apoBank back to the profit zone


  • Net profit of €53.4 million allows for a 4% dividend
  • Operating result up 7% to €341.0 million
  • Burdens from financial instruments portfolio reduced significantly
  • Plans to continue the positive trend in the core business for 2011

Deutsche Apotheker- und Ärztebank (apoBank) today published its results for the 2010 financial year. Thanks to its operational profitability, apoBank achieved a net profit of €53.4 million (2009: -€283.1 million) in the past year. This means that it can pay a profit share of 4% to its approximately 100,000 members, subject to the approval of the Annual General Meeting. In addition, by an allocation to the revenue reserves, the Bank can strengthen its capital basis. An allocation of €40.0 million to the fund for general banking risks also has a capital strengthening effect.

Herbert Pfennig, Spokesman of the apoBank Board of Directors said, "We have good news for our members. We have achieved our overriding aim of being able to pay out a dividend. We owe this success to the results in our core business, where we achieved significant growth despite the many challenges we faced last year. Furthermore, our more than 14,000 new customers are proof of our strong position in the health care sector. And finally, we have also been able to significantly reduce the burdens from our financial instruments."

This means that in 2010, apoBank successfully implemented its strategy defined at the end of 2009 of focusing on its core business and reducing its structured financial products. As part of this strategy, apoBank disposed of activities outside its core business in the past year. For instance, one decision was to outsource all IT activities to the cooperative service provider GAD. At the same time, the Bank invested in expanding and strengthening its core business.

"We will continue on this course in 2011. Therefore, we act on the assumption that we will profit from the strength of our business in spite of the significant rise in expenses for the IT migration and we will be able to pay out a dividend," Pfennig continued.

The Bank’s strategic focus in 2011 will continue to be on providing economic support for health care professionals and their associations. The Bank will strategically set the course for strengthening its market position and responding to the changing conditions in the health care sector. This mainly involves:

  • Extending business activities for employed health care professionals and students in health care professions with specialised advisers
  • Expanding the business with outpatient medical care structures and establishing a consultancy approach which meets needs even better; in order to promote self-employment, the focus will be on care structures provided by health care professionals
  • Investing in the investment business with retail clients to strengthen the Bank’s position as an integrated financial service provider

Beyond the Bank’s operating business, the past year was also characterised by the events in connection with LICON: In the autumn of 2010, the Bank had reason to assume that individual employees had impermissibly obtained personal advantages. As a result, the Supervisory Board and the Board of Directors initiated investigations to reveal any possible misconduct and identify the need to improve internal processes. An immediate action plan was adopted putting in place extensive organisational measures as a basis for preventing such situations from reoccurring. In the course of this, apoBank implemented two significant organisational changes at the beginning of this year:

  • The sales structure was reorganised: This links the branch network more closely to the Board of Directors, and distributes responsibility among several individuals at second management level
  • Compliance functions were strengthened on the basis of measures already introduced at the beginning of last year, in particular with respect to preventing fraud and corruption, and were backed by strict rules for accepting or approving benefits 

Herbert Pfennig commented, "From today’s point of view, the events surrounding LICON/MEDICON fortunately affect a smaller circle of people than we initially feared. We have drawn our conclusions based on these events and have further protected the Bank with improved organisational structures and additional security measures."

The results of the 2010 financial year in detail

The operating result, i.e. profit before risk provisioning, amounted to €341.0 million, thus exceeding the previous year’s good result (2009: €317.8 million). The growth in net interest and net commission income in the customer business in particular contributed to this.

The Bank achieved a net interest income of €679.2 million, exceeding the previous year’s figure by 9.9% (2009: €618.2 million). Net interest income was driven by the lending and deposit business as well as the Bank’s strategic interest rate risk management. Furthermore, the Bank continued to increase the volume of its loans. New loan agreements in the amount of €4.0 billion were almost on a par with last year’s record result (2009: €4.1 billion). In terms of customer deposits, the Bank also posted a clear increase in volumes.

Net commission income went up significantly by 13.9% from €111.6 million to €127.1 million. The securities, lending and life insurance businesses were the main driving forces behind this result. The Bank reported growth especially in custody account management, in customer securities transactions and in private asset management.

The Bank increased its general administrative expenses as planned in 2010, mainly attributable to further strategic investments. These primarily included expenses incurred as part of its IT migration to the cooperative data processing centre of GAD and investments in sales. In total, general administrative expenses including depreciation were €452.4 million, up on the previous year’s figure (2009: €422.6 million).

In the area of risk provisioning, the Bank incurred significantly lower risk costs for the customer lending business than in the previous year, mainly thanks to the good quality of its loan portfolio. Risk costs and precautionary measures for the customer lending business totalled €69.9 million (2009: €103.3 million).

Expenditure for risk costs and precautionary measures for financial instruments and participations amounted to €201.6 million. This is a considerable reduction on the previous year (2009 €485.1 million). As in 2009, the focus of risk costs relating to financial instruments was on the Bank’s structured financial products.

The Bank reduced its financial instruments in 2010 from €15.1 billion to €11.9 billion. Of this, structured financial products accounted for a total exposure of €4.2 billion (2009: €4.5 billion). To further optimise its portfolio and reduce its susceptibility to volatility, the Bank transferred a significant part of its structured financial products to a special fund managed by Union Investment. This allows it to further preserve its resources and focus more on its core competences. The Bank adjusted the guarantee agreement with the Federal Association of German Cooperative Banks (BVR) as part of the transfer.

The balance sheet total went down by 5.8% to €38.8 billion. This decline reflects the reduction of the Bank’s financial instruments portfolio in line with its strategy, which was greater than the growth of the business volume in its core activities.

In 2010, apoBank was able to increase its equity ratio to 11.9% (2009: 10.2%) and its core capital ratio to 7.6% (2009: 6.2%). In particular, the issue of a silent partnership and the continued reduction of risk in structured financial products helped to improve the equity capital situation. The guarantee agreement with the BVR also contributed to this reduction.


According to current projections, apoBank will again achieve a net profit in 2011, allowing it to both pay out a commensurate dividend and to allocate reserves in accordance with its Articles of Association. As planned, the result will be influenced by two central factors: The operating result will be temporarily reduced by expenses during the implementation phase of the bank21 cooperative IT system, which is set to last several years, but will nonetheless remain at a high level due to the Bank’s continued success in its core business. However, a further reduction is expected in the burdens from financial instruments, although ongoing uncertainty in the financial markets means that a more precise forecast is not possible. The results achieved so far in the current financial year show that the Bank is on track.

You will find the financial figures for 2010 here.