Global Transaction Banking

The outlook for transaction banking in the next year will likely be influenced by a number of critical factors. The relatively low interest rate levels seen in key markets during the last years are expected to persist throughout 2014. Global growth may accelerate in 2014, with the eurozone expected to return to its first year of growth since 2011. The U.S. economy as well as key emerging markets should grow faster than in 2013. Revenue pools in transaction banking are forecasted to grow further with a different dynamic among products, while pressure on margins and costs will continue to pose challenges. Significantly more expansive and rigorous regulation, including potential structural changes, will affect the overall banking industry.

Global Transaction Banking (GTB) business will continue to be impacted by the trends described above. The sustained momentum of profitable growth and client acquisition in the underlying business in recent years, together with high quality and innovative products, should leave us well-placed to cope with these challenges and grow our client base. Trade Finance should benefit from the global economic growth, the related foreign trade demand and the expected stabilization of the lending business. Revenue pools in Trust and Securities Services are expected to grow in 2014 and could, together with the trend to concentrate investment banking

services, provide growth opportunities. For Cash Management, the increased level of global activities is a potential positive factor. The business continues to focus on deepening its client relationships with complex Corporates and Institutional Clients in existing regions as well as pushing further growth in certain emerging markets. The co-operation with other areas of the bank (including a strong relationship to CB&S sales) is being continuously expanded to ensure a wider range of clients will benefit from our products and services. This also includes the aligned and integrated commercial banking coverage for small and mid-sized corporate clients in Germany established in September 2013 to strengthen the leading market position in the home market.

Global Transaction Banking

KPI

Target 2015

 

Income before Income Taxes (IBIT)

To grow to € 2.4 bn


In Strategy 2015+ we had planned to grow our income before income taxes to € 2.4 billion by 2015. Market conditions have since been more challenging with lower interest rate levels as well as increased competition in key growth markets. Furthermore, the business will be impacted by regulatory changes such as CRR/CRD 4. However, the strategy and related initiatives to expand the business are expected to remain on track. The successful completion of the turn-around of the commercial banking activities in the Netherlands should as well contribute to GTB’s strategic target.

For 2014, we anticipate a notable increase in profitability compared to 2013 as growth initiatives should start to yield results while at the same time we will continue to invest in solutions, platforms and operational excellence.