Triodos Bank (TRIO) H2 2025 earnings summary

Executive summary

• Reported a net loss of €25 million for 2025, mainly due to a €59.7/€60 million provision for German fiber optic market exposure and additional strategic provisions, while core banking activities remained resilient with stable net interest margin and strong deposit growth.

• Achieved €1.1 billion in new business lending and €736–€763 million in new residential mortgages, with the mortgage portfolio reaching €5.6 billion and customer deposits rising to €15.1 billion, mainly from personal banking customers.

• Strategic actions included winding down German operations by 2027, simplifying Spanish operations, discontinuing two investment funds, and launching the Fit for Impact transformation program to modernize operations, enhance efficiency, and support digitalization and AI adoption.

• Listed depository receipts on Euronext Amsterdam, improving tradability and investor access, with an 82.4% acceptance rate for the DR settlement offer, reducing litigation risk.

• Met 2030 emissions target in 2025, achieving a 42% reduction in greenhouse gas emissions compared to 2020.

Financial highlights

• Net result was €-25 million (2024: €-3 million), impacted by provisions for German fiber optic loans and DR settlements.

• Net interest margin remained stable at 1.92% (down from 2.10% in 2024); net interest income declined 5% to €331.1 million; net fee and commission income also fell 5% to €109.4 million.

• Return on equity was -2% (2024: -0.2%) and cost-income ratio was 85% (2024: 97%), both affected by provisions; operating expenses decreased to €374.2 million.

• CET1 ratio improved to 17.4% (2024: 16.4%), above internal and regulatory targets.

• Customer deposits increased by €597 million (4.1%) to €15.1 billion, with strong growth in the Netherlands.

Outlook and guidance

• Targeting 3%-5% annual loan book growth, with income growth expected mainly from net interest income in 2026.

• Fit for Impact program aims for €25–€30 million annual cost reduction by 2028, targeting a 70%-75% cost-income ratio, 5%-7% ROE midterm, and a net reduction of 250–270 FTEs.

• No final dividend proposed for 2025; interim dividend of €0.60 per DR paid; dividend policy targets 50% payout of net profits over the cycle.

• Expecting lower legal expenses and operating costs in 2026; wind-down of German business to be completed by end of 2027.