Van Lanschot Aktie

Good day, and thank you for standing by. Welcome to Van Lanschot Kempen Analyst Call 2025 Annual Results.

[Operator Instructions]

Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today, Maarten Edixhoven, Chairman of the Management Board. Please go ahead, sir.

Thank you very much, and good morning all. Thank you for joining this morning. And we're happy to share with you our full 2025 results and the progress we are making on our Growing Further Together strategy and 2027 financial targets. I will first discuss some of the highlights demonstrating how we are delivering value for our clients, colleagues and shareholders.

And after that, our CFO, Jeroen Kroes, will take you through the results in more detail. In short, we realized a very strong set of results in 2025 against the backdrop of ongoing geopolitical uncertainty. We remained focused on our clients and disciplined execution of our strategy, ensuring scalable growth and resilience.

Commercial momentum continues across our client segments as demonstrated by net inflow in assets under management of EUR 7.9 billion and a 7% increase in client assets to EUR 180 billion.

Net profit rose 11% to EUR 157 million, driven by commission income and disciplined cost control. Based on these results and our solid capital position, we are very pleased to share a proposed dividend of EUR 3 per share and a capital return of EUR 0.80 per share.

If we go to the next slide. We grew across all our business activities, and I would like to highlight several of our core growth drivers. First of all, we're capitalizing on our commercial momentum in all our markets. Existing clients continuously entrust more of their wealth to us, and it's great to see that many new clients also find their way to us, recognizing the benefit of a focused independent wealth manager.

In the Netherlands, assets under management grew by almost 10%. And in Belgium, it was an impressive 16%. We're gaining market share in both markets. And also in fiduciary asset management, we had many new clients and saw assets under management grow.

We also see strong interest in our private market offering. Private banking clients in the Netherlands, Belgium and Switzerland committed more than EUR 540 million into new funds we launched. And we see a similar appetite with institutional clients, for instance, in private credit.

Bolt-on acquisitions remains another growth avenue for us. The acquisition of Wilton Family Office was a great example of how we look for parties with the right fit to strengthen our proposition in this case, in the highest segment of private banking in the Netherlands.

Fourth, we focus and continue to focus on the great wealth transfer by ensuring our offering adds value for our next generation of clients. We are tailoring our loan offering, for instance, but also providing network opportunities and knowledge sharing.

And partnerships are another way to achieve our strategy. As announced early January, we are planning to set up a 50-50 joint venture with KBC Securities. By combining our equity activities, we will create a leading Benelux broker as well as a leading sector specialist in European real estate and life sciences.

Subject to regulatory approval, the transaction is expected to close in the fourth quarter of this year. This will also bolster our corporate finance activities, which remain a key element of our wealth management strategy. I want to call this out as a great example of how we intend to leverage partnerships to support scalable growth and deliver innovation and enhanced value for our clients.

Move to the next slide. During 2025, we have engaged in several partnerships to this point across our business, strengthening our client offering, operational efficiency and also our innovation capacity. For instance, on the investment management side, we are partnering with State Street Investment Management to drive innovation in active ETFs and other investment solutions to strengthen our offering to clients.

Cultural fit and a long-term focus are key elements we look in for selection of partnerships, just like in our acquisitions. A key area of investment during the year and going forward is obviously AI and digitalization. We see AI as an accelerator of our scalable growth, while at the same time, it is a tool to deliver value to our clients and meet their evolving expectations.

To summarize approach to AI, we look at 4 pillars. First of all, we are continuously strengthening our digital foundations, modernizing platforms and improving data quality.

Second, we are accelerating efficiency by using AI and GenAI to automate routine tasks and to free up capacity for further growth. We are embedding AI solutions in internal software development, client engagement and portfolio management, delivering superior intelligence to our clients. And ultimately, it's about transforming business models, for instance, with AI-driven hyper-personalization and agentive portfolio management. To ensure we continue to work according to our values and compliance standards, we invest both in the technical side and the transformation and training side, and we have implemented clear guardrails and governance throughout the firm.

To give some examples, currently, there are over 20 AI use cases live in production across our organization. Our private banker AI assistant helps our bankers, for instance, to prepare for client conversations. This saves them time about average 3 hours per week and also improved service to clients.

Another one is the investment model agent, increasing the speed and scope of analysis for our investment teams. We are proud that our progress was recognized with 3 Financial Times PWM Tech Awards in 2025. As you would expect from us, as a specialist, highly personal wealth manager, we see AI as an enabler, but never as a replacement of the connections and the long-term connections we build with our clients.

We move to the next slide. It's rewarding to see that our clients tell us we remain very much on the right track, and we are striking the right balance in terms of client experience, digital service and being relevant throughout the various life phases our clients go through.

The Net Promoter Score among private banking clients in Netherlands and Belgium remains very high and client satisfaction within investment management clients and investment banking clients also remain strong.

Then turning to ESG. Simply, we are staying the course. In a year with evolving dynamics, we continue to make our progress on our ambitions. Our specialists continue to support our clients to deliver on their sustainability ambitions. We see clients, NextGen in particular, focusing on the impact of their investments in a broad sense, really focused on impact.

So we are also doubling down in the area of social impact and philanthropy. Also, employee satisfaction remained high with the engagement score well above our target. And when it comes to climate, we are driving year-on-year progress, and we more than met our targets for carbon emission reductions, in both our discretionary assets under management and our own operations.

