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Triodos Bank Invites New Shareholders to Help Support Its Sustainability Mission

Lisa Stanley



With further disclosures on pay and profit in last week’s half year reports from Barclays and Santander UK, some bank investors may be questioning whether these financial institutions still deserve their support. Lisa Stanley explains how and why Triodos is different.

Ethical bank Triodos is urging bank shareholders to reconsider their bank investments and ask whether they could benefit from a fairer and more sustainable return elsewhere. 
 

Over the next three years, as the appetite for alternatives to the established financial system increases, Triodos Bank expects to grow substantially. In recent weeks it has seen new customer applications increase by more than 80%.

To support further growth it is seeking to raise new capital and is offering UK investors the chance to join more than 21,500 other shareholders across Europe by buying depository receipts in the Bank.
 

Triodos Bank depository receipts offer a fair, stable return. Investors in the bank over the last five years have seen an average return of 4.4%. Triodos Bank depository receipts have increased in value over the last decade from €68 per depository receipt in 2006 to €74 today. The bank has maintained a dividend of €1.95 per depository receipt in each of the last three years. 
 

Charles Middleton, Triodos Bank UK managing director, said: ‘Triodos Bank offers straightforward banking. Posting a decent profit, being strongly capitalised and having a stable funding base of savers’ deposits that are lent out prudently to socially and environmentally productive businesses, are integral parts of our approach. We think this straightforward, socially useful banking model is the way banking should be. 
 

"Recent volatility has demonstrated some of the inherently unsustainable elements at the heart of the financial markets, and created a wave of public interest in alternatives. We’ve demonstrated that another way isn’t just possible, but can flourish – helping to build a more diverse, healthier and more sustainable economy in the process."

Triodos Bank has seen its income, balance sheet, net profit and assets under management grow steadily over 2011 and increase further during the first six months of this year. Over two decades the bank has built assets under management of €6.8 billion, achieved balance sheet growth of around 20% per year, and delivered a consistent profit.

It has made around 22,000 loans to sustainable businesses such as Ecotricity, Cafedirect, Glastonbury’s Worthy Farm and Hugh Fearnley Whittingstall’s River Cottage in the UK, and has welcomed more than 350,000 savings customers across its operations in the UK, the Netherlands, Spain, Belgium and Germany.
 

An independent report in March this year demonstrated that values-based banks, such as Triodos, have outperformed traditional banks in many areas, including financial indicators such as return on assets, growth in loans and deposits, and capital strength.
 
The report, which compared the performance of values-based banks against ‘too big to fail’ banks over a three year period between 2007 and 2010, showed values-based banks have higher levels of, and better quality, capital, with an average solvency (BIS1) ratio of 14% at the end of 2011, compared to less than 10% among mainstream banks.

Values-based banks also demonstrated an average Equity/Asset ratio of more than 9% compared to less than 5% at mainstream banks.
 
Last week Triodos Bank launched a new short film, ‘Small. The New Big’. The film calls upon savers and investors to put their money where their mouth is to help shape a fairer, more transparent and more sustainable banking system. Since launching a week ago the film has been viewed almost 45,000 times in the UK.

 

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