apoBank on growth path with good interim result
- Net profit of €24.9 million above previous year’s level
- Increase in operating result
- Phase-out of structured financial products completed
- Outlook for year as a whole: Stable net profit and dividend pay-out planned
Deutsche Apotheker- und Ärztebank (apoBank) completed the first six months of 2014 with a net profit of €24.9 million, thus exceeding the level of the same period in the previous year (30 June 2013: €24.1 million). The operating result, i.e. profit before risk provisioning, rose by 12.1 percent, to €203.5 million. With 376,000 customers, apoBank further consolidated its high level of market penetration (31 December 2013: 373,000 customers), benefiting here in particular from its new customer support concept.
"We also set ourselves the aim of growing the investment business", said Herbert Pfennig, Spokesman of the Board of Directors of apoBank. "We have been very successful in this thanks to our new structure and our integrated advisory services." apoBank recently aligned its sales concept even more closely to the specific needs of health care professionals. Its specialists provide advice that is tailored to customers’ individual life phases.
The phase-out of the structured financial products also went well: In May 2014 - earlier than planned - apoBank completed the phase-out of this sub-portfolio.
The results of the first six months of 2014 in detail
Net interest income, at €379.5 million, was 5.8 percent higher than the level of the previous year (30 June 2013: €358.6 million). The loan portfolio remained stable overall. In the area of customer deposits, the trend towards short-term deposits continued. In addition, apoBank benefited from its strategic interest rate risk management.
Net commission income increased significantly, by 16.3 percent to €62.3 million (30 June 2013: 53.6 €million), driven by the growth in the securities business with private and institutional customers and in private asset management.
Administrative expenses amounted to €227.1 million (30 June 2013: €221.0 million). The increase was primarily a result of investments in the expansion of adviser capacity.
The operating result, i.e. profit before risk provisioning, reached €203.5 million (30 June 2013: €181.4 million).
The bank utilised €67.1 million for risk costs and precautionary measures (30 June 2013: €15.3 million). The increase is mainly due to a one-off provisioning measure. Financial instruments recorded write-ups. Overall, risk costs and precautionary measures in the area of financial instruments and participations amounted to €66.1 million (30 June 2013: €99.8 million). In particular this includes precautionary reserves for potential future burdens.
apoBank’s capital ratios continued to improve. According to the Capital Requirements Regulation (CRR) that took effect at the beginning of the year, the equity ratio was at 25.3 percent. The core capital ratio (Tier 1 capital ratio) reached 20.7 percent and the hard core capital ratio was at 19.1 percent. In addition to allocations to reserves and to the fund for general banking risks from the annual result of 2013, the expansion of capital contributions had a particularly positive effect, with both existing and new members subscribing shares. At the mid-year point, apoBank had 104,425 members (31 December 2013: 104,092 members).
The balance sheet total sank slightly to €34.3 billion as at 30 June 2014 (31 December 2013: €34.7 billion). This is mainly due to the completion of the phase-out of the structured financial products in May 2014.
Outlook for 2014 as a whole
apoBank expects its business to continue to develop positively in the second half of 2014. "Our business model is clearly focused on health care professionals and the health care sector, and our specialist support concept adds tangible value to our customer advisory services. We will continue to benefit from this in the second half of the year", said Pfennig. Overall, apoBank plans to achieve a net profit above that of the previous year and to be able to pay out a stable dividend while at the same time making allocations to its reserves.
As a bank with a balance sheet total of over €30 billion, apoBank will in future be subject to the direct supervision of the European Central Bank (ECB). It is therefore participating in the Europe-wide Asset Quality Review as well as the stress test. The results are expected to be presented in October. Pfennig: "We are confident that we will pass this test due to our good capital situation and the long-term improvement of our risk profile."
You will find the Interim Report 2014 here.