An amount of f 9,5 million was added to the reserve for general
contingencies (in 1976 f 3,1 million). This amount includes an
extra allocation of f 1.345.000, which concerns a special non
recurring gain obtained from the sale of our former office
building at Groningen. We consider this relatively large addition
desirable in view of the considerable growth in our mortage
portfolio.
The results of the real estate business were affected to a con
siderable extent by the sale of a few large office premises. Of the
total result on sales an amount of only 2,4 million was added
to the replacement reserve as a book profit obtained on the sale
of our old real estate holdings, which illustrates the fact that the
rejuvenation of our real estate portfolio has now almost been
completed. Considering the relatively low initial yield of the
replacing new real estate, this rejuvenation may be expected to
put some pressure on the operating results of the next few
years.
It is our conviction that the higher future value of these new real
estate holdings fully justifies this sacrifice.
As in the previous year, an amount of 4 million was added to
the provision for non-occupancy. An amount of 5,6 million was
withdrawn from this provision to cover the non-occupancy losses
sustained in 1977.
The presentation of the minority participations in our annual
accounts was improved in the sense that in the explanatory
notes on the balance-sheet items concerned we have given a
breakdown of the changes in intrinsic value. The increase in the
intrinsic value in 1977 relates, among other things, to the profit
obtained from the sales of offices in the Hoog Catharijne complex,
to which reference is made before. We do not expect the operation
of Hoog Catharijne to make considerable contributions to the
result during the next 2 or 3 years.
The securities business may look back to a favourable year. The
gross result rose from 0,6 million in 1976 to 7 2,0 million in the
past financial year. Some new activities contributed to this
favourable result.
The dividend of the Friesch-Groningsche Hypotheekbank nv for
the financial year 1977 was fixed at 3.30 per 10 of a fully
paid-up share (in 1976 f 2.68) for the old shares f 1.65 per 10
of a fully paid-up share for the new shares issued in 1977.
A statement of the dividends to be paid on the various classes of
shares is given later in this report.
We wish to conclude this report by expressing a word of thanks
to all our employees for the devotion they showed in fulfilling
their duties during the past year.
The Managing Board:
J.de Wilde, chairman
G.J.Jansen
A.C. van Uchelen
