Van Lanschot Kempen NV (VLK) Earnings Call Transcript & Summary

Welcome to our Van Lanschot Kempen Capital Markets Day. My name is Tosca Holtland, and I'm Investor Relations Manager. We have set up the following schedule for today. Our CEO, Maarten Edixhoven, will start by presenting our strategy and sustainability profile. After this first presentation, Richard Bruens, member of the Management Board, will discuss our commercial successes. He will focus on private clients and investment banking clients, followed by a Q&A session. After that, Management Board member, Erik van Houwelingen, will share his views on our investment engine. He will focus on Wholesale & Institutional Clients, with a Q&A session to follow. After this, we have a coffee break from 3:15 to 3:30. After the break, we'll continue with a presentation by our COO, Arjan Huisman. He'll cover digitization and technology, also followed by Q&A. Our CFRO, Constant Korthout, will give the last presentation of today. He'll be discussing our financial results. After this presentation, there is another Q&A opportunity with both our CEO, Maarten Edixhoven and Constant Korthout. Allow me to explain how the Q&A sessions will work. For our analysts, you can ask your questions verbally. Just raise the yellow hands in Teams. After I say your name, you can unmute yourself and ask your question. Our shareholders and other participants can ask questions via the chat function. Please include your name, and where relevant, the name of your company. I hope you enjoy this afternoon. Now I would like to give the floor to our CEO, Maarten Edixhoven.

Thank you very much, Tosca. And dear shareholders, dear analysts, dear participants, thank you for joining me and my team today. And I hope you will enjoy the inspiring story of Van Lanschot Kempen. Today, we will give you an update on our strategy. We will give you an update on our financial targets. And also, please allow me to share some of my personal experiences during the first 7 months at this firm. I've spent, in the first 7 months hundreds of meetings and hours with colleagues, with clients. And also, I've met many of you, our shareholders, over this period. And I must say, I'm really very excited about the position of Van Lanschot Kempen in the wealth management market and the prospects we have for profitable growth and sound returns for our shareholders. So let me -- allow me to go briefly back to our heritage. Our heritage dates back to 1737 as the firm was founded by the entrepreneurial Van Lanschot family, who is still a major investor in our house. Over the centuries, we have seen many wars, we have seen many crises, and we've endured them. The firm is resilient, and we know and we share also with our clients the consequences of each economic and geographic situation, as we have also witnessed over the last couple of months, unfortunately, in Europe. Today is also an important moment as it also marks another transformation of our house, the transformation from a capital-intensive bank towards a capital-light independent and specialist wealth manager. And I think that's an important moment in our history. We entered this new phase well capitalized and on the back of strong results in 2021 surpassing our financial targets, but also on the back of solid results in the first quarter of 2022, as we announced today, and our CFO, Constant Korthout, will expand further on later. I already mentioned towards growth. And I think that's a very important element of our strategy moving forward. And if you look over the last couple of years, we've also shown that we were able to, on average, have 10% growth of our assets under management that are entrusted by our clients to us per year. For the near future, we anticipate that on average for the medium term, we will mirror that growth, that capitalized growth of our assets under management. And we look at that from basically 3 perspectives. First of all, organic growth. We continue -- and Richard Bruens will elaborate on that later from a customer or client perspective, we will continue on the path of organic growth, focusing on net inflow in our institutional segments as well as in our private client segments, as we've also shown in the first quarter of this year. We also trust that we can keep our margins, so it's profitable growth as we are not in the red sea of brokerage services and apps and that kind of market, and we will also not move into that market. Another driver for growth is the further liberalization and individualization of the pension fund market in the Netherlands where we have a lot of experience through our institutional clients. Second, we also have a proven track record of nonorganic growth by executing bolt-on acquisitions over the last couple of years. And it's not only a track record of acquiring those companies, but also of integrating them seamlessly into our firm increasing our efficiency. Just to mention, the Hof Hoorneman transactions, StarBankiers and UBS Netherlands over the recent past. And we will continue to focus on potential M&A in the future, and we also have the capital to do so. Our focus there will be on private banking in the Netherlands and in Belgium opportunities as well as in institutional markets for Western Europe. A third to factor in is also market performance. So in our modeling, we also allow for about 3% per year in terms of market performance. Of course, we realize that markets can go up and down, so that's really on an average of the medium term. We can only execute, and this is something that I really felt deeply during all my meetings in the firm, we can only execute on this growth agenda by having and retaining and attracting the right talent into our house. And at Van Lanschot Kempen, I'm allowed to work with really the best talents of the market. And it's really great to see that -- and people ask me what makes them so special. I think there are 3 elements, which I also get back from our clients. One is the very personal touch that -- the personal relationships that our people have with the clients. Second, the really entrepreneurial mindset. And third, the deep knowledge of the markets and the segments where we are active in. Those people make the difference for our clients, hence, also on having a growth mindset. If you just look at the numbers, then I think we all know that companies that have a high employee engagement and have a high NPS outperform. In this house, we have an employee engagement of 88% last year, and we have an NPS of plus 41. I think those are really good numbers. And I will work day by day, together with my colleagues in the management Board, very hard to keep it that way. But our staff is not only very engaged. They're also very committed. Through our various employee shareholders plans, about 70%, and that's 7-0, 70% of our staff also holds shares in Van Lanschot Kempen. And I think that is a very significant financial but also emotional investment of our staff, and it shows that they trust that our organization can deliver. It's real ownership. Also today, we announced that we will implement also an equity partnership approach for senior leaders into our firm, showing a further development into a professional wealth management firm. Allow me a couple of words on our integrated model. One of the things that I really saw during my first 7 months in the organization is that by being active in the private client segments, the wholesale and institutional segments as well as in the Investment Banking segment, we truly combine a very entrepreneurial spirit and a unique offering to our customers that nobody else in the Benelux really can offer. It also fits very well with our purpose, to create and preserve wealth for our clients and society in a sustainable way. But we do that with these 3 elements combined. And what I see is more and more that, for example, our solutions at the institutional side, for example, like an outsourced CIO, are also being used in our Private Clients side or that customers, clients in the investment banking activities that create wealth are then diversifying their wealth as a private wealth clients. And Richard will elaborate more on how this integrated model is really working. And that is a very hard act to copy. We are also able to do this because we are large enough to offer our services efficient at a competitive price, but we are small enough to be nimble and to be really entrepreneurial and close to our customers -- to our clients, sorry. Then also very important today, we announced also our new financial targets. In my discussion with shareholders over the last couple of months, there was also a clear ask to be more clear about our financial targets. Just to follow through, we have set a CET1 ratio target of 15%, that is 1-5, percent. And plus we add an M&A add-on of 2.5%, allowing us to execute on a nonorganic growth agenda. Any capital above that amount is, in principle, available for distribution to shareholders. Second, an efficiency ratio through the cycle of 70% and a return on CET1 of 12% also through the cycle. The 70% efficiency ratio, I think, reflects very well the high-touch and high-tech approach we have to our customers. We continue to invest in our people and in technology and data that support our services. And of course, Constant Korthout, who will present later, will dive more deeply into the financial targets and the consequences of those. Not only are we a profitable firm, but it's about people and profit and the planet. We are part of society, and this is a topic that's also very close at heart for me. We are very much playing our part in making society better. We are committed to become a net zero wealth manager by 2050. And not only that, we also added interim targets very specifically by reducing our footprint 7% per year on the basis of 2019. Most of the impact we have is through the assets we are allowed by our clients to invest in companies. That's about 99% of our impact. A little bit less than 1% is the balance sheet, the loans, mortgage loans, Lombard loans we offer to our customers, and only 0.1% is our own operation, mobility, housing. Nevertheless, we focus on all 3 areas to reduce our footprint by 7% per year. What is extremely important here is that we are a house of dialogue. Things change as we have seen over the last couple of months in society. So we are a house of dialogue, and we have this dialogue not only with our clients but also with the companies where we invest in. I don't believe in a formalistic approach of just exclusion in terms of sustainability. If necessary, we'll do that, but also on the base of dialogue and wisdom in terms of what's happening in society. And of course, sustainability is about more than just climate change. It's also about the S and the G of ESG. At the S side, the social part, we look very much at equality, but think also about diversity and inclusion as an extremely important topic for this firm. Our staff says that it's a very inclusive firm. People feel at home. And that's also what I hear from the personal stories. At diversity, we really have steps to take, and we will do so. In terms of the G, for example, tax integrity is, of course, a very important topic, but also transparency in our field is very important. And for example, last year, we won a transparency price for annual account. I think those are good examples of a solid embedding of ESG in our operations. What I would like to achieve together with my team is that for every major decision that we take, sustainability is integrated in that decision taking. And that is something we also share at the moment with our staff and are implementing in our decision processes. Now finally, you can only -- I learned from one of my tutors in life that a strategy without execution is a hallucination, and we don't build firms on hallucinations. So with the long heritage we have, are very proud to work with my colleagues in this team and I will present to you today a leadership team that has over 150 years of experience in diverse areas of financial services, and that is very committed and also personally invested as shareholders to make happen what we promise. And I really believe and I have also fun in working with this team. So concluding, I think we are finalizing our transformation towards a leading specialist wealth manager in the Benelux. Second, we have set, I think, ambitious but also realistic financial targets, sharing excess returns with our shareholders. And thirdly, we have a very ambitious growth program that we are looking forward to deliver and share with you. Thank you very much, and look forward to the Q&A.

Thank you, Maarten. Now it's time for our next presentation. Richard Bruens will discuss our commercial successes. Richard, the floor is yours. Enjoy.