If you move to next slide, wrapping up, with these 2025 results, we are well on track to reach our 2027 targets. Jeroen, over to you.

Thanks, Maarten, and let's look at our 2025 results in a bit more detail. Our strong 2025 result was driven by continued growth in assets under management. Total AUM rose by more than 6% with organic growth accounting for 5.3 percentage points. Market performance and the acquisition of Wilton Family Office accounted for the remainder.

While AUM growth for Van Lanschot Kempen as a whole was 6.4%, growth in our Private Bank was significantly higher. As Maarten mentioned, 10% for Private Clients Netherlands and 16% in Belgium. Our target is to grow AUM by an average of 10% per year through organic growth, acquisitions and market performance. Looking at the past decade, we have achieved this target.

Let's take a closer look now at our client segments. Private Clients Netherlands to start with, delivered solid financial results in 2025. Commission income increased by a strong 10%. Interest income was lower, which we had anticipated. And as a result, our overall performance is comparable to 2024.

AUM grew by 10%, as mentioned, with higher net inflows into discretionary management. As in previous years, we observed a seasonal pattern in the development of assets under management within our Dutch private banking franchise with strong inflows in H1 and a small outflow in H2.

Important to note is that this trend is visible in AUM, but not in total client assets. Client assets, which includes both client savings and investments. Net inflow in client assets has been very steady in recent years with comparable net inflow in each half year period over the past 2.5 years.

When looking at AUM in isolation, a recurring seasonal trend emerges. In the second half of the year, clients tend to shift part of their AUM into savings. Also, both existing and new clients tend to postpone investments. Then in the first half of the following year, these savings are typically invested or reinvested into AUM.

Looking through these seasonal effects, the underlying trend remains strong. For instance, inflow from new clients in 2025 were evenly distributed throughout the year. And in early 2026, we already are seeing the typical investment of savings into AUM, while client assets continue to grow.

In Belgium, where we operate under the Mercier Van Lanschot brand, we had an exceptionally strong year. Inflows reached EUR 1.9 billion, commission income rose by 24% and results before tax increased by 78% to EUR 67 million.

Commercial momentum remains very strong with inflows split evenly between new clients and increased share of wallet from existing clients. As Maarten already mentioned, client satisfaction is high with praise for our personal approach, expertise and consistent quality of service.

We continue to expand in this attractive private banking market by focusing more on the French-speaking part of the country by growing our team of bankers and by opening new offices.

Within investment management clients, we had strong inflows in fiduciary management and alternative investment strategies, while liquid investment strategies had an outflow. Let me break this down for you in more detail. Our private market funds had inflow of EUR 800 million across alternative credits, farmland, non-listed real estate and private equity.

We launched several new private equity strategies with total capital commitments from private banking clients of EUR 0.5 billion. This will result in net inflow once the capital is called.

Our liquid investment strategies saw net outflow for 2 main reasons. First, we decided to discontinue the sustainable equity strategy, which held around EUR 600 million in assets under management as it no longer aligned with client preferences and created room to shift more to individual stocks.

Second, our small-cap investment strategies experienced outflow. More than 2/3 of this outflow is related to a few large wholesale clients, shifting their allocation from small caps to large caps. In addition, fund performance over 2025 was lagging, partly because of more value-based investment style and sustainability exclusions.

These outflows impacted the margins in investment strategies. Fiduciary management had a strong year, winning its largest new mandate to date in the Netherlands and the U.K. We were appointed fiduciary manager for 2 pension funds run by the Holcim Group with AUM of GBP 2.5 billion.

In the Netherlands, we welcomed SPW or Stichting Pensioenfonds voor de Woningcorporaties as a new client. The AUM of over EUR 15 billion will show us inflow in 2026. It's also great to see that fiduciary clients more frequently chose complementary services.

In addition to fiduciary management, we also provide them with specific solutions such as alternative credit and non-listed real estate. Taking the results from our private banking and investment management activities together, our securities commission grew year-on-year in line with AUM. Our starting point for AUM in 2026 is higher than it was for 2025.

If we were to maintain this starting point AUM level throughout the year, so without any increase, securities commission would amount to EUR 537 million, and that is around 5% growth, compared to the commission income of EUR 512 million that we reported in 2025.

But obviously, we do see multiple engines to grow our AUM during the year across our private banking activities, private market solutions and fiduciary management. These engines are shown on the right-hand side of the slide. Proceeding now with our investment banking activities.

Here, we delivered a stable year with income and costs broadly in line with 2024. As Maarten explained, we have announced a new partnership with KBC Securities in equities.

Our Corporate Finance and ECM activities remain fully owned as a key element in our wealth management offering. Alongside our strong positions in real estate and life sciences, we increasingly advise private banking clients on the sale of their businesses.

And being able to provide these services is of great value to these clients. Turning to our loan portfolio, which stood at more than EUR 9 billion, consisting of loans to our private clients. Roughly 2/3 consists of mortgages with the remainder mainly in Lombard loans.

The portfolio grew modestly and remains of high quality with an impaired ratio of 0.9%. Then let's move to the NII. Net interest income was EUR 164 million. It improved during the second half of the year. After several ECB rate cuts in the first half, rates were stable in the second half. Combined with portfolio growth and lower amortization of discontinued hedges, this resulted in NII near the top of our guidance.

Under current market conditions, we expect net interest income for 2026 to be in the range of EUR 180 million to EUR 195 million, based on a slightly growing portfolio and normalized margins.

