASH AND CASH EQUIVALENTSCash and cash equivalents in the statement of financial position consists of cash, balances at other banks and short-term deposits (call money) with original maturities of three months or less that are readily convertible into known amounts of cash and on which there is a negligible impairment risk.

4.5 ASSOCIATESAssociates are entities in which BinckBank generally holds between 20% and 50% of the voting rights or in which BinckBank is able to exercise significant influence in some other way but over which BinckBank does not have control. Investments in associates are accounted for using the equity method.

The item includes goodwill paid on acquisition, less any cumulative impairment losses. Under the equity method, BinckBank’s share in the results of the associate is reported in BinckBank’s income statement as share in the results of associates. BinckBank’s share in changes in the reserves of an associate is recognised directly in BinckBank’s equity. The carrying amount of the investment is adjusted for the reported results and changes in reserves. When the carrying amount of the investment in an associate falls to nil, no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate. Where necessary, the accounting principles of associates are adjusted in order to ensure consistency with those of BinckBank.


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4.6 INTANGIBLE ASSETSIntangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less cumulative amortisation and any cumulative impairments.

Intangible assets are determined as having either a finite or an indefinite useful life. Intangible assets with a finite useful life are amortised over the useful life and tested for impairment if there are indications that an intangible asset may be impaired. The useful lives of the intangible assets are assessed annually and adjusted if there has been a change. Amortisation of intangible assets with a finite useful life is presented in the income statement under depreciation and amortisation.

Intangible assets with an indefinite useful life are subjected to an annual impairment test, either individually or at the level of the cash-generating unit. These intangible assets are not amortised. The useful life of an intangible asset with an indefinite useful life is reassessed annually, including an assessment of whether the indefinite useful life is still justifiable.

4.7 PROPERTY, PLANT, AND EQUIPMENTProperty for own use is carried at historical cost less cumulative depreciation and impairments. All other assets recognised in the balance sheet as plant and equipment are carried at historical cost less cumulative depreciation and any impairments. Property, plant, and equipment are subject to straight-line depreciation on the basis of useful life, taking account of the residual value. The expected useful life is:

The expected useful life is:

Property (own use) 50 years

Computer hardware 5 years

Fixtures, fittings and equipment 5-10 years

Other fixed assets 5 years

When an asset consists of various ‘components’ with different useful lives and/or different residual values then the asset is divided into these components and depreciation is applied separately. Useful life and residual value are assessed annually. When it emerges that the estimated values differ from previous estimates then the values are adjusted. When the carrying amount of an asset is higher than the estimated recoverable amount, then an impairment is recognised which is charged to the income statement. Results on the sale of property, plant, and equipment, being the difference between the sale proceeds and the carrying amount, are recognised in the income statement in the period in which the sale occurred. Repair and maintenance costs are charged to the income statement in the period to which they relate. The costs of significant renovations are capitalised when it is probable that additional future benefits will be realised from the existing asset. Significant renovations are written off on the basis of the remaining useful life of the asset concerned. Leasehold prepayments (operational lease) are recognised in investments in real estate. Amortisation of the leasehold is applied on a linear basis over the remaining life to maturity.

4.8 TAXCURRENT TA XCurrent tax relates to immediately payable and offsettable tax assets and liabilities for current and prior years. These are carried at the amount expected to be claimed from or paid to the relevant tax authorities. The tax amount is computed on the basis of enacted tax rates and applicable tax legislation.


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DEFERRED TA XDeferred tax liabilities are recognised on the basis of the temporary differences, at the balance sheet date, between the tax base of assets and liabilities and their carrying amount in these financial statements.Deferred tax liabilities are recognised for all taxable temporary differences except:

• when the deferred tax liability arises on the initial recognition of goodwill or the initial recognition of an asset or a liability in a transaction that is not a business combination and does not affect the operating profit before tax or the taxable profit;

• when taxable temporary differences are related to investments in subsidiaries and associates whereby BinckBank is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, unused tax facilities and unused tax loss carry forwards when it is probable that taxable profits will be available against which the deferred tax asset can be utilised, enabling the deductible temporary differences, unused tax facilities, and unused tax loss carry forwards to be used.

The carrying amount of the deferred tax assets is assessed at the balance sheet date and reduced to the extent that it is not probable that sufficient taxable profits will be available against which some or all of the deferred tax asset can be utilised. Unrecognised deferred tax assets are reassessed at the balance sheet date and recognised to the extent that it is probable that taxable profits will be available in the future against which the deferred tax asset can be utilised.

Deferred tax assets and liabilities are carried at amounts measured at the tax rates expected to be applicable to the period in which the asset is realised or the liability is settled, based on enacted tax rates and applicable tax law. The tax on items recognised directly in equity is accounted for directly in equity instead of in the income statement. Deferred tax assets and liabilities are presented as a net amount if there is a legally enforceable right to set off deferred tax assets against deferred tax liabilities and the deferred tax is related to the same taxable entity and the same tax authority.

4.9 IMPAIRMENT OF NON-FINANCIAL ASSETSThe carrying amount of BinckBank’s assets is assessed at each balance sheet date to determine whether there are indications for impairment. If so, the recoverable amount of the asset is estimated. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. An impairment is recognised when the carrying amount of an asset exceeds the recoverable amount.

4.10 FUNDS ENTRUSTEDThe funds entrusted comprise savings deposits, deposits available on demand and other balances. These are measured at fair value on initial recognition, including transaction costs. They are subsequently carried at amortised cost. Any difference between the proceeds and the redemption value, calculated using the effective interest method, is recognised in the income statement under the interest expense item.

4.11 PROVISIONSA provision is recognised if:

• BinckBank has a present legal or constructive obligation as a result of a past event;• it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and• a reliable estimate can be made of the amount of the obligation.

When it is expected that some or all of a provision will be reimbursed then this reimbursement is recognised as a separate asset only when this reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement. When the effect of the time value of money is material then the provisions are discounted at a rate, before tax, that reflects, when necessary, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.


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4.12 PENSIONSBinckBank operates a pension plan for its executive board and employees based on a defined contribution scheme. In a defined contribution scheme, a percentage of the employee’s fixed salary is paid as contribution to a pension insurer. The percentage payable is age-related. The pension contributions are recognised in the year to which they relate.

4.13 TREASURY SHARESEquity instruments which are reacquired (treasury shares) are deducted from equity at the acquisition price including transaction costs. Gains or losses on the purchase, sale, issue or withdrawal of BinckBank’s own equity instruments are not recognised in the income statement.

4.14 COMMITMENTS AND CONTINGENT LIABILITIESLiabilities with a potential credit risk are recognised under this item.

CONTINGENT LIABILITIESContingent liabilities are liabilities that are not recognised in the balance sheet because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within BinckBank’s control. The maximum potential credit risk associated with these contingent liabilities faced by BinckBank is disclosed in the notes. In estimating the maximum potential credit risk, it is assumed that all counterparties default on their contractual obligations and all assets provided by way of collateral are without value.

IRREVOCABLE FACILITIESIrrevocable facilities are unused credit facilities and all other obligations pursuant to irrevocable commitments that can result in the extension of loans.

4.15 LEASINGLease contracts whereby the risks and benefits relating to the right of ownership are held to a significant extent by the lessor are designated as operating leases. Lease payments made in the capacity of lessee in relation to operating leases are applied to the result during the lease period, after deduction of any premiums received from the lessor. BinckBank is only involved in operational lease contracts as a lessee.

4.16 GENERAL PRINCIPLE FOR RECOGNITION AND MEASUREMENT OF INCOME AND EXPENSESIncome and expense items are recognised in the period to which they relate, having due regard to the above accounting principles. Revenues are recognised if it is probable that their economic benefits will flow to BinckBank and the revenue can be reliably measured.

4.17 INTEREST INCOME AND EXPENSESInterest income consists of the interest on monetary financial assets attributable to the period. Interest on financial assets is measured using the effective interest method based on the actual acquisition price. The effective interest method is based on the expected cash flows, taking account of the risk of early redemption of the underlying financial instrument and the direct costs and revenues, such as the transaction costs charged and any discount or premium. When the risk of early redemption cannot be measured with sufficient reliability, then BinckBank adopts the cash flows during the entire term to maturity of the financial instruments. Interest income on financial assets subject to impairment which have been written down to the estimated recoverable value or fair value are subsequently recognised on the basis of the interest rate used to measure the recoverable value by discounting the future cash flows.

Interest expense consists of the interest expense on all financial obligations and is measured on the basis of the effective interest method. This includes also negative interest paid on financial assets.

4.18 FEE AND COMMISSION INCOME AND EXPENSECommission income comprises payments, excluding interest, received or receivable from third parties, whether on a non-recurring or more regular basis, in respect of brokerage, asset management, and other services.

Commission expense comprises payments, excluding interest, paid or payable to third parties, respectively, whether on a non-recurring or more regular basis, in respect of brokerage, asset management, and other services.


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4.19 OTHER INCOMEOther income comprises amounts not classified under other income items.

4.20 RESULT FROM FINANCIAL INSTRUMENTSThe result from financial instruments concerns the results from derivatives and financial assets and liabilities recognised at fair value through profit and loss. The result consists of the changes in value of these financial instruments attributable to the period. Furthermore the result financial instruments includes the ineffective part of the hedge relationship.

4.21 EMPLOYEE BENEFITSThe employee expenses contain the salaries, pension costs, social security contributions and other employee expenses, such as expenses for share based payments.

Employees can be eligible for share based payments. The expenses of these transaction with employees settled in own equity instruments are based on the fair value as of the date they are awarded. The fair value is based on the underlying price of the share as at the date they are awarded. The expenses of the transactions settled in own equity instruments, having a corresponding adjustment in equity, are allocated to the period in which the conditions relating to the performance obligations are fulfilled. The conditional shares of the program are recognised at their fair value, taking into account the missed dividends and lock-up period.

The payment of the variable performance pay in cash to the executive board and Identified Staff is made after expiry of the remuneration year and in the three succeeding years. Accrual for the current liability and the non-current cash liability is formed for the estimated liabilities accumulated for performances delivered until the balance sheet date.

4.22 SHARE IN RESULTS OF ASSOCIATESThis concerns BinckBank’s share in the results and impairment, where relevant, of its associates. When the carrying amount of the investment in an associate falls to nil no further losses are recognised unless BinckBank has accepted liabilities on behalf of the associate concerned or has already made payments on behalf of the associate.

4.23 TAXTax is recognised in the income statement unless the tax relates to items recognised directly in equity, in which case the tax is recognised in the unrealised results and directly in equity respectively.

4.24 EARNINGS PER ORDINARY SHAREThe earnings per ordinary share are calculated on the basis of the weighted average number of outstanding ordinary shares. The following considerations are taken into account in the calculation of the weighted average number of outstanding ordinary shares:

• The total number of ordinary shares issued is reduced by the treasury shares held by group companies;• The calculation is based on daily averages.

The diluted earnings per ordinary share are calculated by adjusting the weighted average number of shares during the period for potential dilution, for example due to outstanding option entitlements. The conditionally allocated shares arising from share-based payments are not entitled to dividend and are only included in the calculation of the earnings per share at the time they become unconditional.

4.25 STATEMENT OF CASH FLOWSThe statement of cash flows has been prepared using the indirect method, in which cash flows are analysed according to operating, investing and financing activities. In the cash flow from operating activities, the net result is adjusted for income and expenses that have not resulted in receipts and expenditures in the same financial year and for changes in provisions and suspense items. Cash includes the cash in hand together with freely available balances on deposit at central banks and other financial instruments with maturities of less than three months from the date of acquisition. Cash flows in foreign currency are translated into the functional currency at the exchange rate prevailing on the date the cash flow occurs.


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5. Acquisition PritleOn 3 April 2017, BinckBank acquired Pritle in an asset and liability transaction. The takeover of this robo-advisor has given BinckBank a channel to meet a growing customer need and accelerates the rollout of the BinckBank strategy.

Effective 3 April, BinckBank has acquired control of the Pritle activities, and as a result the assets, liabilities, and results are consolidated into BinckBank’s financial figures as from that date. The contribution to revenue and the result from the activities for the period up to 31 December 2017 after the takeover is not significant, and is not presented separately.

The final purchase price for Pritle, € 12.0 million, was financed in cash (€ 6.5 million), € 1.0 million in deferred payment, and an issue of 957,121 BinckBank shares. The direct transaction-related costs are fully accounted for in the income statement. The deferred payment is based on a number of conditions that the management of Pritle must meet which are linked to Pritle’s operational integration. There are no other additional conditions for the purchase price, and no off-balance sheet exposures were transferred.

The following assumptions have been used in the measurement of the fair value of the assets and liabilities acquired:• The identified intangible assets acquired have been measured at fair value for BinckBank. The identified assets are the

software developed in-house. This has been measured based on the cost-price method, by which the fair value is approximated by determining the costs that would be involved in developing the software from scratch.

• The fair value for BinckBank of the acquired existing assets and liabilities has, in view of the low value and the nature of the assets and liabilities, been set at the book value at acquisition.

The fair value of the identifiable assets and liabilities and the goodwill as of the takeover date was the following:

ACQUISITION PRITLE (amounts in € 000’s) Fair value

Property, plant and equipment - hardware and fixtures, fittings and equipment 40

Intangable assets - software 3,000

Other assets - garantee capital Foundation 125

Accruals and deferred income - short term liabilities (114)

Fair value of the identified assets and liabilities 3,051

Acquisition price 12,034

Goodwill 8,983

The goodwill on the acquisition of Pritle has been assigned to the cash flow-generating unit Retail Netherlands.We expect the entire amount of goodwill from the asset and liability transaction to be deductible from corporation tax. The difference between the commercial and fiscal amortisation of goodwill over time will result in a deferred tax liability.


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NOTES TO THE CONSOLIDATED STATEMENT OF FINANCIAL POSITION

(amounts in € 000’s) 31 December 2017 31 December 2016

6. CASH AND BALANCES AT CENTRAL BANKS 1,003,673 854,230

This item includes all cash in legal tender, including bank notes and coins in foreign currency, and any credit balances available on demand from the central banks in countries where BinckBank has offices and the European Central Bank.

7. BANKS

Bank balances 133,968 127,755

This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.

This item comprises:

Balances available on demand 101,376 94,541

Call money 33 44

Mandatory reserve deposits 32,559 29,038

Receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank - 4,132

133,968 127,755

The call money receivables have original maturities of less than three months. Interest is received on these balances at a variable rate based on market rates. The interest received on the credit balances available on demand are based on floating rates retrieved from market rates. The mandatory reserve deposits at central banks are not free on demand. The fair value of the bank balances does not significantly differ from the carrying value due to the short term nature of the related assets.

Due to banks 2,538 2,017

The fair value of the bank balances does not significantly differ from the carrying value due to the short term nature of the related liabilities.


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8. DERIVATIVES

Derivatives receivables 37,418 20,393

Derivatives held for hedge accounting purposes

Interest rate swaps 381 -

Other derivatives

Turbos 36,912 20,330

Other 125 63

37,037 20,393

Derivatives liabilities 37,055 20,428

Derivatives held for hedge accounting purposes


Other derivatives

Turbos 36,928 20,351

Other 99 77

37,027 20,428

BinckBank entered into interest rate swaps to manage the interest rate risk of the balance sheet. The notional value of the swaps BinckBank entered into is € 96 million (2016: nil). As at 31 December 2017, the margin received as collateral on the interest rate swaps is € 246 thousand. All interest rate swaps are part of a hedge relationship for which fair value hedge accounting is applied.

BinckBank issues turbos under its own name to customers. The price risk on an issued turbo position is hedged economically by purchasing a turbo with identical conditions from a third party. The difference in the market value of the purchased and issued turbos is due to the use of a different discount rate for the credit value adjustment (CVA) for BinckBank on the counterparty and for the customer on BinckBank.

9. FINANCIAL ASSETS AND LIABILITIES DESIGNATED AT FAIR VALUE THROUGH PROFIT AND LOSS

Financial assets designated at fair value through profit and loss 16,613 9,499

Financial liabilities designated at fair value through profit and loss 231 1,018


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10. AVAILABLE-FOR-SALE FINANCIAL ASSETS 787,743 724,398


Government bonds/government-guaranteed bonds 33,865 57,002

Other bonds 753,878 667,396

787,743 724,398

This item comprises a portfolio of interest-bearing securities with less than 4.5 years to maturity. At year-end 2017, the effective yield on this portfolio was 0.25% (2016: 0.41%).

Movements in available-for-sale financial assets were:

Amortised cost as at 1 January 723,097 1,165,178

Redemptions (248,125) (667,549)

Sales - (15,066)

Purchases 334,023 254,720

Foreign currency conversion (9,156) 2,801

Amortisation of premiums/discounts (12,752) (16,987)

Amortised cost as at 31 December 787,087 723,097

Revaluation at 31 December 656 1,301

Balance sheet value as at 31 December 787,743 724,398

11. HELD-TO-MATURITY FINANCIAL ASSETS 340,179 790,021



Other bonds 82,335 274,558

340,179 790,021

BinckBank holds a portfolio held-to-maturity financial assets. The purpose of this portfolio is mainly to collect cash flows from interest and redemptions. This item comprises a portfolio of interest-bearing securities with less than 4.5 years to maturity. At year-end 2017, the effective yield on this portfolio was 0.56% (2016: 0.45%)

Movements in held-to-maturity financial assets were:

Amortised cost as at 1 January 790,021 813,484

Redemptions (499,607) (125,959)

Purchases 74,558 106,018

Foreign currency conversion (19,599) 6,906

Amortisation of premiums/discounts (5,194) (10,428)

Amortised cost as at 31 December 340,179 790,021


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12. LOANS AND RECEIVABLES 1,297,830 958,329


Collateralised by securities 558,796 433,181

Collateralised by bank guarantees 2,739 4,563

Collateralised by residential property 736,738 520,676

Fair valued adjustment hedge accounting (280) -

Other receivables 508 484

Loans and receivables, gross 1,298,501 958,904

Less: impairment provision (671) (575)

1,297,830 958,329

The receivables covered by securities and bank guarantees contain loans collateralised by securities. The interest rate on these loans is based on EURIBOR or EONIA, whereby a minimum interest rate is applicable.

BinckBank invests in Dutch residential mortgages. The portfolio comprises variable interest terms and fixed interest terms for periods between one month and thirty years. Part of the mortgage portfolio falls under the National Mortgage Guarantee Scheme (NHG) and amounts per 31 December 2017 to € 318 million (31 December 2016: € 221 million). The interest rates for the mortgage portfolio range from 1.3% to 6.4%.

The movement in the provision for impairments on loans and receivables is as follows:

Movement provision for impairments were:

Balance as at 1 January 575 461

Additions 163 212

Recoveries (67) (96)

Write-offs - (2)

Balance as at 31 December 671 575

The impairments provisions are calculated on an individual and collective basis.


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13. ASSOCIATES 485 -

This refers to the investment in the holding in TOM Holding N.V.

The changes in this item are as follows:

Balance as at 1 January - 1,227

Capital increases and acquisitions 1,504 1,594

Impairment associates 227 (1,744)

Results of associates (1,246) (1,077)

Balance as at 31 December 485 -

In 2017 TOM Holding N.V. wound down its services and terminated its activities and subsequently the board and shareholders decided to liquidate the company. BinckBank paid a capital contribution to facilitate the orderly liquidation of the entity. Any residual value after liquidation will be paid proportionally to the shareholders, including BinckBank. The value of the associate relates to the estimate of the amount to be received. BinckBank will retain her share, until the liquidation is fully completed.


