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Investor Relations release

30.01.2018 - Record growth and a good result: comdirect on the right track

  • 2017 pre-tax profit: €94.9m
  • Pre-tax profit target of around €85m significantly exceeded
  • cominvest: more than €200m customer funds invested
  • Now available: innovative chat transfer function

The comdirect group closed the financial year 2017 with a pre-tax profit of €94.9m. Pre-tax return on equity stands at 15.8%. “comdirect generated a good result in a persistently challenging market environment. We significantly exceeded the target of around €85m before taxes announced mid-year. comdirect continues to be one of the most profitable retail banks in Germany,” says comdirect bank AG CEO Arno Walter. At €120.7m before taxes, the previous year’s high result was due to non-recurring income of around €41m before taxes from the VISA transaction. Without the non-recurrent VISA effect, pre-tax profit is around 19% above the previous year.

Walter: “The good result is due to our strong growth. Strategically, we are on the right track. We want to be the top address for saving, investing and trading with securities in Germany and support our customers as a smart digital companion in all financial issues. We achieve this by offering innovative and intelligent solutions.” Walter names the digital asset management cominvest as an example of this success. Customers have already used this service to invest over €200m since its launch in May 2017. “Its good reception among customers and the numerous awards it has received, such as the Efma Accenture Silver Award, show us that cominvest is the answer to the low interest rate environment.” Another example of services brought onto the market in 2017 are the voice-controlled finance skills for Amazon’s Alexa and for Google Assistant.

Smart financial companion for a mobile generation
Walter announced further innovations for 2018 that, with comdirect as a smart financial companion, will make banking transactions simpler and more convenient. The focus here is on the needs of an increasingly mobile generation. The first new function – innovative chat transfer – is now available via app. With this, making a transfer is as quick and easy as sending a text message. Further functions will follow after short development cycles, in consultation with the customers. comdirect is also making waves as an industry pioneer in the area of voice control. To coincide with the recent market launch of Amazon’s Echo Spot, comdirect has developed a corresponding Alexa skill for the real-time call-up of stock exchange prices.

Top address for saving, investing and trading with securities
Another important topic for 2018 is the expansion of our service for securities customers, with the aim of being the top address for saving, investing and trading with securities. Alongside the continued development of cominvest, this includes, for example, our new motif investing product, with which comdirect supports its customers in selecting securities in line with their investment motive. A selection can be made from areas such as health, environment and technology. The comdirect Academy, a learning platform focusing on securities, will also be launched in the first quarter 2018. It will communicate financial knowledge simply and playfully via interactive elements and videos. According to Walter, “In times of low interest rates, it is all the more important for people to get to grips with securities investment – and we are supporting them in this.” With the aim of motivating women in particular to become more proficient around financial topics, comdirect launched a new initiative in January: “die finanz-heldinnen”. With information and training products, events and female role models, the initiative aims to inspire women to engage with financial topics themselves and to support them in gaining financial independence.

Dividend proposal at 25 cents, profit retention for further growth
After-tax profit amounts to €71.5m, compared with €92.5m in the previous year. The dividend to be proposed at the annual general meeting is 25 cents per share, as in the previous year. The remaining sum of the after-tax profit is to be transferred to retained earnings and used for strengthening the equity basis for further growth.

High net commission income more than compensates for decline in net interest income
The comdirect group’s total earnings stood at €379.4m (previous year: €381.6m). The main source of earnings was the net commission income, which at €251.9m marked a record high and exceeded the previous year’s figure of €215.4m by 17%. At 17.2m, the number of B2C trades in 2017 was 21% above the previous year (14.2m). According to Walter, “The number of our trades is at a record level despite low market volatility. The reason for this is the growth in our customer numbers. The acquisition of onvista also accelerated our dynamic growth.” The persistent zero interest rate environment led to a decline in net interest income after provisions for possible loan losses of 20% to €95.6m (previous year: €118.9m). The decline was more than offset by the sharp increase in net commission income. Other income stood at €31.8m. This was primarily due to a positive result from financial investments. The high levels of the market indices were used to realise share price gains in own investment. In the previous year (€47.3m), other income included the earnings from the VISA transaction.

The administrative expenses of €284.5m were 9% above the previous year’s figure (€261.0m). Reasons for the increase in particular included the rise in other administrative and personnel expenses resulting from the integration of onvista, greater mandatory contributions for the deposit insurance scheme and costs related to implementing major regulatory projects.

Strong growth in customer numbers and assets under control
With a significant increase in its customer base and assets under control, the comdirect group has strengthened its position as one of the leading online brokers in Germany. The total number of customers climbed to 3.34m in 2017, an increase of 221k. The number of custody accounts rose by 209k to 2.08m. Total assets under control increased by €15.6bn to the record level of €91.4bn. Totalling €10.8bn, net fund inflows in the group were also at a record level (previous year: €8.4bn).

The number of customers in the B2C business line (comdirect bank AG, including the onvista bank division) has increased by 205k to 2.29m since the start of the year. In the same period, the number of custody accounts rose by 195k to 1.20m. Of these, 102k customers and custody accounts are the result of the acquisition of onvista bank GmbH, concluded as of 3 April 2017. The number of current accounts rose by 75k to 1.43m. Total assets under control climbed in the previous financial year by €13.0bn to €59.02bn, and the portfolio volume increased by €9.3bn to €37.09bn. €3.0bn in assets under control came from onvista bank GmbH as of 3 April 2017.

The B2B business line (ebase GmbH) increased its customer base to 1.05m (year-end 2016: 1.04m). Assets under control rose to a new high of €32.35bn (year-end 2016: €29.75bn).

The full annual report will be published on 28 March 2018. The figures stated in this press release are as yet unaudited.
 

Overview
in € k Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17
Net interest income after provisions 28,784 27,105  24,513 23,393 24,769 22,949
Net commission income 51,459 55,509  59,148 61,050 61,579 70,151
Other income 1,693 1,002  6,473 9,785 6,585 8,993
Administrative expenses 62,907 69,859 62,707 70,743 71,392 79,685
Pre-tax profit 19,029 13,757  27,427 23,485 21,541 22,408
After-tax profit 13,597 12,607  20,372 20,340 15,476 15,356

 

 

Overview
in € k 2016 2017 2017 vs. 2016
Net interest income after provisions 118,886 95,624 -19.6 %
Net commission income 215,412 251,928  17.0 %
Other income 47,326 31,836 -32.7 %
 Administrative expenses 260,960 284,527 9.0 %
Pre-tax profit 120,664 94,861 -21.4 %
After-tax profit 92,511 71,544 -22.7 %

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