Interim Report 2024
Good interim result for apoBank
28.08.2024
Deutsche Apotheker- und Ärztebank (apoBank) generated a net profit after tax of €47.8 million (30 June 2023: €33.0 million) in the first half of 2024, with the Bank continuing to profit from the higher interest rates in recent months. Operating profit before risk provisioning increased to €262.6 million (30 June 2023: €211.9 million). The Bank used this good performance to further considerably strengthen its reserves.
The intense competition in the banking market remained unbroken in the reporting period. Nevertheless, the Bank maintained its position on the market. With robust new business, it increased its loan portfolio in the practice and pharmacy financing segment from €8.3 to 8.6 billion. Rising new business emerged in real estate loans; overall the loan portfolio remained stable at €16.7 billion (31 December 2023: €17.1 billion). Investment and private financing amounted to €3.7 billion (31 December 2023: €3.8 billion). Overall, the customer loans portfolio was at €34.9 billion (31 December 2023: €35.3 billion).
The trend in the mandated securities business with retail customers was highly satisfactory. The volume of assets managed rose by 19% to €7.0 billion (31 December 2023: €5.9 billion). The deposit volume reached a total of €12.7 billion (31 December 2023: €11.7 billion).
- Interest environment continues to have positive effect on performance
- Asset management grows once again
- Outlook: Fair dividend can be paid out
Deutsche Apotheker- und Ärztebank (apoBank) generated a net profit after tax of €47.8 million (30 June 2023: €33.0 million) in the first half of 2024, with the Bank continuing to profit from the higher interest rates in recent months. Operating profit before risk provisioning increased to €262.6 million (30 June 2023: €211.9 million). The Bank used this good performance to further considerably strengthen its reserves.
The intense competition in the banking market remained unbroken in the reporting period. Nevertheless, the Bank maintained its position on the market. With robust new business, it increased its loan portfolio in the practice and pharmacy financing segment from €8.3 to 8.6 billion. Rising new business emerged in real estate loans; overall the loan portfolio remained stable at €16.7 billion (31 December 2023: €17.1 billion). Investment and private financing amounted to €3.7 billion (31 December 2023: €3.8 billion). Overall, the customer loans portfolio was at €34.9 billion (31 December 2023: €35.3 billion).
The trend in the mandated securities business with retail customers was highly satisfactory. The volume of assets managed rose by 19% to €7.0 billion (31 December 2023: €5.9 billion). The deposit volume reached a total of €12.7 billion (31 December 2023: €11.7 billion).
Outlook for financial 2024
apoBank will continue to resolutely push ahead with its Agenda 2025 fitness programme. Its goals are to grow the financing business and asset advisory services, to further develop products and processes and to make the Bank more profitable. The first milestones have have been reached, with the Bank improving its digital applications for customers and continuously expanding its assets advisory services as well as solutions regarding practices and pharmacies. It has also created clear added value for its members, such as special conditions on deposits and exclusive events.
Matthias Schellenberg, Chair of the Board of Directors of apoBank: "We are well on track with our fitness programme. We are becoming faster and stronger. We have significantly accelerated processes to address key customer issues and our asset management business has grown by €2 billion since our Agenda 2025 was launched. We aim to become the top provider for health care professionals – not just for practice and pharmacy start-ups, but in all aspects of asset management. The good interim result gives us the necessary tailwind on this journey."
For the second half of 2024, apoBank expects the earnings situation to continue its positive trend, although the operating profit of the exceptional year 2023 will not be reached. While the lending business is likely to recover only slowly, the Bank expects further positive impetus to come from the deposits business for the year as a whole. The focus in the customer business remains on supporting and financing start-ups as well as on the mandated securities business with retail clients.
Christian Wiermann, Chief Financial Officer of apoBank: "For the end of the year, we expect net profit to be at the same level as last year. We are thus laying the foundation for our members to be able to share fairly in our operational success this year once again."
Matthias Schellenberg, Chair of the Board of Directors of apoBank: "We are well on track with our fitness programme. We are becoming faster and stronger. We have significantly accelerated processes to address key customer issues and our asset management business has grown by €2 billion since our Agenda 2025 was launched. We aim to become the top provider for health care professionals – not just for practice and pharmacy start-ups, but in all aspects of asset management. The good interim result gives us the necessary tailwind on this journey."
