The banks we have identified as per the stated criteria are Triodos Bank, Achmea Bank, Delen Private Bank, Delta Lloyd Bank NV, Banque de Luxembourg. The number of customers for Tier-2 banks with less than 500,000 customers is not available in most cases. Most of these banks or their parent companies are yet to report or publish their annual reports for 2017. We have triangulated all the figures. Please find details of the same below:
Our research findings indicate that some top Tier-2 banks in Benelux like AXA Bank Europe, Argenta Spaarbank have more than double the number of customers than the defined criteria (less than 500,000 customers). Some other Tier-2 banks like Crelan have even greater assets than the two banks mentioned above. However, we have only considered Tier-2 companies with a customer base of less than 500,000 customers in our research.
Most Tier-2 banks in Benelux have not disclosed the number of clients they serve. Therefore, we have determined the range of total asset value for the top Tier-2 banks in Benelux (with less than 500,000 customers), and triangulated the number of customers these banks are likely to serve.
It is likely that a bank with lesser assets has fewer customers. However, this is subject to the type of customer the bank serves. For example, a bank that only caters to corporate could have fewer customers and much greater assets than one that serves only retail clients. But as majority Tier-2 banks in Benelux serve both corporate and retail clients, and since a couple of banks we have listed serve only high-net-worth individuals (somewhere in the middle of retail and corporate), we have assumed that the number of customers will be proportional to the value of total assets.
CALCULATIONS TO DETERMINE RANGE
Argenta provides retail financial services in Netherlands and Belgium, through Argenta Spaarbank and Argenta Assuranties. The two divisions collectively have 1.7 million customers.
Therefore, percentage of total assets of Argenta Group that is contributed by Argenta Spaarbank = 36.7 *100/(36.7+6.7) =84.56%
We assume that the division of the customer base will be in the same proportion as the division of total assets.
Therefore, number of customers with Argenta Spaarbank = 84.56%* 1.7 million = 1,437,520
This number is much higher than 500,000.
AXA Bank Europe
AXA Bank Europe primarily operates in Belgium. It has 1,000,000 customers and total assets of 28 billion EUR as of end of 2016.
Triodos Bank had total assets of 13,454 million EUR and 652,000 customers at the end of 2016. We know that 60.86% of the total assets and the total number of customers can be attributed to Netherlands and Belgium.
The calculations and assumptions that helped us arrive at 60.86% have been explained in the Tridios Bank section under Top Tier-2 banks in Benelux.
The total number of customers of Triodos Bank from Benelux at the end of 2016 = 60.86% * 652,000 = 396,807 customers
Total assets under management that can be attributed to Benelux region = 60.86% * 13,454 million EUR = 8,188 million EUR
We will now use the above data to determine a total asset value range in which top Tier-2 banks (by asset value) with less than 500,000 customers are likely to fall.
We will begin with the assumption that the top Tier-2 banks in Benelux region will have over 300,000 customers.
Next, we need to determine the upper and lower limit of total asset value for the range. We will use Triodos to define the lower limit of the range; Argenta Spaarbank and AXA Bank Europe will be used to define the upper limit of the range.
The range of the total asset value for top Tier-2 banks in Benelux with less than 500 customers is 6.19 billion EUR to 14 billion EUR. The calculations for the same have been shown in the attached spreadsheet. In this same spreadsheet you will also find calculations for average asset value per customer, which we will use to estimate the number of customers for a bank.
We observe that the average asset value per bank for the larger banks is higher, but at the same time the asset value is not always proportional to the average asset value per customer. It is not possible to ascertain a correlation from such a small sample. So we will broadly assume that the average asset value per customer for a larger bank will be more.
Therefore, we will simply use the average asset value for Triodos Bank (20,635 EUR) to calculate the number of customers for banks in the lower half of the range; for the upper half of the range we will use the average of average value of asset value per customer for Argenta Spaarbank and Axa Bank Europe (25,442 EUR).
TOP TIER-2 BANKS IN BENELUX
We have picked the following Tier-2 banks with less than 500,000 customers from the list of top banks in Belgium, Netherlands and Luxembourg. We have identified top ranked banks from the above country wise list on the basis of the total asset value within our defined range.
Triodos Bank is present in the Netherlands, Belgium, Spain, Germany and UK.
