apoBank: Respectable result in an environment that remains challenging
apoBank: Respectable result in an environment that remains challenging
01.04.2020
In fiscal 2019, Deutsche Apotheker- und Ärztebank (apoBank) achieved a stable net profit after tax of €64.1 million (2018: €62.9 million). After allocations to reserves, the operating result amounted to €117.1 million (2018: €113.4 million), thus slightly exceeding expectations. apoBank has hence compensated to a great extent for higher expenditure that primarily resulted from the investments in a new core banking system.
Ulrich Sommer, Chairman of the Board of Directors: "apoBank closed the past fiscal year with a respectable result and thus further consolidated its base. We will make use of this to provide comprehensive support to health care professionals in the corona crisis, whether it be in the case of liquidity requirements triggered by the crisis or other measures to ensure that practices, pharmacies and hospitals can operate. As the cooperative bank for health care professionals we see it as our duty to make our contribution towards the functioning of the German health care system in these difficult times."
- Covid-19: apoBank supports health care professionals
- Growth continues in retail and corporate client business
- Further increase in asset management
- IT migration lays foundation for further development of banking business
In fiscal 2019, Deutsche Apotheker- und Ärztebank (apoBank) achieved a stable net profit after tax of €64.1 million (2018: €62.9 million). After allocations to reserves, the operating result amounted to €117.1 million (2018: €113.4 million), thus slightly exceeding expectations. apoBank has hence compensated to a great extent for higher expenditure that primarily resulted from the investments in a new core banking system.
Ulrich Sommer, Chairman of the Board of Directors: "apoBank closed the past fiscal year with a respectable result and thus further consolidated its base. We will make use of this to provide comprehensive support to health care professionals in the corona crisis, whether it be in the case of liquidity requirements triggered by the crisis or other measures to ensure that practices, pharmacies and hospitals can operate. As the cooperative bank for health care professionals we see it as our duty to make our contribution towards the functioning of the German health care system in these difficult times."
Key business performance figures in 2019
In 2019, apoBank further expanded its market position in the support of practice and pharmacy start-ups in the health care sector and in the corporate client segment. The new lending business exceeded the already high level of the previous year, rising to €7.6 billion (2018: €7.1 billion). The trend in new loans for start-up financing, real estate and companies in the health care market was equally strong.
Another positive trend was recorded in the investment and asset advisory business with retail clients and institutional investors. Asset management saw considerable growth both in its classical form and as apoVV SMART with regard to the mandated volume. Deposit volume reached €9.7 billion (2018: €7.8 billion). In a very competitive market, the Bank also defended its good position as a custodian. The volume increased to €21.8 billion (2018: €19.6 billion).
Another positive trend was recorded in the investment and asset advisory business with retail clients and institutional investors. Asset management saw considerable growth both in its classical form and as apoVV SMART with regard to the mandated volume. Deposit volume reached €9.7 billion (2018: €7.8 billion). In a very competitive market, the Bank also defended its good position as a custodian. The volume increased to €21.8 billion (2018: €19.6 billion).
Outlook 2020
Sommer: "We are facing great challenges. We are currently focusing on supporting our customers during the corona pandemic. We are convinced that we are equipped to overcome the crisis. We have a stable base, the necessary pragmatism and a strong network. In addition, we have laid the ground in the past for setting up even more efficient processes and structures. We will be successful if our daily actions make the lives of our customers as health care professionals easier."
apoBank will continue to develop its clearly defined business model in 2020. At the core of this is a focused, profitability-oriented growth strategy. To achieve this, the Bank invests in its customer business, the quality of its services and in its IT systems. Its strategic focus areas remain unchanged in the customer business: increasing market share in business start-up financing, stepping up business with corporate clients and expanding the asset and investment advisory services for customers. In addition, products of apoBank subsidiaries such as naontek and Dental Practice of the Future (Zahnpraxis der Zukunft) will contribute towards offering a range of services above and beyond banking services.
Business performance in 2020 will be overshadowed by the repercussions of the corona pandemic which cannot be estimated at this stage. apoBank nevertheless currently continues to anticipate that it will generate a more or less stable net profit.
apoBank will continue to develop its clearly defined business model in 2020. At the core of this is a focused, profitability-oriented growth strategy. To achieve this, the Bank invests in its customer business, the quality of its services and in its IT systems. Its strategic focus areas remain unchanged in the customer business: increasing market share in business start-up financing, stepping up business with corporate clients and expanding the asset and investment advisory services for customers. In addition, products of apoBank subsidiaries such as naontek and Dental Practice of the Future (Zahnpraxis der Zukunft) will contribute towards offering a range of services above and beyond banking services.
