apoBank expands operating income in the first six months of 2018


  • Further rise in customer and membership numbers
  • Dynamic growth in volume of lending business continues
  • Stable net profit after tax of €31.4 million
  • Stable dividend planned for year as a whole

Deutsche Apotheker- und Ärztebank (apoBank) completed the first six months of 2018 with a stable net profit of €31.4 million (30 June 2017: €30.9 million). In a challenging environment, the Bank succeeded in increasing its operating income. Due to the expenditure resulting from the IT migration, which as expected was higher than in the previous year, and extensive allocations to reserves, the operating result amounted to €53.3 million (30 June 2017: €77.7 million).

The growth in customer and membership numbers continued. The number of customers rose to 448,300 (31 December 2017: 436,260), the number of members increased to 112,210 (31 December 2017: 111,494).

In the retail client and corporate client business, apoBank again generated a good level of new lending business in the first six months of 2018. This reached a total of €3.6 billion in spite of ongoing competition, thus again exceeding the previous year’s already very good figure (30 June 2017: €3.4 billion). Customer loans grew to €33.4 billion (31 December 2017: €32.0 billion).

In the commission-based business, the deposit volume of retail clients rose despite stagnating or respectively declining global stock markets, amounting to €8.2 billion (31 December 2017: €8.0 billion). The positive growth trend in asset management also continued. With now approximately 8,700 clients, the total volume of managed assets amounted to €3.4 billion. Nevertheless, commission income was subject to the influence of the new financial market guideline MiFID II. Business with institutional investors was positive. Here, demand remained high for advisory services, such as the development of individual investment strategies or portfolio management. The number of funds in custody and the depository volume also rose.

Outlook for financial 2018

As a lasting turnaround in the low interest rate trend is still not foreseeable, the Bank plans to compensate for the pressure on margins by targeting risk-adequate volume growth in the lending business with retail and corporate clients. In addition, apoBank wants to strengthen its earnings mix in favour of commission-based business. The focus here is on providing high-quality advisory services to retail clients. For this purpose, the Bank pooled all securities activities with its clients under the apoPrivat brand as of early summer. The Bank also wants to expand its business with institutional investors. Overall, apoBank plans to achieve a stable net profit for the 2018 financial year, enabling it to strengthen reserves and pay a consistent dividend.

Ulrich Sommer, Chairman of the Board of apoBank: "In spite of intense competition, we successfully held our position in the market. Our efforts with regard to start-up financing and the corporate client business are paying off. Moreover, our clients are increasingly putting their trust in our advisory expertise in the securities investment business. I see additional growth potential for apoBank in the long term, as we are positioning ourselves more broadly at the interface of the health care and financial markets. We want to utilise our unique expertise in these two markets and develop products and services that contribute added value for our clients and members beyond the traditional banking business."

The results of the first six months of 2018 in detail

In spite of a challenging environment, the Bank registered net interest income growth of a moderate 4.4%, reaching €339.7 million (30 June 2017: €325.3 million). This was due in particular to the expansion of volume in the lending business as well as lower refinancing costs.

Net commission income remained stable at €87.1 million, which is on par with the previous year’s level (30 June 2017: €88.0 million). Retail clients’ deposit volume continued to rise, although at the beginning of the year the commission-based business was negatively affected by difficult conditions on the financial markets as well as the revised European Union guideline for securities services, known as MiFID II since January 2018. The Bank has continued to expand its business with institutional investors.

General administrative expenses increased by 11.5% to €288.1 million (30 June 2017: €258.4 million). Personnel expenses were at €130.1 million, which is on par with the previous year’s level (30 June 2017: €131.3 million). Operating expenditure including depreciation rose significantly to €158.0 million (30 June 2017: €127.1 million). A primary cause of this rise was the increase in expenditure for the IT migration.

The operating result, i.e. profit before risk provisioning, totalled €134.2 million (31 June 2017: €158.5 million).

Reporting a positive risk provisioning for the previous year, now expenditures for risk provisioning from the operating business came to a very low €2.8 million. Net allocations remained at a low level, due to the good creditworthiness in the loan portfolio and successful risk management. In addition, the recoveries from previously written-down receivables remained high.

Risk provisioning with reserve character amounted to 78.1 million (30 June 2017:
€87.6 million). This item includes precautionary measures for unexpected future burdens.

At mid-year, the balance sheet total had risen by 6.5% to €44.1 billion (31 December 2017: €41.4 billion).

The capital position continued to be comfortable in the first half of 2018, even though the regulatory capital ratios, which were on a high level, declined slightly. Due to the strong expansion of the lending business, the common equity tier 1 ratio decreased to 18.7% (31 December 2017: 19.5%), while the total capital ratio fell to 20.6% (31 December 2017: 21.8%).

You will find the Interim Report 06/2018 here.