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14. INTANGIBLE ASSETS 157,950 168,260

The movements in 2017 were as follows:

Brand name

Customer deposits

Customer base Software Goodwill Total

Balance as at 1 January 2017 175 8,409 13,431 1,363 144,882 168,260

Investments - - - 3,738 8,983 12,721

Disposals – cost (31,405) (84,095) (131,058) (4,139) - (250,697)

Disposals – cumulative amortisation 31,405 84,095 131,058 4,016 - 250,574

Amortisation (70) (8,409) (13,236) (1,193) - (22,908)

Balance as at 31 December 2017 105 - 195 3,785 153,865 157,950

Cumulative cost 350 - 650 10,696 153,865 165,561

Cumulative amortisation and impairment (245) - (455) (6,911) - (7,611)


Amortisation period (years) 5 10 5 - 10 5


Brand name

Customer deposits



Investments - - - 386 - 386

Disposals – cost - - - (68) - (68)

Disposals – cumulative amortisation - - - 68 - 68

Amortisation (70) (8,410) (13,243) (963) - (22,686)

Balance as at 31 December 2016 175 8,409 13,431 1,363 144,882 168,260

Cumulative cost 31,755 84,095 131,708 11,097 144,882 403,537

Cumulative amortisation and impairment (31,580) (75,686) (118,277) (9,734) - (235,277)




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The items ‘Brand name’, ‘Customer deposits’ and ‘Customer base’ arise from the acquisition of activities. Software comprises purchased software licences as well as software obtained with acquisitions of activities.

The goodwill item relates to the excess of the price paid to acquire the operations over the fair value of the identifiable assets and liabilities.

GOODWILL IMPAIRMENT TESTThe goodwill shown in the statement of financial position has been allocated entirely to the cash-generating unit Retail Nederland. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount might be impaired. An impairment is measured by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. The recoverable amount is an asset’s net selling price or its value in use, whichever is higher. An impairment is recognised if the recoverable amount is lower than the carrying amount. The net realisable value is only included in the assessment if a reliable estimate can be made of the price at which a transaction could be concluded between parties in the current market circumstances. In order to estimate the value in use, BinckBank estimates the expected future cash flows from the cash-generating unit and determines an appropriate discount rate to calculate the net present value of those cash flows.

The recoverable amount of the cash-generating units is based on the value in use. Cash flow projections over a five-year period have been used, based on financial estimates used by the management to set targets. Cash flows beyond the five-year period have been extrapolated using a growth rate of 2.0 % (2016: 1.6%). Management has compared the principal assumptions against market estimates and market expectations.

The following assumptions have been used:

Assumptions in calculation of value in use of the cash generating unit Retail NL 2017 2016

Discount rate 10.50% 9.96%

Expected growth rate after projection period 2.0% 1.6%

GOODWILL RELATING TO RETAIL NEDERLANDThe principal assumptions used by management in arriving at the cash flow projections for the purposes of the goodwill impairment test were:

• The natural attrition rate and inflow of new private investors based on the trends of the past five years and the budget, including a multi-year forecast, respectively. The estimated growth in the number of customers is reflected in the expected numbers of transactions and the entrusted and placed funds;

• The interest margin based on the actual interest margin achieved over the past year, allowing for the long-term effect of low interest rate;

• Commission income and expense, based on the expected average number of transactions and the average commission income and expense per transaction. The average income, expense and number of transactions are based on the identified trends in the previous year.

The impairment test of 2017 showed a decrease in the value in use, mainly due to a decline in the expected commission income. The results from the test did not give cause to the recognition of an impairment and the derived market value was 111% higher than the carrying amount of the Retail Nederland cash generating unit (2016: 115%).

As at 31 December 2017, there were no changes in the circumstances with respect to the impairment test, as carried out in the fourth quarter, which would give rise to new insights, which could result in an impairment.

IMPAIRMENT TESTING OF OTHER INTANGIBLE ASSETSThe other categories of intangible assets are tested annually or more frequently if events or changes in circumstances indicate that the carrying amount, less applicable annual amortisation, may have suffered an impairment. As of yearend 2017 the other intangible assets were almost fully amortised and there is no indication of any impairment.


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15. PROPERTY, PLANT AND EQUIPMENT 33,969 35,128


Real estate

Fixtures, fittings and equipment

Computer hardware Other Total

Balance as at 1 January 2017 25,821 3,422 5,844 41 35,128

Investments - 991 2,827 - 3,818

Disposals – cost - (969) (8,862) - (9,831)

Disposals – cumulative depreciation - 477 8,261 - 8,738

Depreciation (619) (1,066) (2,193) (6) (3,884)

Balance as at 31 December 2017 25,202 2,855 5,877 35 33,969

Cumulative cost 29,827 10,314 12,520 60 52,721

Cumulative depreciation and impairment (4,625) (7,459) (6,643) (25) (18,752)


Depreciation period (years) 50 5 - 10 5 5

The movements in 2016 are were follows:

Real estate




Investments - 361 3,466 - 3,827

Disposals – cost - (14) (10,455) - (10,469)


Depreciation (618) (1,023) (1,881) (7) (3,529)


Cumulative cost 29,827 10,292 18,555 60 58,734



Depreciation period (years) 50 5 - 10 5 5


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In 2012 BinckBank engaged an accredited appraiser to produce a valuation report of the real estate. The result of the valuation did not materially differ from the carrying amount, and gave no indication of impairment. Developments in the Dutch offices market in 2012-2017 gave no reason to revise this assessment.

The investment in real estate includes prepayments in relation to a leasehold (operating lease) that expires on 15 April 2056. In 2017, an amount of €256 thousand in relation to amortisation of the leasehold has been recognised under depreciation and amortisation (2016: €256 thousand).


16. CURRENT TAX

Current tax assets 16,725 12,270

The balance at year-end relates to the last two financial years.

Current tax liabilities (10) (10)

The reconciliation of the effective tax rate with the tax rate applicable to the consolidated financial statements is as follows:

2017Amount

2017Percentage

2016Amount

2016Percentage

Standard tax rate 2,062 25.0% 1,689 25.0%

Effect of different tax rates (in other countries) 66 0.8% 45 0.7%

Effect of substantial-holding exemptions (216) -2.6% 705 10.4%


Other effects 70 0.9% (150) -2.2%

Total tax expense (274) -3.3% 2,134 31.6%

The effect of tax facilities includes the benefits arising from the agreement BinckBank and subsidiaries have reached with the Dutch Tax and Customs Administration on the application of the Innovation Box. In addition the tax facilities includes a liquidation loss as a result of cumulative losses of the subsidiary TOM Holding N.V. After the completion of the liquidation, this loss will be deducted from the fiscal result before tax of BinckBank N.V. It is expected the liquidation of TOM Holding N.V. will be completed in 2018.

We refer to the section regarding the tax policy in the report of the executive board, for further details on the fiscal policy and fiscal matters.


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17. DEFERRED TAX

Deferred tax receivables 6,371 1,048

Deferred tax liabilities (36,443) (31,982)

Total asset/(liability) (30,072) (30,934)

Maturity of deferred tax receivables:

Within one year 6,371 134

Between 1 and 5 years - 914

Longer than five years - -

6,371 1,048

Maturity of deferred tax liabilities:

Within one year (164) 461

Between 1 and 5 years (352) (232)

Longer than five years (35,927) (32,211)

(36,443) (31,982)

(amounts in € 000’s) 1 January 2017

Movement via income statement

Movement via balance

sheet31 December

2017

Origin of deferred tax assets and liabilities

Compensating losses 1,048 1,900 - 2,948

Liquidation loss associates - 3,288 - 3,288

Available-for-sale financial assets (280) - 116 (164)

Goodwill and intangible assets (31,492) 117 (4,601) (35,976)

Depreciation period differences for fixed assets (625) (22) 158 (489)

Temporary differences as a result of intercompany transactions 465 (233) - 232

Other (50) (8) 55 (3)

Total deferred tax (30,934) 5,042 (4,272) (30,164)


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1 January 2016

Movement via income statement

Movement via balance

sheet31 December

2016

Origin of deferred tax assets and liabilities

Compensating losses 1,121 (73) - 1,048

Liquidation loss associates - - - -

Available-for-sale financial assets (418) - 138 (280)

Goodwill and intangible assets (27,177) 117 (4,432) (31,492)

Depreciation period differences for fixed assets (879) (41) 295 (625)

Temporary differences as a result of intercompany transactions 697 (232) - 465

Other (97) (8) 55 (50)

Total deferred tax (26,753) (237) (3,944) (30,934)

The tax losses carried forward at the end of 2017 pertain to the deferred tax claim for compensating losses of BinckBank N.V. The expectation is that in the tax calculation the full amount of compensating losses can be offset against positive results in the coming years.

The liquidation loss of subsidiaries refers to the cumulative losses in the associate TOM Holding N.V. which after the completion of the liquidation will be deducted from the fiscal result of BinckBank N.V. It is expected the liquidation of TOM Holding N.V. will be completed in 2018.

Available-for-sale financial assets relates to the deferred tax on unrealised gains resulting from the revaluation of the investment portfolio.

Goodwill and intangible assets in the deferred tax liabilities relate to the differences between the commercial and fiscal amortisation of the goodwill and intangible assets acquired in acquisitions of Alex, Fundcoach and Pritle.

The depreciation period differences for fixed assets relate to factors including accelerated tax depreciation on certain investments in fixed assets in the years 2010 and 2011.

The temporary differences as a result of intercompany transactions originated from eliminated consolidated transactions, where the current tax in the different tax entities is recorded at different times over a period of several years.


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18. OTHER ASSETS 58,754 63,451


Trade receivables 483 2,230

Receivables relating to securities sold but not yet delivered 47,362 33,716

Cash flows to be settled – mortgage receivables 5,926 21,188

Other receivables 4,983 6,317

58,754 63,451

All these receivables have a remaining maturity of less than one year. The item receivables arising from securities sold but not yet delivered can fluctuate on a daily basis in line with movements in the market and the total size of the number of transactions.

19. PREPAYMENTS AND ACCRUED INCOME 32,475 35,479


Interest receivable 17,029 20,538

Commission receivable 7,484 7,420

Other prepayments and accrued income 7,962 7,521

32,475 35,479

The commission receivable item comprises the regular commissions as well as performance-related fees. The other prepayments and accrued income item relate primarily to prepaid IT maintenance contracts and other service related contracts.

20. FUNDS ENTRUSTED 3,383,383 3,308,829


Demand deposits in savings accounts 219,707 227,897

Demand deposits in current accounts 3,163,676 3,069,339

Granted credit facilities (building deposits) - 11,593

3,383,383 3,308,829

Starting 2017, the building deposits, initially reflected in the granted credit facilities have been classified as part of the loans and receivables. This presentation provides better insight in the nature and contractual relationship of the item.


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21. PROVISIONS 8,134 8,891


Provisions legal claims 7,248 8,891

Other provisions 886 -

8,134 8,891

The movement in the provisions for legal claims was as follows:

Balance as at 1 January 8,891 7,884

Additions through profit and loss 1,443 3,375

Utilised (2,994) (1,317)

Unused amounts reversed (92) (1,051)

Balance as at 31 December 7,248 8,891

The provision is an estimate of the potential loss for BinckBank as a result of legal proceedings instituted against BinckBank.

The operations of BinckBank take place in an environment that is regulated by legislation and supervision which exposes the organisation to significant legal processes and associated risks arising from disputes and regulatory requirements. BinckBank can therefore be involved in various disputes and legal proceedings. The results of these proceedings are often uncertain and difficult to predict. These uncertainties affect the amount and timing of potential cash outflow, and thereby on the measurement of a provision. BinckBank is in part dependent on the services of third parties for the settlement of legal disputes. BinckBank does not give any further explanation for the disputes being heard provision to avoid influencing the proceedings.

The movement in the other provisions was as follows:

Balance as at 1 January - -

Additions through profit and loss 886 -

Balance as at 31 December 886 -

The other provisions comprise a provision for onerous contracts. BinckBank expects that the future economic benefits do not compensate the expenses related to these contracts. The remaining duration of the provision for onerous contracts is less than 2 years.


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22. OTHER LIABILITIES 52,084 19,841


Liabilities in respect of securities transactions not yet settled 39,369 10,692

Tax and social security contributions 3,681 3,097

Trade payables 3,740 2,426

Other liabilities 5,294 3,626

52,084 19,841

The item liabilities in respect of securities transactions not yet settled can fluctuate on a daily basis in line with movements in the market and the total number of transactions.

23. ACCRUALS AND DEFERRED INCOME 9,294 10,293


Accrued interest 367 338

Employee expenses 5,533 5,390

Other accruals and deferred income 3,394 4,565

9,294 10,293

The employee expenses item includes accruals for holiday allowance, unused holiday leave and performance-related remuneration.


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24. EQUITY 394,889 396,952


Issued share capital 6,750 7,100

Share premium reserve 343,565 361,379

Treasury shares (4,282) (29,468)

Fair value reserve 492 1,021

Retained earnings 47,431 55,537

Non-controlling interests 933 1,383

394,889 396,952


Number Amount Number Amount

Balance as at 1 January 71.000.000 7.100 71.000.000 7.100

Cancelled treasury shares (3.500.000) (350) - -

Balance as at 31 December 67.500.000 6.750 71.000.000 7.100

A total of 67,500,000 share were in issue, each with a nominal value of € 0.10. The share capital is fully paid up.Stichting Prioriteit Binck holds 50 priority shares, each with a nominal value of € 0.10.



Cancelled treasury shares (17,814) -


The share premium is exempt from tax and freelydistributable.



Balance as at 1 January 5,281,525 (29,468) 719,277 (4,979)

Share buy-back - - 4,632,720 (24,950)

Issued to executive board and employees (56,985) 318 (70,472) 461

Issued to third parties (957,121) 5,340 - -

Cancelled treasury shares (3,500,000) 19,528 - -

Balance as at 31 December 767,419 (4,282) 5,281,525 (29,468)

At the end of 2017, the carrying amounts of the treasury shares was measured at the average purchase price of € 5.58. The movements in the amounts of treasury shares purchased and sold are recognised under equity. At the end of 2016 the quoted share price was € 4.43 (2016: € 5.50).


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Fair value reserve 492 1,021

The reserve comprises the fair value gains and losses, after tax, on available-for-sale financial assets.


Unrealised profits 1,432 1,906

Unrealised losses (776) (605)

Tax on unrealised profits and losses (164) (280)

492 1,021

The movements in the fair value reserve were as follows:


Movement in fair value (645) (708)

Realised revaluation through the income statement - 66

Tax on the movement in fair value 116 137

Balance as at 31 December 492 1,021

This reserve comprises the movement in fair value of the available-for-sale financial assets, net of taxes.



Payment of final dividend (12,679) (17,199)

Payment of interim dividend (2,002) (2,657)

Grant of rights to shares 92 162

Shares granted to executive board and employees (318) (461)

Shares issued to third parties (806) -

Cancelled treasury shares (1,364) -

Result for the year 8,971 4,534




Result attributable to non-controlling interests (450) 87


BinckBank has a primary preference relating to the non-controlling interest on certain retained reserves up to an amount of €1.1 million. The total measurement of the non-controlling interests is therefore equal to the paid-up nominal share capital plus the part of the retained reserves in excess of the value of BinckBank’s primary preference. For a more detailed description, see note 35, Related party disclosures.


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NOTES TO THE CONSOLIDATED INCOME STATEMENT

(amounts in € 000’s) 2017 2016

25. NET INTEREST INCOME 30,039 26,325

This includes all income and expense items relating to the lending and borrowing of money, providing they are of a similar nature to interest, as well as interest income on credit balances or interest expense on overdrafts.


Interest income

Balances at central banks - 3

Available-for-sale financial assets 2,500 4,534

Held-to-maturity financial assets 2,283 3,260

Loans and receivables 31,535 22,205

Other interest income 121 121

36,439 30,123

The interest income recognised on non-performing loans is €19 thousand (2016: € 19 thousand).

Interest expense

Central banks 4,022 2,013

Financial institutions 1,674 1,176

Funds entrusted 503 609


Other interest expense 46 -

6,400 3,798

As a result of the continuing low, and even negative, interest rates on balances with credit institutions and the ECB BinckBank is, on balance, paying interest on these assets. Interest paid on funds held by BinckBank due to negative interest rates is recognised under interest expenses.


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(amounts in € 000’s) 2017 2016

26. NET FEE AND COMMISSION INCOME 105,858 109,076

Net fee and commission income comprises fees for services as performed for and by third parties in respect of securities transactions and related services.


Fees and commission income

Commission income 94,691 96,263

Asset management fees 14,137 15,836

Other commission income 16,011 17,448

124,839 129,547

The item asset management fees includes a performance fee of € 1.9 million over 2017 (2016: € 0.4 million). The item other fee and commission income includes BPO fees, all-in and service fees and other securities services.

Fees and commission expense

Costs of securities transactions 16,056 17,105


Other commission expense 1,811 1,688

18,981 20,471

Other commission expense includes fees for the deposit and withdrawal of securities, custody fees, transfer fees, and other management activities.

27. OTHER OPERATING INCOME 7,014 9,910


IT services – revenues 7,950 9,948

IT services – direct expenses (702) (496)

IT services – net result 7,248 9,452

Other revenues (234) 458

7,014 9,910

This includes fees for subscriptions, currency results, and other income and expense items that cannot be accounted for under other items.


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(amounts in € 000’s) 2017 2016

28. RESULT FROM FINANCIAL INSTRUMENTS 6,150 2,530


Result from fair value hedge accounting 73 -

Result from turbos 5,729 2,541

Result from other financial instruments 348 (11)

6,150 2,530

Result from fair value hedge accounting


Fair value adjustment hedged item (280) -

73 -

Result from turbos

Result on turbos 5,724 2,562

Fair value result turbos (CVA/DVA) 5 (21)

5,729 2,541

BinckBank has entered into a cooperation agreement with UBS for the turbos it has issued, whereby the latter bears the market risk. The revenues depend on the financing level of the turbos issued. The fair value result turbos comprise the haircut applied to the valuation of the turbo products relating to credit risk of the various contract parties in the market value of the Binck turbos issued and the corresponding hedge turbos purchased.

Result from other financial instruments

Available-for-sale financial assets - (66)

Other results from financial instruments 348 55

348 (11)

The other results from financial instruments contains mainly the movement in the revaluation of the receivable on DNB in respect of the Deposit Guarantee Scheme - DSB Bank.

29. IMPAIRMENT OF FINANCIAL INSTRUMENTS (92) (116)

This item comprises the movement in the financial assets provision relating to loans and receivables and debt collection of assets previously impaired.


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(amounts in € 000’s) 2017 2016

30. EMPLOYEE EXPENSES 53,048 51,635


Salaries 37,591 36,621

Social security contributions 5,960 5,759

Pension costs 2,702 2,539

Profit sharing and performance-related pay 1,565 1,140

Other employee expenses 5,230 5,576

53,048 51,635

(in numbers) 2017 2016

Number of employees (including members of the board)

Average during the financial year (FTE) 631 632

End of the financial year (headcount) 631 697

The following expenses are included in the employee expenses in relation to associated parties (executive board and supervisory board).


Salaries 1,703 1,703

Social security contributions 30 30

Pension contribution 42 40

Performance-related pay 103 118

Remuneration of supervisory board 213 210

2,091 2,101

More detailed information about the policy governing the remuneration of the members of BinckBank’s executive board and supervisory board is enclosed in the remuneration section of the annual report, on page 75. At the end of 2017, no loans had been granted to members of the executive board (2016: nil).

The fixed remuneration of the board is as follows:

(amounts in € 000’s) Fixed gross salaryPension

contributionTotal fixed

remuneration

Fixed remuneration 2017

V.J.J. Germyns 630 10 640

E.J.M. Kooistra 563 20 583

S.J. Clausing 510 12 522

Total 1,703 42 1,745


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(amounts in € 000’s) Fixed gross salaryPension

contributionTotal fixed

remuneration

Fixed remuneration 2016




Total 1,703 40 1,743

VARIABLE REMUNERATION POLICYBinckBank has a remuneration policy that is based on the Regulation on sound remuneration policy under the Wft 2014 and the provisions pursuant to the Remuneration Policy (Financial Enterprises) Act as included in the Financial Supervision Act.

