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NIBC reveals €3m loan to pension fund

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  • NIBC reveals €3m loan to pension fund

NETHERLANDS - Troubled Dutch investment bank NIBC today revealed it has advanced a subordinated loan of €3m to its €130m trustee-administered pension fund.

NIBC said in its financial statements for 2007 today the loan has been made at an interest rate of 0%, while "there will be no repayment of this loan until the fund has reached a solvency ratio of 150%".

"It is a loan that was given a few years ago when the cover ratio of the pension fund was a bit low," a spokesman told IPE, adding it has now been agreed the loan only needs to be repaid when the solvency ratio reaches 150%.

The cover ratio of the fund at the currently stands at 140%, a spokesman told IPE.

Last year, NIBC was among the first financial institutions to reveal losses incurred because of exposure to the US housing market, which saw the bank lose €141m on its subprime portfolio.

On the back of this loss, the net profit attributable to parent shareholders of NIBC Bank for 2007 dropped by 60%, to €98m, the bank said today.

Assets under management of NIBC's investment management unit - responsible for developing the asset management activities for NIBC's credit, fixed income, private equity, mezzanine, real estate and infrastructure funds - dropped as well to €3.3bn, down from €3.6bn in third-party assets at the end of 2006.

"The reason for this is that one of our so-called foreign debt funds was completed last year," the spokesman explained.

Total assets under administration, however, grew from €14.6bn at the end of 2006 to €18.5bn year-end 2007.

Profit after tax from continuing operations in 2007 was €242m - a 4% increase since the end of the previous year.

Media reports stated NIBC shareholders - a group of large institutional investors headed by American JC Flowers which bought the bank from Dutch pension funds ABP and PGGM in 2005 - have backed NIBC's newly-revealed plans to do a number of takeovers in Europe in the short term and have pledged to invest €300m this year.

IPE reported earlier this month, since last year's losses, Icelandic bank Kaupthing's announced has said it will not proceed with its €3bn acquisition of the bank. (See earlier IPE story: Kaupthing denies NIBC deal is in trouble)

Also, following the collapsed deal, NIBC chief executive Michael Enthoven announced his resignation, alongside Jurgen Stegemann, chief risk officer of NIBC Holdings and NIBC Bank. (See earlier IPE story: NIBC chief steps down as Kaupthing deal collapses)

The bank today appointed Jan Sijbrand, joining from ABN Amro, replacing Stegemann, who is due to leave in March. No replacement has been found yet for Enthoven.

If you have any comments you would like to add to this or any otherstory, contact Carolyn Bandel on +44 (0)20 7261 4622 or email carolyn.bandel@ipe.com

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