Find out more about Credit Europe Bank NV, our legal structure, board members and how we conduct business ethically, in compliance with regulations.
|Establishment of the bank in the Netherlands as part of Fiba Group under the name Finansbank. |
Starting capital: less than 10 million euro. Focus on international trade finance.
Since its incorporation, the bank is under full supervision of the Dutch Central Bank
Expansion to Germany by opening a branch in Frankfurt
Opening of a branch in Antwerp, Belgium
Sale of Finansbank AS, Turkey, to the National Bank of Greece.
Corporate rebranding from Finansbank to Credit Europe Bank started
As a consequence of the sale, the Russian bank in the group became a subsidiary of Credit Europe Bank
Start of a greenfield operation in Ukraine, as well as a branch in Malta.
Opening of repoffices in China (Shanghai) and in Turkey (Istanbul)
After a group restructuring, the existing Romanian and Swiss banking entities became direct subsidiaries of Credit Europe Bank.
Opening of a subsidiary in Dubai
Acquisition of a 95% shareholding in Millennium Bank in Turkey, a (former) subsidiary of the Portugese BCP
In December, the bank transfers its shareholding in Fibabanka AS, formerly known as Millennium Bank to Fiba Holding AS
Credit Europe Bank celebrates its 20th anniversary!
General legal information
Credit Europe Bank NV was established as a public limited company (naamloze vennootschap) in Amsterdam on 24 February 1994. The company has registered shares and is not listed on any stock exchange.
Credit Europe Bank as a parent bank
Currently Credit Europe Bank NV directly owns five banking subsidiaries in Russia, Switzerland, Romania, Ukraine and Dubai, and two leasing companies in Ukraine and Romania. To underpin its central function, the bank applies a functional reporting structure: local managers in the subsidiaries must maintain a direct reporting line to the ‘functional’ head of the respective department in Amsterdam. This structure applies to departments such as Internal Audit, Compliance, Treasury (asset liability management), Credits, Risk Management, IT, Financial Control, Retail Banking and Corporate Banking. Moreover, the General Manager of each subsidiary has a direct reporting line to the CEO of Credit Europe Bank.
The General Managers of the bank’s subsidiaries and the members of the Managing Board meet on a regular basis. The main purpose of these meetings is to share knowledge and experience, to align group policies and to contemplate on the bank’s strategy and budgets.
Furthermore, to support and monitor global business policies, some Supervisory – and Managing Board members of Credit Europe Bank NV have a seat in the Supervisory Board or Board of Directors of a banking subsidiary.
Overview of board memberships in the subsidiaries:
CEB Supervisory Board members:
Hector de Beaufort
CEB Managing Board members:
The total issued share capital of Credit Europe Bank is fully paid by Credit Europe Group NV (CEG), a holding company established in The Netherlands. CEG's shares are majority owned by FIBA Holding AS, which company in its turn is controlled by Hüsnü M. Özyeğin.
Credit Europe Bank has a full banking license in The Netherlands since 1994. The Dutch Central Bank (De Nederlandsche Bank) is the consolidated prudential supervisor: its supervision extends to the activities of the NV in The Netherlands as well as to the banking activities of its subsidiaries. Furthermore, Credit Europe Bank is registered as financial services provider with the Authority for Financial Markets (Autoriteit Financiële Markten) in The Netherlands.
Although Credit Europe Bank is not listed, it voluntarily supports and applies, to a large extent, the best practices of the Dutch Corporate Governance Code, mindful of its role as a financial institution in The Netherlands. This is also in line with the recommendation from the Dutch Central Bank for non-listed banks to apply these best practices. Not only is the Dutch Central Bank the supervisor of Credit Europe Bank, it is also its regulator. The provisions in the Regulations and Policy Rules issued by the Central Bank apply to the bank to the fullest extent. Subjects range from solvency requirements to remuneration policy. Subsequently, Credit Europe Bank is subject to the provisions included in the set of documents titled ‘Future Oriented Banking’ (consisting of the Social Charter, the Banking Code and the Rules of Conduct) issued by the Dutch Bankers’ Association (Nederlandse Vereniging van Banken). For more information on the Bank’s compliance and the principles of the ‘Banking Code’/included in the set of documents titles 'Future Oriented Banking', please see the paragraph below.
