Annual Financial Report 2021

apoBank reports satisfactory 2021 business performance

  • Stable net profit
  • Business start-up financing continues to increase
  • Private asset management on growth path
  • Dividend of 7% proposed

Deutsche Apotheker- und Ärztebank (apoBank) closed financial 2021 with a stable net profit of €65.4 million, compared to €65.3 million in 2020. After allocations to reserves, the operating result before taxes amounted to €124.3 million, significantly above the previous year’s figure (2020: €111.2 million).

Financing of business start-ups and companies in the health care market continued to increase. The lending portfolio shrank slightly overall, in particular due to a more selective residential building financing business.

In the investment and asset advisory services business with retail clients and institutional customers, the Bank strengthened its market position. The mandated volume in private asset management rose to €4.9 billion (2020: €4.4 billion). In a positive market environment, the deposit volume reached €11.9 billion (2020: €10.4 billion). The custodian volume rose to €25.2 billion (2020: €22.5 billion).

Matthias Schellenberg, Chair of the Board of Directors: "In spite of the internal and external challenges of the year, apoBank performed well, among other things thanks to its positioning on the health care market and its close connections to the organisations of the health care professions. So I’m happy that with this result we can have our members participate adequately in the Bank’s performance."

Dividend payout

Last autumn, the European Central Bank (ECB) withdrew its demand that the banks under its direct supervision suspend or significantly limit dividend payouts. As a result, the Supervisory Board and the Board of Directors of apoBank will now propose a dividend of 7% to the Annual General Meeting. This would allow apoBank’s members to participate in the business success of fiscal 2021, as well as retroactively in the business success of 2020, since the full profit carried forward from 2020 is to be paid out.

Outlook 2022

The challenging conditions on the banking market will continue to prevail in 2022 with competition remaining tough in the lending business and the asset and pension businesses in particular. Due to its focused business model, apoBank expects a positive business performance overall in 2022. Net profit is set to increase again, which will enable an appropriate dividend to be paid out to the owners of the Bank. However, the uncertainties around the war in Ukraine and its impact on the financial and capital markets make it difficult to offer a precise outlook.

In 2022, the main focus at apoBank will be on further implementing its transformation agenda. A further focus in the current fiscal year is on continuously improving the functioning of the Bank’s IT systems and applications in the customer business. This includes optimising the processes from the customers’ perspective. The primary goal is to improve customer satisfaction levels again. The Bank also aims to reduce its cost level. These measures are fundamental to its further transformation into a strong "Bank der Gesundheit" (Health Care Bank).

Matthias Schellenberg: "Our comprehensive advisory services for physicians and pharmacists in financing issues of business start-ups in particular, asset accumulation and pension business form the nucleus of our activities." We will continuously expand from this, for example by introducing our new dual advisory model this year. In this model, one advisor remains the key contact person for retail clients throughout their different life phases and the advisor will consult specialists on more complex issues. Our main goal is to provide these customers with fully integrated support."

Details of financial 2021 results

In the lending business, which was deliberately selective, net interest income decreased to 685.0 million (2020: €750.4 million). Burdens resulted among other things from the continuing increase in customer deposits, since in 2021 we had not yet begun to charge custodian fees to retail clients. By contrast, the premium from our participation in the ECB TLTROs provided some relief.

Net commission income rose by 4.7% to €193.0 million (2020: €184.3 million). apoBank recorded a positive trend in earnings in its asset management business and in the securities business with retail clients. Business with institutional investors was also favourable.

General administrative expenses remained stable in the year under review at €715.0 million (2020: €720.9 million). In particular, non-personnel expenses including depreciation were below the previous year’s level. This was mainly attributable to expenditure on IT, which was significantly higher in 2020 than in the reporting year. By contrast, significantly higher regulatory expenses compared to 2020 were included in this item.

Overall, the operating result, i.e. profit before risk provisioning, was approximately at the previous year’s level, at €188.1 million (2020: €184.7 million). The balance of other operating income and expenses had a positive impact compared to 2020. In 2020 the balance was affected by a provision made for back taxes.

Risk provisioning for the operating business was low at -€14.3 million (2020: -€40.1 million). No increased need for risk provisioning in connection with the coronavirus pandemic has been identified so far.

Risk provisioning with reserve character at apoBank amounted to -€49.5 million (2020: -€33.4 million).

Tax expenditure was €58.9 million (2020: €45.9 million).

Net profit after tax reached €65.4 million (2020: €65.3 million).

The balance sheet total was significantly higher than in the previous year, up 13.3% at €67.4 billion (2020: €59.4 billion). Among other things, participation in the ECB TLTROs as well as the continuing inflow of customer deposits led to this increase. The common equity tier 1 capital ratio achieved an adequate level, at 15.9% (2020: 16.3%), as did the total capital ratio, at 17.3% (2020: 18.0%).

apoBank's key data

€ millions 2021 2020 Change in % 1)
Net income interest  685.0 750.4    - 8.7
Net commission interest  193.0 184.3      4.7
General administrative expenses -715.0 -720.9    - 0.8
Balance of other operating income/expenses      25.1  - 29.1       -
Operating profit before risk provisioning  188.1  184.7      1.8
Risk provisioning from the operating business  - 14.3  - 40.1    - 64.3
Risk provisioning with reserve character  - 49.5  - 33.4      48.1
Operating result  124.3  111.2      11.8
Taxes  - 58.9  - 45.9      28.3
Net profit after tax    65.4    65.3        0.1
in % 2021 2020 %-Points
Equity ratio                                                              17.3 18.0  - 0.7
Common equity tier 1 ratio 15.9 16.3  - 0.4
€ millions 2021 2020 Change in % 1)
Balance sheet total                      67,372 59,440   13.3
Costumer loans                            37,787 38,240  - 1.2
Customer deposits                                               3,140 33,241   11.7
1) Rounding differences possible.