Thank you, Tosca. And thank you, Maarten. Also from my side, a warm welcome to you all. As already mentioned by Maarten, we focus on and expect to continue to grow in the years to come. Being responsible for client management and origination, I would like to explain to you how we are going to achieve this. To start with, I would like to stress that the 3 client groups are not just 3 independent groups, but have a lot in common and with lots of crossover potential and cooperation. Now as you can see on the slide, the core of our wealth management strategy are really private clients. Maybe not so much in terms of AUM, which you see on the left-hand side. But particularly, if you look on the commission income, with nearly 65% of total commission income, it is clear that private clients is the core of what we do, very well supported by Wholesale & Institutional Clients as well as investment banking clients. A large focus in our private clients business is the entrepreneur, entrepreneurs with the family business, health care entrepreneurs as well as the next-gen entrepreneurs. The same is actually true for our second client group, the investment banking clients. It does not service the multinationals, but focuses on companies with a valuation of at least EUR 50 million in biotech, in real estate and in infrastructure and renewables. A lot of these companies are, therefore, headed by an entrepreneur as well. And therefore, there is a lot of cooperation between the Investment Banking Clients Group and the Private Clients Group. With regard to the third client group, it is really the high-end investment skills and knowledge of the Wholesale & Institutional Clients Group, supported by the capabilities of the Investment Strategies and Solutions Group, which supports our Private Clients business. We have about 100 investment professionals that service our pension funds and insurance companies daily, and our private clients benefit from the knowledge as well as the product capabilities. In short, these 3 client groups work very well together and are forming a well-integrated wealth management offering. Given that my colleague, Erik van Houwelingen, who speaks after me will go in more detail about the growth prospects of the Wholesale & Institutional Clients Group, I will focus the rest of my presentation particularly on the Private Clients side. Just to be clear and complete, the Private Clients Group of Van Lanschot Kempen consists of 3 segments. First of all, the regions in which we are servicing the high net worth individuals as well as the entrepreneurs. Secondly, the specialties where we have our client groups, business professionals, executives, health care entrepreneurs as well as [ AB ]. And last but not least, the semi institutional client group where we service ultra-high net worth individuals, foundations and family offices. Even though my presentation is really about how we are going to grow in the years to come, I think it is useful to look back at the last years to see what we have achieved and how this will support future growth. As you can see in the slide, we have really been able to grow our assets strongly over the past years. In terms of net new assets, and as you can see on the right-hand side, in terms of the relationship NPS as well. What you do not see on this slide is, if you would go back to 2008, is really the outflow that we had from 2008 to 2015. So not only did we manage to turn around the private bank from a net outflow to a net inflow business, but also, as you can see in this slide, we managed to accelerate the growth of AUM, the net inflow over time. Interesting to note with regards to the NPS, the Net Promoter Score, is that in the first quarter of '22, we managed to record a plus 41 NPS score, as already mentioned by Maarten. And I think this is an important milestone as basically over the past years, we always saw that the NPS at least slightly correlated with the market developments. As you know, Q1 was a negative one for markets. And despite that negative market performance, we still managed to increase our NPS to record levels. It is, in my view, evidence of how strong our customer experience proposition really has become. Now on average, across Private Clients and Wholesale & Institutional Clients, we have been able to grow our AUM by about 10% per year. So this is net new money, market growth as well as growth from acquisitions. And we strive for a similar percentage on average in the years to come, of course, assuming normal market circumstances. Now as we have been able to grow strongly in the last years, I have no doubt we will be able to continue to do so. And I would like to go specifically into more detail about what I believe are the main growth drivers for our business. As I said before, Erik van Houwelingen will discuss the growth of the growth prospects of the Wholesale & Institutional Clients segment. And of course, there will be growth from other sources like our new independent wealth management services team and, of course, from our investment banking clients group. But the 3 main levers I put here for you on the slide, and they are continued growth in the Netherlands, accelerated growth in Belgium, as well as making all our capabilities and expertise available to all our clients. In the next slides, I will go into detail for each of these 3. Starting with continued growth -- further growth in the Netherlands. At Van Lanschot Kempen, we breathe and we live wealth management. It is really the only thing we do. With about EUR 125 billion in client assets, we have enough size to matter. And with about 1,700 people in our firm, we are small enough to be nimble and to act fast. We have the right proposition and service concepts. And as important, we have, in my view, also the best people in the Dutch private banking industry. 3, 4 years ago, we founded our Private Banking Academy and we rehired, retrained and retained our private bankers and specialists. Important to note here is that 70% of our bankers are at least already 5 years with us, and 50% of our bankers even more than 10 years. Now this, as you can imagine, is very much appreciated by our clients and also makes a big difference vis-a-vis our competition in the Netherlands. Obviously, the accelerating growth in the private bank over the years has been created by literally hundreds of initiatives like new service concepts, to mention one, the active investment advice proposition, as well as, for example, our private markets products lease with private equity, land, infrastructure and real estate. But the most important ones for me were, without a doubt, our dedicated focus on creating a unique Van Lanschot Kempen client experience in combination with a disciplined sales management approach. By being really personal, alert in terms of a client's private life as well as market developments, and by being always clear in our communication, we have improved our client satisfaction expressed in this relationship NPS, which we've spoken about a few times now, from minus 7% in 2013 to plus 41% in '22. I often hear from clients that they selected us as they had a very different conversation with our banker than with the bankers of the competitors that they chose to speak to as well. We call this internally in Dutch [Foreign Language] literally translated as a broad conversation, really finding out what is important for the clients, how they want to be serviced and coming up in the end with relevant solutions. We want to act, and we are also allowed to act more and more as a guide, as a trusted adviser, deepening the relationship with our clients far beyond just investing. Now I do not need to tell you that these high NPS scores are not easy to achieve, let alone to maintain. And that it is very high in terms of scores in the financial industry in general. But it's not only about the interaction of bankers with their clients, it is especially making sure that everyone from mid, to front, to back office understands their role in the value chain as well as the value that they can have for their clients. In addition, the customer experience that we create in these personal contacts need to be repeated in the online channels as well. And then we're talking about online banking, the various apps, et cetera, to create a consistent omnichannel experience. We have been investing for many years in IT and in our online capabilities. And my colleague, Arjan Huisman, who will speak later, will tell you more about it in his part of this presentation. Now really wanting to go the extra mile for our clients has always been part of the Van Lanschot Kempen DNA. And we have been able to build on this and create what I proudly call the Van Lanschot Kempen client experience. Everyone in Van Lanschot Kempen, from a banker to each and every Board member, we love to meet clients and love to service our clients. We share our best customer experience practices throughout the firm. And to give you a few examples, I really love it when I hear from a client service desk colleague that she approached the favorite actor of one of our clients that lost her wallet on the way to one of his performances. She called the help desk because she had lost her cards and wanted to block it. And our colleague from the client service desk contacted this actor and asked him to send a nice note to our client as a kind of consolation. I'm also extremely grateful that our back-office staff decided themselves to work whenever it's needed on Saturdays to make sure that all the new clients that join us get their new documentation, their onboarding documentation in time. Now going the extra mile is, of course, wonderful, but you need to get money in from existing and from new customers in order to have healthy and sustainable growth. Now since 2016, we have, therefore, a disciplined sales management program with ambitious individual and team goals, not only in terms of AUM and margins, but also by setting activity goals and ambition. In this sales program, all our commercial people are trained and coached, ensuring we prepare each commercial opportunity as well as we can, also via role playing and have the right pre as well as post-meeting communication so we always come up with relevant solutions for our clients. I am really very proud of all the people with whom we have made this journey since 2013. The private bank, since then, is truly in a different shape, and we are seen by many clients and by competitors as the only true private bank and maybe even the best private bank of the Netherlands. Now on to our second growth lever being the main challenger in the Belgium market. Both the transfer of the Belgian activities to our bilingual Van Lanschot Kempen group infrastructure as well as the acquisition of a 70% stake in Mercier Vanderlinden are our catalysts for even stronger growth in Belgium. With nearly EUR 10 billion AUM, we now have critical mass and can seriously aim to become the top 3 independent private bank. As you can see in the slide, we are now #6. But our goal is really to become the #3 after the Degroof Petercam and Delen. And this challenger role really fits well with our entrepreneurial DNA. As you can see in this slide, our net AUM has also been accelerating over the years, both in absolute terms as well as in percentage terms. And it went from 4.5% in 2018 to 9.5% in 2020, and even 12% in 2021. And with Belgium actually being a larger private banking market than the Netherlands and given the relatively smaller position of Van Lanschot Kempen in Belgium than in the Netherlands, I'm sure that somewhere in the coming years, the growth in net AUM from our Belgium colleagues will take over the growth -- will outpace that of the growth in the Netherlands. Why do I think that is possible? First of all, the sustainability proposition of the DPM profile fund of Van Lanschot Belgium has proven to be a key differentiator in the Belgian market. When it comes to product and service propositions, our Belgian clients, including those of Mercier Vanderlinden, can truly enjoy the benefits of being clients of the group. This includes the combination of the 3 MercLin funds, the offering of Lombard loans, the digital capabilities of online banking and the various apps as well as Kempen funds that we have available. In other words, both Mercier Vanderlinden and Van Lanschot Belgium benefit a lot from each other. From a client coverage perspective, the Mercier Vanderlinden franchise has a strong name amongst the large families and entrepreneurs which Van Lanschot Belgium did not have. And last but not least, looking at the country coverage, the strong position of Mercier Vanderlinden in the French-speaking market means that we move from a Flemish bank to a true Belgian franchise. So you hopefully understand why I am so excited about the partnership that we created with Mercier Vanderlinden, and as a result, the growth prospects that we have in Belgium. Then the third lever, really making all our capabilities and knowledge available to all our clients. As I started with in the beginning, these are not just 3 separate groups, but they very much cooperate and strengthen each other. We strive for making all the capabilities and knowledge and skills that we have in the group to be available for each and every client. Now without aiming to be complete, let me mention a few examples. If we start on the left-hand side -- sorry, it's here now on the top of the slide, with both private clients and investment banking focusing on entrepreneurs, they help each other generating business. Before intensifying this cross-client group cooperation, I could literally count the number of deals that we did together on the fingers of one hand. And I can tell you, they were more than enough. Now since January '21, since we intensified the cooperation, we have done EUR 530 million of deals for private banking clients selling their companies. And the other way around, we have welcomed more than EUR 400 million in AUM from investment banking clients becoming a private banking client after the successful execution of their deal. And mind you, this is only after 1 full year of cooperation. So it does not need that much imagination to envision what the potential will be for the next 5 years as we only literally just started. Then in the middle, you see the slide -- in the middle of the slide, sorry, you see the OCIO concept, the outsourced CIO concept for professional clients, like family offices utilizing our fiduciary management and institutional clients knowledge and service offering with, for example, strategic advice and consolidated reporting. This is really unique in the Netherlands as we are the only party having the skills and the knowledge to offer these services. Now you will not be surprised that within a few months of launching this new concept, we have already onboarded quite a number of large clients. Then the last box shows that we are using the experience we built up in the private bank with regard to both customer experience as well as sales management within our Wholesale & Institutional Clients group. The approach has, of course, been adjusted to the institutional nature of this group, but the philosophy has been more or less the same. And I'm convinced this will lead to even higher client satisfaction as well as more AUM inflow within Wholesale & Institutional Clients. This will obviously take time, as we know from our experience in the private bank, but I'm also convinced here that the upside potential is significant in terms of both AUM and client satisfaction. Then coming to my last slide. As a last example of really using our capabilities and skills for each client is how we have brought together the real estate knowledge of both the Investment Banking client group and the Wholesale & Institutional Clients group for the benefit of our private clients. And what we try to do is really bringing -- aiming to bring the transparency to an opaque asset class for them. Over to Anneka Treon, Managing Director of our Competence Center, who can explain like no other how this works for our private clients.

