apoBank: Leading market position strengthened


  • Customer and member numbers increased
  • Lending and deposit business on growth path
  • Net commission income up by 4.5%
  • Reserves strengthened once again
  • Operating result rises to €159.6 million
  • Proposed dividend of 4.0%
  • 100% acquisition of Konnektum in order to optimise distribution channel strategy

Deutsche Apotheker- und Ärztebank (apoBank) completed financial 2016 with an operating result of €159.6 million after allocations to reserves, an increase of 4.0% on the previous year’s figure (2015: €153.4 million). In spite of a difficult environment, the Bank once again succeeded in expanding its reserves. Net profit after tax rose by 3.2% to €61.0 million (2015: €59.1 million). On this basis, the Board of Directors will propose an attractive dividend of 4.0% to the Annual General Meeting.

In a banking market characterised by strong competition, apoBank continued to gain new members and customers, further consolidating its leading position in the health care market. The number of customers increased to 415,700 (2015: 397,000), of which 109,680 are also members and thus owners of the Bank (2015: 107,768). Herbert Pfennig, Chairman of the Board of Directors: “We are sticking to our growth strategy in the customer business. We are making targeted investments in sales and hired more than 60 new customer advisors in 2016 alone. This philosophy is paying off: Both in the lending and securities business with our customers, we are on a steady growth path and are once again demonstrating the high fundamental profitability of our bank.” New lending business increased again compared to the previous year, amounting to €6.4 billion; the demand for real estate financing was particularly high. In the area of business start-up financing, the Bank maintained its leading market position. A significant rise was also recorded in lending to corporate clients.

apoBank continued to expand the securities business with its customers. Net commission income increased to €139.0 million (2015: €133.0 million). "Our multiple-award-winning asset management was very popular. In addition, we gained new mandates from institutional investors, not least due to our customised advisory services," says Pfennig.

The operating profit, i.e. profit before risk provisioning, reached €249.2 million and thus remained below the previous year’s level as expected, due to the current low-interest rate environment (2015: €304.8 million).

apoBank’s capital position remained comfortable during the reporting year. The common equity tier 1 capital ratio rose slightly to 22.6%. The total capital ratio was 26.1%.

Dr. Thomas Siekmann, Director of Finance and Controlling at apoBank: "apoBank has gained a solid risk profile in recent years. This was reaffirmed by the ECB last year in its stress test, which we completed with above-average results. Therefore, our growth strategy is based on a firm foundation."

Outlook 2017

apoBank will continue to pursue its steady growth path in 2017. "Start-ups, securities business, our business with corporate clients: This is the triad that we are building upon," Herbert Pfennig sums up. "Despite continuously challenging industry conditions and zero-percent interest rates, we have the strength to continue to invest in our business and to grow." The Bank’s aim is to further expand rather than simply maintain its leading position in financing practices and pharmacies. Raising customers’ awareness regarding the opportunities of self-employment plays an essential role here. The Bank is able to build on its close connections to the professional associations.

In the securities business, apoBank intends to significantly increase its deposit volume in the coming years and strengthen its advisory services. The Bank is therefore in the process of extending the range of private banking services, which has proven its success since its introduction in 2012, to all clients. Lean documentation processes and the possible future introduction of robo-advice complete the profile.

In its business with companies in the health care market, apoBank also wants to grow significantly: It aims to double the lending volume, which is currently €2.6 billion, in the next five years. This also includes offering its customers solutions in other areas so that it is perceived more as a principal bank. To this end, the Bank is continually expanding its range of products and services.

Investments in the customer business are accompanied by the apoFuture programme, which has been linking up all digitisation initiatives at apoBank since 2016. The programme focuses on the systematic integration of customers and data when developing innovative and demand-oriented solutions. Other topics include interconnecting all communication channels for customers and the stringent digitisation of internal processes.

apoBank optimises its distribution channel strategy further. The customer service center Konnektum will play a major role in the future. Therefore, apoBank decided to run Konnektum as a 100%-subsidiary as of 30 June 2017.

Expenditure in 2017 will be significantly affected by investments in sustainable IT and in sales. To this end, the Bank will redirect resources from administration to customer service. In terms of income, apoBank anticipates a rising net commission income. The bottom line is that the operating profit, i.e. profit before risk provisioning, will be below the previous year’s level, as expected. Overall, the Bank anticipates a stable net profit after tax. This includes strengthening reserves, although at a lower level than in 2016, and a stable dividend payment.

The results of financial 2016 in detail

Low interest rates continued to impact the development of net interest income in 2016: It decreased by 7.3% to €625.6 million (2015: €675.2 million). Dynamic growth in new business led to a rise in the loan portfolio on the balance sheet of around €1.7 billion. This partially compensated for the lower earnings contribution from strategic interest rate risk management, due to low interest rates. The trend towards short-term demand deposits continued on the refinancing side. Due to the negative deposit interest rate set by the ECB, the yield from the deposit business declined nonetheless.

In volatile markets, net commission income rose by 4.5% to €139.0 million (2015: €133.0 million). The Bank further expanded its investment business with its retail and institutional clients. In particular, the asset management business developed positively, as did the advisory services for institutional investors. In addition, the insurance business expanded.

General administrative expenses rose slightly by 4.1% to €516.4 million (2015: €496.0 million). Here, investments in IT, sales, the rising numbers of employees and costs incurred due to regulatory requirements had an effect.

Overall, the operating profit, i.e. profit before risk provisioning, at €249.2 million, was down on the previous year’s level, as expected (2015: €304.8 million).

At €5.7 million, risk provisioning for the operating business was positive (2015: -€39.2 million). This was largely attributable to two effects: On the one hand, net allocations remained lower than in 2015 due to the good ratings in the credit portfolio. On the other hand, the Bank recorded write-ups in financial instruments and participations, generating a positive profit contribution from this item.

Risk provisioning with reserve character reached €95.3 million (2015: €112.2 million). This item includes precautionary measures for potential future burdens. It also includes the fund for general banking risks, to which the Bank assigned €75.0 million, as in the previous year.

Net profit after tax amounted to €61.0 million (2015: €59.1 million). Subject to approval by the Annual General Meeting, €16 million of this will be allocated to the revenue reserves.

The balance sheet total, at €38.6 billion, was 5.9% higher than in the previous year (2015: €36.4 billion).