Business performance in 2020 will be overshadowed by the repercussions of the corona pandemic which cannot be estimated at this stage. apoBank nevertheless currently continues to anticipate that it will generate a more or less stable net profit.
Annual General Meeting 2020
The Annual General Meeting planned for 29 April 2020 has been postponed to protect the health of all participants and in line with the current measures taken by the authorities to dampen the spread of the coronavirus. The postponement of the Annual General Meeting also means that the representatives cannot pass a resolution on apoBank’s profit utilisation for the time being.
The net profit generated by apoBank enables it in principle to pay its members a dividend of four percent. This is what the Bank was planning to do when preparing the annual financial statements. However, given the unforeseeable developments with regard to the spread of Covid-19, the ECB asked banks on 27 March 2020 to carefully consider their dividend pay-outs and not to pay any dividends at least until October 2020. In compliance with this recommendation and taking account of all interests, the Board of Directors will now propose to decide on a dividend of two percent. According to the ECB, the dividend may only be paid out after the situation has been reassessed in October 2020 at the earliest. The Bank will discuss this proposal in detail in the upcoming committee meetings.
The net profit generated by apoBank enables it in principle to pay its members a dividend of four percent. This is what the Bank was planning to do when preparing the annual financial statements. However, given the unforeseeable developments with regard to the spread of Covid-19, the ECB asked banks on 27 March 2020 to carefully consider their dividend pay-outs and not to pay any dividends at least until October 2020. In compliance with this recommendation and taking account of all interests, the Board of Directors will now propose to decide on a dividend of two percent. According to the ECB, the dividend may only be paid out after the situation has been reassessed in October 2020 at the earliest. The Bank will discuss this proposal in detail in the upcoming committee meetings.
Fiscal 2019 results in detail
In spite of the challenging interest environment, the Bank posted a rise in net interest income of 9.3% to €691.1 million (2018: €632.4 million). The basis for this growth was the lively new lending business.
Net commission income increased by 6.3% to €175.3 million (2018: €164.9 million). The Bank recorded a positive trend in the securities business, both with institutional customers and with retail clients. In addition, revenues from the insurance business and payment transactions increased.
In the year under review, general administrative expenses rose by 14.5% to €683.9 million (2018: €597.6 million). This was primarily due to the expenditure relating to the upcoming migration of the core banking system, as well as project costs for optimising loan processes. In addition, there was an increase in regulatory expenditure.
The operating result, i.e. profit before risk provisioning, amounted to €217.7 million (2018: €233.6 million). Risk provisioning for the operating business was at - €43.9 million (2018: -€31.9 million), which remains lower than the standard risk costs and hence at a low level.
apoBank allocated €57.1 million to risk provisioning with reserve character (2018: €88.3 million).
Tax expenses amounted to €53.0 million (2018: €50.4 million).
Net profit after tax reached €64.1 million (2018: €62.9 million).
The balance sheet total, at €49.6 billion and an increase of 9.3%, was significantly above the previous year’s figure (2018: €45.4 billion). This was driven by the growing customer business. The strong growth in lending was also reflected in the capital ratios. The common equity tier 1 capital ratio decreased to 15.2% (2018: 16.7%). The total capital ratio amounted to 16.5% (2018: 18.3%).
Net commission income increased by 6.3% to €175.3 million (2018: €164.9 million). The Bank recorded a positive trend in the securities business, both with institutional customers and with retail clients. In addition, revenues from the insurance business and payment transactions increased.
In the year under review, general administrative expenses rose by 14.5% to €683.9 million (2018: €597.6 million). This was primarily due to the expenditure relating to the upcoming migration of the core banking system, as well as project costs for optimising loan processes. In addition, there was an increase in regulatory expenditure.
The operating result, i.e. profit before risk provisioning, amounted to €217.7 million (2018: €233.6 million). Risk provisioning for the operating business was at - €43.9 million (2018: -€31.9 million), which remains lower than the standard risk costs and hence at a low level.
apoBank allocated €57.1 million to risk provisioning with reserve character (2018: €88.3 million).
Tax expenses amounted to €53.0 million (2018: €50.4 million).
Net profit after tax reached €64.1 million (2018: €62.9 million).
The balance sheet total, at €49.6 billion and an increase of 9.3%, was significantly above the previous year’s figure (2018: €45.4 billion). This was driven by the growing customer business. The strong growth in lending was also reflected in the capital ratios. The common equity tier 1 capital ratio decreased to 15.2% (2018: 16.7%). The total capital ratio amounted to 16.5% (2018: 18.3%).