NETHERLANDS - Securities services group KAS Bank says its overall 2003 net profit fell to 13.2 million euros from 53.8 million euros in 2002 - though it says things are on an upward trend.

Income from custody services and related investment management services slipped three percent to 22.9 million euros.

"In the course of the second half-year, new clients amply compensated for the fall in assets under custody due to the departure of one large client earlier that year," KAS said. Assets under custody rose 23% to 243 billion euros.

Income from clearing, settlement and electronic information services was down to 26.1 million euros from 35.1 million euros. This was due to fewer transactions and the "cautious investment style by institutional investors and private clients".

KAS said it expects to announce "positive results in 2004 and "gain further ground on our competition" though it was unable to provide a forecast. "The response from the market with regards to our new products and service range gives us confidence."

Spokesman Bob Goulooze said: "We know that we are on an upward trend. We expect the first half of this year to be better than the second half of last year."

The bank said it has been hit by an "unprecedented and turbulent period" in the European securities industry.

" For KAS BANK, this resulted in the loss of a small number of global clients, as reported earlier, significantly affecting the results.

"Nearly all insurers and pension funds were occupied with the continuing issues surrounding pension schemes, which slowed their decision-making on proposal paths."

"In 2003, the first half-year still showed good results whereas the second half-year was significantly less positive," said chairman Sander von Balluseck. "The expectations are that this will be reversed in 2004. Although we are in an upward movement, we feel it is impossible to predict the exact course thereof."

Staff numbers have fallen to 740 from 745, Goulooze said.

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