Reasonable start to the year: comdirect generates €23.7m pre-tax profit in the first quarter of 2016
- Earnings of €88.7m
- Continued strong customer trading: 4.0 million B2C trades
- Dynamic B2C growth: 16 thousand new custody accounts, 24 thousand new current accounts and €1bn net inflows into custody accounts
- Q2 outlook: consumer loan, new corporate design, market launch of comdirect trading App and bonus scheme
Quickborn. The comdirect group closed the first quarter of 2016 with pre-tax profit of €23.7m (previous year: €24.7m). “comdirect has got off to a reasonable start in 2016. Despite the difficult environment, the result is almost at the level of the especially strong quarter of the previous year and return on equity before tax is over 17%”, said Arno Walter, CEO of comdirect bank AG. “This means we are still one of the most profitable retail banks in Germany.”
Total income in the first three months amounted to €88.7m, 9.5% below the exceptional value of the previous year’s quarter at €98.1m. The high earnings continue to be affected by the net commission income, which reached a very high level at €54.9m, although it was 9.3% below the previous year’s value of €60.5m. One reason for this is the change in the composition of trades in the B2C business line. According to Walter, “Our customers executed more orders in the first quarter than ever before. Our CFD traders, who made use of the volatility at the beginning of the year, were particularly active. So were our investors, who invested primarily in shares and securities savings plans, not standing idly by watching their savings dwindle in non-interest bearing accounts.” For this reason, the trade figures rose to 4.0 million in the first quarter (previous year: 3.9 million). The margin per trade was however below that of the previous year due on one hand to the greater share of CFDs – associated with lower order fees – and on the other to lower average order volume, also due to lower index values. The low index values also had an effect on sales follow-up commission from the funds business. In view of the continued difficult interest rate environment, net interest income after provisions for possible loan losses fell 9.0% to €32.0m (previous year: €35.2m).
While earnings fell overall, administrative expenses, at €65.0m, tangibly decreased by 11.5%, reflecting the flexible management in the current interest environment. At €73.4m, the previous year’s value includes much greater other administrative expenses, in particular associated with the launch of the “Bank. Re-envisioned.” campaign. As Walter explained, “Our advantage is that we are able to flexibly manage significant parts of our costs – always with an eye on earnings. We pay particular attention to where we spend our money, with growth and the future clearly at the centre of our focus.”
The number of customers in the B2C business line (comdirect bank AG) has increased by 17 thousand to 2.02 million since the start of the year. Over the same period, the number of custody accounts rose by 16 thousand to 959 thousand and the number of current accounts increased by 24 thousand to 1.29 million. Total assets under custody amounted to €39.80bn at the end of the first quarter, compared with €39.94bn at the end of 2015. The decrease was so low because the price losses in the first quarter were offset by net fund inflows of €1.1bn (previous year: €0.7bn), €1.0bn of which were invested in custody accounts. “The growth in custody accounts and net investment in custody accounts is particularly pleasing because investing and saving with securities is the core of our strategy. We intend to grow further in this area with smart solutions for our customers, making the financial side of their lives as easy as possible”, said Walter. This aspiration will also be reflected in comdirect’s outward image from the end of May, with a fresh new corporate design. There will also be new products such as the bonus scheme, with which customers incidentally invest in ETFs and thus also in their old-age pension provision through online shopping discounts. “We intend to introduce even more customers to securities by giving them new and smart access to money investment”, said Walter. He also announced the market launch of the new comdirect trading App in the current quarter. In banking the product range was expanded with our own consumer loan in April.
At 986 thousand the number of customers in the B2B business line (ebase GmbH) in the first quarter almost reached the level at the end of 2015 (988 thousand). The closures of custody accounts for capital-building payments (VL) usual in the spring were largely compensated for by new business. Total assets under custody saw a price-related decrease, amounting to €24.65bn at the end of the first quarter (end of 2015: €25.56bn).
The comdirect group’s total number of customers increased to 3.00 million in the first quarter, and its total assets under custody amounted to €64.45bn, compared with the record level of €65.50bn at the end of 2015.
The comdirect shareholders can expect a dividend payment. Subject to the approval of the annual general meeting on 12 May 2016, 40 cents per share are to be paid for the financial year 2015.
||Q1 16 vs. Q1 15
|Net interest income after provisions
|Net commission income