Hugo Lasat, Group CEO of Degroof Petercam: “Financial markets were confronted with a valuation reset in 2022 in a context of the Ukrainian war and energy crisis. Degroof Petercam, and the industry in which we operate, went through a challenging year. Despite these headwinds, our business lines generated solid results. 2022 can be considered a positive year due to our resilient business model and the new interest rate environment. The go-live of our new Core Banking platform was an important milestone in Belgium after two years of preparation. Our new future-proof IT environment will allow us to pursue our scalability strategy for our business, facilitate the adoption of technological innovations and support our growth ambitions.”

Increased profitability

Total client assets ended the year at 71.1 billion euros, in line with the financial markets evolution. Net revenues in 2022 amounted to 559 million euros, slightly up compared to 546 million euros last year. The gross operating result reached 106.7 million euros, reflecting lower commission-based fees, partly mitigated by the positive effect on the net margin from the new rate environment. Having ca 70% revenues generated by portfolio and asset management activities shows how Degroof Petercam’s interests are aligned with those of its clients.

The net profit recorded a 61% increase from 47.6 million euros last year to reach 76.4 million euros in 2022. This successful result is mainly explained by the positive impact of the interest rate evolution and lower other operational costs.

At the end of 2022, the balance sheet total stood at 9.3 billion euros, of which more than 5.1 billion euros are highly liquid assets. As a result of prudent management, on December 31, 2022, Degroof Petercam’s consolidated solvency rate stood at 20.3 %, a 60-basis point increase compared to last year, significantly above the minimum threshold.

Gilles Samyn, chairman of Degroof Petercam: “Aside from financial performance, we must also consider our progress in our sustainability journey. In 2022, we observed a continued surge in assets allocated to our sustainable funds, we implemented a formal group-wide sustainability governance and we increased gender diversity on our board. Our institutional asset manager DPAM was ranked second among more than 600 global asset managers in the Hirschel & Kramer Responsible Investment Brand Index. Our commitment to sustainability, to the trust of our clients and to the knowledge of our people allow us to look forward to the future with optimism.”

Outlook – Route 26

The board of directors has validated Degroof Petercam’s growth strategy for the next 3 years with the ambition to be the reference investment house driven by people. This strategy has been translated in a three-year roadmap, Route 26, serving as a guide for all initiatives. It leverages on the scalability of the business model and on potential external growth trends, such as alternative investment assets, developments in IT and digital and the sustainable transition.

Business results

Private banking operating revenues were slightly up over 2021, contributing 46% to total group revenues. This performance was driven by higher interest margins and a growth in credit activity, more than compensating the lower commission fees for asset management.

Institutional Asset Management maintained its solid performance track record on 3 and 5 years. Assets under management amounted 42.1 billion euro (gross) reflecting 2022’s evolution of financial markets and revenues contributed to 24% to total revenues.

Asset Services revenues grew by 3% year-on-year, contributing 14% of total revenues. This increase resulted from higher interest margin income offsetting the negative impact of financial markets that weighed on in-house and third-party funds.

Investment Banking managed to replicate last year’s high level of revenues overall, contributing 16% to total revenues. For the Global Markets business, operating revenues showed a positive evolution, achieved through strong activity in derivatives and incentive plans, slightly offset by a decline in the Fixed Income and foreign exchange activities. Despite a record year in M&A mandates, Corporate Finance reported a decline in revenues reflecting the wait-and-see market conditions.