In 2017, an amount of € 92 thousand has been recognised in the employee expenses in (2016: €162 thousand) relating to the fair value of the variable remuneration in shares for the performance year.

The fair value of shares to be allocated in the future is equal to the fair value at the time of measurement. This fair value is adjusted for:• ‘Missed’ dividends, by discounting the value of the shares by a dividend yield;• The lock-up period, by adjusting the value for the value of an American call option, calculated using a binomial tree.

The parameters used in the calculation of the fair value of the variable performance pay payable in shares are stated below.

2017 2016

Share price on vesting date € 4.43 € 5.50

Volatility 37.1% 28.6%

Dividend yield 4.2% 4.9%

Risk-free interest rate 0.57% 0.95%

Average fair value of share price € 3.33 € 4.34

The projected volatility is estimated on the basis of the historical daily volatility of BinckBank shares. The dividend yield is determined by dividing the dividend in the previous financial year (interim and final) by the share price at the end of the previous financial year.

The total variable remuneration for the executive board and identified staff is shown in the tables below.

(amounts in € 000’s)Remuneration

in cashRemuneration

in sharesTotal variable

performance pay

Variable performance pay 2017




Other 40 40 80

Total 91 92 183


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(amounts in € 000’s)Remuneration

in cashRemuneration

in sharesTotal variable

performance pay

Variable performance pay 2016




Other 102 104 206

Total 162 162 324

The variable remuneration paid in shares is converted at the closing share prices for the relevant performance year, taking account of any depreciating effects.

The following tables list the amounts paid and future payments in shares and cash to the executive board and identified staff. In 2017 no claw-back has been applied to variable performance pay that have been paid. The following tables are included on the basis of projected payments and distributions. The figures in the tables present the number of shares for the period in which the staff member was a member of the executive board or was a member of identified staff.

(in numbers)

Shares still to be issued per

1 JanuaryShares issued

Shares granted

Shares still to be issued per 31 December

Movements 2017

V.J.J. Germyns 21,537 (10,158) 5,754 17,133

E.J.M. Kooistra 21,345 (10,438) 5,148 16,055

S.J. Clausing 4,373 (2,144) 4,658 6,887

Other identified staff 57,149 (34,245) 10,886 33,790

Total 104,404 (56,985) 26,446 73,865

Movements 2016

V.J.J. Germyns 31,663 (15,207) 5,081 21,537

E.J.M. Kooistra 31,366 (14,567) 4,546 21,345

S.J. Clausing 521 (261) 4,113 4,373

Other identified staff 78,264 (40,437) 19,322 57,149

Total 141,814 (70,472) 33,062 104,404


Issued shares in lock-up period

V.J.J. Germyns 21,494 20,388

E.J.M. Kooistra 25,005 28,062

S.J. Clausing 2,405 261

Other identified staff 45,272 65,688

Total 94,176 114,399


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(amounts in € 000’s) 2017 2016

31. DEPRECIATION AND AMORTISATION 26,792 26,215

This item comprises amortisation and depreciation on:

Intangible assets 22,908 22,686

Property, plant and equipment 3,884 3,529

26,792 26,215

32. OTHER OPERATING EXPENSES 61,746 60,299


Marketing costs 14,525 13,318

ICT costs 10,086 11,129

Audit and professional services 15,917 17,172

Housing costs 2,363 2,515

Communication and information costs 9,785 9,115

Other miscellaneous operating expenses 9,070 7,050

61,746 60,299

The Other miscellaneous operating expenses item includes office costs, banking costs, insurance, costs of and contributions to bank supervision, resolution levies, service expenses on mortgage receivables and movements in provisions.


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(amounts in € 000’s) 2017 2016

33. EARNINGS PER SHARE

The basic earnings per ordinary share are calculated by dividing the earnings attributable to ordinary shareholders for the period by the weighted average number of shares outstanding during the period.

The calculation of the earnings per share is basedon the following:

Net result after tax 8,521 4,621

Result attributable to minority shareholders 450 (87)

Result attributable to shareholders of BinckBank N.V. 8,971 4,534

Number of shares in issue on 1 January 71,000,000 71,000,000

Less: repurchased shares on 1 January (5,281,525) (719,277)

65,718,475 70,280,723

Weighted average number of shares relating to*:

Issued to executive board and employees 39,138 70,472

Issued to third parties 715,211 -

Repurchased shares - (2,772,950)

Average number of shares in issue 66,472,824 67,578,245

* The figures presented above are based on the total figures disclosed in note 24, taking account of the date of movement in equity.

Result per share (in €) 0.13 0.07

There are no rights outstanding that could lead to a dilution of earnings per share. The diluted earnings per share are therefore the same as the basic earnings per share, and consequently are no longer separately disclosed in these financial statements. No other transactions in ordinary shares or potential ordinary shares that could lead to a dilution were conducted between the reporting date and the date of completion of these financial statements.


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OTHER NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(amounts in € 000’s) 2017 2016

34. DIVIDEND DISTRIBUTED AND PROPOSED

Declared and paid during the year

Dividend on ordinary shares:

Final dividend for 2016: € 0,19 (2015: € 0,25) 12,679 17,199

Interim dividend for 2017: € 0,03 (2016: € 0,04) 2,002 2,657

14,681 19,856

Proposed for approval by the general meeting of shareholders (not recognised as a liability as at 31 December)

Dividend on ordinary shares:

Final dividend for 2017: € 0,23 (2016: € 0,19) 15,525 13,490

35. RELATED PARTY DISCLOSURES

The consolidated financial statements include the following BinckBank-related parties:

Main activity Country

Interestyear-end

2017

Interestyear-end

2016

Consolidated companies:

Able Holding B.V. (until 23-10-2017) ICT services Netherlands 0% 100%

Bewaarbedrijf BinckBank B.V. Securities custody Netherlands 100% 100%

Think ETF Asset Management B.V. Investment management Netherlands 60% 60%

Associates:

TOM Holding N.V. (in liquidation) Netherlands 25.8% 25.5%

The group of related parties consists of consolidated entities and associates. The interest shown above is equal to the voting rights held in relation to the company concerned. Furthermore the executive board and supervisory board of BinckBank are identified as related parties.

During this financial year there have been no transactions involving the executive board or the supervisory board other than under contracts of employment respectively contracts of services. In 2017 no loans have been issued to the executive board or supervisory board. See note 30 on Employee expenses and the broad outlines of the remuneration report in the annual report for further details.


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TERMS AND CONDITION OF TRANSACTIONS WITH RELATED PARTIESTransactions with related parties are conducted on commercial terms and conditions and at market rates.

As at year-end 2017, BinckBank has not recognised any bad debt provisions for receivables from related parties (2016: nil). The need for such provisions is made each year on the basis of an assessment of the financial position of the individual related parties and the markets in which they operate. No guarantees have been issued or received with regard to related parties. Transactions with consolidated entities are fully eliminated in the consolidated financial statements.

AbleIn 2017 Able paid out a dividend amounting to € 4,4 miljoen. As of 23 October 2017 BinckBank sold its share in Able Holding B.V. resulting in a book profit on the disposal of € 1,9 million.

Bewaarbedrijf BinckBank B.V.In 2017 no capital contribution has been made in the subsidiary Bewaarbedrijf BinckBank B.V. and no related party transactions took place.

Think ETF Asset Management B.V.No capital injections were paid by the shareholders in 2017(2016: nil). BinckBank has a primary preference on any retained reserves up to an amount of € 1.1 million followed by a secondary preference of the other shareholders on any retained reserves up to an amount of € 1.1 million. The results of the financial year are allocated to the shareholders of BinckBank and the other shareholders, according to the preferences as established in the shareholder agreements.

TOM Holding N.V. (in liquidation)In 2017, an additional capital injection of €1,5 million (2016: € 1.6 million) was paid into the associate TOM Holding N.V. In 2017 TOM Holding N.V. wound down its services and terminated its activities and subsequently the board and shareholders decided to liquidate the company. Any residual value after liquidation will be paid proportionally to the shareholders, including BinckBank. The value of the associate relates to the estimate of the amount to be received. BinckBank will retain her share, until the liquidation is fully completed. In 2017, BinckBank charged the related parties a fee for ICT, accommodation and administrative services of € 129 thousand (2016: € 184 thousand), with no receivables from these related parties at year end (2016: € 3 thousand). In 2017, related parties charged BinckBank € 1.5 million (2016: €3.1 million) for their services, whereby payables to the related parties at year end amount to nil (2016: €323 thousand).


36. COMMITMENTS AND CONTINGENT LIABILITIES

Contingent liabilities

Liabilities in respect of contracts of suretyship and guarantees 774 1,069

Liabilities in respect of irrevocable facilities

Liabilities in respect of commitments that could result in lending 18,638 194,823


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SURET YSHIPS AND GUARANTEESTo meet the needs of its customers, BinckBank offers loan related products, such as contracts of suretyship and guarantees. The underlying value of these products is not recognised as assets or liabilities in the statement of financial position. The above figure represents the maximum potential credit risk for BinckBank related to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

LOAN COMMITMENTSThis relates to the obligations pursuant to mortgage offers issued.

ALEX BOTTOM-LINEWith the acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the Dutch Investors’ Association (the VEB). If BinckBank terminates this agreement then it will be liable to pay an amount equal to the custody fee and dividend commission paid by each customer of Alex Bottom-Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each customer on exceeding set limits.

LEASE COMMITMENTSBinckBank has leases and service contracts for office premises in the Netherlands, Belgium, France, Spain, and Italy. It has also entered into operating lease contracts for the vehicle fleet and other contracts for periods of less than five years.

The remaining maturity of the outstanding liabilities is as follows:


Within one year 4,445 4,284

One to five years 4,425 5,993

Longer than five years 1,352 1,869

LEGAL PROCEEDINGSBinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or results, other than cases that have already given cause to the formation of a provision.

ALEX VERMOGENSBEHEERBinckBank has reached agreement with the VEB (Association of Stockholders) and Vermogensmonitor (consumer guidance and advice organisation) on the settlement of complaints from members and clients about the information provided by Alex Vermogensbeheer, during the period from 8 September 2012 to 26 August 2014 and including warnings for market condition risks in 2014. The VEB and Vermogensmonitor have been placed in a position to offer compensation to clients who lodged complaints and meet specific criteria. This has enabled BinckBank to settle as many complaints as possible. However, there is still a risk that clients will lodge new complaints with BinckBank, as a result of which the risk of legal proceedings remains.

SERVICES FROM INTERNATIONAL SUPPLIERS SUBJECT TO INTERNATIONAL LAWSBinckBank procures services from international suppliers on the basis of contracts subject to foreign law that present inherent risks of differences in legal interpretation. The executive board is of the opinion that the outcome of discussions on any such differences in interpretation can be uncertain and that it is currently no indication that these could have material adverse effects on the financial position or results of BinckBank.


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37. Post balance sheet eventsTHINK ETF ASSET MANAGEMENT B.V.On 19 January 2018, BinckBank announced its intention to sell its 60% share in Think ETF Asset Management B.V. to Van Eck Associates Corporation. The sale is expected to be completed during the first quarter of 2018. The sale did not lead to changes in the figures as at 31 December 2017 and the sale will be processed after the sale has been effected and BinckBank no longer has control.

No other events took place after the balance sheet date that would result in material adjustments.


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38. Classification of assets and liabilities by expected maturityThe table below shows the assets and liabilities classified by expected remaining life to maturity.

(amounts in € 000’s) < 12 months > 12 months Total

31 December 2017

ASSETS

Cash and balances at central banks 1,003,673 - 1,003,673

Banks 133,968 - 133,968

Derivatives 125 37,293 37,418

Financial assets designated at fair value through profit and loss 16,613 - 16,613

Available-for-sale financial assets 257,642 530,101 787,743

Held-to-maturity financial assets 203,792 136,387 340,179

Loans and receivables 577,769 720,061 1,297,830

Associates 485 - 485

Intangible assets - 157,950 157,950

Property, plant and equipment - 33,969 33,969

Current tax assets 16,725 - 16,725

Deferred tax assets

Other assets 58,754 - 58,754

Prepayments and accrued income 32,475 - 32,475

Total assets 2,308,300 1,615,761 3,924,061

LIABILITIES

Banks 2,538 - 2,538

Derivatives 99 36,956 37,055

Financial liabilities designated at fair value through profit and loss 231 - 231

Funds entrusted 3,383,383 - 3,383,383

Provisions 8,134 - 8,134

Current tax liabilities 10 - 10

Deferred tax liabilities 164 36,279 36,443

Other liabilities 50,882 1,202 52,084

Accruals and deferred income 9,294 - 9,294

Total liabilities 3,454,735 74,437 3,529,172

Net (1,146,435) 1,541,324 394,889


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(amounts in € 000’s) < 12 months > 12 months Total

31 December 2016

ASSETS

Cash and balances at central banks 854,230 - 854,230

Banks 123,622 4,133 127,755

Derivatives 63 20,330 20,393

Financial assets designated at fair value through profit and loss 9,499 - 9,499



Loans and receivables 477,576 480,753 958,329

Associates - - -

Intangible assets - 168,260 168,260

Property, plant and equipment - 35,128 35,128

Current tax assets 12,270 - 12,270

Deferred tax assets - 1,048 1,048

Other assets 63,451 - 63,451

Prepayments and accrued income 35,479 - 35,479

Total assets 2,334,320 1,465,941 3,800,261

LIABILITIES

Banks 2,017 - 2,017

Derivatives 77 20,351 20,428

Financial liabilities designated at fair value through profit and loss 1,018 - 1,018

Funds entrusted 3,308,829 - 3,308,829

Provisions 8,891 - 8,891

Current tax liabilities 10 - 10

Deferred tax liabilities (461) 32,443 31,982

Other liabilities 18,655 1,186 19,841

Accruals and deferred income 10,293 - 10,293

Total liabilities 3,349,329 53,980 3,403,309

Net (1,015,009) 1,411,961 396,952


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39. Segment informationA segment is a clearly distinct component of BinckBank which provides services to a particular economic market (market segment) that has a different risk and return profile to that of other segments. From an organisational perspective, the operations of BinckBank are primarily segmented in terms of the countries in which BinckBank is active. The executive board determines the performance targets, and authorises and monitors the budgets prepared for these business segments. The management of the business segment is responsible for setting policy for that segment, in accordance with the strategy and performance targets formulated by the executive board. As at 31 December 2017, the business segments are as follows:

• The Netherlands• Belgium• France• Italy• Group operations

All income and expenses are attributed to the geographical areas on the basis of the operations carried out by the offices. In all countries, this relates to the activities as online broker in financial instruments for the private customer market, inclusive of the associated savings products. Professional Services are also included in the Netherlands and Belgium. The Netherlands also includes asset management services, the issue of financial instruments and the results from the BPO operations. All directly attributable income and expenses are recognised within the aforementioned geographical segments, together with the attributed costs of the Group operations.

The item Group operations includes the departments directly managed by the executive board and for which the income and expenses are not included in one of the other business segments. This includes the expenses of the central ICT, operations and staff departments. In addition, all results from the ThinkCapital and Able associates are recognised under Group operations. The allocation of Group operations to the geographical segments is carried out on the basis of predetermined allocation keys.

The same accounting policies are used for a business segment as those described for the consolidated statement of financial position and income statement of BinckBank. The amounts the various business segments charge each other have been eliminated and replaced by the allocation of the actual costs.

Investments in intangible assets and property, plant, and equipment are attributed to the business segments to the extent that the investments are directly acquired by the business segments. All other investments are recognised under Group operations.

Tax is managed at group level and for the segment summary is not attributed to the segments.

In both 2017 and 2016, no customer or group of associated customers was responsible for more than 10% of the bank’s total income.

The following analysis shows the geographical distribution of income from operating activities and the property, plant and equipment and intangible assets of BinckBank. Income is allocated on the basis of the country of domicile of the branch where the account is opened, and the property, plant and equipment and intangible assets on the basis of the country in which the assets are held.


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SEGMENTATION OF FINANCIAL INFORMATION BY REGION

Consolidated 2017

(amounts in € 000’s) Netherlands Belgium France ItalyGroup

activities Total

PROFIT AND LOSS ACCOUNT

Net interest income 23,909 2,101 2,378 1,659 (8) 30,039

Net fee and commission income 82,372 11,615 6,193 2,880 2,798 105,858

Other income 1,365 1 14 - 5,634 7,014

Result from financial instruments 4,923 806 - - 421 6,150

Impairment of financial assets (21) (1) (29) 3 (44) (92)

Total income from operating activities 112,548 14,522 8,556 4,542 8,801 148,969

Employee expenses 10,151 2,794 3,519 1,389 35,195 53,048

Depreciation and amortisation 22,211 52 20 20 4,489 26,792

Other operating expenses 18,124 6,293 4,792 2,179 30,358 61,746

Total operating expenses 50,486 9,139 8,331 3,588 70,042 141,586

Result from operating activities 62,062 5,383 225 954 (61,241) 7,383

Internal cost allocation (49,201) (7,330) (5,660) (4,420) 66,611 -

Result from operating activitiesafter internal cost allocation 12,861 (1,947) (5,435) (3,466) 5,370 7,383

Share in results of associates 864

Result before tax 8,247

Tax 274

Net result 8,521

Tangible and intangible assets 156,749 339 131 11 34,689 191,919

Total assets 2,909,844 560,857 244,475 151,527 57,358 3,924,061

Total liabilities 2,581,477 549,268 237,921 147,927 12,579 3,529,172


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Consolidated 2016

(amounts in € 000’s)Nether-

lands Belgium France ItalyGroup

activities Total

PROFIT AND LOSS ACCOUNT

Net interest income 21,665 1,566 1,846 1,244 4 26,325

Net fee and commission income 88,577 9,193 6,257 1,873 3,176 109,076

Other income 2,026 - 13 - 7,871 9,910

Result from financial instruments 2,240 301 - - (11) 2,530

Impairment of financial assets 5 2 2 (3) (122) (116)

Total income from operating activities 114,513 11,062 8,118 3,114 10,918 147,725

Employee expenses 8,920 2,467 2,765 1,312 36,171 51,635

Depreciation and amortisation 21,750 29 14 62 4,360 26,215

Other operating expenses 19,582 4,647 4,450 2,037 29,583 60,299

Total operating expenses 50,252 7,143 7,229 3,411 70,114 138,149

Result from operating activities 64,261 3,919 889 (297) (59,196) 9,576

Internal cost allocation (48,300) (6,438) (5,545) (4,124 ) 64,407 -

Result from operating activitiesafter internal cost allocation 15,961 (2,519) (4,656) (4,421) 5,211 9,576

Share in results of associates (2,821)

Result before tax 6,755

Tax (2,134)

Net result 4,621

Tangible and intangible assets 166,938 56 129 31 36,234 203,388

Total assets 2,911,770 464,514 227,080 136,033 60,864 3,800,261

Total liabilities 2,582,804 455,186 221,673 132,958 10,688 3,403,309


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40. Risk managementThe executive board of BinckBank, as a financial institution, is well aware of the importance of risk management of the Bank. It is therefore an important subject in managing the organisation.

Risk management supports all stakeholders to ensure the bank’s risks are managed and are within the limits of the risk appetite and legal requirements. This chapter describes the risk appetite, organisational and governance requirements applicable in risk management and the principal of the three lines of defence. After discussion of these general arrangements the chapter continues with a description of the capital requirements in accordance with Pillar I and Pillar II of the Basel- framework. The chapter concludes with the individual risk types BinckBank is exposed to and the way in which the risks are managed.

40.1 RISK APPETITE Risk appetite is the balance between risk and return and is a core element of BinckBank’s business operations. Solid capital- and liquidity ratios are essential conditions for a successful proposition to our customers, which is reflected in the risk appetite. Each year the executive board prepares the risk appetite, which is then reviewed and approved by the supervisory board. The risk appetite is monitored by means of a risk dashboard. This sets quantitative standards in order to assess whether BinckBank has remained within its own risk appetite. Key Risk Indicators (KRI) and Key Performance Indicators (KPI) are included in this dashboard and represent BinckBank’s risk profile as closely as possible. Monthly monitoring in the governance committees makes it possible to make timely adjustments and keep the current risk profile within accepted risk appetite parameters.

