25.23.1 Identify of related parties
Parties are considered to be related if one party can exert control or significant influence over the other party in deciding financial or operational matters. As a part of its ordinary operations, SNS Bank NV maintains various sorts of ordinary business relations with related companies and parties, particularly in the areas of insurance, banking, and asset management. Other parties related with SNS Bank NV are associated companies, non-consolidated associated companies, joint ventures, managers in key positions and close family members of these managers.
Transactions with related parties are conducted at arm’s length. The Responsible living (Verantwoord Wonen) transaction is based on market rates, with adjustments made based on agreements between SRLEV NV and SNS Bank NV. This transaction is explained below in detail. In the transactions with related parties, Best Practices provisions II.3.2, II.3.3, II.3.4, III.6.1, III.6.3 and III.6.4 of the Dutch Corporate Governance Code were complied with.
25.23.2 Positions and transactions between SNS Bank NV, SNS REAAL NV, associated companies and
joint ventures
Positions and transactions between SNS Bank NV, SNS REAAL NV, associated companies and joint ventures
SNS REAAL NV Sister companies Joint ventures Non-consolidated associated companies
in € millions 2012 2011 2012 2011 2012 2011 2012 2011
Positions
Loans and advances 260 219 436 1,040 819 1,017 63 113
Provisions for doubtful debt - - - 3 - -
Subordinated debt 40 140 - - - -
Other liabilities 221 201 2,624 2,827 - - - -
Transactions
Mutation loans and advances 41 (203) (604) (277) (198) (128) (50) (288)
Mutation provisions for doubtful debt
- - - - (3) (8) - -
Mutation Subordinated debt (100) (100) - - - -
Mutation Other liabilities 20 (236) (203) 101 - - - -
Income 5 4 13 11 - (1) - 1
Expense recognised during the period in respect of bad or doubtful debt due
- - - -
Other expenses 155 166 83 81 - - - -
As per 1 January 2012, SNS Bank NV transferred the control over SNS Beleggingsfondsen Beheer BV (SBB) to SNS REAAL NV and ceased to consolidate SBB. SNS REAAL NV consolidates SBB as per that date. The transfer of SBB from SNS Bank NV to SNS REAAL NV is a common control transaction. In this context SNS Bank applies book value accounting.
25.23.3 Transactions and positions with managers in key positions of SNS Bank
Managers in key positions with SNS Bank NV comprise the members of the Executive Board, excluding the CEO, of SNS REAAL NV and the board of the business unit SNS Retail Bank, in total 8 persons (2011: 8 persons).
The table below provides an overview of the total remuneration of senior management.
Specification remuneration managers in key positions
Statutory Other Total
in € thousands 2012 2011 2012 2011 2012 2011
Short-term employee benefits 1,760 1,829 1,373 1,127 3,133 2,956
Post-employment benefits 308 297 171 188 479 485
Other long-term benefits 1 1 95 4 96 5
Termination benefits - 448 - - - 448
Total 2,069 2,575 1,639 1,319 3,708 3,894
Short-term employee benefits means the fixed salary including holiday allowance, 13th month’s bonus, contribution to health insurance and social security. SNS Bank took out three insurance policies for the members of senior
management: WIA insurance, disability insurance and mortality risk insurance. The corresponding premiums are paid for by SNS Bank. These premiums are also part of the short-term employee benefits.
Based on the Budget Agreement 2013 Tax Measures (Implementation) Act (‘Wet uitwerking fiscale maatregelen Begrotingsakkoord 2013’), SNS Bank pays a one-off ‘crisis tax levy’ of 16% in 2013 of the salaries paid to its employees in 2012, to the extent that the salary per employee was more than € 150,000. The crisis tax levy is also part of the short-term employee benefits. Of all 8 persons that were part of senior management on 31 December 2012, the salary in 2012 was more than € 150,000. The total 'crisis tax levy' for senior management is € 264,000.
Post-employment benefits means the pension premiums paid by the employer less the member’s contribution paid by the employee.
Other long-term employee benefits means the reserve for remuneration based on retention agreements. Other long-term employee benefits also means the remuneration based on the Long-Term Remuneration Scheme (LTRS) that was discontinued as from 1 January 2011. The rights existing pursuant to this old scheme are calculated annually in
accordance with the old scheme in the form of a claim giving a right to payment in cash. Three years after the provisional granting, the remuneration is definitively determined and distributed in accordance with the old scheme. The
remuneration granted provisionally in 2008 was definitively granted and distributed in 2011. In 2012, the remuneration granted provisionally in 2009 was definitively granted and distributed. This was also the last award and distribution pursuant to this old scheme.
Termination benefits means the payment made in the context of a termination of the employment agreement. No variable remuneration is paid to senior management for 2012.
The table below provides an overview of the loans granted to members of the senior management that were outstanding on 31 December 2012. These loans were only mortgage loans provided in the course of ordinary business and under conditions that also apply to other members of staff.
Specification loans to managers in key positions
Outstanding as at 31 December Average interest rate Redemptions Advances
in € thousands 2012 2011 2012 2011 2012 2011 2012 2011
Mortgage loans 3,792 4,842 3.67% 3.94% 86 14 - 1,477
Transactions with individual members of the Executive Board and the Supervisory Board of SNS REAAL NV are explained in Chapter 18.7 (Remuneration report) of the Report of the Supervisory Board of the Annual Report of SNS REAAL NV.
25.24 Subsequent events
Nationalisation
After consulting the Dutch Central Bank (DNB), the Minister of Finance decided on 1 February 2013, pursuant to Articles 6:2 and 6:4 of the Financial Supervision Act, to expropriate:
•
all issued shares in the capital of SNS REAAL NV•
all core Tier 1 capital securities issued by SNS REAAL to Stichting Beheer SNS REAAL securities (‘Stichting securities’)•
all subordinated bonds of SNS REAAL NV and SNS Bank NV•
subordinated private debts of SNS REAAL NV and SNS Bank NVExecutive Board members of SNS REAAL NV Ronald Latenstein (CEO) and Ference Lamp (CFRO) and Chairman of the Supervisory Board Rob Zwartendijk resigned from their positions upon the expropriation. Subsequently, Gerard van Olphen took up the position of CEO and Maurice Oostendorp that of CFRO on 4 February. Maurice Oostendorp also became member of the Management Board at SNS Bank on 26 April 2013. For the time being, the current Vice President of the Supervisory Board will fulfil the role of Chairman of the Supervisory Board.
For more information about the nationalisation, please refer to chapter 3 Nationalisation of SNS REAAL. Resolution levy
With the nationalisation decision, the Minister of Finance announced that the banking sector will be asked to contribute a non-recurrent resolution levy of € 1 billion in total. The levy will be imposed in 2014 on all banks participating in the Dutch Deposit Guarantee Scheme using the deposit base on 1 February 2013 as a basis. Expectations are that SNS Bank NV will have to contribute a sum of € 70 million. As the resolution levy is part of the nationalisation on 1 February 2013, it was decided to include the prospected charge in the pro forma figures that take account of all the effects of the nationalisation.
Other
SNS Retail Bank developed plans to conduct its activities more efficiently, including a more centralised use of its office facilities. These efficiency plans are scheduled to be executed in 2013 and are expected to reduce the number of employees by approximately 300 FTEs by the end of 2014 (4.5% of the total number of FTEs).