The whole driver and motivation behind changing the way that we're organized is the client. It's all about how can we increase our pallets of offerings, competencies that we already have for our existing clients. And in order to do this right, we went on a deep dive in truly understanding what do our clients care about the most. And in which areas are they also areas of our firm expertise where we truly have market-leading positions. The area that stood out the most clearly was real estate. Looking at our private clients, we discovered that our clients typically have between 1/4 or 1/3 of their total wealth invested in real estate, invested in bricks and mortars. And we discovered that many of them were simply unaware of the knowledge bank that we have in terms of real assets within our whole organization, whether it's on the Investment Banking side of our market leadership in the listed world, whether it's on the investment management side with the data infrastructure, looking at 20 million data points on a daily basis to get a proprietary edge on valuation and how climate change impacts that, et cetera. So what we did was 3 things. The first thing that we did is really engage in a conversation with our clients about that part of their investment world, entering a holistic conversation with them, a journey with them, bringing it broader than real estate to really real assets about bringing transparency to what is actually a rather opaque asset class, whether it's the valuation, the prices that private individuals are paying for very similar assets and the gap versus what an institutional is paying, whether it's the fact that 60% of carbon emissions is coming from the real asset's sector. So we started off that conversation. The second thing we did where we got fantastic feedback was actually open up our entire data infrastructure to our private clients in a way that was very, very practical, but also extremely personal. So this means private individuals could simply insert their post codes of their portfolios, and we again come up with pretty detailed, comprehensive analysis on how we look at the valuations, what we're thinking about the locations, again, climate risk concerns, et cetera. The third thing that we did was build very specific customer journeys, whether it's an entrepreneur that's just cashed out by selling his or her company and looking to invest that liquidity in real estate but in a less illiquid way. Or it's on the other end of the spectrum, somebody needing advice and help with estate planning, inheritance, et cetera. What's really powerful about this is that it makes it very personal, very practical and very tangible for our clients, which is why this has resonated so well and why we're so proud.

Thank you, Anneka. And what a great example of cross-client group cooperation. In summary, as I said, we strive for growing our assets under management in the coming years by about, on average, 10% per year, of course, given normal market circumstances, a, by continued growth in the Netherlands; b, accelerating growth in Belgium; and c, last but not least, continuing with making all our skills, capabilities and knowledge available to all our client groups. I thank you very much.

Thank you, Richard. Now it's time for questions. [Operator Instructions]

Cor Kluis, ABN AMRO. Yes, thanks for the presentation, quite interesting, especially also the Belgium part because the company becomes larger and becomes quite material. A few questions. Maybe first question is on the growth, the 10% ambition. You mentioned that 3% is from market growth. So there's still 7% leftover for organic in both M&A. Could you give some indication, can it be seen as 50-50, 3.5% the inflow, 3.5% from acquisitions. Can you give some clarity on that one. And also for Maarten on the bolt-on M&A, can you give -- in -- of course, you cannot say what you want to do, but can you at least indicate what you're not going to do. So some broad lines because it's a new CEO situation, of course, and any words in that respect would be helpful on countries on type of businesses. And last question is about capital return. If we -- capital simply it's 17.5%. That's core Tier 1 ratio, which you basically target, does it mean everything above that are going back to shareholders or does that go to -- or do you take into account the cyclical situation, et cetera. That's it from my side.

Okay. Thanks very much, Cor. I will leave the last question to Constant Korthout, our CFRO, who will answer that one. Coming back to your questions, Cor. Yes, if you look at the total, let's say, on average 10% per year, and Maarten indeed said that roughly 3% market growth per year is what you would normally expect, then that leaves indeed 7%. We've deliberately not split that one into how much from one to the other? Why not because it's very unpredictable year after year. As you have seen in the AUM slide, there are years where we can grow our AUM by a multiple of the -- let's say, the percentage. And there are other years where, of course, it is much lower on the AUM side. And I don't have to tell you that the predictability of acquisitions are also not very large. So hence, in an overall 10% target. But you're right by saying about 3% market growth on average per year and then 7% for the rest. But how that plays out over the years, of course, we don't know either. But we know that as an average over the years, that is something we can and we want to make as an overall target. That was your first question. Your second question was, can I say something about acquisitions? Maybe in terms of things that we don't do. Well, again, I think particularly the acquisition side is something that Maarten and Constant can talk about in much more detail. But looking at least to the acquisitions that we have done, I think a number of things are important: a, of course, always cultural fit. So we will not take over, no matter how good the business case is, if there is no cultural fit of the acquisition that we possibly could make. And b, of course, it has to fit well in the wealth management strategy that both Maarten and I described. So I think those are the main important things. And I think Maarten has given some detail on where we are looking in the private banking market as well as in the wholesale and institutional markets, both in the Netherlands and Belgium, et cetera. But then I will repeat Maarten. But maybe Constant or Maarten can give you some more detail acquisition-wise when it's their turn for Q&A.

And Richard, is it really Netherlands, Belgium? Or do you also indicate that maybe U.K. or something might also be a possibility from a regional point of view because...

From a Private Clients perspective, we're particularly looking at Netherlands and Belgium. From a Wholesale & Institutional Clients side, of course, the U.K. market is also a very interesting one.

Thank you, Cor. The next one is Benoit. Benoit, please mute yourself.

So a few questions on my side. Okay. So maybe starting with the growth. So maybe in Belgium, you have roughly on the Slide 15, I think we see that you have a 6% market share, broadly speaking. What could be your natural market share in Belgium going forward? Do you have a bit of a vision there? Clearly, I guess the growth is going to be quite substantial in Belgium versus the Netherlands. So I was just curious on that one. And then maybe on the Dutch market, which you know extremely well, I think you've been getting quite some market share versus the competition in the past few years. Do you have any indication where you are currently on market shares? And again, here, yes, where you could end up basically at the end of this plan? Linked to that, maybe on the Netherlands. I understand that one of your competitor wants to cross-sell much more SMEs and entrepreneurs basically going forward. So they want to use their balance sheet capabilities to maybe cross-sell more going forward on the private banking side. And I was wondering on your side, if you will be open for maybe a bit more balance sheet relationship going forward with SMEs or entrepreneurs, whether that could be also part of the strategy? Maybe turning into cost, because you have an ambition but you have also a target on the cost side, so how do I need to see the balance between cost and growth going forward? You are very reliant also on market, obviously. So can we conclude that, ultimately, if the AUMs are down because of the market, you will also adjust the cost base accordingly. So that was the cost question. And then maybe also moving to the M&A buffer. What if you come across very large M&A? I mean, if you do the math, it's like the EUR 110 million. I will guess you can buy EUR 3 billion, EUR 4 billion AUMs. So to answer the question from Cor, probably it's like EUR 3 billion, EUR 4 billion, I guess, on the inorganic your model. But what if you come across a larger acquisition, what will be the case there? And what if basically in say, 2, 3 years, you've not executed on the M&A. Is that a buffer you want to keep for a longer amount of time?

All right. Thank you very much, Benoit. Well, again, the last question with regards to buffers, and et cetera, I think that is one that Constant, our CFRO, is in the best position to answer so I will leave that for the Q&A later. On the cost side, apart from the details that Constant will be giving, we have a very strict CFO. So we're always very cautious on the cost side. As you have also seen in the past years, imagine going back to the year in which corona started, we are able, both on the Private Clients side as well as on the Investment Banking side and on the Wholesale & Institutional Clients side, to bring down costs if and when needed. It's not the other way that if we grow our income well, that we can grow our costs to a similar extent. There comes the strictness of our CFO again. But then obviously, there's a little bit more leeway in terms of investing in growth. But yes, cost containment and cost management is certainly next to growth always on the top of our mind. Now I can't remember all the questions that you asked, Benoit, so sorry if I forget one. But let's start with Belgium and the market share. Well, it's always difficult to predict at what market share you will end because then you will have to take into account the market growth -- or sorry, the market size in, let's say, 5 years, you have to know what your competitors are doing. So that I will stay away from, but I've clearly stated that we want to become the #3. Of course, I would love to be the #1 and #2 in Belgium. But as you can see, that gap is very large, so that will be slightly delusional. But I think if you position ourselves somewhere between Bank Delen and the #4, then you get an idea of what our ambition is and where we want to be in terms of AUM. And again, of course, that's on an organic as well as with, hopefully, acquisitions in Belgium as well. Otherwise, we will not get to that top 3 position. Now you mentioned about the Netherlands, our market share there. Again, not to dodge the question, but you have to realize our estimate is that the private banking market in the Netherlands is, let's say, somewhere around EUR 350 billion, EUR 400 billion in true assets under management, so not taking into account savings money. So even if we would grow EUR 3 billion faster than our competitors, it would only lead to a 1% gain in market share. So in terms of really gaining significant market share, that is something for the long term. Now we don't mind. We've been in existence since 1737, so we have all the patience that we need. For us, it's very important, a, that our clients are very satisfied. So that's an important measure. And b, that we at least do better than our competition, both in terms of client satisfaction as well as in terms of the growth in net new money. And as long as we do that, we are happy going forward to whatever market share that leads. That was from memory, the questions that I could remember. So please, Benoit, let me know what your next question was.

Yes. Just on the balance sheet. With entrepreneurs, maybe establishing a relationship with entrepreneurs probably start with the balance sheet as well expansion for you. So I was wondering how you see things here?

Yes. No, basically, from 2013 onwards, when we built down the corporate bank and basically said goodbye to the pure corporate banking clients, we've always had as a policy that we were willing to support our private banking clients and then particularly the entrepreneurs, health care entrepreneurs, business professionals and the partners of the big 4, et cetera, et cetera, to also do loans. And you can see that in our balance sheet, besides mortgages, we also have quite a significant portion of other loans, which are particularly these loans to entrepreneurs, a, to support their business; and b, to support their private banking business with us. So that's what we are willing to do and what we continue to do. So from that point of view, I understand that our competitors also want to use their balance sheet to support their business with SMEs.

Thank you, Benoit, for all your questions. Next one is Jason. Jason, please mute yourself.

I was looking to ask you. The first thing that I wanted to ask is on this 10% growth. You had -- I would like to know, I mean, if you could give us a sense of in the past, because that has been, I think, a clarification over the last 10 years, so I would like to know what is the split over the last 10 years, excluding markets, how much it was? And what's the split between M&A and organic growth. That would be great. The second thing is that you spoke about how you try to integrate the family and the investment banking to do more business. Have I got that right that you got EUR 530 million within 2021? Correct me if I'm wrong. And if so, what were you doing you think before? And what have you changed? Because also other banks are now doing that change. And it's the same thing in Belgium and in the Netherlands. They are trying to put the 2 together. So what do you think is your edge, if you want, in that respect? And the other thing is in the market shares in the Netherlands. I mean your -- my understanding was that you hope that your larger competitor, the elephant in the room, basically, given its troubles, could -- that could lead basically for you to take market share. So coming back to what Benoit was saying, do you think that, that could last for the next 2 or 3 years? Or do you think that, that is largely over?

