Report of the Managing Board
Introduction
In our previous annual report we expressed the expectation that the
Group results for 1979 would be maintained at about the same
level as those of 1978. It is now gratifying to establish that, despite
the fact that economic conditions have deteriorated considerably in
the course of 1979, the result of the Group for 1979 barely differs
from that of the previous year.
There has been a change, though, in the division of the contributions
the various corporate divisions have made to the profit.
The results of the finance business have slightly lagged behind
those of 1978. This is due on the one hand to the lower mortgage
production compared with the record years 1977 and 1978 and on
the other hand to the fact that the terms of the funds attracted are
more and more approaching those of the mortgage credits; this
reduces the contribution to the profit as a result of the funds that
were attracted at relatively low interest rates in the past. This latter
development will also affect the interest margin of our business in
the coming years.
General expenses, among which staff expenses as the most important
item, kept rising. The cause of this - apart from monetary
depreciation - lies in the fact that the costs of the staff additions
that had become necessary as a result of the strong expansion in
the past few years and the newly started internationalisation are
having an effect.
Great attention is being given to a curtailment of the rise in expenses.
The results of the measures taken on this account, however, will
not become visible until 1981.
The decrease in the result of the finance business was compensated
by a larger profit of the real estate business. As already mentioned
in previous annual reports, the result of the real estate business
shows fluctuations due to the unequal spread of sales. This may
result from year to year in fluctuations in the profit contribution of
the real estate sector.
Our policy is aimed at maintaining the level of the profit capacity
by adjusting the market approach in the different sectors of our
company, in spite of the deteriorated economic conditions.
Partly for this reason the internationalisation of our business is
continued vigorously.
In 1979 we have formed a Foreign Department within our organisation,
which, in addition to the coordination of a number of concrete
activities in foreign countries, is engaged on research and stock
taking with regard to the possibilities in the various countries.
Enlargement of our real estate activities, notably in France, the
United States and the United Kingdom, were continued during the
past year. Existing interests and opportunities for the future make
the question about the desirability of a possible independence of
the organisation in a few countries a topical one.
In the middle of 1979 we announced our intention to take over the
Kok Group. As known, the Kok Group is mainly engaged in the field
of real estate administration. In addition, they act as brokers, notably
for industrial accommodation. The main reason for this take-over.
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