As per 1 January 2015 the package of documents titled ‘Future Oriented Banking’ entered into effect. This package comprises of a Social Charter, an updated Banking Code (the “new Banking Code") and a Bankers’ Oath (with associated Rules of Conduct). The new Banking Code replaced the Banking Code 2010. In 2016 the Dutch banks reported for the first time on their compliance with the new Banking Code. In the past years Credit Europe Bank NV has spent substantial time on creating awareness amongst its employees on the contents of the ‘Future Oriented Banking’ set of documents in general and the Bankers’ Oath with associated rules of conduct in particular. All Credit Europe Bank NV’s current employees working in the Netherlands have taken the Bankers’ Oath/Affirmation. Each quarter a Banker’s Oath session is organized for new employees of Credit Europe Bank. Please find herein below the report on Credit Europe Bank’s compliance with the Banking Code in the financial year 2016.
The statutory corporate rules in The Netherlands are laid down in Credit Europe Bank's articles of association (statuten). Further, its Managing Board, Supervisory Board, and each subcommittee has its own charter (reglement). For all the employees and others working with Credit Europe Bank, a Code of Conduct has been established to set standards for professional conduct.
Article 96 CRD IV
Article 96 of the fourth Capital Requirements Directive (CRD IV) requires financial institutions to explain on their website how they comply with the requirements included in Articles 88 to 95 of the CRD IV. Article 134b of the Decree on the prudential measures Financial Supervision Act (Besluit prudentiele regels Wft) has implemented the requirements of Article 96 CRD IV in Dutch law.
In the document ‘Compliance with Article 96 CRD IV’ it is explained how Credit Europe Group N.V. and Credit Europe Bank N.V. comply with Article 134b of the Decree on the prudential measures Financial Supervision Act (Besluit prudentiele regels Wft) and Article 96 CRD IV.
The Managing Board of Credit Europe Bank NV is jointly responsible for the consolidated management of the bank, which includes realizing the bank’s goals and strategy, and the policy and results arising thereof. The Managing Board is also responsible for compliance with all relevant laws and regulations, management of the risks attached to our banking activities and for the funding of Credit Europe Bank in line with the approved risk appetite.
The Managing Board of Credit Europe Bank NV comprises six members: Enver Murat Başbay (CEO), Şenol Aloğlu (Deputy CEO), Umut Bayoğlu (CFO), Batuhan Yalnız (CRO), Scott Cheung (member) and Levent Karaca (member).
In 2013 each Managing Board member took the Bankers’ Oath and in June 2015 the members of the Managing Board signed a declaration in which they confirmed their acceptance of the enforcement of the rules of conduct by the Disciplinary Committee and the exercise of authority by the Director General pursuant to the disciplinary scheme in the banking industry rules of conduct (as referred to in the Future-Oriented Banking set of documents).
Internal Audit Department
Credit Europe Bank NV’s Internal Audit Department (IAD) plays an important role in ensuring ever-better governance at the Bank level. It represents an independent and objective assurance and consulting function as a third line of defense. Through the application of a risk-based methodology, IAD evaluates and examines whether proper measures are taken to ensure ‘control’ in the organization and its activities.
Dutch Corporate Governance Code
This section contains a brief overview of CEB’s compliance with the best practice rules of the Dutch Corporate Governance Code (in this section known as the Code). It should be noted that due to its private ownership structure, the Code’s provisions on shareholders (rights, meetings, obligations, protective measures – see Chapter IV of the Code) are not applicable to CEB.
Based on a gap analysis of the provisions in the Code and CEB’s current practice and structure, the CEB’s main deviations from the relevant best practices of the Code are:
Transparency on remuneration of the Managing Board (best practice provisions II.2)
At present, information is given on remuneration of the Managing Board as part of the remuneration paid to Identified Staff. No information is given at an individual level. This also applies to (individual) pension rights, peer group information and performance assessment criteria. It is the view of the Managing Board that the aggregate quantitative and qualitative information provided in the Remuneration report in paragraph F of the Chapter on Corporate Governance included in the Annual Report is sufficiently transparent for stakeholders.
Independence of Supervisory Board members (best practice provision III.2)
Under best practice provision III.2, the requirement is set for Supervisory Board members that ‘all members but one are independent’. Since January 1, 2013, the following statement applies to the Supervisory Board of CEB: that ‘half of the members are independent’. This ratio is in line with DNB’s requirements in that respect.
Diversity (best practice provision III.3)
Although the composition of the Supervisory Board is diversified in terms of background, expertise and age, the gender diversity within the Supervisory Board requires improvement. This is acknowledged by all members of the Supervisory Board. In 2016 gender diversity has been a recurring item on the meeting agenda of the Supervisory Board. Currently a plan of action in this regard is being prepared.
Conflict of Interest Policy
Credit Europe Bank has effected a group of procedures suitable for managing potential conflicts of interests. Such arrangements have to be complied with for professional integrity – and transparency reasons. The generic arrangements aim at setting criteria and controls that identify and govern potential conflicts of interest arising from, amongst others, participation in outside business activities, gifts and private investment transactions by Supervisory- and Managing Board members, senior management or other staff.
