Volksbank NV reported a full-year 2017 net result attributable to shareholders of €329 million, down from €349 million in the prior-year period.
Net interest income fell on a yearly basis to €924 million from €938 million. Net fee and commission income also declined, to €49 million from €57 million.
Investment income amounted to €41 million in 2017, down from €57 million in 2016. The Dutch lender booked a gain on financial instruments of €13 million, compared to a loss of €20 million a year earlier.
Volksbank saw a net release of loan provisions of €24 million, compared to €68 million in 2016. The bank said impairment charges continued to be positively impacted by improving macroeconomic conditions and a further rise in house prices.
Return on equity for 2017 stood at 9.1%, compared to 10.1% in 2016. Adjusted ROE was 8.7%, compared to the year-ago 10.8%, exceeding the bank's objective of 8%.
The bank's transitional CRD IV common equity Tier 1 ratio stood at 34.1% at the end of 2017, compared to 32.6% at the end of June 2017 and 29.2% a year ago. The fully phased-in CET1 ratio rose to 34.3% at 2017-end from 32.8% at the end of June that year and 29.6% at 2016-end. The transitional and fully phased-in leverage ratios stood at 5.5% and 5.6%, respectively, as of Dec. 31, 2017, compared to 5.5% for both at the end of June 2017 and 5.2% and 5.3% at the end of 2016.
Volksbank has set a dividend payout target range of 40% to 60% of net adjusted result. The lender proposed to pay out a dividend of €190 million to NL Financial Investments for 2017, corresponding to a payout ratio of 60%, up from €135 million in 2016.
For 2018, Volksbank said it does not anticipate a release of provisions for loans as in 2016 and 2017. Impairment charges may be unpredictable as a result of the implementation of IFRS 9. The lender therefore expects the net result for 2018 to be lower compared to 2017.
De Volksholding BV is the parent company of Volksbank. All shares of Volksholding BV are held by Dutch state holding company NL Financial Investments.