De risk appetite is based on the following leading principles:

• BinckBank acts in the interest of customers and other stakeholders of the Bank in a balanced way.• BinckBank operates according to high moral, ethical & duty of care standards.• BinckBank does not take risks with funds entrusted by clients that compromise our reliability.• BinckBank operates in a compliant manner within the boundaries of the laws and regulations.• BinckBank is committed to act with integrity with respect to tax (related) matters.• BinckBank discloses information to stakeholders in a consistent & transparent manner.• BinckBank provides a safe and healthy working environment. Employees are treated with dignity and respect.• BinckBank strictly avoids practices that do not display our core values and may damage BinckBank’s reputation.

40.2 RISK GOVERNANCEEfficient and effective risk management is vital to the pursuance of BinckBank’s strategy. The risk management framework with the accompanying policy and systems is continuously improved and adapted to changes in the external setting and the internal organisation. Operational control measures have been described in detail and the effectiveness of these measures is periodically assessed.

GOVERNANCE STRUCTURE & THREE LINES OF DEFENCEBinckBank operates according to the Three Lines of Defence principle (3LoD). The 3LoD concept goes further than organisational structure and the designation of roles. BinckBank regards this as a form of operating, cooperating, and thinking, which is also the foundation of the risk culture. The first line in this structure is formed by operational management and support units that are responsible and answerable for the evaluation, management and mitigation of risks. The first-line departments are advised and monitored by second-line specialised departments: Governance, Risk & Compliance (GRC), Finance & Control, and Legal & Regulatory. These departments are also responsible for managing risk management-related policy, processes and methodologies. The Internal Audit Department (IAD) forms the third line of defence that provides additional assurance to the executive board and the supervisory board by means of a risk-based approach. The executive board is responsible for effectively setting up and managing the governance risk compliance framework. This framework enables the executive board to formulate and monitor the risk appetite and to effectively perform risk management and internal control. The supervisory board and its subcommittees (the audit committee, the risk and product development committee and the remuneration committee) form the last link in the governance risk compliance framework.


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Supervisory board The supervisory board monitors the risks and capital requirements regarding the operations of the bank and the composition of the portfolio. For this purpose, the supervisory board has three subcommittees which are detailed in the table below:

SUBCOMMITTEE OF THE SUPERVISORY BOARD OBJECTIVE RISKS

Risk and Product Development Committee

The Risk and Product Development Committee handles subjects concerning the credit risk, market risk, interest risk, solvency and liquidity risk, operational risk. It also advises the Supervisory Board on matters including the risk profile and the risk appetite of BinckBank. It further tests whether new products or changes to existing products, systems, and services comply with the risk appetite and the duty of care to the client.

• Credit risk• Market risk• Interest-rate risk• Solvency risk• Liquidity risk• Operational risk• Investment policy

on discretionary asset management products

• Data and information risk

Remuneration Committee (RemCo)

The RemCo advises the supervisory board on matters including the remuneration of the executive board and advises on the remuneration of designated persons within the senior management (identified staff) and employees in the control functions.

• Personnel & remuneration

Audit Committee (AC) The Audit Committee is responsible for overseeing the design and operation of the internal control system and risk management measures, and for monitoring the implementation of the external auditor’s recommendations and the functioning of the IAD.

• Financial reporting and disclosure risk

• Compliance risk• Legal risks

› Management control› Internal control measures

› Owner of risk and reward› Risk reporting (1st line)

3RD LINE ‘OF DEFENCE’2ND LINE ‘OF DEFENCE’1ST LINE ‘OF DEFENCE’

RISK & CONTROL

FUNCTIONS

INTERNALAUDIT

DEPARTMENT ( IAD)

SUPPORT DEPARTMENTS

O F F I C E SBelgium France Italy SpainNetherlands

ProductOwners

Treasury &ALM

Operations(incl. CRM)

Audit on 1st and 2nd line

HumanResources

Other support

Enterprise Data & Ananlytics ICT

Risk

&

Cont

rol

mon

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ng

Qua

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Safe

guar

dRi

sk

repo

rtin

g(2

nd li

ne)

Finance& Control

Legal& Regulatory

Governance, Risk& Compliance

S U P E R V I S O R Y B O A R DRisk and Product

Development Committee(RPC)

Remuneration Committee(RemCo)

Audit Committee (AC)

E X E C U T I V E B O A R D

Asset & Liability Committee

Risk &Compliance Committee

InvestmentCommittee

Architecture & Data Board

Remuneration Control

Committee

AccountingCommittee

Legal & RegulatoryCommittee

DisclosureCommittee

InvestmentManagement


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Executive boardThe executive board is responsible for formulating and implementing the strategy of the bank. This includes, among others the capital- and funding plan, which is based on the risk- and capital policy. The board is also responsible for the proper functioning of the processes that ensure the liquidity and capital position of the bank. In addition, they are obliged to provide information to the supervisory board, which in turn assesses the risk appetite of the bank. Decisions are taken during board meetings. In order to ensure that the different types of risks are managed correctly, the Board has set up the following risk committees:

SUBCOMMITTEES OF THE EXECUTIVE BOARD OBJECTIVE RISKS

Asset & Liability Committee (ALCO)

The ALCO monitors all the risks affecting BinckBank’s balance sheet. The ALCO is mainly concerned with the management of credit risk, market risk (currency risk) and the interest-rate risk, and also assesses the adequacy of BinckBank’s liquidity and capital position. This committee also sets the investment policy for the interest rate business.

• Credit risk• Market risk• Interest-rate risk• Solvency risk• Liquidity risk

Risk & Compliance Committee (RCC)

The Risk & Compliance Committee oversees operational and compliance risk in the banking business. This committee has important tasks in ensuring sound and controlled operations. It further tests whether new products or changes to existing products, systems and services comply with the risk appetite and duty of care towards the client.

• Operational risk • Compliance risk• Approval of new

products

Investment Committee (IC) The Investment Committee supervises the implementation of the investment policy for the asset management products. The investment committee assesses changes to the investment policy and approves these where necessary.

• Investment policy on discretionary asset management

Architecture & Data Board The purpose of the Architecture & Data Board is to advise the executive board on the use of data and information and to bring ICT systems and architecture in line with the future strategic direction.

• Data and information risk

Accounting Committee (AcC) The financial reporting and disclosure risk is monitored by the AcC. This body focuses on the management of risks associated with accounting processes, accounting manuals, accounting policies, provisions and the application of new accounting standards (IFRS).

• Financial reporting and disclosure risk

Legal & Regulatory Committee (LRC)

The purpose of the Legal & Regulatory Committee is to oversee the timely identification of new developments in relevant legislation and regulations and determine their impact on BinckBank and control the legal risks.

• Legal risks

Disclosure Committee The Disclosure Committee supervises the disclosure of price-sensitive information. This committee also supervises the measures that are adopted within the organisation to deal confidentially with potentially price-sensitive information.

• Reporting and disclosure risk

ADVISORY COMMITTEE OBJECTIVE RISKS

Control Committee Each year, on the instructions of the RemCo, the Control Committee performs a risk analysis on the implementation of the remuneration policy and reports on this to the RemCo. The Control Committee also conducts an annual audit to determine whether the remuneration policy complies with the relevant legislation and regulations and the applicable recommendations.

• Personnel & remuneration


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40.3 CAPITAL MANAGEMENTBinckBank’s capital requirement is determined on the basis of the risk appetite and strategy, taking into account the expectations and requirements of external stakeholders. The capital adequacy of BinckBank is monitored constantly and compared with the risk appetite and strategy. The current capital position and capital requirement are discussed by the Asset and Liability Committee (ALCO) on a monthly basis. Adjustments can then be made if and when necessary. On annual basis the capital and funding plan is prepared including the strategic and tactical assumptions as well as projections of future developments in the capital position. This plan is also part of the ICAAP documentation.

BinckBank’s legally available capital is comprised entirely of Tier 1 core capital (CET1). BinckBank does not have any additional Tier 1 capital (AT1) or Tier 2 capital (T2). The CRR includes transitional provisions for various requirements. These transitional provisions include the phase-in of deductions to grant banks time to maintain their capital buffer at the required level. When calculating the own funds BinckBank does not take any account of this and adopts the full phase-in as this will prevail in 2018.



Share premium 343,565 361,379


Fair value reserves 492 1,021




Total Equity 394,889 396,952

Less: goodwill (153,865) (144,882)

Plus: deferred tax liabilities related to goodwill 36,064 32,273

Less: other intangible assets (4,085) (23,204)

Less: prudent valuation adjustment (788) (724)

Less: non-controlling interests (933) (1,383)

Less: proposed dividend in accordance with dividend policy (15,525) (13,490)

Less: deferred tax assets (6,235) -

Total available capital – Tier 1 249,522 245,542


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40.4 CAPITAL RATIOSThe CRD IV and CRR directives are applicable to all banks in the Netherlands. This integrated framework for bank supervision consists of three pillars:

• Pillar 1: External capital requirements for credit risk, market risk, and operational risk;• Pillar 2: Internal processes for risk management and for the calculation of internal capital requirements, economic

capital and how the regulatory authority views these internal processes (the Supervisory Review);• Pillar 3: Obligation to provide risk information for external stakeholders.

Pillar 3 concerns the obligation to provide risk information for external stakeholders and supports the determination of the minimum solvency requirements (Pillar 1) and the solvency requirements laid down by the management (Pillar 2). The purpose of Pillar 3 is to improve the quality of the institution’s risk management through the disciplinary market effect. BinckBank has made the Pillar 3 report separately available on its website. Pursuant to the regulations, banks are required to hold sufficient buffer capital to cover the risks arising from banking operations. Pillar I provides guidelines for calculating the minimum capital buffer prescribed by the supervisory authorities to cover credit risk, market risk and operational risk. The regulations provide scope for a series of calculation methods for the capital adequacy requirements relating to these risks, which range from relatively simple to more advanced methods. Banks can exercise their discretion, subject to a number of conditions, in adopting one of these methods. A number of qualitative requirements are applicable to this selection. Banks that opt for a more advanced method may not revert to a simpler method at a later date.

BinckBank uses the standardised method for calculating the risk-weighted items for credit risk, market risk, settlement risk, and operational risk as described in the CRR.

ADDITIONAL CAPITAL BUFFERSWith effect from 1 January 2016 banks are required to maintain a number of additional capital buffers over and above the required capital required capital for credit risks. The following buffers are relevant to BinckBank: Countercyclical capital bufferThe countercyclical capital buffer takes account of the credit cycle and the risks of excessive credit growth in the country in question. The minimum countercyclical capital buffer is 0% and the maximum is 2.5% of the relevant risk-weighted items and must be drawn from the company’s equity (Tier 1 core capital). The institution-specific countercyclical buffer calculated by BinckBank is currently nil, chiefly because most of the country-specific countercyclical buffer requirements have been set at nil by the competent authorities.

Capital conservation bufferThe capital conservation buffer was designed to ensure that banks accumulate additional capital buffers over and above the minimum capital requirements outside stress periods.

The framework reduces the choice of banks that have exhausted their capital buffers to further reduce them by paying generous dividends, thus discouraging them from engaging in ‘unacceptable practices’ such as:

• using recovery forecasts to justify continuing to make generous payments to shareholders. It is the shareholders, not the savers, who should bear the risk of recovery not materialising;

• attempting to use capital allocation as a way of calling attention to their financial strength.

The capital requirements will be increased in phases each year from 0.625% of the risk weighted items in 2016 to 2.5% in 2019. The buffer requirements of the capital conservation buffer total €10.1 million (2016: € 4.8 million).

INTERNAL CAPITAL RATIOSBinckBank uses an internal capital requirement for calculating the amount of capital to be held under Pillar 2. The adequacy of this internal capital requirement is assessed periodically and can lead to higher or lower internal capital requirements. BinckBank uses a minimum internal capital requirement for the Pillar I Total Capital Ratio (TCR) of 15% and a minimum leverage ratio of 3.5%.


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LEVERAGE RATIOThe leverage ratio is a simple non-risk sensitive standard under which capital is divided by a sum of balance sheet items and off-balance sheet items. The unweighted balance sheet total rose in 2017 following to the increase in the funds entrusted.

A summary of BinckBank’s capital adequacy requirements and the associated ratio’s is presented below.


CAPITAL RATIOS

Total available capital (A) – Tier 1 249,522 245,542

Credit risk 581,675 539,650

Settlement risk 6,455 127

Operational risk 221,250 228,898

Total risk weighted exposure (B) – Pillar I 809,380 768,675

Capital ratio (=A/B) 30.8% 31.9%

CRR required capital (=B*8%) 64,750 61,494

CRR buffers 10,117 4,804

CRR required capital incl. buffers 74,868 66,298

Required capital based on own internal standard incl. buffers 149,735 134,518

LEVERAGE RATIO

Risk measure for leverage ratio:

Unweighted balance sheet total 3,924,061 3,800,261

Prudential adjustments (145,240) (139,791)

Risk measure (C) 3,778,821 3,660,470

Leverage ratio (=A/C) 6.6% 6.7%

Required capital based on internal standard (3.5%) 132,259 128,116


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40.5 CREDIT RISK, CREDIT APPROVAL AND CREDIT MANAGEMENT Credit risk is the risk of a counterparty and/or issuing institution that is involved in the trade or issue of a financial instrument defaulting on an obligation and thus harming BinckBank financially. BinckBank’s credit risk can be subdivided into the following categories:

• credit risk on cash and investments;• credit risk on mortgages;• credit risk on outstanding collateralised loans/margin obligations/deferred settlement service (SRD) obligations; and• counterparty risk.

How BinckBank manages these risks and developments in this regard are explained below.

MANAGEMENT OF CREDIT RISK WITH CASH AND INVESTMENT BinckBank deals prudently with the funds entrusted to it by its clients. Funds entrusted, which are not used for residential mortgages and collateralised loans, are partly held in cash with the remainder being placed in the money market and capital market. All placements are made in a responsible manner in accordance with the established risk appetite. BinckBank’s objective with its investment portfolio, within the issued mandate, is to invest the available liquidity in the market in a manner that optimises the interest margin between the raised and placed funds.

The credit risk on cash and placements is monitored daily by the Treasury & ALM department. It reports daily to the CFRO and periodically to the Asset and Liability Committee (ALCO). Cash balances are placed in the money and capital market with central governments, regional governments (if guaranteed by a central government), central banks and other credit institutions with a minimum credit rating of single A (Fitch or equivalent) and a stable outlook.

Agreements and limits with regard to placing funds in the money and capital markets are established in a limits system adopted by the ALCO. The Treasury & ALM department is bound by stringent requirements imposed on funds placed with counterparties. Internally-set limits on both the amount and terms of loans to approved counterparties are observed. BinckBank’s relatively low risk appetite with regard to credit risk is demonstrated by the policy of investing bonds in relatively safe and liquid instruments, most of which are eligible as collateral at the European Central Bank (ECB).

MANAGEMENT AND DEVELOPMENT OF CREDIT RISK ON RESIDENTIAL MORTGAGESThe credit appetite risk is focused on the monitoring and management of mortgage credit risk.

Credit approvalBinckBank acts as the financier in a collective structure in which Dynamic Credit, a service provider licensed by the AFM. BinckBank defines its risk appetite within the investment mandate by issuing acceptance criteria and designating one or more credit risk buckets and interest rate revision periods. When viewed from a risk management perspective, the credit risk and outsourcing risk are of particular importance. Appropriate management of the operational risks, including the outsourcing risks, is provided for in the form of agreements laid down in a service level agreement (SLA). These agreements relate primarily to various elements of the mortgage loan process, the management and administration of mortgages loaned and the submission of data. BinckBank reviews compliance with the SLA once a month. Loan approval and management has been outsourced to Dynamic Credit and is monitored on the basis of the comprehensive data on the mortgage portfolio issued in accordance with the requisite prevailing statutory requirements. The information received is employed for purposes including the recognition of any arrears, where relevant.

BinckBank carries out periodic assessments of the mortgage production within the limits it has set. BinckBank is in a position to issue a stop notice to terminate the production on its behalf. The collateral for the loans is comprised of Dutch residential property. The collateral is comprised of a combination of Dutch homes with and without a National Mortgage Guarantee (NHG).

In July 2016, BinckBank also purchased a portfolio of existing mortgages from Obvion. The agreements reached in this instance relate primarily to the management and administration of mortgages and the submission of data. Appropriate management of the operational risks, including the outsourcing risks, is provided for in the form of agreements laid down in a service level agreement (SLA). BinckBank reviews compliance with the SLA once a month. The management of the credit risks is monitored on the basis of the comprehensive data on the mortgage portfolio issued in accordance with the requisite prevailing statutory requirements. Recognition of the relevant arrears is based on the information received.


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Arrears managementAll loans of which the interest and/or redemption is not paid in time are in arrears. When a client will probably be, or is, unable to fulfil his obligations towards the bank then a provision will be formed. The credit extended to the client is then designated as a non-performing loan.

The service providers are entrusted with the arrears management within the agreements laid down in the SLAs. The service provider is entrusted with the responsibility for the initiation of a forbearance programme to renegotiate the credit agreements. The service provider notifies BinckBank of the initiation of any forbearance programmes.

Provisions methodologyWhen a loan is impaired then BinckBank will make an estimate of the potential loss on the basis of the information at its disposal, including the information received from the service providers. Objective indications for an impairment of an individual item will give cause to an estimation of the cash flows. This estimate is based on assumptions of the proceeds from foreclosure of collateral, the payments yet to be received and the timing of these payments, as well as the discount rate. All other loans for which no individual provision is calculated are included in the IBNR (incurred but not reported) provision. The IBNR provision relates to impairments that have taken place on reporting date but are not yet known to the bank because of an information backlog. This impairment is calculated at portfolio level.

MANAGEMENT OF CREDIT RISK ON OUTSTANDING COLLATERALISED LOANS AND MARGIN OBLIGATIONSBinckBank offers customers various forms of lending against securities collateral. This advance funding can be used to cover margin requirements relating to derivative positions or for the purchase of securities. BinckBank has a potential or actual credit risk in respect of the client in both cases.

Collateralised loans are assessed on an automated basis at the time they are advanced, taking account of the haircut percentages for the collateral that qualifies for that purpose. This is all carried out in accordance with the guidelines set by the ALCO, with due regard for the limits set in Section 152 of the Besluit gedragstoezicht financiële ondernemingen (Market Conduct Supervision (Financial Institutions) Decree, BGfo).

The loans granted are also monitored with automated systems on the basis of real-time prices. The credit risk for collateralised loans arises due to movements in value of the collateral coverage. Specific attention is given to undesirable concentrations in client portfolios, referred to as ‘concentration risk’. A cover deficit arises when the value of the collateral is insufficient to cover the collateralised loans and/or margin obligations. The client must make up a cover deficit within one to five trading days. When the client fails to comply with this requirement then BinckBank is entitled to sell collateral to redeem the loan.

The first-line Credit Risk Management department monitors the outstanding collateralised loan, margin obligation and any excessive concentrations of client portfolios, where relevant. The second-line Risk Management department monitors the activities of the Credit Risk Management department.

Provisions for non-performing collateralised loans are determined individually. The amount of the provision depends on the redemption terms agreed with the client. The total provision as at 31 December 2017 amounted to € 0.5 million (2016: € 0.5 million).


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MANAGEMENT OF CREDIT RISK FROM COUNTERPART Y RISKThe Treasury & ALM department conducts transactions for BinckBank’s account and risk. This involves counterparty risk. The ALCO approves the counterparty limits. The vast majority of equities transactions effected by BinckBank are for the account and risk of customers (online brokerage). These transactions are mainly effected on regulated or other markets such as NYSE and Euronext, where use is made of a central counterparty (CCP). The counterparty risk for customers is therefore low.