And even though NII came down in 2025, we operated with a positive jaw between income and cost. Income increased 5%, cost by 4%, and this resulted in a 9% increase in gross result. And with NII and commission income expected to grow in 2026, this will further support the jaw. However, cost discipline remains essential.

Our focus is on increasing scalability across the organization, particularly in support functions and using AI to improve efficiency. This should help to further improve our cost income ratio, which is currently 69% and within the target of 67% to 70%.

As a wealth manager, we stand out among our competitors because of our personal approach and long-standing relationships.

Clients value this, and we continue to grow FTE in client-facing teams as we grow in the number of clients. At the same time, we invest heavily in efficiency and scalability in the corporate center. In 2025, we absorbed all business growth with the same number of FTE in these functions.

Moving to our total net result, which was up 11%. The main contributor to our higher net result was higher commission income. Other income was EUR 7 million lower than in 2024, and this is primarily due to lower results from our participating interests.

Let's move to our solvency position. Strong capital generation in 2025 supports a proposed dividend of EUR 3 per share. In addition, as we report a solid capital position with a CET1 ratio of 18.2%, we proposed a capital return of EUR 0.80 per share. The capital return, which is expected to take place in 2026 has an impact of 0.7 percentage points. Adjusted for this, the pro forma CET1 ratio lands at 17.5%, which is fully in line with our target.

To conclude, we remain well on track to achieve our 2027 financial targets, and we look forward to the year ahead. With that, let's open it up for questions.

[Operator Instructions]

We will now take our first question from the line of Cor Kluis from ABN AMRO.

This is Cor Kluis from ABN AMRO. Congratulations with the figures, were very strong in all fields. A couple of questions. Maybe first on what happened yesterday and the wealth tax in the Netherlands. The Dutch government, of course, wants to tax investment returns for 36% once tax been realized gains is not allowing minuses and pluses of years to be netted.

The government might change a few of these things, but probably not all 3. So the Netherlands becoming less attractive for wealth in 2028. Could you elaborate a little bit more on your view on this? And also, it's great, of course, that you have good operations in Belgium and Switzerland and abroad, more strategically might this help a little bit more to expand a little bit further abroad where the governments are not acting this way?

Second question is about cost guidance, cost guidance for 2026. Could you help us a little bit with that? You already mentioned that the wage will go up 3.6% on the 1st of January, like last year, basically and FTE growth probably again around 4%.

So you already have 4 basically. What cost guidance can we expect? You talk about AI. You could say AI could cost some money to get it, but you also might get a lot of efficiencies from that. So could you help us a little bit more on cost guidance for 2026?

And my last question is on NII, which was, of course, for H2 at the top end of your guided range and also for 2026 will be, I think, on the top end or above what people have been expecting. Could you elaborate a little bit more why that is so strong this NII? What are the drivers or what are the most important drivers for that? That were my questions.

Thank you very much, Cor, also, of course, for the compliment. I'll take the first question and Jeroen, your second and third question.

On the Dutch government and taxes, yes, there has been a lot of discussion on that. And I think it's good that the new Ministry of Economic Affairs decided to pull the proposal. I think a tax on unrealized gains is almost unknown.

And that's one, I think, of the most important points. The tax system shouldn't deviate too much from the tax systems around us. I would call for a more unified tax approach in Europe in that regard.

So this is a good first step, but that doesn't mean we're out of the woods yet. And I think -- let me make 2 more points. I think what we also in discussions with our clients, see, is that what they especially need is clarity.

Everybody realizes that taxes have to be paid, but you want to have a predictable government so that you can also -- and especially the long-term relationships we have with our clients that you can plan for that. So clarity, stability, I would say, is the most important.

And then second, yes, we are more in favor of taxation of realized gains than unrealized gains. So that, I think, is another point. Then indeed, to your point, we, of course, are also active in Belgium and Switzerland.

And also in those countries, taxes have to be paid, but we are happy that we can serve clients in those countries as well. And we expect those activities to grow as we have seen also quite significantly in Belgium over the last 5 years. So that continues to be our strategy.

We always will be looking at further possibilities to increase our private banking activities and scope also through acquisitions. But we focus in first instance on the Netherlands, Belgium and Switzerland to solicit further growth and follow our clients as well.

So Jeroen, can I give it to you for the question on cost and NII.

Yes. So the question on the cost guidance, yes, Cor, what we said, the 3.5% general salary increase is there. We started the year, obviously, with a higher number of FTEs than we had a year before. So that also impacts the cost going forward.

Something else to say, and I tried to say that by mentioning that when we grow in number of clients, there will be growth in the front end, so the client-facing end of our organization. So bankers, relationship managers, and we use AI to absorb most of this growth in the -- let's say, in the back-end side of the company.

Of course, we also use AI to make our bankers more efficient, so they can service more clients with the same quality. And that is what we are doing. And your question, are you investing in AI? Yes, we are.

But this is all, I would say, within the normal way that we run investments in IT. We all run it through the P&L. We take it in the normal course of business. And yes, we have attracted people that are working on this.

So on the one hand side, you see some extra people focusing on AI implementation and you see some wins in increased efficiency there. So I think that's what I can say on the cost side, then on the NII. If we play back to half a year ago, we discussed the first half year figures.

And at that moment, we were below guidance. I could then already say that we would stick to the guidance, and this turned out to be -- and it turned out to be within the guidance.