A special category of potentially conflicting situations forms the Bank entering into a transaction with a related party. Parties related to Credit Europe Bank include all Fiba Group associated companies, any member of the Supervisory- or Managing Board as well as their close family members and
any entities controlled by them. Related party transactions are settled in the normal course of business and on an arm’s length basis, i.e. under the same commercial and market terms that apply to non-related parties. The kind of transactions that fall under related party transactions are various: loans, deposits or foreign exchange transactions. The Bank has specific arrangements in place to ensure a proper management of potential conflicts of interests in related party transactions. These arrangements include procedures to identify, authorize and report related party transactions to the Managing Board and the Compliance Oversight Committee. Periodically, the Compliance Oversight Committee monitors the developments in related party transactions, including any irregularities found in the management of conflicts related to such transactions. For this purpose, a quarterly report with summarized information on related party transactions is prepared under responsibility of the Managing Board and presented to the Compliance Oversight Committee.
On an annual basis, the bank’s Internal Audit department carries out audit procedures to provide reasonable assurance that the Bank’s policies and procedures for related party transactions are properly and effectively executed.
In the Annual Report, note 36 of the financial statements, a disclosure on related parties is given.
Dutch Banking Code
As per 1 January 2015 the package of documents titled ‘Future Oriented Banking’ entered into effect. This package comprises of a Social Charter, an updated Banking Code (the “new Banking Code") and a Bankers’ Oath (with associated Rules of Conduct). The new Banking Code replaced the Banking Code 2010. In 2016 the Dutch banks reported for the first time on their compliance with the new Banking Code. In the past years Credit Europe bank NV has spent substantial time on creating awareness amongst its employees on the contents of the ‘Future Oriented Banking’ set of documents in general and the Bankers’ Oath with associated rules of conduct in particular. All Credit Europe Bank NV’s current employees working in the Netherlands have taken the Bankers’ Oath/Affirmation. Each quarter a Banker’s Oath session is organized for new employees of CEB. Please find the full report on Credit Europe Bank’s application of the principles of the Dutch Banking Code during the financial year 2016 by clicking on the pdf below.
Remuneration policy 2015
Decision- making process to determine the remuneration
By virtue of CEB’s Group Remuneration Policy, the key elements of the governance structure for the fixing, execution and evaluation of the remuneration management are as follows: CEB’s Supervisory Board is responsible for the establishment, execution and evaluation of the Group Remuneration Policy and the Supervisory Board monitors the proper implementation of this by the Managing Board. The HR & Remuneration Committee (a subcommittee of the Supervisory Board – described in more detail below) meets at least each quarter and prepares the decision-making process for the Supervisory Board, taking into account the long-term interests of all stakeholders of CEB.
Remuneration of Identified Staff (defined in the Group Remuneration Policy and determined as described in the Assessment of Identified Staff procedure) is determined by the Supervisory Board. The remuneration of the other employees is determined and implemented by the Managing Board and supervised by the HR & Remuneration Committee. For senior managers in control functions, remuneration is directly supervised by the HR & Remuneration Committee.
As a general principle, CEB’s Group Remuneration Policy authorizes the Supervisory Board to adjust the variable remuneration of (a group of) Employees – as defined in such Policy, if continuation on the same level would have an unfair and unintended effect.
Moreover, the Supervisory Board has the right to reclaim the variable component of remuneration granted to Employees, if it turns out that such a variable was based on inaccurate data.
Link between performance and pay
One of the key elements of CEB’s Group Remuneration Policy is the description of the appraisal process. In this paragraph, a summary is given of this process:
On the basis of pre-determined and assessable objectives, comprising financial and non-financial elements, and also on the basis of competences and general indicators, an Employee’s overall performance assessment is determined, at least once per year. The non-financial objectives form a substantial portion (with a minimum of 50%) of the total set of objectives for an employee.
Each year, the Managing Board formulates its own objectives (financial and non-financial) and presents them for approval to the Supervisory Board. The approved objectives are then assigned (partially) to the relevant Identified Staff and Employees. Pursuant to the Group Remuneration Policy, financial objective-setting for Employees in control functions may not be based on the commercial objectives of CEB, i.e. the objectives of these Employees are set independent from the financial targets and/or results of the business they control.
Financial performance of an employee is assessed in the context of CEB’s financial stability and own funds requirements as well as the long-term interests of the shareholders and other stakeholders.
