Report of the Executive
Board
1992 was the first financial year in which
FGH BANK N.V. traded under that name: a name that
reflects the status of general bank which was
granted at the end of 1991
This new status enabled us to provide our clients with
additional financial services as from January 1, 1992,
such as funds transfer, current accounts and various
forms of short-term investments, including time
deposits and call moneys.
Among other things it was the general bank status
that enabled the FGH BANK to flesh out the concept
of 'realty bank'.
The Netherlands
The Dutch part of FGH BANK'S operations had an
excellent year in 1992 in terms of both sales and
income. Earlier this year we published our views on the
Dutch property market in our Annual Review.
United States
In line with our earlier expectations the year under
review did not see any improvement in the prospects for
the US property market. Once again the result suffered
in 1992 from the difficulties in this market.
The situation in our US lending business -especially the
growing volume of real estate to be bought up- caused us
to consider the future prospects for our US organization
within the AEGON group. The result was that we
transferred all our shares in Holding FGH North
America Inc. to AEGON US Holding Corporation at the
end of the year under review. We consider that this
transfer will help create the conditions for a rapid
recovery in the profitability of the companies in
question once the US property market turns the comer.
FGH BANK remains involved in these activities through
the provision of management.
In view of the timing of this transaction the results of
the US company have remained incorporated in the
FGH BANK N.V. profit and loss account for 1992.
Real Estate
The market value of FGH's real estate portfolio,
including that of non-consolidated participations, fell by
around NLG 96 million to NLG 150 million. In
particular this fall was brought about by the transfer of
FGH North America Inc. and its operating companies.
Our minority interest in the Marina Benalmadena
project in Spain was transferred during the year under
review to a company forming part of the AEGON
group.
T reasury
In total funds of over NLG 1,075 million were borrowed
during the year under review with a term in excess of
one year in order to fund new loans and refinancing.
The majority consisted of private loans, which were
partly taken out directly by FGH BANK and partly
through the intermediary of the parent company,
AEGON.
The acquisition of general bank status as of 1 January
1992 meant that the Treasury Division was able to
expand its activities with a number of short-term
money products.
Organization and Personnel
The year under review was marked by a number of
large-scale quality-improvement programs, which were
carried out in all parts of the organization.
No substantial modifications to the organizational
set-up of the company took place in 1992. The
restructuring of the bank that got under way in 1989 in
connection with the strategic decision in favor of
specialization has since been completed successfully.
The Executive Board is particularly indebted to the staff
for their efforts and dedication. Our appreciation also
extends to the Staff Council, which has contributed
constructively towards the implementation of company
policy.
Financial Results
At NLG 82.4 million the gross profit for 1992 was lower
than that in 1991 (NLG 94.9 million). This is wholly
attributable to the disappointing results recorded by the
US operations. The results of our activities in the
Netherlands in 1992 were better than those in 1991.
At NLG 31.3 million the net income was also below
that in 1991 (NLG 50.2 million).
A sum of NLG 20.0 million was added to the provision
for general contingencies (VAR) (1991: NLG 22.5
million).
At NLG 552.8 million both the periodical and
non-recurrent interest earnings were higher than in
1991 (NLG 543.7 million); the periodical and
non-recurrent interest charges also rose in 1992, to
NLG 442.2 million, compared with NLG 422.1 million
in 1991.
