apoBank draws a line under the past


  • Extensive risk provisioning results in net loss for the year of Euro 283.1 million
  • Operating result, i.e. partial operating result before risk provisioning, above the previous year’s level at Euro 317.8 million
  • All discernible risks are adequately covered by risk provisions of Euro 588.4 million
  • More than 90 new customer advisors were hired in 2009; sales offensive will be continued in 2010 in cooperation with the cooperative financial network
  • Herbert Pfennig, Spokesman of the Board of Directors: "Now we can start anew."


Deutsche Apotheker- und Ärztebank (apoBank) today announced its results for 2009. The Bank used the past financial year to significantly reduce the risk potential of its Financial Instruments portfolio and has thus laid the foundation to be able to fully concentrate on its core business again. As a result of this strategy, the Bank recorded a net loss for the year 2009 of Euro 283.1 million (31 December 2008: net profit of Euro 59.6 million). This loss is fully offset by the partial reversal of balance sheet reserves, thus allowing for the payments for the hybrid Tier I preferred securities (silent partnership) and for the participation certificates (Genussscheine). It will not be possible to pay a dividend for 2009.

While extensive risk provisions were made, the core business was extremely successful: The further increase in the number of customers to now 333,100 customers (31 December 2008: 319,100) shows that apoBank has succeeded in further strengthening its market position as the leading bank in the health care sector. At Euro 317.8 million, the partial operating result before risk provisioning is above the already high previous year’s level (31 December 2008: Euro 315.9 million), thus demonstrating the operating strength of the largest cooperative primary bank.

Herbert Pfennig, Spokesman of the Board of Directors: "With these financial statements, we are drawing a line under the past after having made adequate risk provisions and having initiated the consistent reduction of our Structured Financial Products portfolio. Now we have set all prerequisites to fully concentrate on the business potentials in our core business again and to build on the successful time before the financial crisis".

In the 2009 financial year, net interest income was once again the Bank’s major source of earnings. Driven by the successful lending business, where new advances increased to more than four billion Euro for the first time, net interest income was significantly up on the previous year by 8.4 % to Euro 618.2 million (31 December 2008: Euro 570.5 million). The measures in strategic interest rate risk management already taken in the past could more than offset the reduced margins in the area of deposits and the overall increase in the Bank’s refinancing costs.

As expected, at Euro 111.6 million, net commission income was lower than in the previous year (31 December 2008: Euro 136.2 million). As part of the adopted risk hedging strategy, commission expenses were negatively affected by measures to hedge individual positions in the Financial Instruments portfolio. Moreover, the continuing investor restraint had an impact on earnings in the securities business with private customers, despite a slight recovery in the second half of the year. On the other hand, alternative investment possibilities, e.g. in the investment properties business and in the insurance business, and the continuing sales success in the new lending business had a positive impact.

As planned, administrative expenses increased by 6.6 % to Euro 422.6 million (31 December 2008: Euro 396.3 million) as part of our “apoFit” project, which started already in 2008. This project for sustainable optimisation of the cost structure aims at creating more scope for strategic investments to implement the adopted growth strategy. Therefore, the increase in administrative expenses is primarily attributable to the expansion of sales staff as well as to one-off expenses arising from the “apoFit” project.

The biggest negative impact on earnings resulted from the substantial increase in risk provisions, particularly for the Structured Financial Products portfolio. The balance of risk provisioning in the 2009 financial year totalled Euro 588.4 million, which was well up on the previous year's level (31 December 2008: Euro 244.0 million). Thus, apoBank took account of all discernible risks in an appropriate manner. No provisioning reserves were reversed in the year under review. The Bank pursues a consistent strategy of reducing the Structured Financial Products portfolio. In the 2009 financial year, this portfolio was reduced by Euro 1.1 billion to now Euro 4.5 billion (31 December 2008: Euro 5.5 billion).

While the risk result was impacted by an amount of Euro 485.1 million (31 December 2008: Euro 330.8 million) from financial instruments and subsidiaries, the traditional customer loan business accounted for Euro 95.9 million (31.12.2008: Euro 36.8 million). The increase reflects the overall growth in the credit volume as well as value adjustments on individual care structures, resulting among other things from longer start-up times. The continued low risk provisioning in the lending business with private customers shows the health care sector’s independence from the economic situation.

The balance sheet total at the end of 2009 amounted to Euro 41.2 billion and thus remained at the previous year’s level (31 December 2008: Euro 41.2 billion). This development reflects the growth in the lending business as well as the opposite effects from the adopted consolidation strategy with respect to financial instruments.

The Bank’s equity ratio and core capital ratio declined to 10.2 % (31 December 2008: 12.8%) and 6.2 % (31 December 2008: 8.7%), respectively, at the end of the year. This is mainly attributable to the increase in required equity for structured financial products. The reason for this was a systematic downgrade of these securities by the external rating agencies. Apart from own measures to strengthen equity, apoBank also agreed on measures with the Federal Association of German Cooperative Banks (Bundesverband der Deutschen Volksbanken und Raiffeisenbanken, BVR) to temporarily ease the burden on equity capital in order to offset the increase in required equity. As a result, the additional required equity is reduced and sustainable and long-term hedging of the equity ratios expected in the capital market is assured.

In 2010, apoBank will further expand its sales offensive started in 2009 in strong cooperation with the cooperative financial network; the offensive has two major thrusts: On the one hand, the branch network will be expanded by further locations in Germany. At the same time, customer relationships will be strengthened; for this purpose, apoBank will focus, apart from the successful lending business, also on the investment business. The offensive is also supported by the expansion of advisory capacities by hiring additional sales staff. With these measures, and in cooperation with the cooperative network, apoBank will significantly expand its sustainably good customer business. With its unique business model, apoBank, as an integral part of the cooperative financial network, maintains market leadership for financial services in the health care sector for the network.

Herbert Pfennig, Spokesman of the Board of Directors: "We had a good start to the 2010 financial year and we are well on schedule. Based on our current planning, we expect to make a net profit sufficient to pay a dividend again in 2010. Since it is not yet foreseeable whether the financial market will return to normal in the 2010 financial year, there are still too many uncertainties to make an exact earnings forecast for the current year".

You will find the financial figures for 2009 here.