So that's good. Why did the second half look so much better? A couple of things there. We already mentioned portfolio growth, the more stable environment with no more ECB rate cuts.

Yield curve became steeper, which was positive for us. And also important is that the amortization of discontinued hedges was -- so the cost we had to incur for that were lower in the second half.

And that combination led to these better figures. And yes, going forward, we feel that the current guidance is the best one we can give at this moment. And as mentioned, you can see that the second half and the trend that you see in the second half will also be forwarded to 2026.

We will now take our next question from Henk Slotboom from the IDEA.

A more fundamental question. There's a lot to do about AI and wealth management and that sort of things, and I won't bore you with those kinds of stories. But what struck me in your introduction, Maarten, was what you said about AI and the productivity for account manager that there's 3 hours extra to be spent on clients.

Now I worked at Van Lanschot for 8 years, so I know that client intimacy is one of the key differentiators there. But still, your NPS is declining, still very high. But almost in all segments, I see a decline. Is this a temporary thing? You would expect if you have more time to speak with your clients and you have more tailored advice that the NPS should go up. So perhaps you can provide some context there.

Yes. It's a great question, Henk, and thank you for that. And now that's actually -- and indeed, if you worked at Van Lanschot, you know that also bankers and relationship managers, what they love most is to work with clients and have the conversations with them on their long-term goals and what's happening in the families and the family companies.

And they like less the admin type of the work. So I think one of the big benefits I didn't even mention next to the efficiency gain, and we are at early stages there is the fact that I really believe that if we have the bankers and relationship managers that are the happiest in their work, have the most quality time with their clients, then our clients are also happier.

So in that sense, I expect AI to make their work better, more interesting. There will be more -- even more -- they are already highly engaged, but even more engaged as they can spend more time with the clients and the admin part of the work is done by very intelligent agents. So more like a digital twin of the private banker. And I think -- I do think that, that will have a positive effect in the end on the service that clients expect, hence, also on the NPS.

But do you -- I guess you agree with me that NPS is what -- is your best protection against whatever could happen from the side of AI type of initiatives we've been all reading about. So it must have a high priority for you.

It does. That's also why we show it. And like you said, there are -- in some areas, there are small decreases, but still at a very high level. And as a management Board, but also the colleagues in the field are following and tracking this very closely. And one of the most important elements of NPS is contact frequency with our clients.

And that's, for example, something we really steer on and also encourage our bankers and relationship managers to focus on. And the quality of that contact, of course, through AI will even be higher. So that's just to give you one view on how we drive that and how we look at that and how we monitor that.

[Operator Instructions]

Well, there are no further questions. So I'll hand you back to your host to conclude today's conference.

All right. Thank you very much. And thank you all for your time today on behalf of Jeroen and the other members of the team here in Amsterdam. To wrap up, we delivered a very strong set of results over 2025, keeping us well on track to deliver on our end of year 2027 financial targets.

And allow me please also give a big compliment to all our teams, colleagues for their energy and dedication, remaining very close to our clients and capturing the growth momentum. We will continue to invest in our solutions and partnerships as well as digital and AI capabilities to deliver the best and most personal experience to our clients, and we remain fully focused on that. So thank you very much, and I hope to speak to you soon in person.

This concludes today's conference call. Thank you for participating. You may now disconnect your lines.

Management by 10% on average a year. Clearly, market performance in the first half of this year was negative for us at EUR 3.3 billion. I'm proud the organic growth remained very strong with net inflows of EUR 4.6 billion, enabling us to pass the mark of EUR 150 billion assets under management for the first time. To cater to our growing client base, we invest in our staff, as I just mentioned, but also in our branch network.

The third component in our growth is inorganic growth. We successfully completed against planned integration of EVi and Robeco's online investment platform, enabling us to focus on attracting new clients in light of the pension reform in the Netherlands. Delivering on our M&A strategy of bolt-on acquisitions, we recently announced that Wilton Family Office will join us, strengthening our position in the highest segment of private banking as well as our presence in the south of the Netherlands.

If we move to the next slide. If we then return to the results in our client segments, it's clear that growth momentum remains strong. In the Netherlands, we recorded a net asset under management inflow of EUR 1.7 billion, of which about 50% is from new clients. Pretax profit was down to EUR 57.5 million due to lower interest income.

Private Clients Belgium continued its strong performance with EUR 1 billion in net inflows on the back of a growing client base and a larger share of wallet of existing clients. Pretax profits almost doubled to EUR 29.2 million. At Investment Management clients, results were more mixed. We had a net inflow of EUR 1.9 billion, mainly in our Institutional solutions. However, we saw outflow in our wholesale small cap and credit fund strategies and decided to discontinue our sustainable equity strategy.

In Fiduciary markets and most notably in the U.K., we won several new mandates, also for our alternative investment strategies, leading to net inflows. Overall, pretax profits in IMC declined slightly to EUR 12.1 million. Here, we will maintain tight control over cost and constantly evaluate our strategies to ensure a distinctive and future-proof offering for our clients.

Then turning to the fourth and last segment, Investment Banking clients. They had a good start of the year. Pretax profits almost doubled to EUR 5.3 million, thanks to higher commission income and trading results, combined with strong cost control.

