apoBank reports slightly higher operating result

30.08.2022
 

• Business performance affected by challenging conditions
• Brisk new business in asset management and business start-up financing
• Appropriate dividend can be paid out

Deutsche Apotheker- und Ärztebank (apoBank) generated a net profit after tax of €32.8 million (30 June 2021: €37.0 million) in the first half of 2022. In a challenging market environment, it increased its operating result to €106.8 million (30 June 2021: €103.0 million).

apoBank continued to focus on its core expertise in the period under report. With brisk new business, it expanded its financing of business start-ups to €8.3 billion (31 December 2021: €7.6 billion). The Bank recorded moderate growth in real estate loans, increasing its lending volume in this area to €18.5 billion (31 December 2021: €18.1 billion). Investment and private financing were more restrained. The customer loans portfolio remained stable overall at €37.7 billion (31 December 2021: €37.8 billion).

The impact of the Ukraine war put pressure on the global economy and affected stock markets. Sinking share prices led to a reduction in retail clients’ deposit volume to €10.7 billion (31 December 2021: €11.9 billion) even though the Bank recorded unabated net inflows. By contrast, the volume of assets managed remained stable at €4.8 billion (31 December 2021: €4.9 billion).

apoBank expects the business environment to remain challenging in the second half of 2022. The financial market volatility resulting from the Ukraine war will negatively impact commission income in the securities business. The effect that rising energy and raw material prices or supply chain delays will have on customers and thus ultimately on apoBank’s business is not yet precisely quantifiable. On the other hand, there have still been no identifiable burdens worth mentioning from the Covid pandemic.

In the customer business, apoBank will focus on financing, in particular in the area of business start-ups, on asset investment advisory services as well as the pension planning business. In addition, it will continue to work to improve the user friendliness and functionality of its digital customer interfaces as well as the service experience.

The Bank expects to end the year with a slight increase in net profit as well as a higher operating result. This would enable apoBank to pay out an appropriate dividend to its members.

Matthias Schellenberg, Chair of the Board of Directors of apoBank: "We achieved a satisfactory performance in the first half of the year. But conditions remain challenging for banks. This makes it all the more important that we focus on our strengths and core expertise. For us that lies in financing, primarily in the areas of practices and pharmacies, for example in the case of business start-ups as well as asset management and pension planning for academic health care professionals. This will also be reflected in our revised strategy agenda, which we will present by the end of the year."

apoBank maintained its net interest income on the level of the previous year, at €362.8 million (30 June 2021: €358.9 million). The new lending business performed very well overall. On the liabilities side, the trend towards short-term demand deposits did not continue in the period under review. This is likely to also be due to the – temporary – introduction of custodian fees for retail clients. This meant that the Bank was able to at least partially compensate for the burdens resulting from the low-interest environment in the first half of the year.

At €102.4 million, net commission income held its good previous-year level (30 June 2021: €102.0 million). In a difficult market environment, the Bank recorded a positive trend in earnings overall in the asset management business and in the deposit business with retail clients. It posted lower commission income in the securities business.

General administrative expenses amounted to €365.3 million (30 June 2021: €371.2 million). Here, personnel expenses increased to €127.1 million (30 June 2021: €125.0 million). Operating expenditure including depreciation sank to €238.2 million (30 June 2021: €246.1 million). While regulatory payments rose by a good third, lower expenditure on projects provided some relief.

Operating profit before risk provisioning reached €106.8 million (30 June 2021: €103.0 million), and thus considerably exceeded the Bank’s expectations.

Risk provisioning for the operating business was at -€3.0 million (30 June 2021: -€6.1 million). This decline is mainly the result of lower allocations to loan loss provisions. Risk provisioning with reserve character amounted to -€29.7 million (30 June 2021: -€24.1 million).

The bottom line operating result before tax was €74.1 million (30 June 2021: €72.7 million). Net profit after tax was at €32.8 million (30 June 2021: €37.0 million). The strong increase in tax expenditure compared to the previous year was due among other things to a higher bank levy and the formation of extensive reserves, neither of which are tax deductible.

As at mid-year, the balance sheet total remained stable at €66.9 billion (31 December 2021: €67.4 billion). The common equity tier 1 capital ratio, at 16.2%, was above the level at the end of 2021 (31 December 2021: 15.9%); the total capital ratio reached 17.9% (31 December 2021: 17.3%).

	1.1 - 30.06.2022	1.1. - 30.06.2021	Change in %1
Net interest income	362.8	358.9	1.1
Net commission income	10.,4	102.0	0.4
General administrative expenses	-365.3	-372.1	-1.6
Balance of other operating income/expenses	6.9	13.2	-47.4
Operating profit for risk provisioning	106.8	103.0	5.8
Risk provisioning from the operating business	-3.0	-6.1	-50.3
Risk provisioning with reserve character	-29.7	-24.1	28.6
Operating result	74.1	72.7	2.9
Net profit after tax	32.8	37.0	-11.3

	30.06.2022	31.12.2021	Change in %1
Equity ratio, %	17.9	17.3	0.6 %-Pkt.
Common equity tier 1 ratio, %	16.3	15.9	0.3 %-Pkt.
Balance sheet total, € billion	66.9	67.4	-0.7

^{1)Rounding differences}