Business development satisfactory for first half of 2011


  • Net profit on previous year's level at €23.5 million
  • Growth in core business: further increases in lending and deposit business
  • IT migration costs impact on operating result
  • Forecast for financial year confirmed

Deutsche Apotheker- und Ärztebank (apoBank) concluded the first half of its current financial year with a net profit of €23.5 million (30 June 2010: €25.0 million). Two key developments characterise this result: firstly, the positive development in the Bank's core business, i.e. with health care professionals and their organisations, and secondly the investments made as part of strategic projects including, in particular, the optimisation of its IT structure. Because of this increased investment expenditure, operating profit before risk provisioning – apoBank's operating result – at €160.2 million was, as expected, below the high figure achieved in the prior-year period (30 June 2010: €175.9 million).

"Despite the significant investment expenditure on our IT migration, we are satisfied with the result for the first half of the year," says Herbert Pfennig, Spokesman of the Bank's Board of Directors. "This result is an expression of the strength of our core business. Even if current trends on the financial markets make us cautious in our prognoses, based on the encouraging business performance for the past six months we stand by our forecast for the year as a whole. For the full year we aim to achieve a net profit that will permit an appropriate dividend payment to be made."

Overall, the Bank has built upon the successful development in its core business from the previous year and further strengthened its market position. The number of customers continued to grow, crossing the 350,000 mark for the first time in the first half of this year.

Business development in detail

Net interest income, at €320.9 million, was slightly higher than in the prior-year period (30 June 2010: €315.4 million). This was partly driven by growth in the new lending business to €2.2 billion (30 June 2010: €1.9 billion), which was also reflected in the expansion of the Bank's loan portfolio. In addition, as margins improved, customer deposits increased further to €18.7 billion (31 December 2010: €18.2 billion). Conversely, the increase in interest rates led to higher refinancing costs.

"The good level achieved in the new lending business, involving retail customers in particular, is an expression of our strong position as a bank for the health care professions," continues Pfennig. "This shows that we can continue to differentiate ourselves positively from other providers, even in times of intense competition, thanks to our unique expertise."The structural changes in the health care sector are also reflected in apoBank's business activities: The increasing significance of cooperative models, initiated and operated by health care professionals, is given particular recognition by the Bank in the form of a special division within its retail client business. Loan commitments to outpatient care structures in the first half of 2011 amounted to around €150 million.

Commission business was stable overall, at €58.5 million (30 June 2010: €67.1 million). The main reason for this decline in figures is a reclassification of income from the customer lending business to net interest income. Alongside robust progress overall in the securities business with retail customers, private asset management in particular made an increasing contribution to the Bank's results; the first half of 2011 saw this positive trend continue. It gained over 300 new customers, and the volume of assets under management rose significantly, from €1.1 billion to €1.3 billion.

General administrative expenses were principally characterised by significant expenditure associated with the migration to the cooperative IT system bank21. General administrative expenses thus increased to €219.5 million (30 June 2010: €200.9 million), as planned.

Says Pfennig, "Following the migration phase, apoBank will be able to generate significant cost advantages and will enjoy more efficient structures that will also provide a benefit to our customers. This will enable us to even better fulfill the demands we place on ourselves regarding customer orientation."

Overall, the Bank achieved a marked reduction in its risk provisioning compared to the prior-year period. Risk costs for the customer lending business reflect the stable general conditions in its core business, and increased slightly in conjunction with the further growth in its lending business to €33.5 million (30 June 2010: €30.2 million). Risk costs and precautionary measures for financial instruments and participations were also down significantly to €61.8 million (30 June 2010: €115.5 million).

There was a slight increase in the balance sheet total for the reporting period, to €39.3 billion compared to €38.8 billion as at 31 December 2010. While customer business volume increased, the Bank also achieved progress in reducing risks in its structured financial products. During the first six months, the Bank reduced the volume of its structured financial products markedly, from €4.2 billion as at 31 December 2010 to €3.5 billion.

In accordance with its strategy, apoBank also succeeded in improving its equity capital situation during the first half of 2011. There was an increase in both equity ratio (13.6% compared to 11.9% as at 31 December 2010) and core capital ratio (8.5% compared to 7.6% as at 31 December 2010). The main contributing factors here were the continued risk reduction and allocations to the reserves from the 2010 annual result. Due to increasing regulatory requirements, the Bank will continue in future to focus on taking the appropriate measures to further bolster its equity base.


apoBank expects the positive trend in its operating business to continue, also in collaboration with the cooperative FinanzGruppe. Despite significantly higher expenses caused by the IT migration, it aims for an adequate profit before risk provisioning thanks to its operational profitability. Overall, apoBank is planning on generating a net profit that will enable it to pay a dividend to its members and make a statutory allocation to its reserves.

In terms of risk provisioning, the Bank currently expects a decline compared to the previous year. While the risk costs for its customer lending business are developing at a steadily low level in line with the expansion in business volume, the situation on the international financial and capital markets makes it difficult to forecast developments in the case of financial instruments.

You will find the financial reports of apoBank here.