Before turning to Jeroen, let me wrap up with our nonfinancial targets, focusing on people and society at large. We continue to reduce the annual weighted average carbon intensity of our discretionary assets under management. That keeps us well ahead of our 7% average annual reduction target. We're also on track for our own operations to progress to being net zero in 2050. We maintain our focus on inclusion and diversity with targets on gender balance among our senior staff and corrected pay gap, and we are pleased to see that we are continue to be able to attract new talent and keep the talent we need to serve our clients in the best way.

Jeroen will now talk you through the results in more detail, and I will be with you later. Jeroen, over to you.

Thank you, Maarten. Let's look at the numbers in a bit more detail now. Like Maarten said, we achieved solid financial results in the first half of 2025. Our AUM inflow amounted to EUR 4.6 billion with strong inflows in all segments. On an annualized basis, our inflow amounts to 6% growth in our AUM, and that shows that our commercial momentum remains strong. The strong inflow was partially offset by negative market performance of minus EUR 3.3 billion. But on balance, our AUM came in above EUR 150 billion for the first time. We reported a net profit of EUR 67.8 million, which is down compared to last year.

And on the next page, I would like to break that down. Commission income rose by 11% or more than EUR 28 million. This growth is directly related to the higher AUM base compared to last year and due to continued inflows across all segments. At the same time, our commission income came under some pressure by the fall of our market and negative market performance in the first part of the year. Interest income fell in line with our expectations as previously shared with you. This decline was mainly due to lower interest margins after ECB rate cuts.

As we lowered interest rates on savings and deposits at a slower pace, this has put pressure on our interest margin. Other income declined mainly from lower income from securities and associates, while continued investment and inflation led to a 5% higher cost level. As said, as we continue to invest in further growth and because of salary indexation, on balance, this led to a cost/income ratio of 71.8%, which is above our 2027 target range. And therefore, we keep focusing on cost control to support scalable growth.

So let's now move to the segments and go to Private Clients Netherlands. Private Clients Netherlands had a strong first half of 2025. Net AUM inflows were strong with EUR 1.7 billion. Inflows in the first quarter were EUR 1.2 billion and included the seasonal effect of clients reinvesting money that they put on the savings account during the last quarter of 2024. In the second quarter of the year, we also had strong continuing inflows of EUR 0.5 billion. The inflows were 50% from new clients and 50% from existing ones. And the net inflow was balanced between discretionary and nondiscretionary portfolio management. And here, we see that our focus on the discretionary portfolio management is paying off with a higher percentage than the percentage that we saw in inflows of last year in this segment.

Private Clients Netherlands grew its commission income by 10%. However, the operating result before tax was lower at EUR 57.5 million due to lower interest income in this segment. AUM at EVi decreased slightly to EUR 7 billion caused by market performance and some consumption. Evi results continued to contribute to our bottom line. And we are pleased that we now successfully completed the integration of Robeco's online investment platform into Evi.

From Netherlands to Belgium. Commercial momentum in our Belgium business remained strong with EUR 1 billion inflow in the first half, of which also here 50% came from new clients. This brings total AUM close to EUR 16 billion. Commission income grew by 23%. And net interest income in Belgium, which is a relatively small part of total income of this segment, also increased due to growing balances in savings and loans. The operating result before tax grew strongly to EUR 29 million, and the cost income ratio improved to 49%.

As Maarten already said, we saw mixed results in investment management clients. Net inflow for the total segment amounted to EUR 1.9 billion. And the inflows were strong at fiduciary management and alternative investment strategies, but we saw outflows to liquid investment strategies. As Maarten already mentioned, this has to do with outflow in our small caps and credits strategies, but also for by and large part with the discontinuation of the sustainable equity fund. The inflow of almost EUR 3 billion in fiduciary management came from several new clients in both the Netherlands and the U.K. An inflow at alternative investment strategies that amounted to EUR 0.3 billion came from an increasing interest for these products that we saw from existing fiduciary management clients, which we think is a very good sign that these clients are also interested in the alternative investment strategies.

Important to note is that the majority of the negative market performance that we saw in the first half of the year was within the fiduciary management part. IMC as a total and certainly the fiduciary clients have a lot of exposure to fixed income strategies. And with the rising long-term interest rates, this negatively impacted especially these portfolios. Operating results before tax in this segment declined from EUR 13.7 million to EUR 12 million. Commissioning grew 6%, thanks to the net inflows in fiduciary management and also the inflows in the alternative investment strategies. Costs at the same time increased by 11% as we expanded our team to support the growing client base. Our focus here is on maintaining tight cost control, and we are constantly evaluating our strategies to ensure a distinctive and future-proof offering.

Let's zoom in on the margins. Margins in the segment remained largely stable. Looking a bit deeper into the margins of Private Clients in Netherlands, we saw a slight increase at Evi due to a mix effect with a relatively larger share of AUM in our discretionary products. At Investment Management, the overall margin remained stable, but underlying, we saw some shifts. The margin at investment strategies declined due to some outflows from the liquid investment strategies that changed the product mix. The margins at fiduciary management, at the other hand, they improved from 5 to 6 basis points. A relatively large part of the clients pay a fixed fee that is indexed on a yearly basis. Our total AUM remained stable. This translates into a higher margin.

We spoke about Private Clients Netherlands, Belgium and Investment Management Clients and that is now time to go to the fourth segment, which is Investment Banking Clients, where we saw an improved result. Investment Banking Clients recorded a pretax profit of EUR 5.3 million, and both commission income as well as trading results were higher than a year ago. Costs remained stable and well under control in this segment with -- also on a nominal basis, no cost increase. A transaction I would like to highlight is this is a great example of how we can create synergies between our segments is the acquisition of Forum Estates by Cibus Nordic Real Estate.

