Today, Triodos Bank provides an update on the steps it is taking in order to be able to resume trading of the Depository Receipts.
Since March, Triodos Bank has focused on supporting its business and retail customers through the financial challenges associated with the corona crisis by, among others, agreeing payment holidays, and offering refinancing arrangements, in line with the government support schemes per country. We have reached out to our communities to help them make sense of the crisis and provided practical support.
The economic consequences experienced by our customers are likely to impact also the bank itself. How big or long-lasting this effect will be, is hard to predict fully at this stage. Triodos Bank’s strong capital position, significantly above the minimum capital requirement, will help the bank in dealing with this crisis.
Price of Depository Receipts
While trading in Depository Receipts has been suspended, the calculation of the price has continued as usual every week and currently stands at EUR 83.00 [18 March 2020: EUR 84.00].
Depository Receipts derive their value from the calculated value of the bank’s net assets (all assets minus all liabilities). This approach avoids uncontrolled market volatility and speculation and makes the price of Depository Receipts much more stable than the price of stocks which are listed on a stock exchange. Weekly calculation of the Depository Receipt price includes any known economic expectation at that time.
Change in facilitating transactions in Depository Receipts
Triodos Bank facilitates transactions to and from Depository Receipt holders, by (re)purchasing and (re)selling Depository Receipts. Depository Receipts are directly linked to the capital of the bank. The amount of Depository Receipts the bank can repurchase is limited by regulation.
To facilitate transactions in a controlled way, the total value of Depository Receipts that may be offered for sale by any Depository Receipt holder can be restricted. When Triodos Bank is ready to start selling and repurchasing Depository Receipts again, the maximum value that may be sold to Triodos Bank will be restricted to an amount of EUR 5,000 per investment account per week. Sales and demand patterns will be monitored carefully and this amount may change again in future.
Financial impact of COVID-19
A prerequisite for reopening trade is a reasonable expectation that there will be a measured response on Triodos Bank’s offering, resulting in the inflow of new Depository Receipt capital. Insight into the financial situation of Triodos Bank and the effects of the current crisis on the performance of the bank are key elements for Depository Receipt holders to be aware of. On 21 August 2020 Triodos Bank will publish its Half Year Results 2020, which will give an overview of its performance between 1 January – 30 June 2020. Trading is expected to reopen shortly after this date, pending approval from the relevant regulatory bodies.