FORBEARANCEForbearance occurs when a client is no longer able to fulfil his obligations towards BinckBank due to financial difficulties or to financial difficulties to be expected within the near future and the bank, in view of these circumstances, has made concessions on the terms and conditions of the credit agreement with the objective of enabling the client to fulfil the revised obligations.

These concessions on the existing credit agreement relate to circumstances surrounding the client’s financial situation and would not have been made if these circumstances had not arisen. For this reason, forbearance is not an issue when amendments of the conditions of the credit agreement are made for reasons other than the client’s financial difficulties.

The objective of the forbearance measures implemented is to maximise the probability of the recovery of the client’s payment capacity and, as a result, minimise the losses incurred in writing down all or part of the loan. The measures need to offer the client an appropriate and sustainable solution that will ultimately enable the client to fulfil the original obligations pursuant to the credit agreement.

In practice, the forbearance measures do not always achieve the intended result, i.e. the recovery of the client’s payment capacity or preventing a continued decline in the client’s payment capacity. This can, for example, be the case when the client’s financial situation continues to deteriorate or an expected improvement in his situation fails to materialise. Any such situations give cause to a new analysis of the client’s general and financial situation and the determination of the revised strategy to be followed.

A forbearance situation ends when the status ‘non-performing’ has no longer applied to the loan for a period of two years. The ‘non-performing’ status must last a minimum of one year starting from the last forbearance measure. The client must moreover have made significant and regular payments of interest and/or principal during at least half this period. After expiry of the two-year period, no payments by the borrower may be in arrears for more than 30 days.


Forbearance

Mortgage receivables with forbearance measures 1,663 5,151


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CAPITAL REQUIREMENTS PILAR 1 FOR CREDIT RISKBinckBank applies the standardised method as described in the CRR to calculate the risk weighted assets for credit risk purposes. The overview below presents how the risk weighted assets are determined.

Exposure net of value adjustments

and provisionsRisk weighted

exposure amount8% Pillar I capital

requirement

(amounts in € 000’s) 2017 2016 2017 2016 2017 2016

Claims or contingent claims on centralgovernments or central banks 1,202,189 1,072,311 108 728 9 58

Claims or contingent claims on regionalgovernments or local authorities 131,917 377,410 - - - -

Claims or contingent claims on multilateraldevelopment banks 12,528 23,848 - - - -

Claims or contingent claims on financialenterprises and financial institutions 800,978 667,207 278,677 227,388 22,294 18,191

Claims or contingent claims on corporate clients 305,810 209,359 29 19 2 2

Claims or contingent claims on private individuals and SMEs 372,724 502,774 52,440 75,391 4,195 6,031

Claims secured by mortgages 660,268 443,540 134,097 82,702 10,728 6,616

Overdue items 660 254 187 30 15 2

Claims in the form of covered bonds 83,196 310,196 8,320 31,020 666 2,482

Claims on institutions and corporates witha short-term credit rating 113,075 114,893 47,159 38,502 3,773 3,080

Exposure in shares 1,720 6,463 4,301 8,893 344 711

Other receivables 60,284 88,735 56,357 74,977 4,509 5,998

Total credit risk standardised method 3,745,349 3,816,990 581,675 539,650 46,535 43,171


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MA XIMUM CREDIT RISKThe maximum credit risk of on balance sheet items is, in general, the carrying value of the relevant financial asset. The maximum credit risk of off balance sheet items is the maximum amount that could possibly be paid. Collateral received is not taken into account in the determination of the maximum credit risk. The maximum credit risk of the following items differs from the carrying value.

(amounts in € 000’s) Total Limit

Neither past

due nor impaired Past due Impaired Provision

Non- performing

loans

31 December 2017

Loans and receivables

Collateralised by securities 558,796 559,570 558,796 - - - -

Collateralised by bank guarantees 2,739 10,524 2,739 - - - -

Collateralised by residential property 736,293 754,931 734,918 975 565 (165) 565

Other receivables 2 508 - - 508 (506) 508

Total 1,297,830 1,325,533 1,296,453 975 1,073 (671) 1,073

31 December 2016

Loans and receivables

Collateralised by securities 433,181 434,250 433,181 - - - -

Collateralised by bank guarantees 4,563 11,609 4,563 - - - -

Collateralised by residential property 520,555 715,378 520,444 - 232 (121) 232

Other receivables 30 484 - - 484 (454) 484

Total 958,325 1,161,721 957,188 - 716 (575) 716

The total outstanding amount in the tables is reduced by the impairment of loans. Impairment is classified into Incurred But Not Reported (IBNR) and into specific provisions. At the end of 2017, the IBNR item amounted to € 165 thousand (2016: € 114 thousand) . All loans of which the interest and/or redemption is not paid in time are in arrears. When a client will probably or is unable to fulfil his obligations towards the bank then a provision will be formed. The credit extended to the client is then designated non-performing credit.

Non-Performing Loans relates to loans that can be designated as:• loans that have been in material arrears for over 90 days; or• loans for which a provision has been taken; or• loans with a Probability of Default of 1; or• Forbearance exposures for which the two-year probationary period has yet to begin.


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BinckBank provides loans solely on the basis of collateral received in the form of marketable securities, bank guarantees or mortgage collateral. The loans and receivables classified by cover ratio are as follows:


NHG guaranteed 318,471 243,788

Less than 75% of the value of the collateral 539,944 526,891

Between 75% and 90% of the value of the collateral 273,771 73,345

Between 90% and 100% of the value of the collateral 107,469 50,484

Greater than 100% of the value of the collateral 58,846 64,396

Total 1,298,501 958,904

SECURITIES LENDINGBinckBank usually acts as the principal in the borrowing and lending of securities.

The following table lists the receivables and payables relating to securities recognised and loans provided, inclusive of the collateral received.

Receivables in respect of securities lending

Own position (on balance) 1,131 -

Securities on behalf of clients (off balance) 12,895 3,881

Total 14,026 3,881

Collateral received

Own position 1,152 -

Securities on behalf of clients 11,632 2,019

Total 12,784 2,019

Liabilities in respect of securities lending

Own position (on balance) - -

Securities on behalf of clients (off balance) 12,895 3,881

Total 12,895 3,881

Collateral paid

Pledged collateral received 11,632 -

Other - -

Total 11,632 -

Received and paid collateral contains both cash and non-cash positions.


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RISK CONCENTRATION PER ECONOMIC SECTORThe following table lists the credit risk by economic sector.

RISK CONCENTRATION BY ECONOMIC SECTOR AS AT 31 DECEMBER 2017

(amounts in € 000’s)Central

banksFinancial

institutions

Government/Governmentguaranteed

Privateindividuals

Otherprivatesector Total

Cash and balances at central banks 1,003,673 - - - - 1,003,673

Banks 32,559 101,409 - - - 133,968

Derivatives - 37,293 - - 125 37,418

Financial assets designated at fair value through profit and loss - - - - 16,613 16,613

Available-for-sale financial assets - 753,878 33,865 - - 787,743

Held-to-maturity financial assets - 82,335 257,844 - - 340,179

Loans and receivables - - - 1,239,078 58,752 1,297,830

1,036,232 974,915 291,709 1,239,078 75,490 3,617,424

Guarantees - - - 634 140 774

Total 1,036,232 974,915 291,709 1,239,712 75,630 3,618,198

RISK CONCENTRATION BY ECONOMIC SECTOR AS AT 31 DECEMBER 2016

Centralbanks

Financialinstitutions

Government/Governmentguaranteed

Privateindividuals

Otherprivatesector Total

Cash and balances at central banks 854,230 - - - - 854,230

Banks 29,038 98,717 - - - 127,755

Derivatives - 20,330 - - 63 20,393

Financial assets designated at fair value through profit and loss - - - - 9,499 9,499

Available-for-sale financial assets - 667,396 57,002 - - 724,398

Held-to-maturity financial assets - 274,558 515,463 - - 790,021

Loans and receivables - - - 905,843 52,486 958,329

883,268 1,061,001 572,465 905,843 62,048 3,484,625

Guarantees - - - 848 221 1,069

Total 883,268 1,061,001 572,465 906,691 62,269 3,485,694


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RISKCONCENTRATION – GEOGRAPHICALThe following table lists the credit risk by geographical area.

GEOGRAPHICAL DISTRIBUTION AS AT 31 DECEMBER 2017

(amounts in € 000’s) Supra-

nationalNether-

lands

Belgium, France,

Italy Ger many

Other EU-

countriesNorth

AmericaOther

countries Total

Cash and balances at central banks - 995,875 7,798 - - - - 1,003,673

Banks - 100,218 23,905 - 78 8,994 773 133,968

Derivatives - 381 125 - - - 36,912 37,418

Financial assets designated at fair value through profit and loss - - 16,613 - - - - 16,613

Available-for-sale financial assets - 116,822 198,288 30,107 249,296 84,158 109,072 787,743

Held-to-maturity financial assets 12,490 - - 269,517 - 58,172 - 340,179

Loans and receivables - 1,234,049 48,942 6,446 4,122 - 4,271 1,297,830

12,490 2,447,345 295,671 306,070 253,496 151,324 151,028 3,617,424

Guarantees - 774 - - - - - 774

Total 12,490 2,448,119 295,671 306,070 253,496 151,324 151,028 3,618,198

GEOGRAPHICAL DISTRIBUTION AS AT 31 DECEMBER 2016

Supra-national

Nether-lands

Belgium, France,

Italy Ger many

Other EU-

countriesNorth

AmericaOther

countries Total

Cash and balances at central banks - 847,328 6,902 - - - - 854,230

Banks - 87,968 27,998 - 122 11,179 488 127,755

Derivatives - - 63 - - - 20,330 20,393

Financial assets designated at fair value through profit and loss - - 9,499 - - - - 9,499

Available-for-sale financial assets 8,549 99,335 160,268 77,916 221,532 75,840 80,958 724,398

Held-to-maturity financial assets 15,224 5,000 - 703,310 - 66,487 - 790,021

Loans and receivables - 908,938 36,340 5,230 5,219 - 2,602 958,329

23,773 1,948,569 241,070 786,456 226,873 153,506 104,378 3,484,625

Guarantees - 1,069 - - - - - 1,069

Total 23,773 1,949,638 241,070 786,456 226,873 153,506 104,378 3,485,694


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RISK CATEGORY BY RATINGThe assessment of the creditworthiness of financial assets and liabilities is based on credit ratings provided by rating agencies. Cash and placements with banks are classified on the basis of the short-term credit ratings of rating agencies. The banks with no rating item concerns the residual receivable that arose from the implementation of the deposit guarantee scheme for DSB. The long-term rating is used for the investment portfolio. The loans and receivables relate to credit collateralised with securities and mortgage rights. These are not rated by rating agencies.

FINANCIAL ASSET RISK CATEGORIES AS AT 31 DECEMBER 2017

Short term rating Long term ratingNo

rating Total

(amounts in € 000’s)F1

or higherF2

or lower AAA

betweenAA+ and

AA

between A+ and

A- BBB+

Cash and balances at central banks 1,003,673 - - - - - - 1,003,673

Banks 131,361 2,607 - - - - - 133,968

Derivatives - - - - - - 37,418 37,418

Financial assets designated at fair value through profit and loss - - - - - - 16,613 16,613

Available-for-sale financial assets - - - 329,177 444,897 13,669 - 787,743

Held-to-maturity financial assets - - 232,162 108,017 - - - 340,179

Loans and receivables - - - - - - 1,297,830 1,297,830

Total 1,135,034 2,607 232,162 437,194 444,897 13,669 1,351,861 3,617,424

FINANCIAL ASSET RISK CATEGORIES AS AT 31 DECEMBER 2016

Short term rating Long term ratingNo

rating Total

F1or higher

F2or lower AAA

betweenAA+ and

AA

between A+ and

A- BBB+

Cash and balances at central banks 854,230 - - - - - - 854,230

Banks 89,572 34,050 - - - - 4,133 127,755

Derivatives - - - - - - 20,393 20,393

Financial assets designated at fair value through profit and loss - - - - - - 9,499 9,499

Available-for-sale financial assets - - 55,932 338,959 316,617 12,890 - 724,398

Held-to-maturity financial assets - - 501,003 268,869 - - 20,149 790,021

Loans and receivables - - - - - - 958,329 958,329

Total 943,802 34,050 556,935 607,828 316,617 12,890 1,012,503 3,484,625


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ENCUMBERED AND UNENCUMBERED ASSETSFinancial assets pledged as collateralReceipts and payments in relation to the settlement of securities transactions with the various parties involved do not occur at exactly the same time on the settlement date. In order to bridge these intra-day time differences, BinckBank has pledged part of its investment portfolio of fixed-income securities as collateral with its custodian. As there were no overnight exposures during and at the end of 2017 (and 2016), no pledge has been created.

In order to guarantee payments for regarding the financing of the mortgages BinckBank pledged part of its investment portfolio of fixed-income securities as collateral with its counterparties.

Financial assets received as collateralBinckBank provides loans and other facilities on the basis of securities pledged by customers as collateral. BinckBank is not entitled to lend the securities received as collateral and may only proceed to sell them if the borrower remains in default. BinckBank has established that all the risks and rewards of these securities are for the customer and therefore has not recognised these securities in the balance sheet.

Transferred financial assetsAs part of its liquidity management, BinckBank has repo facilities with several banks. Securities sold under the repo facilities are transferred to a third party, for which BinckBank receives cash. These transactions are effected subject to conditions based on the ISDA rules with regard to collateral. BinckBank has established that it retains virtually all the risks and rewards of these securities – credit risk and market risk in particular – and therefore continues to recognise them in the balance sheet. Furthermore, it assumes a financial liability with regard to the cash to be repaid.

BinckBank did not use these facilities in either 2017 or 2016, and accordingly no such positions are recognised in the balance sheet.


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The following table lists the value of the financial assets pledged as collateral and/or encumbered.

FINANCIAL ASSETS PLEDGED AND/OR ENCUMBERED


(a)Financial

assets, gross

(b)Encumbered

financial assets

(c)=(a)-(b) Un-encumbered

financial assets

31 December 2017

ASSETS

Cash and balances at central banks 1,003,673 - 1,003,673

Banks 133,968 32,693 101,275

Derivatives 37,418 - 37,418

Financial assets designated at fair value through profit and loss 16,613 16,613 -



Loans and receivables 1,297,830 - 1,297,830

Total 3,617,424 315,086 3,302,338

31 DECEMBER 2016

ASSETS

Cash and balances at central banks 854,230 - 854,230

Banks 127,755 157 127,598

Derivatives 20,393 - 20,393

Financial assets designated at fair value through profit and loss 9,499 9,499 -



Loans and receivables 958,329 29,038 929,291

Total 3,484,625 496,563 2,988,062


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OFFSETTING OF FINANCIAL ASSETS AND LIABILITIESFinancial assets and liabilities are set off against each other and the net amount is presented in the balance sheet when there is a legally enforceable right to set off the amounts and an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Generally, this does not apply to master netting agreements, and the assets and liabilities concerned are therefore presented on a gross basis in the balance sheet. Master netting agreements usually stipulate separate net settlement of all financial instruments falling under the agreements in the event of default on a particular contract. While master netting agreements can substantially reduce credit risk, it must be remembered that the extent to which the total credit risk is reduced can vary significantly within a short period, since the receivable is affected by every transaction under the agreement.

The following tables show which financial assets and liabilities are subject to offsetting within the balance sheet under IAS 32 and the effects of master netting agreements that do not comply with IAS 32:


(a) (b) (c)=(a)-(b) (d) (e)=(c)-(d)

Financial assets

and liabilities, gross

Recognisedfinancial

assets andliabilitiesoffset in

the balancesheet, gross

Financial assets and liabilities

included inthe balance

sheet, net

Related amounts not offset inthe balance sheet

Net amount

Financialinstruments

Collateralreceived and paid

in cash

31 December 2017

ASSETS

Banks 133,968 - 133,968 (1,566) - 131,402

Derivatives 37,418 - 37,418 (381) 37,037

Total assets 171,386 - 171,386 (1,566) (381) 169,439

LIABILITIES

Banks 2,538 - 2,538 (1,566) - 972

Derivatives 37,055 - 37,055 (28) 37,027

Other liabilities 52,084 - 52,084 (246) 51,838

Acrued liabilities 9,294 - 9,294 (107) 9,187

Total liabilities 100,971 - 100,971 (1,566) (381) 99,024

31 December 2016

ASSETS

Banks 127,755 - 127,755 - - 127,755

Derivatives - - - - - -

Total assets 127,755 - 127,755 - - 127,755

LIABILITIES

Banks 2,017 - 2,017 - - 2,017

Derivatives - - - - - -

Total liabilities 2,017 - 2,017 - - 2,017


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40.6 MARKET RISKBinckBank’s sole market risk in Pillar I is currency risk. Currency risk is the risk of fluctuations in the value of items denominated in foreign currency as a result of movements in exchange rates. The policy is not to take active foreign-exchange trading positions.

40.7 OPERATIONAL RISKThe operational risk is the risk of losses caused by inadequate or deficient internal processes and systems, human error or external events and fraud. Due to the nature of its business activities, BinckBank has a high inherent operational risk. Operational risk is determined by various factors including the large number of complex administrative entries that must be processed on a daily basis. Another important aspect of the operational risk is that communication with the customer and third parties (stock exchanges) is primarily via the internet or telephone. This means that daily activities depend heavily on ICT and external connections. As a result, BinckBank is inherently sensitive to ICT disruptions. A third aspect that leads to a high inherent operation risk is the fact that BinckBank is committed to innovating and improving its services, which results in the regular implementation of system adjustments and improvements.

A framework of processes, systems and accompanying control measures has been established to consistently control operational risks. Together with a clear organisational structure within the 3LoD model, this forms the basis for the design of internal control system. BinckBank runs a number of risk management processes through the first-line departments. Risk management in the second line of defence has a coordinating, advisory, and monitoring role to safeguard the correct functioning of the first-line risk management processes. Despite the large number of risk-mitigating measures in the risk management framework, it is still possible for BinckBank to be faced with an operational loss. BinckBank is insured for certain types of operational loss. This insurance includes policies for directors’ and officers’ liability, corporate liability, professional liability, inventory, reinstatement costs, and trading loss.

The internal target for 2017 is for these operational losses on normal business not to exceed 1.0% of the total income from operational activities on an annual basis. Operational losses in 2017 amounted to 1.12% (0.90% in 2016) of the total income from operational activities. These operational losses mainly consist of the financial result of out-trades, compensation for customers (claims) and losses resulting from faults in the IT systems, and operational processes. Movements in current claims and provisions for operational losses are included.

SPECIFIC OPERATIONAL RISKSICT riskSince the business activities of BinckBank depend heavily on ICT, a significant proportion of the operational risk concerns ICT risk. Deficiencies in ICT can constitute a significant threat to critical business processes and customer services. To reduce this risk, specific control measures have been implemented. These include measures in the areas of IT administration, software development and cybersecurity. Information securityInformation security is regarded as a company-wide responsibility to protect customer and company information. The second line is responsible for formulating the strategic information security policy and the risk management framework, and monitors the correct adherence to this policy. The first line of defence is responsible for the security of BinckBank’s systems, applications and data. Taking the appropriate measures based on targeted risk assessments for business and IT processes guarantees that the data of our customers and our commercial data are properly protected. Business Continuity Management (BCM)The availability of critical services and the security of customers, visitors, and employees are of the highest importance to BinckBank. In order to ensure the availability of its critical services, BinckBank has implemented a BCM process. BCM forms part of the overall risk management framework. The business continuity council meets at least once a quarter. In the event of a disaster, this council also acts as the crisis team and operates on the basis of a clearly defined and tested crisis management process. BinckBank also has a financial recovery plan, which describes the measures BinckBank can take to recover from a financial or other crisis on its own initiative. BinckBank uses the standardised approach (SA) to calculate its operational risk under Pillar I. Under the SA, the operating income in the three preceding financial years is divided into various business lines with the prescribed capital requirements of between 12% and 18%. The following table provides an insight into the calculation of the capital requirement arising from the operational risk.