All right. Let's start again with the last question. Well, we always operate from our own strength. So it's not so much a question of our competitors are weak and therefore, we can do better. We have both in ABN AMRO, ING, Rabo, InsingerGilissen. We have a good competitor base in the Netherlands. And you have to be mindful, as we always say half-jokingly, you have to torture your clients 3 times before they start thinking about leaving the bank. So our game is really not to steal customers from other banks. This is really about entrepreneurs selling their businesses. And at the moment an entrepreneur sells a business, regardless if it's EUR 50 million, EUR 100 million or hundreds of millions, that's really when the true game starts. Of course, it starts already 1, 2 years before that. Because if you only come at the moment, the company is sold, then you're already too late. And that's where the cooperation between the Private Bank and the Investment Bank, for example, is a very valuable one. Now to come back to that question. Yes, the EUR 530 million was not literally purely in 2021. That is also the first few months of this year. So you could say 2021 and the first quarter of 2022. Yes. Well, it's not really a secret, I think. We've deliberately put all client management and origination activities under one and the same management. I'm the person that is in the Board responsible for that, but we have a management team, client management and origination, with some people from the private bank, from Wholesale & Institutional Clients and from the investment bank. And we meet at least once a week. And of course, you bond and you get a really good working relationship together. And that is really different from the years before, not because we didn't want to work together or because there was animosity. But it is always like if you're organized, in this case, in 3 silos, the private bank, an asset manager and the investment bank, then even though you want to, on a day-by-day basis, you are so busy that in the end, really cooperating is a difficult one. And you see that with other firms as well. Secondly, we are, thankfully, as I said, small enough. So we are 1,600 people. Altogether within client management and origination, 800 people. And it's not that difficult for everyone to get to know each other, for everyone to work together and really know what the goal is. Can you imagine if you are a very big bank, I will not mention names, but let's say, either in the Netherlands or somewhere else in Europe, and you have thousands of people in the private bank. You have thousands of people in the investment bank. You have thousands of people in the asset manager. It is just much more difficult to really get this bonding and cooperation together. So I think it is really a function of, a, being relatively small with only 1,600 people. And b, really focusing on wealth management as the only thing that we do that is that success. And I'm really optimistic that the EUR 530 million that you mentioned, in just the first year that we do this, we can really build on this in the years to come. I think those were the answers to your question, Jason. But if I forgot one, please let me know.

Yes. If I may, just -- it was the split on -- of the 10% over the last 10 years. And that was one. And just a follow-up and clarification what you just said. That means that you find that this is additional revenue that you are bringing to the table. So this EUR 520 million, EUR 530 million, in a certain way, is an initiatives that should be bringing you additional revenues going forward, correct?

Sure, sure, sure. Because that leads to this, a, it leads, of course, to fees on the Investment Banking side; and b, in return, although it's not completely one-on-one, part of that EUR 530 million is also in the EUR 400 million that flow back into the private bank. So besides fees in the investment bank, you also get the, let's call it, the private banking fees of that money that flows back into your private bank. So absolutely, that leads to, has led to and will lead to additional revenues, absolutely. Now in terms of the split, I don't have that from the top of my head. But I guess you have all the ingredients. You know over the years exactly what our net inflow has been. You know the acquisitions that we made. Staal was about EUR 2 billion, Hof Hoorneman was about EUR 2 billion. UBS was about EUR 2.5 billion. So you know what we got from there. And then the market developments are also clear if you look at the past. So I'm sure you can make that calculation. But it does come on average to about the 10%.

Great. Thank you, Jason, for your questions. And thank you, Richard, for answering all these questions.

More than welcome. My pleasure.

Now it's time for the next presentation. Thank you. Erik van Houwelingen will share his view on our investment engine. Erik, the floor is yours.

All right. Let's get organized here. Thank you very much, Tosca, and good afternoon to all of you who have dialed in today. Over the next 15 minutes or so, I would like to give you a little bit more of an insight into our investment engine. And then, in particular, focusing in more on the Wholesale & Institutional Clients segment, which primarily is driven by the offering that we have in the investment management space. Here, also some numbers from what you've already heard from Richard and also Maarten, again, underscoring the development of our assets under management. So standing at EUR 112 billion end of last year. And you can see also in the graph how that, on average, has grown over the last 5 years. And you also see again the split between our Private Clients segment at EUR 45 billion and also our Wholesale & Institutional, I'll start calling that Institutional segment, with around EUR 68 million. So it's roughly a 60-40 split as that has developed. Again, already mentioned, this is the combination, obviously, of strong net flows in all client segments and then supported by bolt-on acquisitions, and certainly, also financial markets, at least until recently. Let's start focusing and zooming in on the offering that we have in the institutional client segment. And I'll start on the left-hand side, our fiduciary management offering. It spans basically a full set of services that we make available for pension funds or insurance companies to help them guide through all of the investment decisions that they will have to make in, at the end of the day, investing their money according to a good plan. And you see the service wheel describing the various steps that, that entails, but it starts with asset allocation, strategic, technical, into implementation, finding the best managers within or with a certain strategy. And then obviously, going into things like hedging currency risk, hedging interest rate risk or inflation risk into all kinds of bespoke forms of reporting. It's a very, very interesting area that we have developed at Van Lanschot Kempen over the course of the last 10-plus years. And really, our key differentiators in the market, so what we hear back from our clients are the client intimacy, basically, the performance and the robustness of our solutions. And then, in particular, also the knowledge that we have in the more alternative or we call it internally less liquid space, i.e., asset classes like real assets or private markets. And also because of our sustainability profile and the things that we do with clients there. That means that if you sum that up today, we are a market leader in the Netherlands, and on the back of quite an impressive series of commercial successes, now also a challenger in the U.K. And to kind of illustrate that, I've asked my colleague, Nikesh Patel, who's part of the senior leadership in the U.K. to briefly give you a little bit of an additional insight in the U.K. market.

The U.K. business has seen great progress in the last few years across both our fiduciary and our products and strategies, with these now contributing a nearly even amount of revenues in the region. We have won and successfully onboarded many new clients over the last 18 months and are in the progress on boarding a number of others this quarter. Clients are appointing Kempen for our standout capability in specialist asset classes, our ability to create customized solutions that fit the needs of our entire client base across Europe and the U.K., our risk-adjusted returns compared to our peers as well as our market-leading, and indeed, client-leading approach to sustainability and responsible investments where we integrate best thinking from our Dutch teams as well as our U.K. experts. The U.K. institutional market is the largest in Europe, and therefore, provides a key distribution opportunity for our products and strategies. The U.K. has also not yet seen the levels of pension consolidation that has occurred in the Netherlands. There are literally hundreds of pension schemes who will make the switch to fiduciary management over the next few years, with a broader investment scope and thus, higher margin than is typical in the Dutch market. We've already evolved from being one of the newcomers to being one of the main challengers in the U.K. market. And our appointment to Clara, the first U.K. pension consolidator, and the only one took an authorized so far, cements our role in this evolving market. Altogether, this underlines the attractiveness of the U.K. to our business and why we consider the U.K. to be our second home market.

Thanks, Nikesh. Let's move over to the right side of the slide and talk a few moments about our investment strategies. As you can see here, you know we are a boutique firm specialized in 6 areas where we have expertise in the small-cap sustainable equity, dividend, euro credit, real assets and private markets. This is a competence or a set of competencies that we have been developing over the course of the last many decades and really underscores, I think, and underlines the boutique structure that we currently have in place. In terms of key differentiators here, I think it's fair to say that all of these strategies, they focus on a longer term. We invest in companies but also hold investments that are there for the longer term. So very little in terms of short-term type of trading strategies. Our focus is long term. And with that embedded also the sustainability elements of those long-term investing and holdings of companies and investments. So the key differentiator then is not just that long-term orientation, but also certainly the very, very strong track records that we have in many -- and almost all of these strategies, combined with the craftsmanship and just the passion for investing that is thoroughly embedded in these teams. Then to the section in the middle. That's where, over the course of the last 1.5 years, we've started to basically bridge between fiduciary management and investment strategies or asset management into something that we have started to call asset class solutions. And why is that? That is because increasingly, our clients, whether those are fiduciary clients or asset-only clients, have been asking us for advice into what Anneka also said the sometimes opaque asset classes. So real assets, private markets, infrastructure, farmland, alternative credit all fit that bill and increasingly become also part of the solution for an institutional investor. But they often lack specific expertise and advice that is needed and necessary in order to navigate the choices that they have to make in these asset classes. It's something that we've been doing for a long time out of our fiduciary management capability. And then on the other hand, we have teams that are actually what we call everyday touching money, investing, looking at companies, looking at investment objects in these more opaque asset classes. And then on top of that, we have a very, very strong team -- manager selection team that is actually being able to select also from the broad world around us best-in-class asset managers. This is an area that is in full development. We have a number of billions today already under assets, assets under management with large institutional clients, primarily in the Netherlands. And that kind of concludes the total offering that we have for wholesale institutional clients. And for that matter, and this picks up to a point that Richard makes earlier -- or made earlier, it's not only for wholesale institutional clients. This is often where the ideas start and where things are emulated in propositions that we bring to market. But undoubtedly, many of these ideas and propositions are also very, very suitable for the various segments in our Private Clients segment. So think about high net worth individuals. They are interested in private markets, in private debt, in real assets as Anneka explained as well. But also, for example, our semi-institutional clients, they are very interested in some of the solutions that we can offer to our large and largest clients as well. So that's on our offering. And let's zoom in a little bit more on our clients. And just as you've heard from the other speakers on the NPS score that we have for our private clients, we do exactly the same thing for our institutional clients. So that's embedded in the Net Promoter Score. And the Net Promoter Score, we just got the results a couple of months ago for this segment, came in at 38. So a comparable very, very high level also compared to others in the industry and what have you. And it underscores basically because what a Net Promoter Score really says is the willingness of our clients to also be referral to other potential clients. And that's actually what we also see in practice happening in the institutional space, in both the Netherlands but also in the U.K. Now having said that, obviously, that's great news. But let's talk for a second about the environment that these clients are in and the expectations that clients have from an organization like Van Lanschot Kempen. Let's look at the external developments, the environment that they're in. It's turbulent, right? And that's certainly true in the last quarter because of all of the developments on the back of the pandemic, the war in Ukraine, high levels of inflation, possible recession, possible stagflation scenarios. There's lots of questions that our clients are working through and, to some extent, are struggling with. And it's difficult to kind of navigate and also guide them towards some answers. And then a little bit longer term and more permanent drivers of change, you think about sustainability and how fast that world has been changing over the course of the last couple of years and questions that pension funds will have to answer on behalf of their participants because they are fiduciary, obviously, for their participants, the plan participants. But also on innovation, what to do with technology, what to do with all kinds of regulation that they are increasingly facing and that they have to deal with. That applies to us, by the way, as well. And what about investment portfolios and yields? Yields have been depressed, especially as you know, on the bond side of things, although things have been rising in the last few weeks and months. So one of the underlying themes, and you'll hear this in our story as well, is a move to the more alternative space and a search for yield is kind of the term that goes with that. So that environment is littered with challenges. And the moral of the story is that for us, it's really, really important to act as a trusted adviser for these clients and to be almost the right hand when it comes to decision-making time on some of these very, very challenging issues. And that translates then what you see on the right side of the slide into what we offer to our clients in terms of added value. And obviously -- and we call that 4 alphas, as you see in the slide. And obviously, that is investment alpha. It's about investment performance and doing it better than average or maybe an absolute return strategy. But increasingly, it's also about sustainability alpha. So being able to guide them through the areas and the challenges that come with sustainable investing, but also to provide them real-life solutions and to create impact for them in managing portfolios for them, critically important. It's an area that suits us very well because we know these companies or these investments that we invest in very, very well. We're there for the longer run. We engage with these companies and with these investments for sometimes the course of 10 years. Service alpha, and you've heard that in the story from my colleague Richard as well, is really about staying close to a client. It's about building intimacy to a client. It's about being there when he has or she has a question. And it's also basically about keeping your promises and make sure that you take that to the heart and that you go the extra mile. So what you have seen and heard from primarily the Private Clients segment is also held dear to the heart in the institutional segment. And then last but not least is innovation alpha. You've also heard that we continue to kind of reinvent ourselves. And we have to because otherwise, you cannot be in business as long as we have since the early beginnings of our firm. And this is around doing new things, new themes in the market, but also embedding innovation in our investment process. I'll say a few words about that later. To give you an idea on how that works, again, I have a short video. It's from Pension Funds PostNL, one of our large clients that basically we've been working on the sustainability ambition. And they have centered that, like many of our other clients, around sustainable development goals, or SDGs. And this is where they will pick it up in the short move. [Presentation]

