Message from our CEO

'Our purpose - Leading the way to safe and transparent markets - guides us in our efforts to add value to clients, stakeholders and society.' Rutger Schellens Chief Executive Officer

"ABN AMRO Clearing Bank’s financial performance in 2018 has been excellent, we are proud to share, and revenue generation was the best so far. With a net profit of EUR 119 million and a return on equity (RoE) of 10%, we have been able to both outperform against our planning and against our shareholder’s target RoE. It is fair to say that we have seen some extraordinary income (EUR 10 million), but we also had to cope with limitations in on-boarding new clients due to the current calculation methodology of capital requirements (current exposure method - CEM) in the Leverage-Ratio calculation and as a result AACB’s impact on the Leverage Ratio (LR) of ABN AMRO. These performance results, together with an increase of our Net Promoter Score (from 28 to 36) and Employee engagement score (from 80 to 83), make us feel we are on the right track.

In the course of the year we have updated our strategy and have developed our purpose, linked to the purpose of our shareholder: banking for better, for generations to come. Our purpose - Leading the way to safe and transparent markets - guides us in our efforts to add value to clients, stakeholders and society.

Also, we have progressed in our ambition to becoming a more global and efficient counterpart for our clients in 2018. With the upcoming system replacement in the US, we have almost completed the last step in our move to a global clearing platform. Both the consolidation and transfer of part of our IT infrastructure (data centres) to an external vendor as well as outsourcing the End User Services is planned to be finalised in 2019. The decision to work on modernising our global clearing platform marked the start of a multi-year initiative. Furthermore, we reorganised both our Operations and Accounting departments in Amsterdam. And last but not least, we introduced the Agile way of working for the IT and product development activities in Europe. The next step will be to connect the same activities in Asia-Pacific and the United States to the global grid.

In 2018, preparations for Brexit demanded a lot in terms of our flexibility in making sure we have solutions for different scenarios, lobbying policymakers and informing clients about these scenarios. We have made key decision makers aware of the impact for financial markets: such as the connections to central counterparty (CCPs) and exchanges from both the Continent and the UK for both our clients and ourselves. Although some uncertainties remain for the industry, it seems like the most important topics have been covered when the transitional arrangement for a soft and hard Brexit scenario was announced in December 2018. Regulatory challenges like Basel IV and the Leverage Ratio implementation (including the introduction of the standard approach to counterparty credit risk methodology (SA-CCR)) remain. Yet we feel we are on the right track and have clear plans to mitigate the impact for AACB.

In February 2018, we announced a partnership with Nx’change to introduce a new service to give non-bank organisations entrusted with client funds an alternative for escrow accounts. In this cooperation AACB delivers individual cash accounts under its banking licence through the blockchain. Nx’change, a growing next generation stock exchange, was also the first client to launch this service.

During the FOW International Awards dinner we have been chosen by our clients as the Proprietary Traders Clearing Firm of the year for the 6th year in a row.

All in all a busy and rewarding year. We hope we can continue on our path together with our valued client-base, staff and other stakeholders."

Amsterdam, 24 May 2019

Rutger Schellens
Chief Executive Officer