Our investment bank, as far as the buyer, so Cibus, and in close cooperation with the private banking colleagues in Belgium and Switzerland, we signed an innovative transaction structure. The shareholders of the target were onboarded as clients and received payments for the transactions in shares of the buyer. So this led to an inflow of approximately EUR 200 million in assets under administration within our private bank.

Then it's always good to look at the recurring securities commission. And as you know, this is the level of securities commission that we would get in a year if our assets under management would remain stable during the whole year. And as you can see, the combination of strong inflows but also the negative market performance led to a steady growth in this number, which increased to EUR 508 million.

Then it's time to zoom in into the interest income. And the interest income Maarten already said it, and I mentioned it before, it came down compared to the first half of 2024. The ECB lowered interest rates over the last 12 months in several steps from 3.75% to 2%. This decline was only partially passed through to clients, which led to a declining margin. Our balance sheet developed in line with expectations with the conversion from cash to AUM and a shift from term deposits into savings. If you look at the NII for the total year, we expected decline in NII, we expect it to have bottomed out and expect a higher NII in the second half of the year. Our full year guidance remains unchanged at EUR 155 million to EUR 165 million. And we expect the upward trend that we will or expect to see in the second half to continue in 2026.

From interest income to the other income. Other income consists of income from securities and associates and results from financial transactions. Here, we recorded a decline, and this was mainly due to a negative revaluation of one of our minority interest at Van Lanschot Kempen Participaties. All the other components of other income developed in line with usual business patterns. It is good to say that the sale of the company called OGD was announced and we have a minority stake in this company. This transaction is set to close in the third quarter, and that will result in a book profit of approximately EUR 4 million.

Then a bit more about our cost level. We want to grow in a scalable way and therefore, continue to focus on cost control and efficiency improvements. Total cost increased by 5%, mostly due to staff cost. And next to regular salary increases, we also expanded our workforce to accommodate growth. It's visible from this slide most of the colleagues are in client-facing roles, such as relationship managers in the private bank and colleagues managing our alternative investment strategies. We remain focused on cost control and efficiency improvement. And as mentioned, a good example is the segment Investment Banking where we kept costs at the same level as last year.

Moving forward to our loan portfolio. We saw modest growth in the loan portfolio with a 1% growth in the mortgage group and 5% growth in other loans. The impaired ratio was 1%, and this was down from 1.4% last year, and it shows the quality of our loan book. And also important to say, it led to the good quality that were released from the loan loss provisions, as is visible in the next slide. We released EUR 3.1 million from the loan loss provisions in the first half of 2025. And as mentioned, a good quality loan book, we have a weighted average LTV of 58% for our Dutch residential mortgage portfolio, which, as you know, makes up more than 2/3 of our total loan book.

Let me take you through the capital developments. In June, we returned EUR 1.40 per share to our shareholders. After this capital return, our CET1 ratio now stands at 18.2%. The acquisition of Wilton Family Office is expected to reduce the ratio by approximately 0.25 percentage point. Our capital strategy remains unchanged. We see here at a ratio of 17.5%. If we expect that this ratio will be clearly above 17.5%, we intend to return the capital above 17.5% to shareholders. And I said clearly above, what do we mean by that? By clearly above, we mean a surplus that is significant enough to justify a separate capital return. And towards the end of the year, we will forecast our capital position for year-end. And if this forecast indicates that the ratio will be only marginally above 17.5%, we could use our regular dividend distribution to return capital to shareholders.

As you know, DNB has imposed a risk weight floor for residential mortgages, and this floor is included in our current ratio. Should DNB decide to remove this floor, and the first moment that I could make that decision is December 2026, this would positively impact our CET1 ratio by approximately 1.5 percentage points.

Summing it up, we are on track to reach our financial targets as we continue to deliver on our strategy. Yet, we saw a negative market performance in the first half of the year, and it impacted also our ratios. But underlying, we see good developments. The first half year shows strong autonomous growth. Our NII is in line with expectations. And with good prospects for the second half of the year, our costs are under control amid the ongoing investments. So with that, we remain on track for the 2027 targets.

And with that, I would like to hand it back to Maarten.

Thank you very much, Jeroen, for the clear explanation. And Laura, let's now move to the questions that might be based on our first half results.

[Operator Instructions] I will now take our first question from Benoit Petrarque of Kepler Cheuvreux.

So the first question is on the investment strategies and especially the outflow. Just wondering if you managed to stabilize the outflow into the third quarter. And also, maybe could you recall us a bit what is the long-term strategy for the investment strategies because clearly, there have been a lot of consolidation in the sector, a lot of margin pressure as well in the sector. And yes, the question is whether you are the best owner for that asset? And also linked to the final question on investment strategies, is that fair to assume that the outflow of EUR 1.3 billion is linked to roughly 53 bps margin? So is that 53 bps margin on EUR 1.3 billion a good estimate on how much fees you will lose from that?

Then the next question is on net interest income. So thanks for the, well, slightly updated guidance. Can I conclude that you expect NII in '26 to be higher than '25? And could you maybe be a bit more specific on that if possible, because the implicit NII in H2, I think is definitely well above H1 based on the guidance. It's at least 4% higher in H2 versus H1. So that's a very strong momentum in H2. And I was wondering what the trend could be in 2026 as well?

