REPORT OF THE EXECUTIVE BOARD
was seen as being instrumental in updating the
bank’s image to reflect more accurately its position
as a vital part of the AEGON concern. At the same
meeting, Mr. R.A.H. van der Meer was appointed
to the Board of Directors and Mr H.B. van Wijk
elected as the Board’s Chairman.
FGH BANK’S operating profit before tax rose to
NLG 104.2 million in 1990 from NLG 87.3 million
in 1989. The strong growth in profits was mainly
attributable to the company’s operations in the
Netherlands. The poor results of FGH BANK’S
American subsidiary depressed profits below the
level originally projected.
On an after tax basis, profits fell from NLG
77.1 million in 1989 to NLG 67.3 million in 1990.
This reflects the fact that up to the end of 1989,
profits were fiscally still being offset against losses
made in previous years.
In view of the continuing weakness of the American
realty market, an additional sum of NLG 10 million
was added to the contingency reserves as in 1989.
Income in the form of interest payments rose
in 1990 as did the associated expenses, although the
net income figure remained virtually unchanged at
NLG 98 million.
Income from brokerage fees and incidental interest
payments rose NLG 0.9 million in 1990 to NLG
20.5 million. Brokerage income increased in both
the Netherlands and the United States, while the
total fees collected from accelerated loan redemp
tions dropped slightly. The overall loan premium
rose due to the higher volume of financing supplied
for new construction and development projects.
Profits from participating interests not
consolidated in the balance sheet fell from NLG 7.5
million to NLG 4.0 million, as these figures no
longer include the results of Van Haften Co. N.V.,
a former subsidiary company.
All other areas of the business showed a significant
improvement in profitability compared with 1989,
mainly due to the sale of participating interests and
reductions in the required level of provisions.
I The value of the consolidated loan portfolio at
the end of 1990 totaled NLG 5.2 billion compared
with NLG 4.8 billion at the end of 1989. This incre
ase was due to a higher volume of lending activity
both in the Netherlands and the United States.
As a result of the profits growth, the company’s
equity position improved, with the stockholders’
equity rising to NLG 542.8 million at the end of
1990. from NLG 498.8 million the previous year.
In the coming period, FGH BANK intends to
extend its lending portfolio and to expand its
ancillary realty services. Greater emphasis will be
placed on improving the quality and range of services
offered to clients. FGH BANK will continue to
develop new market sectors that require specialized
services. The Executive Board of FGH BANK is
confident that this strategy will allow the bank to
strengthen its existing business base.
Although investment is expected to remain at
a similar level as that recorded in 1990, some
reduction in staff numbers will be necessary. The
general outlook for the Dutch arm of FGH BANK is
good, while uncertainty about the American
economy and the realty market in the United States
14
COMPANY ACCOUNTS
FUTURE PROSPECTS
