Van Lanschot Kempen N.V.

Our stable outlook on Netherlands-based VLK reflects its focus on wealth management and our anticipation that its AUM base will remain resilient over the next two years, through organic and potential M&A, and excluding market effects. With costs remaining broadly under control, we expect the bank to improve efficiency to be in line with the industry and consistent with the current ratings. We also expect VLK's capital will remain a key rating strength based on a risk-adjusted capital (RAC) ratio, before diversification, of 10%-15% over the next 24 months. This reflects the controlled expansion of core activities and sufficient internal capital generation. We could take a negative rating action if the bank's strategy proves unsuccessful, for instance if its domestic

...We expect Van Lanschot Kempen (VLK) to continue building its wealth management franchise over the next few years. During the past decade, the bank has transitioned toward a more focused business model, and now looks to expand its market presence and consequent assets under management (AUM) from the current 96.2 billion at September 2022. Efficiency remains a clear focus to improve the business model sustainability. The AUM is pressured by ongoing market headwinds, which in turn could lower commission and fee income. Maintaining costs under control despite the current inflationary environment is therefore key for VLK to achieve its 70% cost-to-income target. Further capital to be used for merger and acquisition (M&A) or shareholder returns, although capitalization will remain stable. We project VLK's S&P Global Ratings risk-adjusted capital ratio will remain strong, above 10%, despite the announced use of the excess capital above the bank's target. This is because we anticipate this negative...

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