Satisfactory 2020 business performance


apoBank reports satisfactory 2020 business performance


15.04.2021
 
  • Customer loans and deposit volume expanded
  • Higher operating income and stable net profit
  • Transformation to "The Health Care Bank"

Deutsche Apotheker- und Ärztebank (apoBank) closed financial 2020 with a stable net profit of €65.3 million compared to €64.1 million in 2019. After allocations to reserves, the operating result before taxes amounted to €111.2 million (2019: €117.1 million). The operating business performed robustly: apoBank further expanded its loan portfolio, which rose to €38.2 billion (31 December 2019: €37.3 billion) as financing for start-ups and companies in the health care market performed as planned.

In the investment and asset advisory business with retail clients and institutional investors, the Bank maintained its market position. The mandated volume in private asset management increased significantly. The deposit volume reached €10.4 billion (2019: €9.7 billion). The volume held in custody rose to €22.5 billion (2019: €21.8 billion).

Ulrich Sommer, Chairman of the Board of Directors: "The past financial year was marked by very special challenges for us and our customers. In addition to the effects of the coronavirus pandemic, we also mastered a very complex IT migration. Against the backdrop of these extraordinary circumstances, we achieved respectable operating result."

Dividend payout

With this solid performance, apoBank is in principle in a position to have its members participate fairly in its business success. However, in December the European Central Bank (ECB) renewed its demand to its directly supervised banks to either suspend or significantly limit dividend payouts for 2019 and 2020 until 30 September 2021.

The Board of Directors and Supervisory Board of apoBank will therefore propose to the Annual General Meeting to pay out the dividend of two percent that had already been decided upon for fiscal 2019.

However, due to the ECB’s demand, after this payment only a small distributable amount will be available for 2020. Therefore, the Board of Directors and the Supervisory Board will propose to the Annual General Meeting to carry forward to new account an amount of €49 million from the 2020 net profit. This would entail a dividend of four percent. This is intended to create the basis upon which the Bank can have its members participate fairly in the Bank’s business success for financial 2020, if then time delayed.

Outlook 2021

In spite of the ramp-up of vaccination measures, there is currently no end to the coronavirus pandemic in sight. However, due to the special character of its business model, apoBank currently does not foresee any major burdens as a consequence of the pandemic. However, it is not possible at this point to forecast any potential future financial consequences for the Bank. apoBank is nevertheless expecting to generate a stable net profit in 2021 again.

At the end of 2020, apoBank launched its Oskar strategy programme, which has two goals: on the one hand to transform itself into a strong health care bank that can focus even more consistently on the evolving needs of health care professionals in a changing market environment, and on the other hand, to further strengthen the Bank’s financial base through more efficient processes and optimised structures.

Ulrich Sommer: "Our founder created new financing solutions for pharmacies in times of change; in this tradition, we will develop solutions to enable our customers to continue to follow their calling to the full going forward. It is our aim to meet the needs of health care professionals in an integrated manner – in particular in their roles as businesspeople and in building their personal assets."

The investment and advisory business is to be given more weight in the future. The managed deposit volume is to be significantly expanded to €25 billion by 2027. In parallel, apoBank will further consolidate its market leadership in the area of practice and pharmacy start-ups.

In addition, the Bank wants to offer more services that support customers in their daily professional lives above and beyond banking. naontek AG was founded for this purpose in 2019. With its univiva platform, naontek offers health care professionals a digital marketplace where ultimately they will find everything they need professionally. The range of offerings now extends far beyond a market for training courses, today offering independent advice as well as acting as a marketplace for practice furnishings and fixtures, medical technology, practice marketing and much more. Around 40,000 health care customers are currently registered with univiva.

Details of financial 2020 results

Under challenging conditions, apoBank increased its net interest income by 8.6% to €750.4 million (2019: €691.1 million). Here, the Bank profited from low interest expenses, among other things.

Net commission income rose by 5.1% to €184.3 million (2019: €175.3 million). The Bank was able to build on the positive trend of the previous year in the securities business, both with institutional customers and retail clients.

In the year under review, general administrative expenses rose by 5.4% to €720.9 million (2019: €683.9 million). As in the previous year, expenditure on the migration of the core bank system as well as other projects were the main reasons for this increase. Regulatory expenditure also rose once again.

The operating result, i.e. the profit before risk provisioning, at €184.7 million, was below the previous year’s level, as expected (2019: €217.7 million).

Risk provisioning for the operating business was at - €40.1 million (2019: -€43.5 million). To date, there has been no evidence of an increased need for risk precautions in connection with the Corona pandemic.

Risk provisioning with reserve character at apoBank amounted to -€33.4 million (2019: -€57.1 million).

Tax expenditure was at €45.9 million (2019: €53.0 million).

Net profit after tax reached €65.3 million (2019: €64.1 million).

The balance sheet total was significantly higher than the previous year’s figure, at €59.4 billion, an increase of 19.8% (2019: €49.6 billion). This strong rise was amongst other things due to the Bank’s participation in the long-term tender of the European Central Bank. Capital ratios started to increase slightly again this year. The common equity tier 1 capital ratio reached 16.3% (2019: 15.2%). The total capital ratio amounted to 18.0% (2019: 16.5%).