Triodos Bank Reaches Settlement with Certificate Holders Amidst Trading System Dispute
Sustainable bank Triodos agrees to €10 reimbursement per certificate, allocating €101 million for compensation, reflecting on its financial outlook for 2024.
Amsterdam – Triodos Bank, a pioneer of sustainable and ethical banking, has announced a settlement with its certificate holders, agreeing to pay a compensation of €10 per certificate.
This agreement is part of a resolution to address the longstanding dispute regarding the bank's transaction system for trading these certificates.
With this settlement, Triodos aims to appease holders who have seen their investments diminish significantly and to avert ongoing legal battles.
Effectively absorbing nearly all of the projected profit for the next fiscal year, Triodos has provisioned €101 million to fulfill this settlement, emphasizing its impact on the bank's financial performance.
Announced on a Friday morning, this decision reflects the bank's substantial efforts to mend relations with its investor base, who own a unique financial instrument—certificates of shares in Triodos Bank.
Historically, these certificates contributed to the bank's equity, enabling it to extend loans and investments aligned with its sustainable ethos.
Initially launched over four decades ago, Triodos certificates were not freely tradable like regular shares on open markets.
Instead, transactions were limited to direct trades with the bank itself.
This model functioned smoothly until 2020, when the coronavirus pandemic prompted an unusual number of certificate holders to attempt to sell back their certificates, leading Triodos to freeze trading activities temporarily.
Trading resumed in 2023, though not on a conventional stock exchange.
Rather, the bank moved trading to a 'multilateral trading facility'—a controlled environment with selective access—intended as an interim solution.
Since reopening, the certificates have endured a drastic devaluation.
Before the halt in 2020, certificates were valued at €84.
When trading resumed, values quickly fell to €50 and currently stand at a mere €26 per certificate.
The announcement of compensation coincides with Triodos Bank's plans to transition certificate trading to Euronext, Amsterdam's main stock exchange.
This move is anticipated to provide better liquidity and transparency for certificate holders.
According to Triodos, this transfer is scheduled to occur before May of this year.
The Stichting Certificaathouders Triodos Bank, representing the interests of the certificate holders, has expressed approval for the agreed compensation.
The foundation describes the settlement as the maximal achievable outcome for both the holders and the bank, urging acceptance among certificate holders.
Triodos remains committed to sustainable banking principles while navigating the complex dynamics between investor satisfaction and operational integrity.
The bank will present its financial results on March 13, offering a deeper insight into its fiscal health following this substantial financial provision.
This agreement is part of a resolution to address the longstanding dispute regarding the bank's transaction system for trading these certificates.
With this settlement, Triodos aims to appease holders who have seen their investments diminish significantly and to avert ongoing legal battles.
Effectively absorbing nearly all of the projected profit for the next fiscal year, Triodos has provisioned €101 million to fulfill this settlement, emphasizing its impact on the bank's financial performance.
Announced on a Friday morning, this decision reflects the bank's substantial efforts to mend relations with its investor base, who own a unique financial instrument—certificates of shares in Triodos Bank.
Historically, these certificates contributed to the bank's equity, enabling it to extend loans and investments aligned with its sustainable ethos.
Initially launched over four decades ago, Triodos certificates were not freely tradable like regular shares on open markets.
Instead, transactions were limited to direct trades with the bank itself.
This model functioned smoothly until 2020, when the coronavirus pandemic prompted an unusual number of certificate holders to attempt to sell back their certificates, leading Triodos to freeze trading activities temporarily.
Trading resumed in 2023, though not on a conventional stock exchange.
Rather, the bank moved trading to a 'multilateral trading facility'—a controlled environment with selective access—intended as an interim solution.
Since reopening, the certificates have endured a drastic devaluation.
Before the halt in 2020, certificates were valued at €84.
When trading resumed, values quickly fell to €50 and currently stand at a mere €26 per certificate.
The announcement of compensation coincides with Triodos Bank's plans to transition certificate trading to Euronext, Amsterdam's main stock exchange.
This move is anticipated to provide better liquidity and transparency for certificate holders.
According to Triodos, this transfer is scheduled to occur before May of this year.
The Stichting Certificaathouders Triodos Bank, representing the interests of the certificate holders, has expressed approval for the agreed compensation.
The foundation describes the settlement as the maximal achievable outcome for both the holders and the bank, urging acceptance among certificate holders.
Triodos remains committed to sustainable banking principles while navigating the complex dynamics between investor satisfaction and operational integrity.
The bank will present its financial results on March 13, offering a deeper insight into its fiscal health following this substantial financial provision.