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STANDARDISED APPROACH AS AT 31 DECEMBER 2017

Operating incomeOperating

incomeCapital

requirement(amounts in € 000’s) 2015 2016 2017 Average

BUSINESS LINE

Retail brokerage 107,254 89,996 93,949 97,066 12% 11,648

Retail banking 25,702 26,133 29,975 27,270 12% 3,273

Agency services 7,928 7,951 4,584 6,821 15% 1,023

Asset management 19,204 12,987 11,720 14,637 12% 1,756

Total 160,088 137,067 140,228 145,794 17,700

STANDARDISED APPROACH AS AT 31 DECEMBER 2016

Operating incomeOperating

incomeCapital

requirement2014 2015 2016 Average

BUSINESS LINE

Retail brokerage 98,933 107,254 89,996 98,728 12% 11,847

Retail banking 28,479 25,702 26,133 26,771 12% 3,213

Agency services 7,082 7,928 7,951 7,654 15% 1,148

Asset management 20,407 19,204 12,987 17,533 12% 2,104

Total 154,901 160,088 137,067 150,686 18,312

40.8 BUSINESS RISKBusiness risk is defined as the threat to BinckBank’s results or capital of as a result of incorrect strategic decisions or the lack of adequate response to changes in environmental factors.

Environmental factors are the competitor activity, customers, potential entrants to the market and government institutions. BinckBank’s business risk is mainly reflected in the dependence on the transaction volume in the financial markets. This makes BinckBank’s profitability highly reliant on the sentiment and the volatility of the stock market. To reduce the business risk, various projects were started in 2016 with the aim of creating a more stable revenue stream. Examples include the launch of ‘Binck Laten Beleggen’ in Belgium and the Netherlands, investing in the Dutch residential mortgage market and the launch of ‘Binck Foward’ and ‘Binck Pension’ on the basis of the fintech software obtained from the acquisition of Pritle in 2017.


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40.9 INTEREST RATE RISKInterest rate risk relates to the sensitivity of the interest rate result and/or the market value of the bank to interest rate movements. A movement in the yield curve affects the future interest income and/or the net present value thereof. As a result, interest rate movements can have an impact on both the interest rate result and the bank’s market value. A distinction can be made between the following forms of interest rate risk:

• Repricing risk: the interest rate risk arising from timing differences in interest rate adjustments of instruments. The earlier or later repricing of assets than liabilities creates interest rate risk. The repricing risk depends on factors including the extent to which interest rate movements are spread evenly across the yield curve (parallel yield curve shift);

• Yield curve risk: the interest rate risk arising from non-parallel shifts in the yield curve;• Optionality risk: the interest rate risk arising when certain options have been made available to clients (for example,

partially penalty-free right of early redemption or a capped variable interest rate) and this risk is not or cannot be fully hedged;

• Basis risk: the interest rate risk that arises when movements in an instrument used as a hedge do not precisely mirror movements in the corresponding item in the statement of financial position (for example, a mortgage based on 1-month Euribor versus a swap based on 3-month Euribor).

The interest rate risk management involves the use of models to determine the interest rate risk of the assets and liabilities, whereby account is taken of the contractual and client-conduct aspects of the products.

BinckBank pursues a prudent interest rate risk policy, which considers both the short-term and the long-term interest rate risk. The short-term interest rate risk is addressed mainly from the perspective of income (earnings-at-risk). The earnings-at-risk analyse studies the sensitivity of interest rate results among several interest rate scenarios. In 2017 the earnings scenarios were recalibrated, taking into account the current low interest rate and other circumstances. In addition, the horizon of the earnings at risk scenarios has been extended to two years. According to the analysis of the earnings-at-risk the following are the most adverse scenarios:

• Increased competition for customer savings, resulting in higher interest rates that are paid on customer deposits.• Further fall in market interest rates, whereby BinckBank is unable reduce the deposit interest rate to less than zero

percent. In this scenario we assume that customers consider zero percent to be a ‘natural’ bottom in interest rates. Below zero percent, customers might be tempted to transfer their deposits to competing banks or even withdrawing funds to hold them in cash.

In 2017, the results of the scenarios for earnings-at-risk remained within the defined limits.

For the long-term interest rate risk it is mainly the economic value calculation that is used. This approach assesses the change in the value of BinckBank’s assets and liabilities caused by sudden shifts in the interest rate. Time analysis is the most important instrument applied in the calculation of the economic value. The duration of equity indicates the extent to which the economic value of equity changes due to parallel interest rate movements.


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During 2017, the duration of equity was managed by the ALCO within a bandwidth of 0.7 to 3.3 years. Due to the low interest rates, customers’ interest in long term fixed interest rate loans (especially mortgages) remained high. The resulting upward effect on the duration was mitigated by entering into interest rate swaps. The implementation of a new ALM model for the management of interest rate risk in the banking book (IRRBB) resulted in significant improvements in the management of exposure to IRRBB on a forward-looking basis.

The duration of 2 years at the end of 2017 means that the value of equity would decrease by 2.0% (€ 10.3 million) if interest rates were to increase in parallel by 100 basis points. In the event of a parallel fall in interest rates of 100 basis points, the value of equity would increase by the same figures.

The following tables show the interest rate maturity based on the contractual interest rate typical residual maturities of the individual balance sheet items.

INTEREST RATE MATURITY CALENDAR AS AT 31 DECEMBER 2017

(amounts in € 000’s) < 1 month> 1 month

< 1 year> 1 year < 5 year

> 5 year< 10 year > 10 year

Non- interestbearing Total

ASSETS

Cash and balances at central banks 1,003,673 - - - - - 1,003,673

Banks 133,968 - - - - - 133,968

Derivatives - - - - - 37,418 37,418

Financial assets designated at fairvalue through profit and loss - - - - - 16,613 16,613

Available-for-sale financial assets 23,016 234,627 530,100 - - - 787,743

Held-to-maturity financial assets 22,159 181,634 136,386 - - - 340,179

Loans and receivables 561,655 26,321 89,721 571,387 48,746 - 1,297,830

Total 1,744,471 442,582 756,207 571,387 48,746 54,031 3,617,424

LIABILITIES

Banks 2,538 - - - - - 2,538

Derivatives - - - - - 37,055 37,055

Financial liabilities designated at fairvalue through profit and loss - - - - - 231 231

Funds entrusted 3,383,383 - - - - - 3,383,383

Total 3,385,921 - - - - 37,286 3,423,207


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INTEREST RATE MATURITY CALENDAR AS AT 31 DECEMBER 2016



> 5 year< 10 year > 10 year

Non- interestbearing Total

ASSETS

Cash and balances at central banks 854,230 - - - - - 854,230

Banks 123,622 - - - - 4,133 127,755

Derivatives - - - - - 20,393 20,393

Financial assets designated at fairvalue through profit and loss - - - - - 9,499 9,499

Available-for-sale financial assets 32,226 219,524 472,648 - - - 724,398

Held-to-maturity financial assets 63,398 442,989 283,634 - - - 790,021

Loans and receivables 438,184 23,441 68,168 332,869 95,667 - 958,329

Total 1,511,660 685,954 824,450 332,869 95,667 34,025 3,484,625

LIABILITIES

Banks 2,017 - - - - - 2,017

Derivatives - - - - - 20,428 20,428

Financial liabilities designated at fairvalue through profit and loss - - - - - 1,018 1,018

Funds entrusted 3,308,829 - - - - - 3,308,829

Total 3,310,846 - - - - 21,446 3,332,292

INTEREST RATE RISK ON THE RESULTThe short term interest risk is addressed from an income perspective. The effect of a gradual movement in interest rates on BinckBank’s profitability is determined using an Earnings-at-Risk model. This measures the impact of the interest-rate risk on the adjusted net result determined by calculating the expected interest income and interest expense on the basis of a gradual change in the market interest rate over a period of one year. This clearly expresses the interest-rate exposure of BinckBank’s result.


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GRADUAL PARALLEL YIELD CURVE SHIFT

Effect on the result


Over a period of 1 year

+200 basis points 9,913 8,892

-200 basis points (774) (1,572)

Over a period of 2 years

+200 basis points 33,075 35,198

-200 basis points (5,298) (5,915)

INTEREST RATE RISK ON CAPITALThe long term interest is addressed using an economic value approach. This approach is based on an examination of the change in the value of BinckBank’s assets and liabilities cause by sudden shifts in the yield curve, or interest rate shocks. The economic value approach uses duration analyses. The duration of equity indicates the extent to which the economic value of equity changes due to interest rate movements.

The investments in mortgages with longer fixed interest periods had an upward effect on the duration of equity. As the duration of the assets is more than that of the liabilities, a fall in the interest rate has a negative effect on BinckBank’s equity. BinckBank manages the effect of interest-rate movements on its equity by means of tolerance levels and monthly interest-rate risk reporting to the ALCO. The effect of an interest-rate shock of 200 basis points on equity is shown in the table below (before tax).

SUDDEN PARALLEL YIELD CURVE SHIFT

Effect on equity

31 December 2017 31 December 2016

+200 basis points (21,163) (845)

-200 basis points (3,424) (1,805)

40.10 LIQUIDITY RISK Liquidity risk is the risk that BinckBank will not be able to meet its payment obligations. BinckBank adopts a prudent policy with regard to liquidity risk that is designed to ensure that demand by its customers for their cash can be met at all times. There were no materially significant liquidity incidents in the financial year 2017.

The main objective of our liquidity risk management is to ensure that the bank is able to maintain or generate sufficient cash to fully meet its payment obligations as soon as they are payable, subject to acceptable conditions. Because liquidity risk can theoretically jeopardise the continuity of a bank, we have placed our tolerance for the liquidity risk at low. One of the most important elements of our approach to liquidity risk management is to maintain the trust of the stakeholders in the bank’s solidity at all times. The policy for measuring, monitoring and managing liquidity risks within BinckBank is set out in the liquidity evaluation assessment process (ILAAP), which is updated annually and assessed by the supervisor.

For managing the liquidity risks, we use a risk framework that enables the extensive measurement, evaluation and calibration of indicators related to liquidity risk. The framework consists of the risk appetite, the liquidity buffers, monitoring and reporting, forecasts, capital and funding plans and planning for unforeseen financing requirements.


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There are clear escalation procedures when the lower limit of the internal liquidity target threatens to be exceeded. Escalation takes place in accordance with the so-called traffic light model. The traffic light model consists of a system of warning signals which lead to increased vigilance with regard to the liquidity position. Code green applies when none of the escalation criteria have been triggered. This can be escalated to code yellow, orange and ultimately code red. Code red would apply in a situation of negative publicity regarding BinckBank’s reputation and/or heavy cash outflow in combination with a limited available cash balance.

Targets and limits for liquidity risk are revised on an annual basis as part of the ILAAP. Limits include, but are not limited to, levels for the liquidity coverage ratio (LCR), the net stable funding ratio (NSFR), the liquidity buffers and the stress test results, all of which are reported to ALCO on a monthly basis. The liquidity buffer is the most important defence element against the liquidity risk and the quality and volume of the buffer are monitored on daily basis, together with inflows and outflows in the funds entrusted.

Scenario analysis is part of our liquidity and funding plans, of which stress tests are a key element. By means of stress tests we assess the resilience of the bank to various adverse liquidity events - both BinckBank’s idiosyncratic and system-wide events and combinations of the two. The liquidity stress tests use various alternative sources of liquidity (Contingency Funding). These sources are:• Repurchase agreements;• Multi currency credit facility (with securities collateral);• Liquidation of the investment portfolio;• Mandatory reserve requirement European Central Bank.

FINANCIAL INSTRUMENTS – REMAINING CONTRACTUAL MATURIT Y OF LIABILITIESThe undiscounted liabilities on the basis of the remaining contractual maturity of financial liabilities are as follows:

UNDISCOUNTED LIABILITIES CLASSIFIED BY REMAINING CONTRACTUAL MATURITY AS AT 31 DECEMBER 2017



> 5 year< 10 year > 10 year Total

LIABILITIES

Banks 2,538 - - - - 2,538

Funds entrusted 3,383,507 - - - - 3,383,507

Derivatives - 99 - 28 36,928 37,055

Financial liabilities designated at fair value through profit and loss - 231 - - - 231

Total 3,386,045 330 - 28 36,928 3,423,331

UNDISCOUNTED LIABILITIES CLASSIFIED BY REMAINING CONTRACTUAL MATURITY AS AT 31 DECEMBER 2016

< 1 month> 1 month



LIABILITIES

Banks 2,017 - - - - 2,017

Funds entrusted 3,297,413 11,593 - - - 3,309,006

Derivatives - 77 - - 20,351 20,428

Financial liabilities designated at fair value through profit and loss - 1,018 - - - 1,018

Total 3,299,430 12,688 - - 20,351 3,332,469


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FINANCIAL INSTRUMENTS BY EXPECTED MATURITYFunds entrusted are treated as being on demand. In practice, a longer behaviour-typical maturity is allocated to these products. The positions at the end of the year are representative of the positions during the year. In addition, the loan facilities and possibilities for liquidation of the interest-bearing securities are shown. This concerns fixed-interest securities which can be traded in an active market or used as collateral for lending from DNB.

MATURITY CALENDAR AS AT 31 DECEMBER 2017




ASSETS

Cash and balances at central banks 1,003,673 - - - - 1,003,673

Banks 133,968 - - - - 133,968

Derivatives - 125 65 316 36,912 37,418

Financial assets designated at fair value through profit and loss - 16,613 - - - 16,613

Available-for-sale financial assets 23,016 234,627 530,100 - - 787,743

Held-to-maturity financial assets 22,159 181,634 136,386 - - 340,179

Loans and receivables 561,655 16,114 65,274 79,179 575,608 1,297,830

1,744,471 449,113 731,825 79,495 612,520 3,617,424

Guarantees - 37 - 737 - 774

Total 1,744,471 449,150 731,825 80,232 612,520 3,618,198

LIABILITIES

Banks 2,538 - - - - 2,538

Derivatives - 99 - 28 36,928 37,055

Financial liabilities designated at fair value through profit and loss - 231 - - - 231

Funds entrusted 3,383,383 - - - - 3,383,383

Total 3,385,921 330 - 28 36,928 3,423,207

Liquidity surplus/deficit on basis ofcontractual maturities (1,641,450) 448,820 731,825 80,204 575,592 194,991

Credit & lending facilities and possibilitiesfor liquidation 1,082,747 (416,261) (666,486) - - -

Liquidity surplus/deficit takingaccount of credit & lending facilities andpossibilities for liquidation

(558,703) 32,559 65,339 80,204 575,592 194,991


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MATURITY CALENDAR AS AT 31 DECEMBER 2016




ASSETS

Cash and balances at central banks 854,230 - - - - 854,230

Banks 123,622 - - 4,133 - 127,755

Derivatives - 63 - - 20,330 20,393

Financial assets designated at fair value through profit and loss - 9,499 - - - 9,499

Available-for-sale financial assets 14,963 236,787 472,649 - - 724,399

Held-to-maturity financial assets 63,398 442,989 283,635 - - 790,021

Loans and receivables 438,184 11,855 48,418 55,806 404,066 958,329

1,494,397 701,193 804,702 59,939 424,396 3,484,626

Guarantees - 132 - 89 848 1,069

Total 1,494,397 701,325 804,702 60,028 425,244 3,485,695

LIABILITIES

Banks 2,017 - - - - 2,017

Derivatives - 77 - - 20,351 20,428

Financial liabilities designated at fair value through profit and loss - 1,018 - - - 1,018

Funds entrusted 3,297,236 11,593 - - - 3,308,829

Total 3,299,253 12,688 - - 20,351 3,332,292

Liquidity surplus/deficit on basis ofcontractual maturities (1,804,856) 688,637 804,702 60,028 404,893 153,403

Credit, lending facilities and possibilitiesfor liquidation 1,436,059 (679,776) (756,284) - - -

Liquidity surplus/deficit takingaccount of credit & lending facilities andpossibilities for liquidation

(368,797) 8,861 48,418 60,028 404,893 153,403


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40.11 FINANCIAL REPORTING RISKThe financial reporting risk is the risk of BinckBank failing to satisfy the legislation and regulations with regard to reports under the heading of financial reporting and the disclosure of information to the market, governments and regulatory authorities. BinckBank endorses the importance of providing accurate, timely, and comprehensive reports to the market, governments, and regulators. At all levels of external reporting, from regulator reports and financial statements to tax reports, there has been an increase in demand in recent years for information, data points, and detailed reports and demand is expected to rise even more so in the coming years. Consequently, BinckBank has expanded and strengthened its reporting function over the past few years through the appointment of various specialists. In addition, external advisers are brought in where needed to support internal specialists in certain areas. BinckBank has established stringent standards with regard to the timeliness and accuracy of the reports in order to meet the external requirements. These standards are monitored on a monthly basis. Monitoring of the external financial reports is the responsibility of the accounting committee and the audit committee.

40.12 LEGAL AND COMPLIANCE RISK The legal and compliance risk is the risk that BinckBank will fail to comply with applicable legislation and regulations, which may lead to damage being suffered. BinckBank places a high priority on integrity and reliability, and emphasises this by means of its code of conduct, house rules, insider trading regulations, and whistle-blower’s scheme. BinckBank strives to comply with all existing, changing and new legislation and regulations in a commercially responsible manner.

40.13 FAIR VALUEFAIR VALUE OF FINANCIAL INSTRUMENTSBinckBank has classified its financial instruments that are measured in the balance sheet at fair value in a hierarchy of three levels based on the priority of the input to the valuation. The fair value hierarchy assigns the highest priority to quoted prices in an active market for similar assets and liabilities and the lowest priority for measurement techniques not based on observable market data. An active market for assets and liabilities is a market in which transactions for assets and liabilities occur with sufficient frequency and volume to provide reliable price information on an ongoing basis.

The fair value hierarchy consists of three levels:Level 1: fair value is determined on the basis of quoted prices in an active market; Level 2: measurement techniques using observable market parameters;Level 3: measurement techniques using input not based on an observable market and which has a more than immaterial

effect on the fair value of the instrument.

Observable input relates to market data obtained from independent sources. Input not based on observable market data is based on subjective assumptions by BinckBank with regard to factors used by market participants to determine the price of an asset or liability developed on the basis of best information available in the circumstances. This input may include factors such as volatility, correlation, spreads to discount rates, default rates, recovery rates, prepayment rates and certain credit spreads. Valuation techniques that depend to a larger extent on non-observable inputs involve a greater contribution from management to determine the fair value.

Where valuation techniques or models are used to determine fair value, they are regularly reviewed and validated by qualified staff who are independent of those who have developed the said techniques or models. Models are calibrated in order to ensure that the results reflect actual data and comparable market prices. If available, models use observable data in order to minimise the use of non-observable inputs. BinckBank makes exclusive use of third-party valuation models and does not make any estimates of its own with regard to the inputs used. All the valuation methods employed are internally evaluated and approved. The majority of the data used in these valuation methods is validated on a daily basis. Valuation methods are inherently subjective. Measuring the fair value of certain financial assets and liabilities is accordingly largely dependent on estimates. The use of other valuation methods and assumptions might produce estimates of fair values that are materially different.