I hope that gives you kind of an insight in the kind of co-creation that we have taken to our heart in working with our clients and also to work on innovation. We are confident that, that strategy will also bring us other benefits because next to the results that we started to build capability ourselves in investing in farmland or sustainable farmland fund or funds and investments, on the back of that, we have also selected in this case, 3 best-in-class other farmland fund managers. So it's not only about promoting our own funds. It's basically about giving access within a sub-asset class to a best-of-breed selection of managers and to work from there. And in this case, also very aligned with what you have heard earlier. We've made this proposition available after the co-creation to other institutional investors, but also to potentially interested investors in our private client segment. So again, kind of underscoring the strategy of building something in an institutional space, but then making it wider or widely available within our segment. Okay. Let's move to the next slide and start talking a little bit about the business dynamics of the institutional segment. And here, you see the title, it's A journey to profitable growth. If you look at where the business today is, and I think, hopefully, you've got that out of my storyline so far, we're doing a good job in terms of the solutions. We're doing a good job in terms of servicing our clients as evidenced. We have the scale. In other words, we have the competencies and the offering to really start accelerating. We have to do that in a profitable manner. I think it's fair to say that in terms of the ambition that we have, we also need to strive for better numbers when it comes to, for example, the cost income ratio. And the 4 different panels and aligns with which we want and will achieve that over the course of the next couple of years are here listed in this slide. So first of all, targeted growth in selected markets and solutions. On the fiduciary management side, that means that we're going to be selective with respect to new clients in the Netherlands. They have to fit our strategic profile as well. So we want to be there for them. But in a way, they also need to be aligned with us. So be a little bit more selective. In the U.K., as you've heard also in Nikesh's story, we've basically now started to position ourselves with this challenger status for further and accelerated growth with fee levels that are higher, for example, than in the Netherlands. So it's clear that we'd like to steer -- in terms of the business mix, to steer towards, for example, the U.K. And that, for example, we would like to steer more towards asset-class solutions where also fee levels are, I think, robust and also towards working with certain consolidated platforms like the Clara example that you've heard from Nikesh. Then on the other side of the spectrum, so the investment strategies, it's really about making more of our strategies available to the market and to sell them successfully. If we look at the mix today, then the revenues are driven predominantly by 3 strategies. So that is [ high diff ], small caps and euro credit. At the same time, we have a number of strategies that have now come to maturity and provide us with the ability to also truly sell these in European markets. I'm thinking about European small caps next to the global small caps, which is very successful, but also infrastructure, non-listed real estate, private markets, farmland funds that you've heard about. So there's a number of strategies there that are ready to go if you wanted to kind of formulate it that way. Then to the right, additional focus on alternative asset classes. You've heard me talk about that before. We will continue that journey. Infrastructure is something that we have not mentioned in this speech, but is an example of that. Real assets, another example, next to, for example, the farmland proposition. Over to impact through sustainable entrepreneurial. And again, here, you see a focus on the word entrepreneurship that you've also heard in Richard's story. I think, for us to understand our clients' needs and to navigate and to do that in an entrepreneurial fashion, but to also work with the firms that we invest in on the entrepreneurial basis and really also with them have an impact in terms of improving their business model, but also their sustainability profile, we have plenty of examples of that, but we still, I think, have a ways to go in also making that clear to the outside world that we have that kind of a power when it comes to sustainability. And then last but certainly not least, I think it's fair to say just that like in many other industries as well, also the industry of investment management has seen major changes as a result of technology and data. And since last year, when we developed a plan for this continued growth and journey towards profitable growth, we have been elevating our spend levels in IT and in data because it's mission-critical that we continue to work on a platform or an operating platform that is effective but also efficient and that it also helps us in improving the cost-to-income ratio. Whilst at the same time in the engine of our investment -- in our investment manufacturing process, you see that the role of data but also with that technology, real assets was an example that was mentioned with Anneka, where you could see how basically data-driven and data-oriented it is, that's our road to the future. So we will continue to invest, and it will help us in also improving our cost-to-income ratio. Okay. Before we go to Q&A, in summary, I think we have a great offering, servicing not only the institutional client base, but increasingly also our private client base. That we have great clients, that we're proud of the client base that we have and that, in general, these clients are also happy with us. And that three, as of last year, we will continue the road to further profitable growth, meaning, that we can also further put ourselves in a position to drive down our cost-to-income ratio in a significant manner. Thank you for your attention, and I think we will open it up for Q&A.

Indeed, thank you, Erik. It's time for questions. We'll follow the same procedure, and I already see some yellow hands. Benoit, please unmute yourself. You can ask your question.

So the first one is on the -- thanks, Erik, for the presentation. In terms of what we have seen in 2021, the pretty large outflows in fiduciary and also on the strategies on the credit side, could you confirm that you've stabilized that? I mean it seems that Q1 is stabilized, clearly, but just wanted to get some feedback from you on that point. The second one is on the performance of the strategies. What have you done? Are you happy with that? Is there other things to improve on the performance? Or, I guess, with the NPS you've shown us, it's pretty good, but I just wanted to talk about the performance side of the investment strategies. And finally, maybe with this big pension reform coming in the Netherlands, just wanted to have your thoughts on how it will impact the fiduciary business. I will guess that will impact many pension funds, including some of your clients. So yes, how do you see that? I will guess this is an opportunity for you moving into more kind of DC offering. You can probably play a role there. But it's probably a high growth business going forward potentially for you, but just wanted to get some feedback also on that from you directly.

Yes. Thanks for your question, Benoit. And also, thank you for already providing the answer to the last question. That was very, very kind of you. I think what many of you don't know is that we are already also probably the, but otherwise, one of the biggest fiduciary management -- fiduciary managers on the DC side of things. So we typically think of the C plans that we support, but some of the biggest DC pension funds and also other plans in the DC space, we actually the fiduciary manager. So we already hold a position and we do -- I didn't talk about that today, but we're doing some very, very interesting stuff there as well. And there, I think if we look in terms of the pension reform and the way that, that is heading, we've started to liaise, for example, with our colleagues of Evi, who are obviously very well positioned in understanding customer journeys for individuals. And obviously, that's not our cup of tea because we do B2B or B2B2C, in this case. So we're starting to liaise and including conversations with some of our current clients on how can we actually lever that competence on, for example, plan participant communication as we see things evolve as part of the Pension Reform Act. On the DP -- DB plans and talk about that for a long time, long story short, those DB plans are, in principle, already CDC plans, collective defined contribution plans. Yes, it's going to change with a lot of difficult rules, but we will still need or they will still need a fiduciary manager in order to assist them. So we'll have to work with the pension fund and with administrators in order to make sense of all of these difficult rules, but it's not going to change our position. So the opportunity is going to be in the DC space for those organizations that basically will, just like in the U.K., will close the DB account and then all of the new plan participants or the new rights will be done in a DC environment. Okay. I'm also going from the back to the first question here. I learned that from [indiscernible]. On performance, performance, both from an investment performance, but also from a sustainability angle that's often measured now as well with, for example, Morningstar globes, you can see the sustainable footprint, and you can talk about it for all day as to what that means, but I will give you some indication. Across our offering performances, both in terms of investment performance and sustainable performance are very strong. It's an average of 4, almost scale of 3 to 5. And I think you become eligible for actual sales with a level 3, and that's kind of the minimum, but you need to be 4 or 5. So if that's the average, then it sits, I think, with what I was trying to hit on that our performance track records, on average, there's 1 or 2 exceptions that I would like to improve on, and that we've started to, I think, work on improvements. But on average, it looks strong. And obviously, next to a Net Promoter Score that is high, that provides kind of wins in the sale, right, or it should in terms of also potential growth in the future. Then your first question, let it be very clear, and it's also a matter of record. We have net outflows in the institutional segment last year on the back of a couple of events. We had 3, maybe 4 clients, but big clients that merged into other entities. So for example, pension fund [ Evi has ] public record that merged into a bigger pension fund. All of a sudden, EUR 2.5 billion of assets under management out the window. Couple more examples. You see it's a lumpy business. Sometimes you're on the good things, on the good side of the line. And in this case, we were not on the good side of the line. And we've also let that also be clear, seeing the departure of our credit team or at least a large part of our credit team. With that, also all document that we suffered losses as well. The point that I want to make because that is then more forward-looking, and then Constant starts to get nervous because I'm not supposed to be Constant looking, but I can tell you a few things. A, over 2021, if you combine it with the inflows that we saw on the strategy side, our net new run rate, so despite the fact that assets under management were withdrawn, our net new run rate stayed the same. It was basically flat, 0.1, something like that. So a number of zero. So it shows that also in that mix with new clients in the U.K., with some big wins in the strategy side, it's not only bad news. Actually, it's something that I'm quite proud of that despite those tailwinds, we were able to basically stay flat on our net new run rate measured on 2021. The pipeline in the Netherlands last year has been very dismal, also as a result of these new pension reforms. It's going to happen. Is it not going to happen? What's the impact? So a lot of parties were just basically waiting and [ would come to ] market. That has changed in the fourth quarter of last year. This is also a public record. So our pipeline in the Netherlands is actually much, much better than it was in 2021. Now hopefully, some good things are going to come out of that. Our pipeline in the U.K. continues to be very strong also because of Clara. Clara got its permission earlier this year, but basically has a flow of potential clients already lined up because it took a long time to get regulatory approval. So there, I think we're confident that they will onboard their first client maybe to over the course of this year and then further growth is absolutely there. We are convinced that Clara will be a smashing success in the U.K. So there's good drivers that make us confident with respect to both this year, but also the years to come. And then I have not spoken about asset-class solutions, with a very, very good pipeline and also our products and strategies where we are happy with the pipeline that we currently have. So it's not a forward-looking statement. I can just kind of tell you what the pipeline today looks like.

Thank you, Benoit. And next questions are for Cor.

Yes. A couple of questions. So first of all, you mentioned you're a market leader in the Netherlands. Could you just -- and this market is not so transparent, at least for us, than probably the private banking market, but could you give some somewhat feeling and clarity on what are the largest players, what is the market share or -- and the way that you analyze that market, maybe the submarkets, but at least we have some feeling of the market that you position in that market. That's my first question. The second question is on IT. What we have learned, of course, from the U.K. platform providers that these businesses require, of course, continual investments in IT and data, et cetera. Can you give some feeling on how far are you -- which things have to be improved? Or are you already saying, we are -- for both U.K. and the Netherlands scale [ or get to do ] some extra investments? And my last question is also in this market. How long are these clients normally staying with the company? Are these contracts that they are locked in? Or is it going to leave whenever they want? How does this work to estimate the sustainability of this revenue flow?