Total banking activities of Triodos Bank = 9,261,874
Banking activities in the Netherlands = 3,741,424
Percentage of Banking activities in Netherlands & Belgium = (3,741,424 +1,895,244)*100/ 9,261,874 = 60.86%
Total number of customers of Triodos Bank in 2016 = 652,000
According to the bank’s guidance the number of customers was projected to grow by 5% to 10% in 2017. We will assume the mid-range value of 7.5% for our calculations.
Total number of customers of Triodos Bank = 652,000 * (110+7.5)% = 700,900
We assume that the number of banking activities and the number of customers have a linear relationship and the percentage of customers of Triodos Bank who belong to the Benelux region remain the same in 2017.
Therefore, the number of customers in Netherlands and Belgium = 60.86% * 700,900 = 426,568 customers
We assume that the percentage of total Assets Under Management (AUM) attributed to Netherlands and Belgium will also be 60.86%; assuming a linear relationship between AUM and the number of customers across regions. Please note that the total assets for Triodos is the same as the assets under management.
AUM for Netherlands and Belgium = 60.86% * 13,454 = 8,188 billion EUR
The balance sheet total is projected to grow by 10% to 15%. We will consider the middle value (12.5%) of the range for calculating the AUM in 2017.
Therefore, AUM in 2017 = (100 + 12.5) % * 8,188 billion EUR = 9,212 million EUR
Total asset value of Achmea Bank at the end of H1 2017 = 14,226,501,000 EUR
We observe a trend of degrowth in total asset value between 2015 to H1 2017. We will assume that the asset value reduction in H2 2017 was the same as the asset value reduction in H1 2017.
Therefore, asset value at the end of H2 2017 = 14,226,501,000- (14,985,230,000 – 14,226,501,000) = 13,467,772,000 EUR
Since this bank is at the upper end of the range, we assume that it will have higher average asset value per customer.
Therefore, Total number of customers of the bank = 13,467,772,000 EUR / 25,442 = 529,352 customers
Please note that this value has been estimated as the bank has not disclosed the number of customers it has on its website or annual report.
Also, we have included this because it is very close to the defined criteria of 500,000 customers. The actual number of customers at Achmea Bank may be lesser as this is a private bank that caters to high-net-worth individuals.
DELEN PRIVATE BANK
This company is now a subsidiary of a larger company, Ackermans &Van Haaren; we cannot derive the exact revenue contribution of Delen Private Bank to Ackermans & Van Haaren from the balance sheet.
Therefore, we will estimate the asset value in 2017 by assuming that it will grow at the same rate as Triodos Bank (7.5%).
Total assets of Delen Private Bank in 2017 = 7,842,836,020 * (100+7.5)/100 = 8,431,048,722 EUR
Total number of customers can be estimated by assuming an average asset value per customer of 20,635 EUR, as this is in the lower half of the range.
Therefore, total number of customers = 8,431,048,722 / 20,635 = 408,580
DELTA LLOYD BANK NV
There isn't a significant change in the value of total assets year-on-year. Hence, we will assume that the total assets in 2017 is the same as that in 2016. This is equal to 5,490,752,000 EUR
We will calculate the number of customers by assuming the average asset value per customer is 20,635 EUR as the asset value is closer to the bottom of our range.
Please note that we have added this even though it is below our determined range because it has been listed as one of the top banks, and there are only a few Tier-2 banks in Benelux that have customer bases smaller than 500,000 customers.
Total number of customers = 5,490,752,000/ 20,635 = 266,089 customers
Banque de Luxembourg
Therefore, growth rate in the year 2016 = (13,414,822,000 – 12,923,559,000)* 100 / 12,923,559,000 = 3.8 %
Assuming the same growth rate for the year 2017 the total assets of the company in 2017 = (100+3.8)%* 13,414,822,000 = 13,924,585,236 EUR
As this is in the top half of the range we will assume average asset value
per user as 25,442 EUR.
Therefore, the total number of customers = 13,924,585,236/ 25,442 = 547,307 customers
As this is a wealth management company, it is likely that the average number of customers is lesser than the value arrived at.
There are few Tier-2 banks have less than 500,00 customers. The banks we have listed are Triodos Bank, Achmea Bank, Delen Private Bank, Delta Lloyd Bank NV, Banque de Luxembourg. All required details pertaining to these banks have been entered in the attached spreadsheet.