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The fair value of financial instruments measured at fair value is determined as follows:

(amounts in € 000’s) Level 1 Level 2 Level 3 Total

31 December 2017

Derivatives 36,912 506 - 37,418

Financial assets designated at fair value through profit and loss 16,613 - - 16,613

Available-for-sale financial assets - 787,743 - 787,743

Total assets 53,525 788,249 - 841,774

Derivatives 36,928 127 - 37,055

Financial liabilities designated at fair value through profit and loss 231 - - 231

Total liabilities 37,159 127 - 37,286

31 December 2016

Derivatives 20,330 63 - 20,393

Financial assets designated at fair value through profit and loss 9,499 - - 9,499

Available-for-sale financial assets - 724,398 - 724,398

Total assets 29,829 724,461 - 754,290

Derivatives 20,351 77 - 20,428

Financial liabilities designated at fair value through profit and loss 1,018 - - 1,018

Total liabilities 21,369 77 - 21,446

The investment portfolio concerns bonds that are actively traded between professional market participants without the intermediation of a regulated market. Active price quotes are available from brokers on request. Transactions in these bonds are not centrally registered or published by a stock exchange, and BinckBank is therefore of the opinion that there is no demonstrably active market and has classified these instruments as level 2.

No financial assets have been reclassified from one level to another level in 2017 or 2016.


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STATEMENT OF FINANCIAL POSITION ITEMS WITH A FAIR VALUE THAT DIFFERS FROM THE CARRYING VALUEThe following statement of financial position items have a fair value that differs from the carrying value:

(amounts in € 000’s) Carrying value Fair value

31 December 2017


Loans and receivables 1,297,830 1,309,618

31 December 2016




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C O M P A N Y

F I N A N C I A L

S T A T E M E N T S


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Company balance sheet (before appropriation of profit)(amounts in € 000’s) Note 31 December 2017 31 December 2016

ASSETS

Cash and balances at central banks c 1,003,673 854,230

Banks d 131,610 119,063

Loans and receivables e 1,297,830 958,329

Bonds and other fixed-income securities f 1,127,922 1,514,419

Equities and other non-fixed-income securities g 16,613 9,562

Investment in associates & group companies h 1,721 6,463

Intangible assets i 157,950 168,086

Property, plant and equipment j 33,969 34,805

Current tax assets k 16,725 12,112

Deferred tax assets l 6,279 -

Other assets m 95,810 82,345

Prepayments and accrued income n 32,451 37,687

Total assets 3,922,554 3,797,101

LIABILITIES

Banks d 2,538 2,017

Funds entrusted o 3,383,383 3,308,832

Current tax liabilities k 10 10

Deferred tax liabilities l 36,443 31,982

Other liabilities p 89,060 40,444

Accruals and deferred income q 9,030 9,356

Provisions r 8,134 8,891



Share premium 343,565 361,379


Revaluation reserve 492 1,021

Other reserves 40,462 53,660

Unappropriated profit 6,969 1,877

Equity s 393,956 395,569



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Company income statement(amounts in € 000’s) Note 2017 2016

INCOME

Interest income 36,447 30,119

Interest expense (6,401) (3,798)

Net interest income t 30,046 26,321

Fee and commission income 121,622 126,076

Fee and commission expense (18,591) (20,175)

Net fee and commission income u 103,031 105,901

Other operating income v 1,092 2,431

Result from financial instruments w 6,150 2,530

Impairment of financial instruments x (92) (116)

Total income from operating activities 140,227 137,067

EXPENSES

Employee expenses y 47,893 44,855

Depreciation and amortisation z 26,506 25,905

Other operating expenses aa 59,672 57,664

Total operating expenses 134,071 128,424

Result from operating activities 6,156 8,643

Results of associates and group companies 1,378 (1,891)

Result before tax 7,534 6,752

Tax ab 1,437 (2,218)

Net result for the year 8,971 4,534


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NOTES TO THE COMPANY FINANCIAL STATEMENTS

a. GENERAL

COMPANY INFORMATIONBinckBank N.V., established and registered in the Netherlands, is a public limited liability company incorporated under Dutch law, whose shares are publicly traded. BinckBank N.V. is officially domiciled at Barbara Strozzilaan 310, 1083 HN Amsterdam. BinckBank N.V. provides online brokerage services in financial instruments for private and professional investors. In addition to its brokerage services, BinckBank N.V. offers asset management and savings services.

The company financial statements for BinckBank for the period ending on 31 December 2017 have been prepared by the executive board and approved for publication pursuant to the resolution of the executive board and the supervisory board dated 12 March 2018.

Amsterdam,

Executive board: Supervisory board:V.J.J. Germyns (chairman) J.W.T. van der Steen (chairman)E.J.M. Kooistra (CFRO) Ms C.J. van der Weerdt-Norder (vice-chairman)S.J. Clausing (COO) Ms J.M.A. Kemna A. Soederhuizen Ms M. Pijnenborg

b. ACCOUNTING POLICIES

GENERALThe company financial statements of BinckBank N.V. have been prepared in accordance with the provisions of Part 9 of Book 2 of the Dutch Civil Code. The option described in Section 362 Book 2 of the Dutch Civil Code of applying the same principles in the company financial statements as in the consolidated financial statements has been used. The principles in the company financial statements are therefore the same as those stated for the consolidated financial statements, with the exception of those listed below.

ASSOCIATESThe investments in associates are recognised and measured using the equity method. The reporting dates of these companies are the same and the accounting principles applied to their financial reporting are in accordance with those applied by BinckBank for similar transactions and events in similar circumstances.


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NOTES TO THE COMPANY BALANCE SHEET


c. CASH AND BALANCES AT CENTRAL BANKS 1,003,673 854,230

This item includes all cash in legal tender, including bank notes and coins in foreign currency, any credit balances available on demand from the central banks in countries where BinckBank has offices and the European Central Bank.

d. BANKS

Bank balances 131,610 119,063

This item includes all cash and cash equivalents relating to the business activities held in accounts with credit institutions supervised by bank regulators.


Balances available on demand 99,018 85,849

Call money 33 44

Mandatory reserve deposits 32,559 29,038

Receivable from DNB in relation to the Deposit Guarantee Scheme for DSB Bank - 4,132

131,610 119,063

Credit balances available on demand recognises an amount of €1.0 million (2016: €2.0 million) received in the form of cash collateral relating to securities lending transactions. The call money receivables have original maturities of less than three months. Interest is received on these balances at a variable rate based on market rates.

Due to banks 2,538 23,582

The short-term liabilities all have a maturity of less than 3 months.


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e. LOANS AND RECEIVABLES 1,297,830 958,329

This item comprises receivables from clients, including overnight loans and overdrafts that are collateralised by securities, bank guarantees, and receivables secured by mortgages on immovable property.

Collateralised by securities 558,796 433,181

Collateralised by bank guarantees 2,739 4,563

Collateralised by residential property 736,738 520,676

Fair value adjustment hedge accounting (280) -

Other receivables 508 484

Loans and receivables, gross 1,298,501 958,904

Less: impairment provision (671) (575)

1,297,830 958,329

The interest rate on loanes collateralised by securities or bank guarantees is based on Euribor or Eonia and a minimum interest rate is applicable. The interest rates of the mortgage portfolio are between 1.3% and 6.4%.Other receivables refer to amounts receivable after execution of collateral.

f. BONDS AND OTHER FIXED-INCOME SECURITIES 1,127,922 1,514,419

This comprises the investment portfolio consisting of:



1,127,922 1,514,419

Available-for-sale financial assets



Other bonds 753,878 667,396

787,743 724,398

This item comprises a portfolio of interest-bearing securities with less than 4.5 years to maturity. As at 31 December 2017, the effective yield on this portfolio was 0.25% (2015: 0.41%).

Held-to-maturity financial assets



Other bonds 82,335 274,558

340,179 790,021

BinckBank holds a portfolio held-to-maturity financial assets for the purpose of collecting cash flows from interest and redemptions. This item comprises a portfolio of interest-bearing securities with less than 4.5 years to maturity. As at 31 December 2017, the effective yield on this portfolio was 0.56% (2016: 0.45%).


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g. EQUITIES AND OTHER NON-FIXED INCOME SECURITIES 16,613 9,562

h. INVESTMENT IN ASSOCIATES AND GROUP COMPANIES 1,721 6,463


Group companies 1,236 6,463

Other associates 485 -

1,721 6,463

Movements during the year were as follows:


Capital increases and acquisitions 1,504 1,594

Sales (2,617) -

Dividends (4,400) -

Reclassification due to intragroup transactions 1,276 -

Impairment 227 (1,744)

Result in associates (732) (146)


The investments and acquisitions and the impairment items relate to investment in TOM Holding N.V. The item sales relates to the sale of the interest in Able Holding B.V. on October 2017. The item dividends relates to the received dividends from Able Holding B.V.The reclassification due to intragroup transactions relates to group transactions in 2013 which were reclassified to other liabilities due to the sale of Able Holding B.V. in 2017.

OVERVIEW OF GROUP COMPANIESThe group companies are listed in the folowing table.

Place CountryInterest

year-end 2016Interest

year-end 2015

Bewaarbedrijf BinckBank B.V. Amsterdam Netherlands 100% 100%

Able Holding B.V. Reeuwijk Netherlands 0% 100%

Think ETF Asset Management B.V. Amsterdam Netherlands 60% 60%

Information about the aforementioned capital interests is enclosed in note 13 to the consolidated statement of financial position.


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i. INTANGIBLE ASSETS 157,950 168,086


Brand name

Customer deposits



Investments - - - 3,720 8,983 12,703

Disposals – cost (31,405) (84,095) (131,058) (3,318) - (249,876)

Disposals – cumulative amortisation 31,405 84,095 131,058 3,318 - 249,876

Amortisation (70) (8,409) (13,236) (1,124) - (22,839)


Cumulative cost 350 - 650 10,696 153,865 165,561

Cumulative amortisation and impairment (245) - (455) (6,911) - (7,611)




Brand name

Customer deposits



Investments - - - 365 - 365

Disposals – cost - - - (68) - (68)

Disposals – cumulative amortisation - - - 68 - 68

Amortisation (70) (8,410) (13,243) (856) - (22,579)


Cumulative cost 31,755 84,095 131,708 10,294 144,882 402,734

Cumulative amortisation and impairment (31,580) (75,686) (118,277) (9,105) - (234,648)




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j. PROPERTY, PLANT AND EQUIPMENT 33,969 34,805


Real estate




Investments - 475 2,356 - 2,831

Disposals – cost - (103) (6,995) - (7,098)


Depreciation (619) (1,010) (2,032) (6) (3,667)


Cumulative cost 29,827 10,314 12,520 60 52,721



Amortisation period (years) 50 5 - 10 5 5


Real estate




Investments - 353 3,415 - 3,768

Disposals – cost - (14) (10,455) - (10,469)


Depreciation (618) (992) (1,709) (7) (3,326)


Cumulative cost 29,827 9,942 17,159 60 56,988



Amortisation period (years) 50 5 - 10 5 5

The investment in real estate includes prepayments in relation to a leasehold (operating lease) that expires on 15 april 2056. In 2017, an amount of €256 thousand in relation to amortisation of the leasehold is recognised under depreciation and amortisation (2016 €256 thousand).


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k. CURRENT TAX

Current tax assets 16,725 12,112

Current tax liabilities (10) (10)

Total assets/(liabilities) 16,715 12,102

The balance at year-end relates to the last two financial years.

l. DEFERRED TAX

Composition

Deffered tax assets 6,279 -

Deferred tax liabilities (36,443) (31,982)

Total assets/(liabilities) (30,164) (31,982)

Origin of deferred tax liabilities:

Compensating losses 2,948 -

Liquidation losses associates 3,288 -

Available-for-sale financial assets (164) (280)

Goodwill and other intangible assets (35,976) (31,492)

Depreciation period differences for non-current assets (489) (625)

Temporary differences as a result of intercompany transactions 232 465

Other liabilities (3) (50)

Total deferred tax (30,164) (31,982)

m. OTHER ASSETS 95,811 82,345


Trade receivables 167 855

Receivables relating to securities sold, but not yet delivered 47,362 33,716

Derivative financial instruments 37,418 20,330

Cash flows to be settled – mortgages receivables 5,926 21,188

Other receivables 4,938 6,256

95,811 82,345

All receivables under other assets have a term of less than one year. The item receivables arising from securities sold but not yet delivered can fluctuate on a daily basis in line with movements in the market and the total size of the number of transactions. The derivative financial instruments contain the market value of the turbos purchased by BinckBank as hedge of the market risk on the issued turbos. The market value of these derivative financial instruments contains a haircut for the counterparty credit risk exposure.


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n. PREPAYMENTS AND ACCRUED INCOME 32,451 37,687


Interest receivable 17,029 20,533

Commission receivable 7,484 7,420

Other prepayments and accrued income 7,938 9,734

32,451 37,687

The commission receivable comprises the regular commission as well as the receivable relating to performance-related fees. Other prepayments and accrued income concern mainly prepaid IT maintenance contracts and other service related contracts.

o. FUNDS ENTRUSTED 3,383,383 3,308,832


Demand deposits in customer savings accounts 219,707 227,897

Demand deposits in customer current accounts 3,163,676 3,069,342

Granted credit facilities (building deposits) - 11,593

3,383,383 3,308,832

Starting 2017, the building deposits, initially reflected in the granted credit facilities have been classified as part of the loans and receivables. This presentation provides better insight in the nature and contractual relationship of the item.

p. OTHER LIABILITIES 89,060 40,444


Derivative financial instruments 37,055 20,428

Equity positions 231 1,018

Liabilities in respect of securities transactions not yet settled 39,369 10,693

Tax and social security contributions 3,631 2,714

Amounts owed to group companies 124 124

Trade payables 3,643 2,214

Other liabilities 5,007 3,253

89,060 40,444


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The derivative financial instruments contain the market value of the turbos issued by BinckBank. The market risk of these turbos is hedged by purchasing a turbo with identical characteristics. The market value of these derivative financial instruments has been adjusted with a haircut for the own credit risk exposure. The item liabilities in respect of securities transactions not yet settled can fluctuate on a daily basis in line with movements in the market and the total number of transactions.

q. ACCRUALS AND DEFERRED INCOME 9,030 9,356


Accrued interest 367 338

Employee expenses 5,473 4,964

Other accruals and deferred income 3,190 4,054

9,030 9,356

The employee expenses item includes accruals for holiday allowance, unused holiday leave and performance-related remuneration.

r. PROVISIONS 8,134 8,891

The movement in the legal provisions was as follows:


Additions through profit and loss 2,329 3,375

Utilised (2,994) (1,317)

Unused amounts reversed (92) (1,051)


s. EQUITY 393,956 395,569



Balance as at 1 January 71,000,000 7,100 71,000,000 7,100

Cancellation treasury shares (3,500,000) (350) - -

Balance as at 31 December 67,500,000 6,750 71,000,000 7,100

The number of shares in issue is 67,500,000, each with a nominal value of €0.10. The share capital is fully paid up.Stichting Prioriteit Binck holds 50 priority shares, each with a nominal value of €0.10.



Cancellation treasury shares (17,814) -


The share premium is exempt from tax, and freely distributable.


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Treasury shares (4.282) (29.468)

Aantal Bedrag Aantal Bedrag

Balance as at 1 January 5,281,525 (29,468) 719,277 (4,979)

Share buy-back - - 4,632,720 (24,950)

Shares issued to executive board and employees (56,985) 318 (70,472) 461

Shares issued to third parties (957,121) 5,340 - -

Cancelled treasury shares (3,500,000) 19,528 - -

Balance as at 31 December 767,419 (4,282) 5,281,525 (29,468)

At the end of 2017, the carrying amounts of the treasury shares was measured at the average purchase price of €5.58. The movements in the amounts of treasury shares purchased and sold are recognised under equity. At the end of 2016 the quoted share price was €4.43 (2016: €5.50).

Revaluation reserve 492 1,021


Movement in fair value (645) (708)

Realised revaluation through the income statement - 66

Tax on unrealised result on available-for-sale financial assets 116 137


The reserve comprises the fair value changes, after tax, on available-for-sale financial assets.In the determination of the distributable amount, any negative revaluation reserve is deducted from the reserves available for distribution.

Other reserves 40,462 53,660


Grant of rights to shares 92 162

Shares issued to executive board and employees (318) (461)

Shares issued to third parties (806) -

Cancelled treasury shares (1,364) - -

Appropriation of result for previous year (10,802) 2,588



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Unappropriated result 6,969 1,877


Addition to/(reduction from) other reserves 10,802 (2,588)

Payment of final dividend (12,679) (17,199)


Payment of interim dividend current year (2,002) (2,657)



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NOTES TO THE COMPANY INCOME STATEMENT

(amounts in € 000’s) 2017 2016

t. NET INTEREST INCOME 30,046 26,321

This includes all income and expense items relating to the lending and borrowing of money, providing that they are of a similar nature to interest, as well as interest income on credit balances or interest expense on overdrafts.


Interest income

Balances at central banks - 3




Other interest income 121 121

36,447 30,119

The interest income recognised on non-performing loans is €19 thousand (2016: €19 thousand).

Interest expense

Central Banks 4,022 2,013

Financial institutions 1,674 1,176

Funds entrusted 503 609


Other interest expense 47 -

6,401 3,798

The other interest expense item includes interest paid on balances held with credit institutions. As a result of the continuing low, and even negative, interest rates on balances with credit institutions and the ECB BinckBank is, on balance, paying interest on these assets. Interest paid on funds entrusted is recognised under interest expenses.


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(amounts in € 000’s) 2017 2016

u. NET FEE AND COMMISSION INCOME 103,031 105,901

Net fee and commission income comprises fees for services as performed for and by third parties in respect of securities transactions and related services.


Fee and commission income

Commission income 94,691 96,263


Other commission income 16,011 17,448

121,622 126,076

The item asset management fees includes a performance fee of €1.9 million over 2017 (2016: €0.4 million). Other fee and commission income includes all-in fees and other securities services.

Fee and commission expense

Costs of securities transactions 16,056 17,105

Asset management fees 849 1,382

Other commission expenses 1,686 1,688

18,591 20,175

Other commission expense includes fees for the deposit and withdrawal of securities, transfer fees, other management activities, and custody fees.

v. OTHER OPERATING INCOME 1,092 2,431


IT services – revenues 1,716 2,254

IT services – direct expenses (390) (276)

IT services – net result 1,326 1,978

Other revenues (234) 453

1,092 2,431

This includes fees for subscriptions, courses, currency results, and other income and expense items that cannot be accounted for under other items.


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(amounts in € 000’s) 2017 2016

w. RESULT FROM FINANCIAL INSTRUMENTS 6,150 2,530


Result from hedge accounting 73 -

Result from turbos 5,729 2,541

Result from other financial instruments 348 (11)

6,150 2,530

Result from hedge accounting


Fair value adjustment hedged item (280) -

73 -

Result from turbos

Result on turbos 5,745 2,562

Fair value result turbos (CVA/DVA) (16) (21)

5,729 2,541

BinckBank has entered into a cooperation agreement with UBS for the turbos it has issued, whereby the latter bears the market risk. The revenues depend on the financing level of the turbos issued. The fair value result turbos comprise the haircut applied to the valuation of the turbo products relating to credit risk of the various contract parties in the market value of the Binck turbos issued and the corresponding turbos purchased.

Result from other financial instruments

Available-for-sale financial assets - (66)

Other results from financial instruments 348 55

348 (11)

The other results from financial instruments contains mainly the movement in the revaluation of the receivable on DNB in respect of the Deposit Guarantee Scheme - DSB Bank.


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(amounts in € 000’s) 2017 2016

x. IMPAIRMENT OF FINANCIAL INSTRUMENTS (92) (116)

This item comprises the movement in the provision on financial assets relating to loans & receivables and collecting of assets written off in the past.

y. EMPLOYEE EXPENSES 47,893 44,855


Salaries 33,967 31,922

Social security contributions 5,592 5,307

Pension costs 2,323 2,071

Profit sharing and performance-related pay 1,488 1,015

Other employee expenses 4,523 4,540

47,893 44,855

Details of the remuneration paid to the individual members of the executive board and supervisory board of BinckBank N.V. is disclosed in the consolidated financial statements.