Yes. Again, we'll start with the last question. Very sustainable if you provide the service that they're looking for. They're usually 5-year contracts. If something really happens, then there's breakup clauses and everything else. But most of the clients that we have in portfolio today have been with us, well, not the recently onboarded clients, but beyond 5 years. So if you're able to provide the service, then from our perspective, that leads to a high client satisfaction, but also a high client retention. And some of our larger clients that were up for kind of a retender because they have to retender by law, every 5 years or so, we've been going through that, and they both decided to stay with us. So for us, that's great news, of course, but it also shows that under normal circumstances, that you're looking at longer-term relationships here. That's kind of, I think, the answer to that part of your question. Going back to what the market composition looks like, both in the U.K. but also in the Netherlands, your question was primarily around the Netherlands based on the market leader, thing that I said, that I don't like to talk about competitors, Cor, but -- and happy to take you through that in much more detail some other time because it's also not a secret or anything. But in the Netherlands, there's 2 parties that dominate or have dominated the fiduciary management space and have been successful in the fiduciary management space over the course of the last year. We're one of them. We're about equal size. Then there's a couple of, let's just call them U.S.-based players that we sometimes see back or often see back in finals and in RFPs. And then there's a larger group of 15 to 20 that are active in the fiduciary management space. And then we're not talking about the large pension funds that have their own fiduciary management capability. So we're talking about pension funds that basically outsource, however defined their fiduciary capability to an organization like Van Lanschot Kempen. The point to make there, and this also feeds into the question that you had in the middle, is that in order for this business to be run also from a financial perspective so that the numbers start to add up, you need a certain skill and you need to have a certain level of professionalism. Obviously, we don't always call it that way. But for our clients, we need to be able to play Champions League. Not good enough to play first division because you have to deliver quality, for example, to a pension fund like PostNL. These are professionals that are sitting in the boards, right? So they require that we deliver at certain levels, that we can qualify maybe as playing Champions League. So it's in that combination that you can kind of argue that it's not sustainable for everybody in that business. If you have 15 to 20, then the number of are simply subscale. And a number of them will simply not be able or a combination of the 2 to touch the level of professionalism. So it's almost like it's self-selecting and that at the end of the day, you have a much, much smaller group of 4 or 5 that actually dominate the space. That's what we've merged towards in the Netherlands over the course of the last couple of years. It's a very interesting phenomenon. In the U.K., with still 5,000 or 6,000 pension funds, it's scattered all over the place, but it's dominated by the Aons and the Mercers and the BlackRocks of this world. So we're very proud that we're now in a position to basically go head to head with some of these established names. I mean, you cannot be fired for selecting BlackRock, right? But if you then decide not to take BlackRock but to go with Van Lanschot Kempen instead, that kind of fuels our energy to continue to see and seek the opportunities in that business. Your last point on technology. Yes, we need technology. We -- and increased levels of spending in technology and data. Data takes center stage kind of adjacent to technology as well. It also is a barrier for some of these other parties that do not have the scale and are maybe not willing to invest these monies into the further development of the business. That's basically, in summary, the trajectory that we are on when we're saying our road map is for profitable growth. On the one hand, we need to further build the franchise with selective growth that I hope I explained clearly. But on the other hand, use technology to further streamline our processes and our target operating model in order to further drive efficiencies as well. That's perfectly possible, by the way. But that's something that in the course of the 3 years that we have planned out, we started in 2021, by the way, is that we will also start to realize and materialize some of these efficiency gains, driving down also the cost/income ratio of the segment. So it's a balancing act of investing and making sure that we have selective growth and further looking for efficiencies in the value chain.

Thank you, Cor, and thank you, Erik. Thank you very much. Those were the questions for you.[Presentation]

Good afternoon. Good to have you back after the break. In the video that you just saw, you saw some of our staff in digital analytics and technology. And with this group of people every day, we try to improve our client journeys and our internal processes, primarily for our clients but also for our colleagues. And we do that by expanding our functionalities, upgrading applications, providing better tooling, but also on our data architecture and our underlying technical infrastructure. And looking back, I think with this group of people, we've made enormous progress in doing so. Richard already spoke about the client side. And I think if you look back over the past years, we have made enormous steps on our digital client offering. We are currently scored by our clients above 8 out of 10, and that has been an enormous step forward. But we are also doing other things, maybe not directly visible for clients, but important to supporting our client business. We, over the past few years have acquired a number of acquisitions, and we swiftly migrated the client bases of those acquisitions to our Van Lanschot Kempen platform. Two years ago, we also migrated our Belgium franchise to our group platform, and this helps to simplify our overall IT landscape. Over the past few years, we also moved a significant part of our infrastructure to the cloud, and I'll come back to that later because I've got a separate slide on that. We also successfully outsourced a number of activities to third parties. We currently are using over 100 different SaaS applications, some very small, some others bigger. For example, we outsourced our mortgage processing platform, our payments processing, but for example, also our regulatory reporting platform. And this has helped us to phase out a number of legacy platforms, which has reduced our IT spending, but also create simplicity in the landscape and therefore, helping our change velocity. The same is true on the data side. We have shifted towards a more data-centric IT architecture, which really helps in terms of flexibility and increasing our change velocity. We, over the past few years, also developed a full-blown data analytics suite in the cloud, where we combine most of our relevant clients and investment data together with all relevant analytics tools that we have in the cloud. And our 6 data analytics teams are using this infrastructure to deliver functionality to the business. We are also continuously optimizing our processes, which helps us to free up capacity for growth. Already before COVID, we have rolled out full working-from-home functionality to all our staff. And obviously, that helped us enormously over the past 2 years when COVID hit us, but it has also helped us to improve our client relationship because it has provided new tools to interacting with our clients. But I think the most important item on this slide is the last one, and that's around people and culture because all of this wouldn't have been possible with the right people. We have invested significantly over the past years in our people and culture. We hired a strong set of talented, capable, young professionals from various backgrounds. We currently, in digital advanced analytics and technology, over 20 different nationalities. And I dare to say that they work in a very result-oriented, fast-paced, but also collaborative way together with the business side, obviously. Currently, 40 out of our 53 teams in digital analytics and technology are working agile. And they do that in a 2- to 4-week delivery cycle, which means that every 2, 3 or 4 weeks, there is a sprint review in which the teams demo the functionality that they have developed over the previous sprint, but also set the priorities for the upcoming sprints. And this helps us to work in a very result-oriented way, but also remain flexible in setting and changing priorities, both at team level, but also across teams. And that is important to achieve a very high overall change velocity. One of these teams is our client center team, and our client-center team has developed our client-center application. And that's an application that we have built on top of our other systems and provides our bankers with an integral view of our clients, but also facilitates them efficiently, but also in a personalized way, interacting with our clients. And in the next video, Peter Huiskamp, who is the product owner of this team, will give you a snapshot of the functionality that they have developed just as an example of the things that we are doing. Please start the next video. [Presentation]

As I already mentioned in the beginning, we have shifted quite a significant part of our infrastructure to the cloud. And you see the development that we have gone through on this slide. And this has provided us with both scalability but also flexibility on our infrastructure side and also an increasing number of standard IT tooling that is available in the cloud. Currently, we run our private client content in the cloud, so meaning, our apps and portals, a significant part of our banker tooling, like client center, which Peter just spoke about, our API tooling. We have shifted a significant part of our connectivity, which you see on the right-hand side of this slide, to the cloud and an increased number of our IT support tooling is run from the cloud like CI/CD, but also IT monitoring. And as I said before, we have also built a data analytics suite in the cloud. We -- this has been a step-by-step process that we plan to continue in the years to come, both by shifting more functionality to the cloud, but also still some functionality to third parties. One of the teams that is using our data analytics suite in Azure is the investment management data analytics team. And they support our portfolio managers with data analytics functionality and are providing data analytics for these teams. In the next video by Edouard Minoux, who is the product owner of this team, but also a data scientist, he's going to show you some of the functionality that we have developed for the real estate portfolio management team. Please start the video. [Presentation]

Going forward, we plan to move full speed ahead on our digital agenda, and there are many compelling reasons to do so that you see on this slide. All of you probably already know this, but nevertheless. Obviously, client expectations keep rising. The increasing availability of data provides increasing opportunities for data analytics. Cloud has really become the standard in terms of infrastructure, as I just spoke about. We see a continuing need for process optimization to control costs, especially in an environment with higher inflation. On the cyber crime side, there is a consistently increasing threat to the industry. probably to society at large, and that has our attention. And also with the increased competition for talent, it's important to have an ambitious digital agenda because I believe, and they also tell that to me, that top talent really wants to work on an ambitious digital agenda. And that brings me to our priorities going forward. To start with, obviously, the client side. We will keep expanding the digital offering for our clients, more and better information, better interaction, more self-service, to see if we can bring the currently above 8 score out of 10 to a 9. As Erik already spoke about, we have also increased the focus on upgrading our investment management, institutional application landscape. We're not there yet at the level of the private client side, and we will invest to bring that to the same level. And we see also further opportunities on the data analytics side, on the client service and investment management side, not just to generate interesting insights, but really to embed data analytics in our regular day-to-day client service and investment management processes and to have real impact there. We will also continue our efforts on process optimization by expanding banker and investment adviser tooling like client center that you just saw. Also here, we see opportunities to improve and optimize processes through data analytics, especially on the KYC and the AFC side. And we see also opportunity to further leverage our workflow and API tooling to optimize our processes. On the IT side, it's also important to keep doing the housekeeping on the fundamentals. That's not very sexy. But if you don't do that, you end up with legacy and spaghetti and in the worst combination, the two together. Therefore, we will keep doing regular life cycle management. We still see some opportunity to further consolidate our application landscape. We will continue to move to the cloud, as I spoke about before, and keep investing on the cybersecurity side. And then the last one, the people agenda, probably the most important thing. We will keep fine-tuning the agile way of working to make sure that our overall change velocity is as high as possible. We keep investing on training and development for our staff because next to an ambitious digital agenda, they also seek professional and personal growth. And we will further deepen our talent pipelines to make sure that if we have vacancies in the future, we have as much talent lined up for that as possible. And that brings me to the last slide. We have gone through quite a transformation on the IT side in the past 10 years. And you see a part of that on the left side of this slide. And it has created room for us to also invest on the digital side. We are currently spending around EUR 91 million in IT-related spend. A significant part of that is IT development, so investments in new and changing functionality. As we have done in the past, also in the future, we are running these investments fully through our P&L. So we're not accumulating them on our balance sheet and to kind of depreciate them in the future. So we take all our investments through the P&L, and we also expect this spend to increase with a bit over the coming years. That brings me to the end. I'm not sure whether we have made up for some of the lost time, and I don't know whether time for questions, Tosca, but I'm happy to take them.

You're very fast. Thank you, and there is time for questions. We will follow the same procedure. Cor, please go ahead.