And then maybe on the OpEx of 5%. Could you maybe help us to understand how that will trend into the second part of the year and also maybe in '26? It sounds like you are hiring people still. So cost growth will still be there in H2, but what about '26?

Okay. Benoit, thank you and good morning to you. Of course, I'll take your first question, and Jeroen will take your questions 2 and 3. Regarding investment strategies, the outflow, roughly the EUR 1.3 billion, you could say half is in small cap and credits, and half is in sustainable equity strategy. And that is a decision we took ourselves to close that strategy because we consider to be subscale and not sufficient for the future. So half, it was due to our own decision and the half was in especially small cap because of tactical reallocation towards large caps by our wholesale partners. That translates into your second question on the margins, the 53 bps. Now, that's too high because -- sorry, Jeroen, do you want to add?

Yes. Maybe to say on the outflow, yes, in fact, I think it's a relatively good estimate because this is the kind of business that has relatively high margins. So I will not give you the exact details, but it makes sense that it would be an okay estimate to use this.

So it's the average basis points on the outflow. With regard to the near future, we do expect that the large transitions, technical asset allocation changes of our wholesale partners are behind us, but we still might see some smaller movements out or in those strategies in the second half. And with regard to the future of investment management and especially our own strategies, we do believe that this is a very important part of our proposition as also many of our private clients are invested in those strategies. So we are fully committed to that segment of our business, but obviously also working to further improve our proposition and strategies as we develop further.

Moving to you for the NII, Jeroen.

Maybe one small addition to what Maarten said, it's also good that the outflow we saw was from clients that not step out of the strategies totally. So they reallocated but they were not lost as clients. I think that's also important to say.

Then on NII, yes, can we say that NII 2026 will be higher than 2025. Let's recall what I said. We keep the guidance the same, which means that we expect a better second half than first half. We say that the positive trend will go further in 2026. That being said, the logical conclusion is that we expect a better 2026 than 2025. And then you asked, can you give more guidance at this moment on 2026? The answer is no, not yet. We will come with guidance on 2026 when we present the full year figures.

Then the cost level, yes, we grew cost 5%. What do we expect here? It is that we want to invest in the further growth. So if we're growing like we do in assets under management, we also need to accommodate that growth with client-facing people. And yes, if we are growing, we will keep doing that. At the same time, in parts of the business where things go slower than expected, we need to steer. And I gave the example of the investment bank where we had some tough years and where we really kept costs under very tight control. And so we will do that in the parts where it's needed. And in the part where we are growing fast, we will certainly also keep attracting people to accommodate the growth.

We will now take our next question from Cor Kluis of ABN AMRO ODDO BHF.

My first question is about the NII for H2. Basically, H1 was 76%, and you guide for H2 79% to 89%. So could you first confirm that it's probably going to be at the bottom end of the range? Because if you go from 76%, it's probably going to go up closer towards that 80% than the 90% for H2? And could you also elaborate why it's going to grow quite nicely in the second half of this year? What are the operational stories behind that?

And second question is on FTEs. You grew your FTEs by almost 3% in H1. Can we also expect a continuing growth because your inflows remain quite good, continuing growth also for H2? Or is it more hiring in the first half than having done most of the year already, so FTE growth for the remainder of the year.

My last question is about the loan growth, especially the other loans had a 5% growth. I think you mentioned it's partly due to Lombard loans, current accounts. What's exactly going there? Is this a change of strategy? Is it more the message from the Linde Belgium operations, which are doing more growth? Or this also more strategy driven that you do some changes there? So those are my questions.

All right. Then first, again, the NII, let's dive into that a bit deeper. We keep the guidance the same, Cor. I'm not going to say it's at the bottom or the top. This is the guidance we feel comfortable with. So this is where we stand. And what I can tell you is that, of course, things can change in the coming months, and that could easily have impact of several millions either way. So that's why I'm not going to give you some kind of a point, but I give you this range.

Then why will it grow? It has to do with a lot of things. It also has to do with the portfolio that we have. When we manage that portfolio and we rebalance it, when interest rates started to behave, we also, let's say, change the portfolio, we change the hedging and the whole combination of the portfolio and the hedges leads to a situation where we expect that it will become more positive in the second half.

Next to that, there are other things like we have now probably see most of the ECB rate cuts. So that also brings us to a situation that is more stable and more positive. And we saw that the yield curve is steepening, which in general, is positive for us. So it's a lot of combinations together that lead to this.

Then on the FTE growth, it's a bit the same like I said to Benoit. So Benoit also said, do you see this cost increase? Are you going to grow further? What I just said is where we see the strong growth and that's certainly in private banking, there we also need to grow the client-facing people. And where we see things develop in a less beneficial way, we will keep a very tight control on cost, but also on FTE growth. So on balance, we will see some growth, but we will certainly keep it under tight control.

Then on the loan growth, yes, you saw that the other loans grew by 5%, which is a bit more than before. And in fact, we're happy with it because in line with the growth of our portfolio and our client portfolio, we feel that the loan portfolio could and should move in the same direction, which means that we can do things like the Lombard lending and other lending to our clients. And that's what is happening. And yes, it's not only Belgium, but yes, Belgium is also successful in Lombard lending just like the other parts of the business. No further questions?

We have our next question from Henk Slotboom of The Idea.

