apoBank continues to expand its customer business
- Growth in number of customers and members
- Positive trend in lending and investment business volume
- Stable net profit after tax of €31.9 million
- Stable dividend planned for fiscal 2019
Deutsche Apotheker- und Ärztebank (apoBank) generated a stable net profit of €31.9 million (30 June 2018: €31.4 million) in the first six months of 2019. In a challenging environment, the Bank was able to increase its earnings from operations. After the expected higher expenditure as a result of the upcoming IT migration as well as allocations to reserves, the operating result amounted to €60.3 million (30 June 2018: €53.3 million).
The growth trend in the customer business continued. The number of customers rose to 470,380 (31 December 2018: 458,770); the number of members increased to 114,452 (31 December 2018: 113,455). At €3.7 billion, the new lending business again exceeded the very good level of the previous year (30 June 2018: €3.6 billion). In business start-up financing, the Bank expanded its leading market position. In the corporate clients business, too, the Bank expanded its loan portfolio.
In the securities investment business as well as in private asset management, which are combined under the apoPrivat brand, the Bank gained new customers. The deposit volume managed by the Bank increased considerably to €8.8 billion (31 December 2018: €7.8 billion). The portion of this figure mandated in private asset management reached €3.7 billion (31 December 2018: €3.3 billion). apoBank also expanded its function as a depository for funds of institutional investors. As at mid-year, the Bank was acting as custodian for a total of €21.0 billion (31 December 2018: €19.6 billion) in over 250 funds.
Outlook for fiscal 2019 as a whole
apoBank plans to increase its earnings from operations by generating risk-adequate volume growth in the lending business with retail and corporate clients as well as its commission-based business. However, the burdens resulting from around ten years of historically low interest rates as well as ever-increasing regulatory requirements are becoming more and more noticeable. Nevertheless, apoBank plans to once again strengthen its reserves for 2019 as a whole and to achieve a stable net profit, which will enable a consistent dividend payout.
Ulrich Sommer, Chairman of the Board of Directors at apoBank: “We are focusing on our strengths in the classical banking business. We are making good progress here. In the long run, however, we want to be more than a financial partner: With complementary services for health care professionals that go above and beyond classical financial services, we are creating added value for our customers. An important milestone here is the new univiva platform that was launched at the beginning of July as a broker for further training for health care professionals, and which will gradually expand its offerings.”
The results of the first six months of 2019 in detail
In spite of the challenging environment, the Bank posted a slight rise in net interest income of 5.4% to €357.9 million (30 June 2018: €339.7 million).
Net commission income rose by 3.9% to €90.5 million (30 June 2018: €87.1 million). The Bank recorded a positive performance in the securities business with institutional customers and retail clients. In the retail clients business, private asset management grew in particular. The insurance business also contributed to growth.
General administrative expenses increased by 12.0% to €322.6 million (30 June 2018: €288.1 million). Personnel expenses amounted to €130.4 million, which is on par with the level of the previous year (30 June 2018: €130.1 million). Operating expenditure including depreciation, on the other hand, rose as expected to €192.2 million (30 June 2018: €158.0 million). The main reason for this was expenditure on the upcoming IT migration in particular, higher regulatory expenditure as well as investment in optimising our lending processes.
The operating result, i.e. profit before risk provisioning, amounted to €135.1 million (30 June 2018: €134.2 million).
Risk provisioning for the operating business was at - €36.1 million (30 June 2018: -2.8 million). This risk provisioning covers a number of smaller loan loss provisions in the retail clients business.
Risk provisioning with reserve character amounted to €38.8 million (30 June 2018: €78.1 million). This item covers precautionary provisioning measures for any unexpected future burdens.
At mid-year, the balance sheet total had risen by 5.8% to €48.0 billion (31 December 2018: €45.4 billion).
The capital position continued to be comfortable in the first half of 2019. Due to the strong growth in the lending business, the common equity tier 1 ratio decreased to 15.0% (31 December 2018: 16.7%), and the total capital ratio to 16.2% (31 December 2018: 18.3%). Thus the ratios remain considerably above the regulatory minimum requirements for apoBank.
The interim financial report as well as the interim disclosure report as at 30 June 2019 are available for download here.