Yes. It's good to see a bank moving to the cloud a little bit further than the average. So that's good to see. So also related to that, questions on the move to Azure. You make 2 comments on the slides, a significant part of the infrastructure move to Azure. And you mentioned continue to move to Azure. So could you give some feeling about what is significant? What have you done at this moment? You already mentioned the activities, but there's so much IT in a bank. What is still not move to the cloud or to Azure? And what activities are you willing also to move over, how you say, continue to move to Azure? What other activities are you looking because it's -- so that's 1 question. And I understand it's very difficult to give a percentage, but at least some feeling of where you think about to also move to the cloud. And second thing, because you are moving maybe a little bit more than others to the cloud, does it help you also in hiring new IT staff? Because you can understand if you come from university and you have to work at an IT department, it's more interesting to work on this than on -- let's not say other things, but on other systems.

Thank you, Cor. And let me try to answer. It's indeed very difficult to give kind of a percentage on how far you are moving to the cloud. What we have done is basically split this whole process in a couple of building blocks. One is the application side. There's a data side. There's IT monitoring side. There is connectivity. And I'm now forgetting the fifth because we have 5. I think on connectivity, on data, on IT monitoring, we're quite far ahead. On the application side, we have kind of the front-end tooling, including the client side, is in the cloud. But on the more product administration side, that process still needs to happen. Yes, it's difficult to put a percentage on it, but I would say maybe halfway or something, but this is kind of a guess out of the blue sky. But we have made strong steps, but there is also still a part to go. And on your question on talent, you're absolutely right. I think when I talk to our young professionals, they are really looking for kind of an ambitious digital agenda, working on the new stuff with new technologies. And obviously, having a strong cloud platform helps because also on the development side, with all the tools that are available in the cloud and the efficiency in which you can develop, that makes their life easier. And therefore, they appreciate that. So you're absolutely right. Moving ahead on your digital agenda is key in hiring talent.

Thank you, Cor. And then the next question is from [ Jason ]. [ Jason ], please unmute yourself.

We still don't hear you, [ Jason ].

No, we don't hear anything. Let's continue with Benoit first, and I will come back to you, [ Jason ]. Benoit, please go ahead.

Yes. On the -- so the first one is on the KYC. We've seen a lot of developments within the Dutch financial sector, obviously. How far are you involved? And is that -- I guess you are already involved, but how far are you involved? And what are your plans actually to further improve the KYC, basically, process? Do you have plan to use artificial intelligence like some of your competitors are thinking? The second one is, it's interesting, one of your priorities is on the process optimization probably helping the, say, the rest of the bank to also become a bit more efficient. So on one side, we see investment -- IT costs going up. Do you expect a bit of cost savings somewhere else in the bank? Is that something you have in mind as well, try to improve the overall efficiency of Van Lanschot Kempen? And just trying to also now on the Slide 35, you don't put any amounts. Basically, it's a growth above inflation. Which inflation are we talking about? Is that the current inflation or kind of normalized inflation? Could you help us a bit on that? That would be useful.

Thank you very much, Benoit, for the questions. Maybe a couple of points. First on the KYC, AFC side. I think here, we are a bit different than the general retail banks are kind of front office bankers play an important role in KYC because they obviously have a very close relationship with our clients. They know a lot of that information. But what we're doing there is to kind of support them maximumly with workflows to go through this process and prefill as much as information as possible because, obviously, they shouldn't spend their time on administrating these kind of things, but talking to the clients as much as possible, and we try to leverage that. So that's one part of the things that we're doing. On the monitoring side, that's, I think, where really the AI comes in. To give you just an example what we're doing with our analytics teams. We're also building kind of a network between clients to see if we have clusters of suspicious behavior and therefore, making our, for example, transaction monitoring a lot more efficient. So that's on the KFC, AFC side. On the process optimization, you're absolutely right. We have increased our investments on the IT side and that helps to streamline processes, both on the front-end side for our bankers, relationship managers, but also the operations side, the investment management side. And basically, that helps us to free up capacity for growth. We have seen that in the past years with increasing client numbers that we haven't added staff proportionally. So that helps us there. In terms of the inflation that we're expecting, I'm going to refer to Constant, who is next, who has done our modeling. Obviously, we're not hoping to see a continuous 10% type of inflation because that would not be good for IT costs, to be honest, because in some of the external contracts, indexation is just part of the contract. So if we would see very high inflation, that will have impact our cost. But I expect Constant to say a bit more about that. Does [ Jason ] work in the meantime?

Let's try again.

Yes, I can hear you. Very good.

Yes. All good. Sorry, apologies on my end. No, it was more in line with what Benoit was asking. It is around potential cost savings because that could be -- my understanding was that there are still some things that are being implemented, for example, in asset management. So are there any potential cost savings to come on the IT front or most of those things are behind us?

I think the serious cost savings are behind us. We still have a couple of things to do, but that would more kind of lower the increase than that you would see enormous reductions there. The benefits are really on the front efforts, operations and kind of the processor side, so to say.

Thank you very much, Arjan.

You're welcome. And then we're next to Constant, I think.

That's indeed the next one. And it's also the last one of today's presentation. Constant Korthout, our CFRO, will present our financial results and the update on our financial targets. The floor is yours.

Thank you. Thank you, Tosca. And welcome to you all. Final story of today. What I would like to do is basically look a little bit back at our track records, also make a quick stop in our Q1 '22 results that we published today. And then I will look forward to how we see the future. And it also brings us automatically to the targets that we have revised as of today, and I'll take you through that in the next 15 minutes. But let's start with looking back. And as you see -- heard from my colleagues already, we can look back at a period where we saw serious growth in both our assets under management and our commission income. On this slide, you see that we more than doubled our assets under management since 2016 as a result of inflow, market performance and M&A. Also on the right-hand side, you see the development of our commission income, which is also significant, 58%. And that, I think, balances with the changing business model over these years where we became more a wealth manager and also more driven by commission income. If you look back in 2012, roughly 41% of our total income came from commission. In 2016, it was 50%. And 2021, last year, it was already 65%. So you see that the evolution of our P&L has changed significantly over the last 10 years. We haven't touched upon the M&A strategy, and I will come back on that later. But looking back, here, you see the successful acquisitions that we did since 2015. As already pointed out by Richard, most of these transactions are in the Dutch market: Staalbankiers, UBS, also this partnership with a.s.r., Hof Hoorneman, and they're all focused on integrating our -- the acquired company into Van Lanschot Kempen and focusing on the synergies we could derive from that. The last transaction in 2021, Mercier Vanderlinden, is of a different kind, where we, well, basically transform our position in Belgium to a larger player. And as Richard already indicated, also with the aim to become 1 of the top 3 players in the -- of independent wealth managers in the Belgium market. So that's, I think, a different story. But we can look back at a very successful range of acquisitions, and you can see the pace is almost 1 a year. Then let me make a quick stop at the first quarter '22 results that we published this morning. And by exception, we went more in detail today. First of all, our net result, we -- is down from EUR 33 million to EUR 25 million. The most important reason for that is that we had to report a provision that we took in relation to a court ruling in relation to the interest derivative matters of the past. We got a negative court ruling a few weeks ago. That court warning itself surprised us because we didn't expect it. We also think the court ruling is not in line with similar court rulings in similar cases. At this point in time, we're looking into that, and we will define our next actions on that. But from a prudency point of view, we decided to take a provision of the expense of the first quarter. And the gross provision is almost EUR 10 million. You can also see the underlying net result, which adjusts for that, is slightly up compared to the first quarter of last year. So overall, despite the fact that the first quarter, of course, was more bumpy in terms of market developments than it was last year, we are pleased with the results we can report. We see also net inflow, both in the Private Clients division, but also Institutional division, we see in both client segments, we see net inflows in the first quarter. So also, we feel comfortable that despite markets have changed a bit, that overall, we are still in a good shape. Of course, our assets under management went down in the first quarter, that's merely because of the market developments that I just referred to, same counts for client assets, but, as I said, we also have net inflow there. Our capital position stands at 20.8%, down from the end of the year, but that is -- the reason for that is that we had to take into account the mortgage floor that was there as of January 1. And if you would adjust for that, I think our capital ratio is even slightly up. I think also notable to say that in the first quarter, we reported a net release from our loan loss provisions of about EUR 7 million, which I think also indicates that also in our loan portfolio, things are in a good shape. Then start to looking forward. And on this slide, you see a little bit the drivers that we identify for the evolution of our net result in the coming years as we see them. And I'll take you to -- from left to right. And I'll start with the interest block NII. We think it's going to be a positive. As we all know, markets have turned in our favor somewhat in recent months. And we think that in the end, that will be beneficial to our P&L. However, this will be gradual, and this also will be modest. So that's why I think we took this block into account. The main driver for our growth in income will be our commission income. As you heard from my colleagues, we aim for a 10% growth in the coming years. And I think that, that would show off in the commission income blocks even -- for Private Clients, where we, I think, maintain a momentum. But also, as you heard from my colleague, Erik, also in the Wholesale & Institutional segment, we intend also to focus more on profitability. And I think with profitable growth, I think we can also see a significant uptick in that segment. Investment Banking will grow alongside with the market. You see also the block expenses. There, we expect that also we will keep investing in our organization, as we have done over the past, of course, combined with cost discipline. At the same time, we want to maintain high quality in our organization, so it also means investing. And also, in the short run, we also see that the labor market is tight. We see inflation going up. So also, in that respect, we have to account for an uptick in expenses. The last block is our loan loss provisions. While we have seen already for a number of years net releases, we expect looking forward that at some point in time, we will go back to a more normalized situation where you would have a somewhat normalized addition to loan loss provisions. But given, let's say, our low-risk loan portfolio, it will be small and, I would say, single-digit basis points on our lending portfolios. Then focusing a little bit on -- in particular, this commission part. Here, you see the AUM mix, how it has evolved since 2016. And you see all parts have grown over the past 6, 7 years, but also you see how it is split currently between the fiduciary part, which is, of course, I would say, low fee, but high ticket. And the high fee part in Private Clients and in the investment strategies. And you see it's, at this point in time, roughly 50-50. We expect that, that split will remain the same in the coming years. If you drill down in the Private Clients segment, there we see, over the past few years, quite resilient margins. Margins are between 60 and 65 basis points. And while given the fact that we keep investing in the services to our clients, we think also we can maintain margins roughly at the same level. In the Wholesale & Institutional segment, of course, margins are much lower. Currently, we're reporting 12 basis points in that segment. There also, we have seen the most fee pressure over the past 5, 6 years. We expect maybe to continue that. But at the same time, we will focus more on profitability. And also next to that, we also will invest in more alternative strategies which are more high-fee generating. So also there, we expect that fee can be maintained at current levels, maybe even a little bit better. This slide shows you the recurring fee base, as we have shown them more than once already. And you see that over the last 5, 6 years, we have generated quite a significant base of recurring management fees. I think this is something we're focusing on very much. And I think also it serves as the basis for our future profitability. And also going forward, we expect that this recurring fee base will grow based on the growth we expect and the margins we hope to maintain. Then going to capital. Here, you see a slide where you see the distribution of capital over the various categories. Currently, we have EUR 4.5 billion of risk-weighted assets, and that includes the mortgage floor I was referring to before. As you know, we have been quite disciplined on capital. And well, capital life has been the focus for the past 8, 9 years, and here you see the current situation. You see on the left-hand side, you see the 2 lending books, which roughly account for 50% of our RWA, 50-50 split between mortgage lending and non-mortgage lending. Next to that, you see the operational risk part, which is mandatory, I would say, for an organization like us. And also treasury, which is effectively you have to have to run a bank. And beyond that, there's not that much capital absorption anymore. So you see that we, well, I think, have effectively reached a point where we are really a capital-light balance sheet. Even if it feels a little bit counterintuitive, our investment bank is only absorbing a small percentage of our risk-weighted assets. I also would like to note here that I referred already to the mortgage floor that was implemented in January. That's a temporary measure from the Dutch Central Bank. And we expect that to be a temporary measure. In 2025, it is expected that Basel IV will be implemented. And we expect that at that point in time, the mortgage floor will be exchanged for the Basel IV implementation. Based on our calculations, we expect that the Basel IV will have a much milder impact on our risk-weighted assets than a mortgage floor has. So we expect in 2025 to see, all things equal, a net release of risk-weighted assets at that point in time. Of course, we are not immune to external development. And maybe it's obvious, but I would like to take you through some of these elements. Of course, lower stock markets, which is quite topical in the last few weeks, has a negative impact on our P&L. Reversely, of course, higher stock markets, they have a positive impact on our P&L. Inflation, and I think it was also a question that was raised to Arjan on how do we look at inflation, currently, in our models, we have factored in -- well, some higher inflation for the short run. At the same time, we expect that, over time, inflation will go back to more normalized levels. But if inflation were to persist, it would have a negative impact on our organization, in particular, as a result of the expense base we run. The yield curve. If the yield curve gets deeper, it's going to have a positive impact on our P&L. As I said already before, it will be gradual and it will be modest, but still, I think it will benefit us at the end of the day. Last but not least, our loan portfolio could be affected by macroeconomic downturn. However, given the nature of our lending portfolio, which is predominantly mortgages and also the type of clients we have, we expect to have that, a very minor negative impact on our P&L. We discussed already before our M&A strategy, and I would like to explain a little bit more our focus that we have in our M&A strategy. We are very disciplined. And our focus on private banking is Netherlands and Belgium. That's also the criteria for doing M&A, is deriving synergies from transactions, and we think we can drive synergies the best in the markets we are already present, being the Netherlands and Belgium. Moreover, we think that both markets are deep enough to tap on for the coming period. So we will focus on the Netherlands and Belgium. And also, we think there will be ample opportunities for us to do M&A transactions in the coming years. Institutionally, we will focus on a more Western Europe profile. Of course, we are present in the Netherlands and the U.K. And if there are good opportunities come along, we would certainly follow these opportunities also to build on our institutional client base. I referred already to our capital position. And looking back, we have already, for a while, we have a very solid capital position. And also we have deployed that capital position, on the one hand, to support the growth and the M&A agenda. On the other hand also, we have allowed that capital to be deployed for capital returns. If you would calculate as from 2016 until the dividend that will be payable in June, we paid to our shareholders roughly EUR 500 million in terms of dividend or excess capital returns over the past 6 years. So that's a very generous amount. Still, we are -- we have a CET1 ratio of 20.8%, and our strategy effectively remains the same. It will be deployed for growth, but also can be deployed for excess capital returns. And today, we make that more explicit in how we want to go about that. And you will see that on this slide. Currently, we have a 20.8% capital ratio. We set the target for our CET1 at 15%. We would like to add an M&A buffer of 2.5% to be available for M&A. Everything else, so the access beyond the 17.5%, that's the part that we intend to distribute to shareholders between now and the end of 2023. That's, of course, subject to regulatory approval, but that's the plan we have, and I think that makes it more specific how we would like to go about this capital strategy. Our other target is the efficiency ratio that was set for 70%, 72%. We made it a bit sharper, and we go for a 70%. We think the 70% matches with our business model. It also matches with our ambition to service our clients with high quality, so we will keep investing in our organization. At the same time also, we have to take into account something like inflation. So the combination of high-growth agenda, but also keep investing brings to a target of 70% efficiency ratio for the coming years. Our return on CET1, we said that that's currently set for 10% to 12%. That, we make also a bit sharper, and we set it at 12% through the cycle. With -- of course, this return on CET1 is more or less the result of everything else we have said before about the results that we project, but also the capital strategy that we project and the efficiency ratio. But we think 12% fits well with this agenda. And just to give you some perspective on this number. Earlier this week, I did the math, what's the return for shareholders was if you would have invested in our stock in 2012 until now. The return will be almost 11% annually compounded. If you would invested in May 2016, when we dealt with the stake of Delta Lloyd, if you would have invested at that point in time, your annualized return, compounded again, would be around 14%. So I think this target matches also well with the results we have delivered over the past years. Here, you see again the targets that we published today. Also, I note that the dividend payout ratio will remain at 50% to 70%. Yes, and in summary, I think you can see that our strategy works. We have made good progress over the last couple of years. We become a little bit more explicit in our targets and our strategy, how to deal with capital. And also, we sharpened our targets for efficiency and return on CET1. That's where I want to leave it, and go back to Tosca.