I realize it's not the biggest part of your business, but a question on Evi. On the one hand, in your answer to one of the previous questions, you said there's a direct link between hiring people and growth in assets under management. Well, the cheapest way, I guess, to grow assets under management is by means of platforms like Evi. And moreover, because the integration with the Robeco assets has now been completed, you would have expected the emphasis to shift from the integration efforts to Robeco's acquisition growth assets and you now have the full time for it.

And I was a bit surprised to see that the assets under management of Evi have dropped by EUR 0.2 billion. Can you tell me what's happening there and how you look at it? I noticed that when I switch on my B&R, having got to act the morning, the first thing I hear is Evi. So I guess, you're intensifying the commercial efforts there. But perhaps you could highlight what the plan is and what has happened in the first half year?

Henk, very good question on Evi. And like you said, we're on track, integrated and finalized the system transformation from both Evi and Robeco. As you can imagine that, that requires full focus to do that in a very controlled way. So now we have, let's say, a platform of about EUR 7 billion assets under management, which is really a good starting point for our access to this part of the wealth management and one of the largest in the Netherlands, and we also intend now to focus fully on the growth in that segment. If you look at the first half of the year, of course, markets were a bit against us. So that explains the small drop and plus we also in the process, of course, also look at closing smaller accounts, et cetera.

But from actually now on or, let's say, the end of the second quarter on, the full focus is on growing that segment, attracting new clients also on the back of the pension reforms where Dutch citizens will have to invest more of their money into investment solutions, and I think Evi is very well positioned to grow there. And as you know, the Dutch are very thrifty savers. And one of the things that we really are discussing with our clients is also to make sure that you invest so that you can beat inflation and be ready, for example, for your retirement.

So yes, that is absolutely now a focus to get that segment growing. And if I compare it to a couple of years ago when we had less than EUR 2 billion in the segment and now around EUR 7 billion, I think, yes, we are at a much better point, integration behind us, focus on growth.

I will now move on to our next follow-up question from Benoit Petrarque of Kepler.

Sorry, three quick questions. The first one on M&A. Just could you update us on the pipeline and any plans for the rest of the year and also on the contribution of the family office on the income and also the P&L. On the replicating portfolio, Jeroen, could you update us on the current duration of the replicating portfolio? And it sounds like you changed it a little bit, so it would be great to have an update. And then maybe on the fiduciary management business. How much are you cross-selling to your own funds because it seems that you've been crossing the private equity funds to fiduciary clients. So just wondering where you are on that cross-selling potential.

Okay. Let me take the first and last question and the second for you, Jeroen. On the M&A, yes, we were very happy to be able to announce the acquisition of Wilton Family Office as it really fits our bolt-on acquisition strategy. As I also mentioned in my introduction, we expect that to close in the fourth quarter. So we will see, of course, the commissions and other results and expenses coming into our numbers really in 2026 onwards. That will, of course, be a modest contribution because it's a smaller acquisition.

If you look at the pipeline, I think, as what we do in our nonautonomous growth strategy, we continue to look at opportunities that we see in the market, especially in private banking in the Netherlands and Belgium. Of course, we also look at other opportunities, for example, private market type of solutions, enabling our clients to have access to those solutions. But we are and remain very diligent in that.

Also because our autonomous growth is at the moment very, very strong, so we want to continue to focus on that. So we have, I would say, the luxury to really look at bolt-on acquisition targets that really fit our culture, really fit our financial discipline. Otherwise, we don't do it. We don't look at it. And we focus on attracting new clients via autonomous growth or, for example, by opening new offices, like we did in Belgium in Knokke-Heist. So we have different levers for growth. So it really has to fit, then we will do it.

With regard to fiduciary management, that's one of the areas, and Jeroen also explained the focus and the winning of new mandates. For example, I want to highlight there, our association with Clara, a pension fund consolidator in the U.K. And we are increasingly also looking at through our -- and especially also our private market solutions to giving those, like Clara, access to those solutions. So that's increasing. We cannot give any specific numbers on that, but it's really a focus area to ensure that the pension funds, institutional clients also have access to our private market and nonlisted solutions. And I think that's a possible plus in our growth strategy.

Jeroen?

Maybe I think what we could say is that we have EUR 5.6 billion in the alternative strategies within IMC. And around 1/3 of that is with our fiduciary management clients. So that gives a bit of a feel. And the fiduciary management clients have a very small stake in the liquid investment strategies. So that gives a bit more feeling for you.

Then the question on duration. Like I said, we benefit from the fact that the interest rate curve is steepening, so that's end of the portfolio repricing. When you talk about the duration, we keep neutral stance there. So we did not really make a very big move in the duration strategy, Benoit.

There are no further questions in queue. I'm handing it back over to you, Maarten, for closing remarks. Thank you.

Thank you very much. And to wrap up the excellent conversation of this morning, we will continue to execute on our growing further together strategy. And you also heard, Jeroen saying, very confident to deliver on our 2027 financial targets. We continue to invest in excellent staff and also our technology and AI capabilities to deliver really superior solutions to our private and institutional clients. And I think extremely important, we see continued strong commercial momentum in our foundational private banking segments and continue to focus on profitable growth and cost discipline in the Investment Banking and Investment Management segments.

I would like to thank you for your attendance and excellent questions that always is a pleasure to discuss with you. Looking forward to future interactions. And I wish you a great day.

Thank you. This concludes today's call. Thank you for your participation. You may now disconnect.