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 25th 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 four banking subsidiaries in Switzerland, Romania, Ukraine and Dubai, and one leasing company in Ukraine. 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
Frederik Bernard (Frits) Deiters
Seha Ismen Ozgur
CEB Managing Board members:
In September 2018 Credit Europe Bank N.V. transferred in total 90% of its shares in Credit Europe Bank Ltd. (Russia) to two of its indirect shareholders. Currently, Credit Europe Bank N.V. holds a minority stake of 10% in its former subsidiary Credit Europe Bank Ltd (Russia).
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 2018.
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 four members: Enver Murat Başbay (CEO), Şenol Aloğlu (Deputy CEO), Umut Bayoğlu (CFO) and Batuhan Yalnız (CRO).
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). On 8 December 2016 the Corporate Governance Code Monitoring Committee has published the revised Dutch Corporate Governance Code. It should be noted that due to our private ownership structure, the Code’s provisions on shareholders/general meeting (rights, meetings, obligations, protective measures – see Chapter IV of the Code) are, to a large extent, not applicable to CEB. As CEB has adopted a two-tier structure, chapter 5 of the Corporate Governance Code (one-tier governance structure) does not apply.
In 2018 CEB reports on its compliance with the Corporate Governance Code as follows:
Long-Term Value Creation
The Bank’s focus on long-term value creation (as opposed to achieving short-term gains) is inherent to its private ownership structure. The (long-term value creation) business strategy of the Bank for the period until 2021 is included in a strategy document (for more details on the contents of the Strategy Document reference is made to section D). This document has been prepared by the Managing Board and is extensively discussed with and approved by the Supervisory Board. Long term sustainability is given a prominent role in determining the Bank’s strategy and in the decision-making process. All stakeholders’ interests are carefully considered in this process. On an annual basis the strategy is being reviewed and where necessary updated (as a result of the most recent strategic discussions, the Bank will particularly focus on digital banking and trade finance activities). Inter alia through the regular updates that are given on the implementation of the Bank’s strategy, the Supervisory Board monitors the implementation thereof. It is of great importance for the Bank to be continuously informed about the latest (technology) developments in this rapidly changing society. In order to adequately anticipate to this internal trainings are being organized, external seminars/courses are attended and the Bank became a member of TRAFEC (a web-based Trade and Finance Exchange Console).
CEB has established an Internal Audit department in accordance with the principles and best practice provisions of the Corporate Governance Code. CEB’s risk management framework is comprehensive and managed by an independent risk management function under direct responsibility of the Chief Risk Officer. Risk management plays a central role in the bank’s decision making process. More information on CEB’s Risk Management can be found in note 36 of the Consolidated Financial Statements. The Supervisory Board –inter alia– oversees the effectiveness of the design and the operation of the internal risk management and control systems. Within the Supervisory Board an Audit & Risk Committee (“ARC”) has been established. Ernst & Young Accountants LLP has been appointed by the Bank’s general meeting of shareholders (at the nomination of the Supervisory Board) as the Bank’s external auditor. At least annually the ARC discusses the Bank’s audit plan and any findings of the external auditor. Exchange of information between the Managing Board/Supervisory Board and the external auditor takes places in meetings of the ARC, in meetings between the Managing Board and the external auditor, but also outside meetings there is regular contact with the Bank’s external auditor to share information and discuss specific topics in more detail.
Effective Management and Supervision
The composition of the Supervisory Board and Managing Board is very well balanced inter alia taking into account the specific knowledge and experience of each of the members. As at 31 December 2018 the Supervisory Board has six members1 (Mr. Umut will resign from the Supervisory Board as from 1 January 2019) and the Managing Board has five members2. Considering the size and nature of the Bank such number3 is deemed sufficient to properly perform their tasks. The independence of the Supervisory Board is not fully compliant with best practice provision 2.1.8 as upon the appointment of Mr. Umut’s successor half of the members will be independent. However, the current composition of the Supervisory Board is in line with DNB’s requirements in respect of independence. At this moment (i.e. yearend 2018) all members of the Supervisory Board and Managing Board are male.
The Bank has adopted a diversity and inclusion policy. The main goal of the policy is to promote diversity and inclusion in the workplace as drivers for innovation, growth and better balanced decisions. The policy covers amongst others diversity/inclusion in the following areas: educational and professional background, gender composition, nationality composition and geographical provenance and age and seniority. The policy is being implemented by adjusting the Bank’s recruitment policy, education of the Bank’s staff and keeping board members (and staff) informed on diversity and inclusion trends, practices and achievements. The main item for improvement reflected in the diversity and inclusion policy is having a more balanced gender split amongst CEB’s staff. In the past period gender diversity has increased (including senior management level). The composition of the Bank’s Supervisory Board and Managing Board diverges from the statutory target for the male/female ratio. In the past years the Bank maintained, as much as possible, the current composition of its Supervisory Board and Managing Board in order to keep up with the rapidly changing environment and subsequent effect thereof on the Bank’s business plans (reference is also made to the paragraph on structure and composition of the Supervisory Board as included in the Report of the Supervisory Board which is part of the Bank’s annual report). In order to be, by 2022, more in line with the statutory targets for male and female members of the Managing Board and Supervisory Board the aim is to appoint female members in case of new appointments to these boards or replacement of current members (N.B. the proposed successor of Mr. Umut is female). In addition the Bank adopted a diversity policy to have a more balanced gender split amongst CEB’s staff and its boards.
