A simple mortgage and savings bank – Dick Okhuijsen, the President of SNS Bank in the interview by Agnieszka Krawczyk

Dick Okhuijsen: SNS Bank is the fourth largest bank in the Netherlands and, as a midsized bank, we see it as our role to keep the Dutch  banking market  competitive. We want to be a challenger of the major banks in the Netherlands. Moreover, we believe there is a need for a simple mortgage and savings bank. Accessible and trustworthy, so that customers know where they stand with regard to their finances. A bank with comprehensible savings, mortgage and current account products.

AK: Which banks did better in the crisis, smaller savings banks or the bigger ones with more diversified investments ? What was the condition of genuine Dutch banks in comparison with foreign ones?

DO: In retrospect, it is evident that the retail banking operations in the Netherlands have held up very well during the crisis, both larger and smaller banks. Real estate financing, investment banking and international activities appeared more vulnerable to the economic crisis. For us, the lesson learned from recent years is that we have gone back to our roots, focusing on our core values such as social responsibility, client focus and trust.

Dick Okhuijsen, President of SNS Bank Phot. SNS Bank.

AK: What was the situation of SNS bank then? You were very much property oriented before the crisis, weren’t you?

DO: SNS REAAL acquired Property Finance in 2006, broadening the business scope of SNS Bank to real estate financing. Consequently, the real estate crisis hit us hard, resulting in major write-offs on our commercial loan portfolio. This stood in sharp contrast to the good performance of our mortgage loan book.

AK: In what way did you change your investment directions and policies after the crisis?

DO: First of all, following the nationalisation of SNS REAAL and SNS Bank, we have split-off the real estate financing activities from SNS Bank, so that we are now again a pure retail bank. And within our retail banking activities, we are making clearer choices, focusing on retail and SME clients, simplifying our product offerings, improving our customer services  and trying to put clients’ interests first.

AK: On February the 1st 2013, SNS Bank was nationalized by the Dutch government. What were the bases of this decision? Was it too big to fall?

DO: SNS Bank has a market share of approximately 10% of the Dutch retail savings market and a market share of between 8% and 9% in Dutch retail mortgages. As such, it is considered  a systemically important bank. Therefore, when the losses at the real estate finance activities led to a capital shortage at SNS Bank, the Dutch Minister of Finance decided to nationalise the bank.

AK: What has changed since then? How do you feel in the new situation? The nationalization imposed new restrictions on the bank. How much has it influenced the competitiveness of the bank?

DO: Following the split-off of Property Finance, which was finalised at the end of 2013, SNS Bank is again able to focus completely on its core business: mortgages and savings deposits. The solid capital position of SNS Bank now enables us to work hard on regaining our market share in mortgages. There are no restrictions imposed on the commercial operations of SNS Bank in terms of the pricing of mortgages  or interest rates offered on savings accounts.

AK: The Dutch government that spent 95 billion Euro for the help to the banks seems to have drawn conclusions from the crisis and now the new codes of conduct are being introduced. Starting from the half of this year the bankers will be obliged to take an oath or to make a non-religious declaration to follow the special code of conduct. The breach of the oath will result in drawing on the black list, financial fee or suspending from work (this will come into force the next year). Do you think that this is a step in a good direction and it is going to give good effects?

DO: The past has shown that in some cases banks took on too much risk and did not act in the interests of customers. I am convinced that lessons have been learned from this. The introduction of a banker’s oath must be seen as part of a broader cultural shift in the banking sector, aimed at restoring confidence in the financial sector. As such, it is a step in the right direction. We must, however, take care not to overburden financial institutions with administrative tasks.

Headquarters of SNS Bank, Utrecht, the Netherlands
Phot. SNS Bank

AK: What is the investment structure of SNS Bank now and what is your place on the Dutch banking and financial market?

DO: SNS Retail Bank has a multi-brand, low cost strategy.  With our four distinctive brands, SNS Bank, ASN Bank, RegioBank en BLG Wonen, we target different client groups. SNS Bank is our main brand. ASN Bank focuses on sustainable and social responsible banking. RegioBank is our a ‘regional’ or ‘local’ bank brand and BLG Wonen focuses on mortgages and house and home-related financial services for intermediaries.  With our relatively large network of bank shops and strong direct distribution channels, we want to offer simple products to our retail and SME clients, at a low cost price.

AK: Are you interested only in the Dutch market or do you think of the expansion abroad like ING? You are the fourth on the list of the largest Dutch banks, just after the “big three”.

DO: SNS Bank focuses on the Dutch market only and we have no plans for international expansion. Our aim is to service our clients better than our competitors and we have sufficient scale to do so.

AK: What are the greatest challenges for SNS Bank in the nearest future?

DO: We want to restore confidence in SNS Bank among Dutch citizens. By being a simple mortgage and savings bank, where people can take out simple products, we believe we can regain their trust.

AK: Thank you very much for the conversation.

Agnieszka Krawczyk

The Polish version of the interview has been published in the September edition of the BANK Financial Monthly.