"It is a shared responsibility for all at Triodos Bank to keep the right balance between achieving our impact objectives, realising our financial targets and managing our risks within our risk appetite."
In 2025, we continued to manage our risks in a fast-moving environment. Looking externally, geopolitical volatility intensified, tensions between global powers rose and societal polarisation grew, increasing the risks of the environment in which we operate. While internally, we had multiple risks to manage.
We successfully reduced the impact of our litigation risk related to our DRs. We deeply value our relationship with our DR Holders and understand the impact the suspension of DR trading had on some. By listing Triodos Bank DRs on Euronext in June 2025, we aimed to improve accessibility and tradability. Favourable rulings in the Spanish Supreme Court in May 2025 had a positive impact in reducing the number of cases brought by DR Holders. In addition, over 82.4% of DRs were registered for the settlement package we offered DR Holders. This enabled us to move forward together and focus on creating impact.
As a bank, credit risk is one of the most important risks we face. In 2025, our overall credit quality remained healthy and in line with expectations. An exception was the fibre optic subsector in Germany, where fast-paced developments in the German market and sector-wide challenges led to several credit events later in the year. This was an unusual combination of events specific to one sector in one country. We are closely monitoring these developments and the impact on this specific portfolio. We do not have similar exposures or concentrations in our portfolio which are at risk.
Strong capital and liquidity ratios demonstrate our resilience and our ability to absorb events while continuing to finance the real economy and deliver positive impact.
We also devoted significant attention to our in-control framework during 2025. We took further steps to improve our internal governance framework, our risk control activities and our risk maturity level and culture. We concluded that we need to take additional steps in the coming years to achieve our ambition levels. While this is a multi-year trajectory, we remain committed to closing areas of improvement identified and are continuing to implement programmes to achieve this.
In this Annual Report, for the first time, we included the effectiveness of our internal risk management and control systems, relating to operational and compliance risks, in our Risk Management Statement (Verklaring Omtrent Risicobeheersing (VOR)). The process to prepare the VOR and its substantiation raised further awareness in the organisation, supporting our ongoing efforts to build a more mature risk culture.
We also progressed our approach to the responsible and ethical use of AI, which presents both risks and opportunities. While managing potential risks, we are investigating ways to use AI safely to enhance risk‑management effectiveness. This includes improving the efficiency of control activities, supporting better analysis and boosting our cyber resilience while maintaining strict governance over responsible AI use.
The cyber threat landscape continued to intensify in 2025, reflecting broader developments across the financial sector. In response, we further strengthened our cybersecurity and operational resilience. This included investments in detection and response capabilities, continued improvement of business continuity processes and advanced cyber resilience testing.
Looking ahead, we expect volatility to persist amid ongoing geopolitical tensions and macroeconomic uncertainty. These developments reinforce the need for an integrated and forward‑looking approach to risk management. Responding effectively will require close collaboration across all three lines of defence and a shared commitment to risk management.
As CRO and Executive Board sponsor for equity, diversity and inclusion (EDI), I was also proud to see the increased diversity within the Executive Board in 2025 and that we met all our EDI targets in 2025. We remain committed to building a more diverse leadership across the organisation. I believe diversity of background, generation and perspective strengthens decision-making, enhances employee engagement and contributes to long-term organisational health.
Marjolein Landheer
Chief Risk Officer