Financial performance shall be evaluated on the basis of (a) divisional/ departmental profitability, calculated on financial criteria such as Net Income and (b) the department’s attribution/claim to the risk profile of CEB.
Via a web-based performance management system, an overall ‘performance score’ is generated. The three performance categories are competences, general indicators and objectives. For the overall score, the following weighted percentages apply per category: competences 30%, general indicators 20% and objectives 50%. The end score is a figure between 1 and 5 – whereby 5 is excellent.
Performance evaluation of Identified Staff takes into account performance over several years and appraisals for Employees in control functions take into account the ‘countervailing function’ of these staff members.
Most important characteristics of remuneration system
Apart from the governance structure and appraisal process, the CEB Group Remuneration Policy also incorporates rules and guidelines for the setting and determination of fixed and variable remuneration for Employees.
As a rule in CEB, fixed salary levels are conservatively aligned in comparison to similar functions in banking and the industry, nationally and internationally.
One of the basic principles for granting variable pay (if any at all) is that variable pay may never exceed 100% of the fixed salary, and that guaranteed variable remuneration to Identified Staff is not allowed.
Phantom Share plan
In CEB’s Phantom Share Plan the terms and conditions for the granting of Phantom Shares to Identified Staff are laid down. The Plan entails that variable remuneration awarded to an Identified Staff will be for 60% unconditional and for 40% deferred. If an Identified Staff member is awarded a total of more than € 300.000 gross (or equivalent), 40% will be unconditional and for 60% deferred. At least 50% of the variable remuneration (deferred or unconditional) is in the form of financial instruments whose value is determined by/ derived from the value of CEB shares: Phantom Shares. These financial instruments are rights – not shares.
The deferred part of the variable remuneration vests over a period of 3 years. Furthermore, vested Phantom Shares (whether deferred or unconditional) are subject to a retention period of 1 year. Vesting and exercise of the Phantom Shares is subject to the fulfillment of certain conditions. For example, the holder’s performance score (see paragraph above) must exceed a certain limit.
Most important parameters & motivation for variable remuneration
Pursuant to the Group Remuneration Policy, the granting of variable remuneration ‘at all’ depends on CEB’s performance in a year. By virtue of the rules, if CEB’s ROAE in any given year is less than 2% or negative, there will be no variable remuneration. Additionally, the requirement applies that the granting of variable remuneration may not restrict CEB’s possibilities to reinforce its regulatory capital, its solvency ratio or its own funds.
CEB has no other non-cash benefits/non-cash variable remuneration elements.
Aggregate quantitative information on remuneration per business segment
In 2015, CEB paid out € 57,475,965 to employees working in the Wholesale Banking business segment and € 47,177,170 to employees in the Retail Banking segment.
Aggregate quantitative information on remuneration for Identified Staff and senior managers
CEB has identified 82 Identified Staff members and 111 senior managers.
In 2015, the total amount of remuneration paid out to the Identified Staff and senior managers amounted to € 20,903,041, split into € 13,247,235 for Identified Staff and € 7,655,806 for senior managers. Such total remuneration was split into € 19,821,350 fixed salary (for Identified Staff € 12,469,171 and senior managers € 7,352,179) and € 1,081,691 variable remuneration (for Identified Staff € 778,064 and senior managers € 303,627). Please note that the variable remuneration for Identified Staff was split in a deferred and unconditional part (resp. 40% and 60%, or resp. 60% and 40% if awarded a total of more than € 300,000 gross) and awarded in cash or Phantom Shares (50/50). A retention period of 1 year applies to the vested Phantom Shares.
The total amount of awarded + outstanding deferred remuneration (vested and unvested) in 2015 (for the Phantom Shares granted as per 2014) amounts to € 1,881,556.
As part of the CEB’s Group Remuneration Policy, variable remuneration packages of all employees are granted based on the (financial and non-financial) performance over the respective reporting year and paid out in the form of cash and/or Phantom Share (both unconditional and conditional) in the preceding years. This Remuneration Report refers to the performance year of 2014, with the related bonus payment executed in 2015.
By virtue of the rules in the Group Remuneration Policy, in 2015 there will be no ‘less than awarded’ deferred pay-out due to unsatisfactory performance adjustment.
New severance payment
In the reporting year 2015, CEB on a consolidated basis paid severance payments to a total of 21 employees – none of which was an Identified Staff member. For none of them did the severance payment exceed one year's fixed salary – a requirement explicitly included in CEB's Group Remuneration Policy. In total, CEB paid € 1,048,798 in severance in 2015. The highest amount granted was € 100,685.
CEB did not pay sign-on or entry awards to any Identified Staff member in 2015.