apoBank reports satisfactory interim result
apoBank reports satisfactory interim result
27.08.2020
Deutsche Apotheker- und Ärztebank (apoBank) completed the first six months of 2020 with a stable net profit of €32.7 million (30 June 2019: €31.9 million). In a challenging environment, the Bank was able to increase its operating income. After higher expenditure as a result of the IT migration as well as provisionings, the operating result was €55.6 million (30 June 2019: €60.3 million).
apoBank continued on its growth path in the first half of 2020. For example, loans and advances to customers rose to €38.3 billion (31 December 2019: €37.3 billion). Financing grew for new practices and pharmacies as well as for real estate. The Bank also expanded its loan portfolio in the corporate clients business.
In the securities business as well as in asset management, the Bank withstood the adverse general conditions. In spite of the market distortions caused by the corona pandemic, the deposit volume remained stable at €9.7 billion (31 December 2019: €9.7 billion). Of this, the mandated volume in asset management reached €4.3 billion (31 December 2019: €4.1 billion). In an adverse economic environment, apoBank maintained its good market position as a custodian for institutional investors’ funds. In this capacity, it held €21.5 billion at the mid-year point (31 December 2019: €21.8 billion).
- Investment business withstands difficult environment
- Stable net profit after tax of €32.7 million
- IT stabilisation at advanced stage
Deutsche Apotheker- und Ärztebank (apoBank) completed the first six months of 2020 with a stable net profit of €32.7 million (30 June 2019: €31.9 million). In a challenging environment, the Bank was able to increase its operating income. After higher expenditure as a result of the IT migration as well as provisionings, the operating result was €55.6 million (30 June 2019: €60.3 million).
apoBank continued on its growth path in the first half of 2020. For example, loans and advances to customers rose to €38.3 billion (31 December 2019: €37.3 billion). Financing grew for new practices and pharmacies as well as for real estate. The Bank also expanded its loan portfolio in the corporate clients business.
In the securities business as well as in asset management, the Bank withstood the adverse general conditions. In spite of the market distortions caused by the corona pandemic, the deposit volume remained stable at €9.7 billion (31 December 2019: €9.7 billion). Of this, the mandated volume in asset management reached €4.3 billion (31 December 2019: €4.1 billion). In an adverse economic environment, apoBank maintained its good market position as a custodian for institutional investors’ funds. In this capacity, it held €21.5 billion at the mid-year point (31 December 2019: €21.8 billion).
Outlook for financial 2020
apoBank wants to increase its operating income by achieving risk-adequate volume growth in the lending business with retail and corporate clients as well as in the commission-based business. For financial 2020 as a whole, apoBank plans to generate a net profit slightly above the previous year’s level – this would include an appropriate dividend.
In the second half of 2020, apoBank will continue to focus on the follow-up activities related to its IT migration. IT stabilisation is now at an advanced stage, further optimisations of bank services will follow step by step.
Ulrich Sommer, Chairman of the Board of Directors of apoBank: "We are continuing to work on offering our customers the reliable service they are accustomed to. With our new core banking system, we will be offering them additional, digital services going forward, which will enable us to clearly stand out from the competition. We want to be a reliable partner to health care professionals, supporting them with added-value solutions for all areas of their day-to-day professional lives. After all, our claim is: We enable health!"
In the second half of 2020, apoBank will continue to focus on the follow-up activities related to its IT migration. IT stabilisation is now at an advanced stage, further optimisations of bank services will follow step by step.
Ulrich Sommer, Chairman of the Board of Directors of apoBank: "We are continuing to work on offering our customers the reliable service they are accustomed to. With our new core banking system, we will be offering them additional, digital services going forward, which will enable us to clearly stand out from the competition. We want to be a reliable partner to health care professionals, supporting them with added-value solutions for all areas of their day-to-day professional lives. After all, our claim is: We enable health!"
The results of the first six months of 2020 in detail
In spite of the fact that the interest environment remained challenging, apoBank posted a rise in net interest income of 6.8% to €382.3 million (30 June 2019: €357.9 million).
Net commission income increased by 14.0% to €103.2 million (30 June 2019: €90.5 million). The securities business performed well with respect to both institutional and retail clients.