For the second half of 2024, apoBank expects the earnings situation to continue its positive trend, although the operating profit of the exceptional year 2023 will not be reached. While the lending business is likely to recover only slowly, the Bank expects further positive impetus to come from the deposits business for the year as a whole. The focus in the customer business remains on supporting and financing start-ups as well as on the mandated securities business with retail clients.
Christian Wiermann, Chief Financial Officer of apoBank: "For the end of the year, we expect net profit to be at the same level as last year. We are thus laying the foundation for our members to be able to share fairly in our operational success this year once again."
The results of the first half of 2024 in detail
Net interest income reached €495.2 million (30 June 2023: €484.0 million). The main reason for this was the higher interest rates in the money market segment compared to the previous year’s period. New lending business grew from €1.6 to €2.1 billion.
At €91.3 million, net commission income was slightly below its previous year’s level (30 June 2023: €95.9 million), as expected. Thanks to the increase in the mandated business with retail customers, earnings from the securities business were at the previous year’s level in spite of the exit of the custodian business.
General administrative expenses decreased, amounting to €346.8 million (30 June 2023: €370.2 million). Here, personnel expenses sank to €130.8 million (30 June 2023: €135.5 million), mainly due to lower allocations to provisions for company pensions. Operating expenditure including depreciation sank to €215.9 million (30 June 2023: €234.7 million). While expenditure on projects and operating costs rose, there was some relief in the area of regulatory expenses. The cost-income ratio sank to 58.4% (2023: 63.7%).
The bottom line operating result, i.e. the profit before risk provisioning, rose by 24% to €262.6 million (30 June 2023: €211.9 million), thus exceeding the Bank’s expectations.
Risk provisioning for the operating business amounted to -€30.3 million (30 June 2023: -€22.8 million). The underlying reason for this is allocations to loan loss provisions in the retail clients portfolio. The high level of risk provisioning with reserve character was increased once again. It reached -€87.1 million (30 June 2023: -82.9 million).
On balance, operating result before tax was €145.3 million (30 June 2023: €106.2 million). After tax, net profit is €47.8 million (30 June 2023: €33.0 million).
As at mid-year, the balance sheet total was stable at €50.7 billion (31 December 2023: €50.7 billion). The common equity tier 1 capital ratio was at 17.0% (31 December 2023: 16.7%) and the total capital ratio reached 18.2% (31 December 2023: 18.0%).
At €91.3 million, net commission income was slightly below its previous year’s level (30 June 2023: €95.9 million), as expected. Thanks to the increase in the mandated business with retail customers, earnings from the securities business were at the previous year’s level in spite of the exit of the custodian business.
General administrative expenses decreased, amounting to €346.8 million (30 June 2023: €370.2 million). Here, personnel expenses sank to €130.8 million (30 June 2023: €135.5 million), mainly due to lower allocations to provisions for company pensions. Operating expenditure including depreciation sank to €215.9 million (30 June 2023: €234.7 million). While expenditure on projects and operating costs rose, there was some relief in the area of regulatory expenses. The cost-income ratio sank to 58.4% (2023: 63.7%).
The bottom line operating result, i.e. the profit before risk provisioning, rose by 24% to €262.6 million (30 June 2023: €211.9 million), thus exceeding the Bank’s expectations.
Risk provisioning for the operating business amounted to -€30.3 million (30 June 2023: -€22.8 million). The underlying reason for this is allocations to loan loss provisions in the retail clients portfolio. The high level of risk provisioning with reserve character was increased once again. It reached -€87.1 million (30 June 2023: -82.9 million).
On balance, operating result before tax was €145.3 million (30 June 2023: €106.2 million). After tax, net profit is €47.8 million (30 June 2023: €33.0 million).
As at mid-year, the balance sheet total was stable at €50.7 billion (31 December 2023: €50.7 billion). The common equity tier 1 capital ratio was at 17.0% (31 December 2023: 16.7%) and the total capital ratio reached 18.2% (31 December 2023: 18.0%).
The interim report as of june 30, 2024 is available here.