Report of the Managing
Board for 1994
We have set out our views on the Dutch real
estate market in our Annual Review and
confine ourselves in this Annual Report to the
financial and internal developments in 1994 of
FGH BANK, the realty bank.
Financial results
The gross result for 1994 amounted to
NLG 167.6 million, which is substantially higher than
the NLG 144.0 million realized in 1993. The
improvement in the result, apart from non-recurrent
revenue items, included in 'Result on financial
transactions', was realized mainly by the Dutch lending
business.
The net result achieved by FGH BANK for 1994 was
NLG 12,5.6 million, which represents a considerable
improvement on the NLG 100.3 million achieved in
1993.
The 'Value adjustment to receivables' (previously
referred to as 'Addition to provision for general
contingencies') amounted to NLG 5.0 million, compared
with NLG 10.0 million in 1993.
Interest income increased by NLG 7.7 million from
NLG 608.4 million in 1993 to NLG 616.1 million in
1994. Interest expense declined by NLG 7.3 million to
NLG 434.8 million. Interest income includes a
non-recurrent revenue item of NLG 23.5 million earned
on lending activities (1993: NLG 24.9 million).
The income earned from securities and (non-
consolidated) participating interests was slightly lower,
falling from NLG 5.9 million in 1993 to
NLG 5.5 million in 1994.
An amount of NLG 11.4 million was included under the
heading 'Result on financial transactions' in 1994 to
account for 'Result on sale and valuation changes to
securities'. This substantial increase on the
NLG 0.1 million in 1993 was derived primarily from the
proceeds on the sale of our entire interest in Household
Mortgage Corporation Pic of London.
Operating expenses increased by NLG 1.2 million in
1994.
The consolidated loan portfolio amounted to
NLG 6.9 billion at the end of 1994, compared with
NLG 6.8 billion at the end of 1993.
The financial position was further improved in 1994,
in part as a result of retained earnings. Group equity
amounted to NLG 809.2 million at the end of 1994,
compared with NLG 707.4 million at the end of 1993.
At the end of 1992, the company was confronted with
an unexpected claim lodged by the Dutch Ministry of
Finance concerning the sale in the early 1980s of a
number of companies with fiscal replacement
reserves. FGH BANK strongly disputes the validity of
this claim, which could amount to some tens of
millions of guilders. We are supported in this view by
the expert opinion of our advisers and are confident
that we will be able to contest this claim
successfully.
Real Estate
The market value of FGH's real estate portfolio,
including that of non-consolidated participating
interests, amounted to NLG 218.8 million.
Treasury
During the reporting period, more than
NLG 1,161.4 million of funding was arranged with a
term longer than one year in order to provide new
loans and for refinancing purposes. Most of the
funding came from private loans, with part being
arranged by FGH BANK'S parent company AEGON
and part directly by FGH BANK.
Organization and Personnel
In 1994, no significant changes were made to the
company's organizational structure.
The Managing Board is extremely grateful for the
commitment shown by the staff and expresses its
appreciation for the constructive role played by the
Staff Council in helping to shape company policy.
Future Prospects
Our policy for the coming period will continue to be
directed at securing balanced growth and maintaining
the quality of our loan portfolio and our other realty-
based activities. Constant attention will also be
focused on improving and extending our range of
customer services, in part by adapting our product
package.
We expect a slight fall in the number of employees in
1995. Investment levels will show no significant
change.