In the reporting period, general administrative expenses were up by 16.1% to €374.6 million (30 June 2019: €322.6 million). Personnel expenses increased to €134.2 million (30 June 2019: €130.4 million). Operating expenditure including depreciation rose to €240.4 million (30 June 2019: €192.2 million). The main reasons for this were the costs of the IT migration as well as higher regulatory expenditure. The IT costs will affect operating expenditure at the end of the year too.
The operating result, i.e. the profit before risk provisioning, at €103.6 million, was below the previous year’s level, as expected (30 June 2019: €135.1 million).
Risk provisioning for the operating business was at -€43.4 million (30 June 2019: -€36.1 million). This increase is essentially due to loan loss provisions in the large customers portfolio. Risk provisioning with reserve character amounted to -€4.6 million (30 June 2019: -€38.8 million).
The bottom line operating result was thus €55.6 million (30 June 2019: €60.3 million). Net profit after tax amounted to €32.7 million, as planned (30 June 2019: €31.9 million).
At the mid-year point, the balance sheet total had increased by 13.1% to €56.1 billion (31 December 2019: €49.6 billion). In addition to the growing lending and deposit business, participation in the long-term tender of the ECB (TLRTO 3) was responsible for this rise.
The capital position was adequate in the first half of 2020. Due to the strongly growing lending business, the common equity tier 1 capital ratio sank to a still comfortable 14.2% (31 December 2019: 15.2%); the total capital ratio dropped to 15.1% (31 December 2019: 16.5%). The ratios are thus significantly above the minimum required for apoBank by the regulatory authorities.
Net commission income increased by 14.0% to €103.2 million (30 June 2019: €90.5 million). The securities business performed well with respect to both institutional and retail clients.
In the reporting period, general administrative expenses were up by 16.1% to €374.6 million (30 June 2019: €322.6 million). Personnel expenses increased to €134.2 million (30 June 2019: €130.4 million). Operating expenditure including depreciation rose to €240.4 million (30 June 2019: €192.2 million). The main reasons for this were the costs of the IT migration as well as higher regulatory expenditure. The IT costs will affect operating expenditure at the end of the year too.
The operating result, i.e. the profit before risk provisioning, at €103.6 million, was below the previous year’s level, as expected (30 June 2019: €135.1 million).
Risk provisioning for the operating business was at -€43.4 million (30 June 2019: -€36.1 million). This increase is essentially due to loan loss provisions in the large customers portfolio. Risk provisioning with reserve character amounted to -€4.6 million (30 June 2019: -€38.8 million).
The bottom line operating result was thus €55.6 million (30 June 2019: €60.3 million). Net profit after tax amounted to €32.7 million, as planned (30 June 2019: €31.9 million).
At the mid-year point, the balance sheet total had increased by 13.1% to €56.1 billion (31 December 2019: €49.6 billion). In addition to the growing lending and deposit business, participation in the long-term tender of the ECB (TLRTO 3) was responsible for this rise.
The capital position was adequate in the first half of 2020. Due to the strongly growing lending business, the common equity tier 1 capital ratio sank to a still comfortable 14.2% (31 December 2019: 15.2%); the total capital ratio dropped to 15.1% (31 December 2019: 16.5%). The ratios are thus significantly above the minimum required for apoBank by the regulatory authorities.
Key financial data
| € millions | 30.06.2020 | 30.06.2019 | Change % (1) |
|---|---|---|---|
| Net interest income | 382.3 | 357.9 | 6.8 |
| Net commission income | 103.2 | 90.5 | 14.0 |
| General administrative expenses | -374.6 | -322.6 | 16.1 |
| Operating profit before risk provisioning | 103.6 | 135.1 | -23.3 |
| Risk provisioning from the operating business | -43.4 | -36.1 | 20.2 |
| Risk provisioning with reserve character | -4.6 | -38.8 | -88.2 |
| Operating result | 55.6 | 60.3 | -7.7 |
| Net profit after tax | 32.7 | 31.9 | 2.4 |
| 30.06.2020 | 31.12.2019 | Change (1) | |
|---|---|---|---|
| Equity ratio, in percent | 15.1% | 16.5% | -1.4%-points |
| Common equity tier 1 ratio, in percent | 14.2% | 15.2% | -1.0%-points |
| Balance sheet total, € billions | 56.1 | 49.6 | 13.1% |