Thank you very much, Constant. So now it's time for our last Q&A round. And this Q&A around will be with both Maarten and Constant. So Maarten, join us. And well, you all know how to ask questions. So Benoit, please go ahead.

Yes. So yes, the first one is again on the M&A. That was the kind of first question I had. So you have this EUR 110 million budget. What if you end up buying something more expensive? What is the plan there? And also, kind of I wanted to understand how long you want to keep this M&A buffer before eventually, well, distributing it to -- back to the shareholders? Or is that something you want to keep for the long run potentially? So that was the first question. Second one was actually on the net interest income. It sounds quite small in terms of impact. Some Dutch banks that are starting to talk about much higher effect on the replicating portfolio with -- especially if the shorter end of the curve starts to improve. Did you factor in on your chart the potential hike of interest rates we might see later this year? And what is the kind of sensitivity? What type of sensitivity do you have to, say, 50 bps hike? That will be the question. And then I was wondering, in terms of looking at your payout at the same time, the fact that you have a capital-light business, so your growth does not require that much capital, why do you target 50% to 70% payout? Because at the end of the day, it could be a bit higher potentially, given that you don't put much into -- of the growth into capital requirements. So I was wondering what is the thinking process behind this payout ratio.

Okay. Maybe I'll take them and you join. On the M&A agenda, and let's say that the buffer that we put there, I don't know until when we will keep that buffer. I think that also depends on the strategy and to the extent we see opportunities in the market. But as you see, our strategy is based on organic growth and inorganic growth. And as long as we have that strategy, I think it's wise to keep some dry powder for M&A. Of course, your question, if the deal of the century comes along and the EUR 110 million is not sufficient, I think we have 2 options at that point in time. We can, of course, allow ourselves to go temporarily below the 15% target because it's not a hard minimum, it is a target. And while, of course, always there's, obviously, you have option to call upon shareholders to do something. So I think we have enough options if the 2.5% buffer is, at some point in time, not sufficient because we have a terrific deal. But based on, let's say, past experience, we think this EUR 110 million matches with, let's say, our appetite and what we see in the market. About interest NII, yes, of course, we count on a slightly higher interest rates. At the same time, of course, at this point in time, we generate quite some interest margin also from the negative interest rates that we can charge to our clients. I think that, at some point in time, will also disappear. So we think the short-term effect of rising rates could be a little bit limited. But of course, as I said, it will be gradual over time. It can be more meaningful. I cannot give you an exact sensitivity because I think it depends on what kind of moves you're going to see. But yes, of course, in the end, it will be positive, but we are a little bit conservative on that. The payout ratio of 50% to 70%. Yes, that's because we think that it's always good to also deploy a bit of your annual profits to add it to reserves to deploy it to replenish maybe the M&A buffer. So from that perspective, we think that this combination of more explicit capital strategy and combining with another 100% payout, I think, is the best way to go.

Thank you, Benoit. Cor, please go ahead.

Yes. Yes, a couple of questions. First of all, the growth that you have, understand the management [ talked a growth ] of around 10% for the next coming years. What is more important, of course, from what will the commission income growth will be then? And in the last 10 years, you've seen a difference. There was 10% AUM growth and it was around [indiscernible] somewhere 6% commission income growth. Now you made a comment that you, if I understand this correct, that the asset mix will be quite similar in Private Clients and Institutional. Does that mean then that commission income growth would also be around 9% or 10% in the next few years? Or do we miss something? So that's one. The other one is the EUR 145 million, so the excess capital basically above the M&A buffer, returning to shareholders. How comfortable are you on that? You've mentioned you need regulatory approvement -- approval. So we already discussed this some way with the DNB. And what time line? Is it more an end of period thing? Or are you more thinking about, let's do it half year, half year? Or like in the past, you always do it at the end of the year? How are you looking as to the way to return that? So that's my 2 questions.

Should I take the first one?

Yes, sure.

So -- yes. Thank you. Good to see, by the way, all of you 3 now also live. So thank you for your questions as well, Cor. On the first one on growth, indeed, on average through the cycle, 10% of AUM. And I would say, as an estimate, and of course, we have to see how the exact mix will work out, but we know we have like a margin of 62 basis points on the Private Clients side and about 12 basis points on the Institutional side. And assuming that we will be able to maintain our margins in both markets, I would say basically that at the lower end, but let's say, the base case will be the 5% to 6% that we have seen in the past. And at the higher end, it will be 7% to 8% in terms of provision growth related to the AUM growth. But of course, that really depends on mix we see in our Private Clients and Institutional side.

Yes. And with respect to the EUR 145 million, how certain we are about that. Of course, I have to refer to the fact that we have to go through a process with the regulator. But at this point in time, I think if you look at our balance sheet and everything else and also run some sensitivities, well, we feel comfortable about that. The way we will go about that in the period until 2023, also something we will come back to you. But let me tell you that, well, if you have a good tradition, don't change it. So think a little bit what we did in the past.

Yes. In general, regulators, like me, don't like surprises. So also consistency there really works well in terms also with the relationship with the regulator.

Thank you, Cor. Is there another question?

Yes. Just -- sorry for that, but just on the net Basel IV versus the mortgage add-on. How much release would that be roughly, just high level? And I heard that it's not yet clear if the DNB will actually release the add-on on the Dutch mortgages. But I'm also not sure by that.

Yes. Well, it's -- at this point in time, our working assumption that in 2025, they will implement Basel IV and the mortgage floor will disappear. And well, that's our assumption at this point in time. Just keep in mind that we got EUR 600 million of RWA as a result of this mortgage floor. And based on our knowledge of Basel IV and of course, as of today, we expect that, well, at least more than half of that will disappear in 2025 based on calculations today and based on that assumption.

Thank you. Any other questions? I don't think so. Then thank you, Constant and Maarten, for answering all the questions.

Thank you.

Well, in case you have any questions later on, please don't hesitate to reach out to us. And then I would like to thank you all for spending this afternoon with us.

Okay. Thank you. Thank you all.

Thanks for tuning in. Bye.