The rules to be observed and procedures to be followed in case of appointment and reappointment of Supervisory Board and Managing Board members are set out in the Bank’s internal policies/charters. A succession planning document for the Bank’s senior management is almost finalized. This policy will take the rationale of the diversity policy into account. Annually the functioning of the Managing Board and Supervisory Board and its individual members is being evaluated.
For the organization of the Supervisory Board reference is made to relevant paragraphs of the Supervisory Board Report as included in the Bank’s annual report.
The diverse composition of the Supervisory Board and Managing Board in terms of age, background and expertise enables balanced decision-making by these bodies corporate. The high level of transparency between the Supervisory Board and Managing Board also contributes to effective and balanced decision-making. The Supervisory Board’s sub-committees also support the balanced decision-making. The respective interests of the Bank’s main stakeholders (being CEB’s clients, employees and business partners, the shareholders as well as society) are taken into consideration in the decision-making process. The Supervisory Board and Managing Board members annually discuss other (board) positions held by the board members.
In order to promote and create the desired culture aimed at long term value creation, upon employment the bank’s employees participate in an induction program during which they are trained on the bank’s core values, its main policies/regulations (including the Bank’s code of conduct and the staff handbook) and the Bank’s culture. For all employees CEB organizes regular thematic awareness trainings and during quarterly staff events the (desired) culture within the Bank is highlighted and discussed. In 2017 the Bank’s senior management attended a training program on culture and core values. As part of the training program new core values have been developed (these are dynamism, diversity and expertise). The initial roll-out of the new core values has taken place in 2018. In 2019 the new core values will be further embedded in the Bank’s organization. Another way to promote a culture aimed at long term value creation is the Bank’s remuneration policy (see herein below and section F).
To enable the Bank’s employees to report and to deal with reporting of misconduct or actual or suspected irregularities within the Bank an internal alert system (whistle blower policy) has been established. This policy describes amongst others the purpose of the internal alert system, usage of the internal alert system, anonymous reporting, confidentiality and external whistleblowing procedures. In case of (material) misconduct or irregularities the Supervisory Board is informed. Through the Compliance Oversight Committee, the Supervisory Board monitors the operation of the internal alert system, how is dealt with signs of misconduct or irregularities and in case of misconduct or irregularities how adequate follow-up of any recommendations for remedial actions is performed.
The Bank has established different policies and procedures to manage and prevent conflicts of interests (these include a conflicts of interests handling policy and a related party transactions policy). For more information on the handling of potential conflicts of interests reference is made to section E.
CEB’s Group Remuneration Policy is in line with national and international regulations. The policy applies to CEB and its subsidiaries. It also covers the remuneration of Managing Board members of CEB and its subsidiaries. Through its conservative remuneration policy CEB promotes a sound remuneration culture with a long term focus. The Group Remuneration Policy is reviewed and approved by amongst others the Supervisory Board. The Supervisory Board monitors the proper implementation of the policy by the Managing Board. Annually the compliance to the rules and procedures under the policy is reviewed in line with the Control Functions Remuneration Monitoring Procedure. The HR & Remuneration Committee 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.
The Supervisory Board determines the level of remuneration for the members of the Managing Board in line with the principles of the Group Remuneration Policy.
The remuneration received by the members of the Supervisory Board is not dependent on the (financial) results of the Bank. Each Supervisory Board member receives an appropriate amount of compensation taken into account the total number of hours spent for the tasks and the compensation paid to Supervisory Board members of companies of comparable size and business.
The Bank’s Remuneration Report is included in section F and is also made available on the Bank’s website. The main elements of the agreement of a Managing Board member with the Bank are not published on the Bank’s website as CEB holds the view that sufficient information is disclosed in the Bank’s Remuneration Report.
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.
1 As from 1 January 2019 Mr. Onur Umut resigned from the Supervisory Board after completing his final appointment term. His successor, Ms. Seha Ismen Ozgur, has been approved by DNB and commenced her position with effect from 13 May 2019.
2 Following his appointment as CEO of Credit Europe Bank (Suisse) S.A., Mr. Karaca resigned from the Managing Board with effect from 1 March 2019. As a result of which the Managing Board currently consists of four members. The proposed allocation of tasks amongst the remaining members of the Managing Board is being reviewed by DNB.
3 i.e. also the number of Managing Board members remaining after the departure of Mr. Karaca.
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 2018 by clicking on the pdf below.
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. Such reclaim is allowed until two years after the award of the variable pay.
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 (ii) 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. 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.