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Third quarter results 2001

Third quarter results 2001. 12 November 2001. Mix of clients and products proves its value,. Revenues held up well despite weaker market conditions Operating result excluding contribution EAB and impact exchange rate, up by 2.3% Efficiency ratio stable at 73.9% from 73.8% in Q2. despite…….

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Third quarter results 2001

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  1. Third quarter results 2001 12 November 2001

  2. Mix of clients and products proves its value, • Revenues held up well despite weaker market conditions • Operating result excluding contribution EAB and impact exchange rate, up by 2.3% • Efficiency ratio stable at 73.9% from 73.8% in Q2

  3. despite……. • Increase in provisioning to EUR 308 mln, driven by one-off items in WCS portfolio • Increase in effective tax rate to 38% due to losses not tax deductible • Net profit was at EUR 476 mln, a decline of 29.1% from Q2

  4. WCS client coverage model further refined • To strengthen co-ordination between the client and product business units • To focus specialist sector resources on most significant client relationships • To reinforce country coverage capabilities to support greater focus on large cap corporate clients

  5. Capital allocation and operating result Operating result Capital Allocation

  6. Q3 01 Q2 01 Q3 00 (EUR m) - specific bad debt provisioning - cross-border risks provisioning Provisioning for loan losses Addition to FAR Total 295 13 308 - 308 262 (9) 253 - 253 154 0 154 - 154 Q3 01 Q2 01 Q3 00 (EUR m) 200 90 1 6 11 220 40 (1) 5 (11) 75 60 5 14 0 Higher provisioning C&CC WCS PCA M AALH CC

  7. Provisioning is within sustainable levels RWA BASIS POINTS EUR bn 39bp 35bp 40bp 26bp 23bp Risk provisioning (2001: excl. changes in FAR)as a % of RWA (right hand scale) * 2001 annualised

  8. Tier 1 ratio affected by FX % change 30 09 01/ 30 06 01 30 09 01/ 31 12 00 (EUR bn) 30 09 01 30 06 01 Total assets Shareholders’ equity Group capital Risk-weighted assets Total capital ratio Tier 1 ratio 597.7 11.1 32.7 274.1 10.10% 6.47% 614.6 11.6 34.7 286.1 10.19% 6.55% (2.7) (4.3) (5.8) (4.2) 10.0 (11.6) 0.5 3.9

  9. Strong performance C&CC reflects inherent strength Revenues Q3 2001 % change Interest (66%) Commissions (18%) ytd 01/ ytd 00 Q3 01/ Q2 01 Q3 01 Q2 01 (EUR m) Trading (3%) (2.8) (9.1) (1.2) (4.5) 818 220 598 166.4 5.0 143.3 (11.3) Operating result Provisioning Pre-tax profit RWA* (EUR bn) 795 200 591 158.9 Other (13%) * RWA September 2001 compared to June 2001 • Operating result excluding Q2 contribution of EAB, up by 8.3% • Strong performance of all three home markets (Netherlands, US and Brazil) • Overall quality of the portfolio remains strong, reflecting diversified client base. • Provisioning back to normal in Netherlands and stabilisation in US and Brazil

  10. Restructuring within C&CC on track • Restructuring programme BU Netherlands on track • To date, 158 branches have been closed • Staff informed about option of voluntary retirement Staff should make decision before 15 January • Closure of countries and disposal of retail businesses • Sale of retail business in Argentina completed • Exit of nine countries completed • Integration of MNC and Standard Federal completed • Standard Federal completed its merger with MNC in October • Number of branches has decreased by 59

  11. Increasing share of annuity business in WCS % change Revenues Q3 2001 Commissions (34%) ytd 01/ ytd 00 Q3 01/ Q2 01 Q3 01 Q2 01 (EUR m) Trading (19%) Operating result Provisioning Pre-tax profit RWA* (EUR bn) 229 40 178 100.5 (20.1) 125.0 (52.2) (4.3) (43.5) 9.4 (61.7) 183 90 85 96.1 Other (6%) Interest (41%) * RWA September 2001 compared to June 2001 • Mix of clients, products and geography proves its value • Measures are being taken to bring costs in line with revenue development • Provisioning has risen, but credit quality has overall been holding up well • Sharp increase in effective tax rate due to losses not tax deductible

  12. WCS cost target - at most zero growth • Equity related business in the US • Focus research around key sectors • Reduction of trading personnel to reflect smaller stock footprint. • Equity related business in Asia • Closure of domestic Japanese equity business • Rationalisation of Asian (ex-Japan) equities operations • Corporate Finance • Refocus on key sectors

  13. WCS benefits from well diversified portfolio Manufacturing Services/Leisure Telecom Services 11% (6%) 5% (6%) 8% (10%) Media Agriculture/Raw 4% (3%) Materials Technology 2% (2%) 7% (8%) Construction/Real Estate 6% (6%) Oil & Gas 10% (9%) Metals & Mining 3% (3%) Utilities Transport 10% (9%) 7% (7%) Retail Chemical 2% (2%) 5% (5%) Consumer (Non) Durables Pharma/Health Food etc. Automotive 3% (3%) 3% (2%) 7% (10%) 7% (8%) ( ) December 2000

  14. Revenues PCAM affected by weak markets % change Revenues Q3 2001 Q3 01/ Q2 01 ytd 01/ ytd 00 Commissions (74%) (EUR m) Q3 01 Q2 01 Revenues Operating result Provisioning Pre-tax profit 330 51 1 47 377 97 (1) 99 (12.5) (47.4) - (52.5) (3.8) (43.4) (80.0) (42.7) Trading (2%) Other (3%) Interest (21%) • Decline in revenues, due to depressed market conditions • Migration from equities to bonds and cash leads to lower margins • Fall of assets under management/administration due to weaker market values • We expect the coming year to be challenging

  15. ANNEXES

  16. 4,674 3,456 1,218 308 858 329 - 476 476 0.30 4,901 3,615 1,286 253 1,039 296 962 1,633 671 0.44 (4.6) (4.4) (5.3) 21.7 (17.4) 11.4 - (70.9) (29.1) (31.8) 2.3 6.5 (7.8) 75.1 (21.9) (15.3) - 15.3 15.3 (25.6) Key figures: profit and loss account % change Q3 01/ Q2 01 9 months 01/00 (EUR m) Q3 01 Q2 01 Revenues Operating expenses Operating result Provisioning for loan losses Operating profit before tax Taxes Extraordinary result Net profit Net profit excl. sale EAB EPS (x EUR)

  17. Operating result excluding contribution EAB and impact exchange rate, up by 2.3% Publisheddecrease Impact ofEAB Impact ofcurrencies Organic growth (%) (EUR m) 1.5 1.3 2.3 (14) (168) (106) (62) (17) (134) (99) (35) (19) (227) (159) (68) (181) Revenues Expenses Operating result Pre- tax profit

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