Number of employees (including members of the board)

Average during the financial year 621 607

of which employed in The Netherlands 510 507

End of the financial year (headcount) 623 617

of which employed in The Netherlands 510 511

(amounts in € 000’s) 2017 2016

z. DEPRECIATION AND AMORTISATION 26,506 25,905

This item comprises amortisation and depreciation on:

Intangible assets 22,839 22,579

Property, plant and equipment 3,667 3,326

26,506 25,905


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(amounts in € 000’s) 2017 2016

aa. OTHER OPERATING EXPENSES 59,672 57,664


Marketing costs 13,981 12,669

ICT costs 11,047 12,055

Audit and professional services 14,442 15,321

Housing costs 2,029 1,987

Communication and information costs 9,619 8,958

Miscellaneous overheads 8,554 6,674

59,672 57,664

The item Miscellaneous overheads comprises costs including office costs, banking costs, insurances, contributions regarding banking supervision, single resolution fees, servicing fees for mortgage rights and movements in the provisions.

ab. TAX

Tax 1,437 (2,218)

The reconciliation of the effective tax rate with the applicable tax rate is as follows:

2017 Amount

2017 Percentage

2016 Amount

2016 Percentage

Standard tax rate 1,884 22.8% 1,688 25.0%

Effect of different tax rates (in other countries) 66 0.8% 45 0.7%

Effect of substantial-holding exemptions (345) -4.2% 473 7.0%


Other effects 302 3.7% 80 1.1%

Total tax expense (1,437) -17.4% 2,218 32.8%


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ac. NOTES TO FEES OF GROUP AUDITORThe following fees, including VAT, were charged to the company, its subsidiaries and other consolidated entities in relation to the procedures performed by the external audit firm and its affiliates as referred to in Section 2:382a of the Dutch Civil Code:

(amounts in € 000’s)Deloitte

Accountants B.V.Deloitte overig

netwerk Totaal

2017

Audit of the financial statements, including the audit of the company financial statements and other statutory audits of subsidiaries and consolidated companies

394 42 436

Other audit assignments 107 18 125

Tax related non-audit services - - -

Other non-audit services - - -

501 60 561

2016

Audit of the financial statements, including the audit of the company financial statements and other statutory audits of subsidiaries and consolidated companies

391 44 435

Other audit assignments 107 18 125

Tax related non-audit services - - -

Other non-audit services - - -

498 62 560

ad. COMMITMENTS AND CONTINGENT LIABILITIES


Contingent liabilities

Liabilities in respect of contracts of suretyship and guarantees 774 946

Liabilities in respect of irrevocable facilities

Liabilities in respect of commitments that could result in lending 18,638 194,823

SURET YSHIPS AND GUARANTEESTo meet the needs of its customers, BinckBank offers loan related products, such as contracts of suretyship and guarantees. The underlying value of these products is not recognised as assets or liabilities in the statement of financial position. The above figure represents the maximum potential credit risk for BinckBank related to these products on the assumption that all its counterparties should default on their contractual obligations and all existing collateral should prove worthless. Guarantees include both credit-substituting and non-credit-substituting guarantees. In most cases, guarantees can be expected to expire without a call being made on them and they will not give rise to any future cash flows.

ALEX BOTTOM-LINEWith the acquisition of Alex Beleggersbank at the end of 2007, BinckBank also acquired the Alex Bottom-Line product, which is an agreement with the VEB (Association of Stockholders). If BinckBank terminates this agreement then it will be liable to pay an amount equal to the custody fee and dividend commission paid by each customer of Alex Bottom-Line on entry into the agreement plus the amount of any custody fee and dividend commission additionally paid by each customer on exceeding set limits.


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LEASE COMMITMENTSThe company has leases and service contracts for office premises in the Netherlands, Belgium, France, Spain, and Italy. It has also entered into operating lease contracts for the vehicle fleet for periods of less than five years.

The commitments per remaining maturity date is as follows:


Within one year 4,445 3,697

One to five years 4,425 5,145

Longer than five years 1,351 959

LEGAL PROCEEDINGSBinckBank is involved in various legal proceedings. Although it is not possible to predict the outcome of current or impending lawsuits, the executive board believes – on the basis of information currently available and after taking legal counsel – that the outcomes are unlikely to have material adverse effects on BinckBank’s financial position or results, with the exception of the cases reported under the note on provisions.

ALEX ASSET MANAGEMENTBinckBank has reached agreement with the VEB (Association of Stockholders) and Vermogensmonitor consumer guidance and advice organisation on the settlement of complaints from members and clients about the information provided by Alex Asset Management, including warnings for market condition risks in 2014, during the period from 8 September 2012 to 26 August 2014. The VEB and Vermogensmonitor will be placed in a position to offer compensation to clients who lodged complaints and meet specific criteria. This has enabled BinckBank to settle as many complaints as possible. However, there is still a risk that other clients will lodge new complaints about Alex Asset Management with BinckBank, as a result of which the risk of legal proceedings remains.

INTERNATIONAL SERVICES SUBJECT TO FOREIGN LEGISLATIONBinckBank procures international services from data and other suppliers that may be subject to foreign legislation, meaning there is an inherent risk of differences in interpretation. The executive board believes that while the outcome of discussions regarding such differences in interpretation is uncertain when they do arise, there is currently no reason to assume that this could have material adverse effects on BinckBank’s financial position or results.

ae. POST BALANCE SHEET EVENTSTHINK ETF ASSET MANAGEMENT B.V.On 19 January 2018 BinckBank announced its intention to sell its 60% holding in Think ETF Asset Management B.V. (Think)to Van Eck Associates Corporation. The sale is expected to be completed at the end of the first quarter of 2018. The sale did not lead to changes in the figures as per 31 December 2017. The sale will be processed after the sale has been effected and BinckBank no longer has any control over Think.

No other events took place after the balance sheet date.


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af. PROPOSAL FOR PROFIT APPROPRIATIONOn the proposal of the Priority, no transfer will be made to the reserves. The entire profit for the period is at the disposal of the shareholders. It is proposed to distribute a final dividend of €0.23 per ordinary share. For this purpose an amount of €8,556,000 will be withdrawn from the other reserves.

The profit appropriation and the proposed dividend distribution will then be as follows:


Profit in 2017 8,971

Less: paid interim dividend (2,002)

At shareholders’ disposal 6,669

Add: deduction from the other reserves 8,556

Proposed dividend 15,525

This proposal is not reflected in the balance sheet.


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OTHER INFORMATION

Independent auditor’s report

To: the shareholders and Supervisory Board of BinckBank N.V.

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2017 INCLUDED IN THE ANNUAL ACCOUNTS

OUR OPINIONWe have audited the accompanying financial statements 2017 of BinckBank N.V., based in Amsterdam. The financial statements include the consolidated financial statements and the company financial statements.

In our opinion:• The accompanying consolidated financial statements give a true and fair view of the financial position of BinckBank N.V. as

at 31 December 2017, and of its result and its cash flows for 2017 in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code.

• The accompanying company financial statements give a true and fair view of the financial position of BinckBank N.V. as at 31 December 2017, and of its result for 2017 in accordance with Part 9 of Book 2 of the Dutch Civil Code.

The consolidated financial statements comprise:1. The consolidated statement of financial position as at 31 December 2017.2. The following statements for 2017: the consolidated income statement, the consolidated statements of comprehensive

income, changes in equity and cash flows.3. The notes comprising a summary of the significant accounting policies and other explanatory information.

The company financial statements comprise:1. The company balance sheet as at 31 December 2017.2. The company profit and loss account for 2017.3. The notes comprising a summary of the accounting policies and other explanatory information.

BASIS FOR OUR OPINIONWe conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the “Our responsibilities for the audit of the financial statements” section of our report.

We are independent of BinckBank N.V. in accordance with the EU Regulation on specific requirements regarding statutory audit of public-interest entities, the ‘‘Wet toezicht accountantsorganisaties’’ (Wta, Audit firms supervision act), the ‘‘Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten’’ (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the ‘‘Verordening gedrags- en beroepsregels accountants’’ (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.


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MATERIALIT YBased on our professional judgement we determined the materiality for the financial statements as a whole at € 1,060,000. The materiality is based on 6% of the average income before tax in the past three years. We have also taken into account misstatements and/or possible misstatements that in our opinion are material for the users of the financial statements for qualitative reasons.

We agreed with the Supervisory Board that misstatements in excess of € 53,000, which are identified during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds.

SCOPE OF THE GROUP AUDITBinckBank N.V. is at the head of a group of entities. The financial information of this group is included in the consolidated financial statements of BinckBank N.V.

Our group audit focused on significant group components. We have performed audit procedures ourselves regarding the branches of the group entities. We have also made use of component auditors from the Deloitte network to perform specific audit procedures on the branches in Belgium, France and Italy. With respect to the remaining entities we have performed review or specific audit procedures.

By performing the procedures mentioned above at group entities, together with additional procedures at group level, we have been able to obtain sufficient and appropriate audit evidence about the group’s financial information to provide an opinion about the consolidated financial statements.

GENERAL OBSERVATIONAs part of the audit of the financial statements, we have obtained an understanding of the internal controls that are relevant for the financial statements 2017 in order to select the audit procedures that are appropriate in these circumstances. The governance, risk & compliance framework enables Binckbank to manage the internal control environment effectively. This framework is maintained by the departments in the first line of defense of BinckBank N.V. and periodically reviewed by the second and third line of defense. The second and third line of defense report on a frequent basis to the Executive Board and the Supervisory Board. We believe that BinckBank’s internal control framework meets the required criteria and it allows us to perform a system based audit in an effective manner.

OUR KEY AUDIT MATTERSKey audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements. We have communicated the key audit matters to the Supervisory Board. The key audit matters are not a comprehensive reflection of all matters discussed.

These matters were addressed in the context of our audit of the financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

In prior year, we identified “valuation of mortgages” as a key audit matter of our audit, due to the fact that investing in mortgages was a new activity for BinckBank. We noted that during 2017 the activities have not changed compared to prior year. Therefore, we decided that this matter is no longer a key audit matter of our audit.

• Cut-off, completeness and accuracy of interest income and fee and commission income

Key audit matterBinckBank N.V. has several income sources, as disclosed in note 4 of the financial statements, of which interest income and fee and commission income are the most significant. Given the relative size of these revenue streams we have identified cut-off, completeness and accuracy of interest income and fee and commission income as a key audit matter.

Audit procedures performed We have tested the design, implementation and operating effectiveness of the (application) controls with respect to the cut-off, completeness and accuracy of the interest income and fee and commission income. Furthermore, we have performed a substantive analytical review using data analytics techniques complemented with detailed substantive procedures to test on the underlying pricing arrangements. Finally, we have evaluated the internal accounting policies for compliance with EU-IFRS.


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• Valuation of goodwill

Key audit matterReference is made to disclosure note 4 and disclosure note 14 in the financial statements 2017. BinckBank N.V. has capitalised € 154 million of goodwill. Given the relative size of this balance in combination with the estimation uncertainty we have decided to classify valuation of goodwill as a key audit matter.

Audit procedures performed We have tested the impairment model prepared by management and tested the valuation based on the impairment model as prepared by the external expert employed by management. In addition we have tested the assumptions of management including the projected cash flows, the discount rate and the expected growth percentages on reasonableness. As part of these testing procedures we have obtained information supporting the assumptions and tested this information, where possible, with the use of external sources. We have performed backtesting procedures on the estimates made in prior years by comparing the projected cash flows of previous years to the actual results. Furthermore, we tested the arithmetic accuracy of the impairment model and the sensitivity analyses prepared by management. Furthermore, we have performed our own sensitivity analyses. The impairment test and the assumptions used are described in note 14 of the financial statements. • Reliability and continuity of the automated systems

Key audit matterGiven the activities of BinckBank N.V., the continuity of the operations is highly dependent on the IT-infrastructure as also explained in the Risk management paragraph of the annual accounts. Therefore, reliability and continuity of the automated systems has been a key audit matter during our audit.

Audit procedures performedWe have tested the reliability and continuity of the automated systems relevant for our audit. For this purpose we have made use of IT auditors within our audit team. Our procedures included testing the design, implementation and operating effectiveness of the relevant general IT and application controls.

• Legal disputes and compliance with law and regulation

Key audit matterLaw and regulation with respect to financial institutions is extensive and subject to change. BinckBank N.V. is active in several jurisdictions which all have their specific requirements. Furthermore, BinckBank N.V. is involved in several legal disputes. We have focused on the accounting and disclosures in respect of legal disputes.

Audit procedures performed We have tested the design, implementation and operating effectiveness of the relevant processes for our audit with respect to the legal and compliance functions. Furthermore, we have performed detailed substantive procedures on the related provisions and have requested confirmations of the involved lawyers. During these procedures we have made use of local specialists when deemed necessary. We also considered whether the disclosures in note 21 of the financial statements in respect of this legal exposure is compliant with the relevant accounting requirements. We focused on the adequacy of disclosure of the related risks and assumptions.

REPORT ON THE OTHER INFORMATION INCLUDED IN THE ANNUAL ACCOUNTS In addition to the financial statements and our auditor’s report thereon, the annual accounts contain other information that consists of:

• BinckBank at a glance• Key figures• About BinckBank• Report of the Executive Board• Corporate Governance• Risk Management• Management Statement• Report of the Supervisory Board• Other information


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Based on the following procedures performed, we conclude that the other information:

• Is consistent with the financial statements and does not contain material misstatements.• Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements.

By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.

Management is responsible for the preparation of the other information, including the Report of the Executive Board in accordance with Part 9 of Book 2 of the Dutch Civil Code, and the other information as required by Part 9 of Book 2 of the Dutch Civil Code.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

ENGAGEMENTWe were engaged by the Supervisory Board as auditor of BinckBank N.V. on April 22, 2014, as of the audit for the year 2014 and have operated as statutory auditor ever since that financial year.

NO PROHIBITED NON-AUDIT SERVICESWe have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on specific requirements regarding statutory audit of public-interest entities.

DESCRIPTION OF RESPONSIBILITIES REGARDING THE FINANCIAL STATEMENTS

RESPONSIBILITIES OF MANAGEMENT AND THE SUPERVISORY BOARD FOR THE FINANCIAL STATEMENTSManagement is responsible for the preparation and fair presentation of the financial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, management is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting frameworks mentioned, management should prepare the financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Management should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements.

The Supervisory Board is responsible for overseeing the company’s financial reporting process.

OUR RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTSOur objective is to plan and perform the audit assignment in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.


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We have exercised professional judgement and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. Our audit included e.g.:

• Identifyingandassessingtherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designingandperformingauditproceduresresponsivetothoserisks,andobtainingauditevidencethatissufficientandappropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate inthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessofthecompany’sinternalcontrol.

• Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Concludingontheappropriatenessofmanagement’suseofthegoingconcernbasisofaccounting,andbasedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtonthecompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport. However, future events or conditions may cause the company to cease to continue as a going concern.

• Evaluatingtheoverallpresentation,structureandcontentofthefinancialstatements,includingthedisclosures.• Evaluatingwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachieves

fair presentation.

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities.Decisivewerethesizeand/ortheriskprofileofthegroupentitiesoroperations.Onthisbasis,weselectedgroupentitiesforwhichanauditorreviewhadtobecarriedoutonthecompletesetoffinancialinformationorspecificitems.

We communicate with the Supervisory Board regarding, among other matters, the planned scope and timing of the audit and significantauditfindings,includinganysignificantfindingsininternalcontrolthatweidentifiedduringouraudit.InthisrespectwealsosubmitanadditionalreporttotheauditcommitteeinaccordancewithArticle11oftheEURegulationonspecificrequirements regarding statutory audit of public-interest entities. The information included in this additional report is consistent withourauditopinioninthisauditor’sreport.

We provide the Supervisory Board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the Supervisory Board, we determine the key audit matters: those matters that were of mostsignificanceintheauditofthefinancialstatements.Wedescribethesemattersinourauditor’sreportunlesslaworregulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest.

Amsterdam, 12 March, 2018

Deloitte Accountants B.V.

Signed on the original: R.J.M. Maarschalk


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PROVISIONS OF THE ARTICLES OF ASSOCIATION REGARDING PRIORITY

SHARES (ARTICLES 15 AND 21)

The rights attached to the priority shares include the right to make non-binding nominations for appointment to the company’s supervisory board and executive board and to take various other actions.

The priority shares are held by Stichting Prioriteit Binck, Amsterdam.

This foundation’s board, which consists of three members, is appointed by the supervisory board and executive board of the company.

The board members of Stichting Prioriteit Binck are:J.W.T. van der SteenMs C.J. van der Weerdt-NorderV.J.J. Germyns


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PROVISIONS OF THE ARTICLES OF ASSOCIATION REGARDING PROFIT

APPROPRIATION (ARTICLE 32)

1. The company may only make distributions to the shareholders if the company’s equity exceeds its issued and paid-up share capital plus the reserves required to be held by law or by the articles of association.

2. Firstly – and only insofar as profits allow – an amount equal to six per cent (6%) of the nominal value of the priority shares will be distributed on these shares.

3. The foundation will determine the extent to which the remaining profits will be transferred to reserves. Profits remaining after application of the previous subsection and the previous sentence will be at the disposal of the general meeting of shareholders. Any amounts not distributed will be transferred to the company’s reserves.

4. Withdrawals from distributable reserves may be made pursuant to a resolution by the general meeting of shareholders, subject to the prior consent of the foundation.

5. The executive board may resolve to allow the company to make interim distributions, providing it demonstrates in the form of an interim statement of assets and liabilities as referred to Section 105(4) Book 2 of the Dutch Civil Code that it complies with item 1 above and subject to the prior consent of the foundation. The distributions referred to in this subsection may be made in cash, in shares in the company’s equity or in marketable rights thereto.

6. The general meeting of shareholders may resolve to declare that distributions on shares other than interim distributions as referred in subsection 5 of this article (whether at the shareholders’ discretion or otherwise) may, instead of being made in cash, be made fully or partly (whether at the shareholders’ discretion or otherwise) in:

a. ordinary shares (which will, if desired and possible, be charged to the share premium reserve) or marketable rights to ordinary shares, or

b. equity instruments of the company or marketable rights thereto. A resolution as referred to in the previous sentence may only be passed after being proposed by the executive board

and approved by the supervisory board. A proposal to pass a resolution as referred to in b will be submitted only after consultation with Euronext Amsterdam N.V.7. No distribution will be made to the company in respect of shares it holds in its own capital or on shares for which the

company holds depositary receipts.8. The calculation of the profit distributable on shares will disregard shares that are not eligible, pursuant to subsection 7,

for such distribution.9. Once a resolution to make a distribution has been passed, the amount will be declared payable within fourteen days. An entitlement to receive a distribution will lapse five years after the date on which the amount is declared payable,

and the said amount will then revert to the company.


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FOREIGN OFFICES

BinckBank BelgiumItaliëlei 1242000 AntwerpBelgiumTelephone +32 3 303 3133www.binck.be

BinckBank France1 Rue Collange92300-Levallois-Perret FranceTelephone +33 170 36 70 62www.binck.fr

BinckBank ItalyVia Ventura 520134 MilanoItalyTelephone +39 02 360 16 161www.binck.it

BinckBank Spain (Alex Spanje)Urbanización La CarolinaEdificio Aries, Local N29602 MarbellaMalagaSpainTelephone +34 952 92 4011www.alexspanje.com

COLOPHON

Photography: Lex van Lieshout Fotografie, Zoetermeer, The Netherlands

Maurits Giesen, Den Haag, The NetherlandsXander Koopmans, Keepsake, Haarlem, The Netherlands

Design: Mug in Vorm - Grafische Ontwerpen, Amsterdam, The Netherlands

BinckBank N.V.Barbara Strozzilaan 310, 1083 HN Amsterdam, The Netherlands

P.O. Box 75047, 1070 AA Amsterdam, The NetherlandsT +31 20 522 03 78 | [email protected]

www.binck.com

Documents

ANNUAL REPORT 2017 - BinckBank · Annual Report 2017 // 8 ABOUT BINCKBANK BINCKBANK AT A GLANCE x million Aet under adminitration Aet under management Number of tranaction 0 2 4 6