The ratings on Netherlands-based private bank F. van Lanschot Bankiers N.V. reflect Standard&Poor's Ratings Services' view of its conservative management, satisfactory capital base, and sound funding position. Van Lanschot's rising credit risks, structurally modest profitability, as well as its limited size in a competitive banking segment mitigate the positive factors. After a weak performance in 2009, we believe Van Lanschot's core profitability is headed for recovery in 2010 but that pressure on revenues will persist. An increasing interest margin due to the repricing of the loan book and lower market rates for customer deposits will partly counterbalance our expectation of subdued wealth management fee and trading income. Over time, the bank's greater emphasis on asset gathering than on
