Credit transactions.
Slight increase.
Netherlands: revival of growth.
Aggregate lending, which in this context is
defined as the sum of Debtors, Bills receivable,
Advances against treasury paper and/or secur
ities and Amounts receivable from or
guaranteed by public authorities, rose slightly
by 0.8%.
The fall in the value of the dollar and the dollar-
linked currencies was among the principal
causes of the slow growth; this is explained by
the fact that a substantial proportion of our
credit business is transacted in those currencies.
In many of the countries in which we operate,
the demand for credit, expressed in the local
currency, increased sharply. In the Netherlands,
the position recovered to some extent.
Against this background, we view the situation
as satisfactory, the more so as the year produced
a minor shift in demand, away from government
and towards our "traditional clients", namely
commerce and industry and family households.
This was discernible both in the Netherlands
and abroad. Less satisfaction, however, was
provided by interest margins, which were under
pressure over a wide front. The principal cause
was without doubt the increasingly keen
competition, which in the guilder market was
exacerbated by movements in money and
capital market rates, the latter falling while the
former did not.
These unfavourable factors were to some extent
balanced by a decline in bad debts (a product of
a better year in the domestic loan sector) and a
reduction in specific provisions for country risks,
which related, among other things, to the fall of
the dollar. Moreover, the foreign branches could
also reduce somewhat the provisions for
doubtful accounts.
The volume of our domestic credit business,
comprising loans to resident and non-resident
debtors, increased slightly in the year under
review. This is reflected in the growth of the
above-mentioned balance sheet items, of which
the share of the ABN in the Netherlands
amounted to Fl. 53.2 billion at the balance sheet
date, compared with Fl. 51.8 billion a year
previously. Loans to residents of the
Netherlands accounted for the whole of the
growth, the item Amounts receivable from or
guaranteed by public authorities recording as big
a volume increase as the other aforesaid items
together; loans to non-residents' fell slightly.
The year produced an unusually large increase
in demand for credit from the private enterprise
sector in the Netherlands. This development,
which led to an improvement in our share
of the market, was due in part to a greater
willingness on the part of industry to invest.
As far as the division between short- and long-
term credits was concerned, a growing prefer
ence for the latter was perceived in the latter
part of the year, the reason for which lay in the
lower interest level. The increase in demand was
almost equally divided between small and
medium-sized companies and those in the
"large" category. The conditions upon which
government guarantees are provided as
(additional) surety for loans to small and
medium-sized firms were amended in 1985. The
new system, which is considerably simpler than
the old, has proved satisfactory in practice and
has led to a significant increase in the number of
ABN Bank helped to negotiate a loan from the European
Investment Bank for Verenigde Bloemenveilingen, the flower
market at Aalsmeer. Member of the Managing Board,
J. de Jongh (right) represented the bank at the signing of the
contract. From left to right, others present on this occasion
were Mr. R. Wagener (E.I.B.), Mr. A. Pais (vice-president of
E.I.B.) and Mr. J. Maarse Albzn. (president of the VBA-board).
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