comdirect reports extraordinarily high profit for quarter

Quickborn, 28.04.2020

  • Profit in Q1 2020: €77.9m before taxes
  • Record trades: 12.0m in first quarter
  • Consistently strong growth: 87k net new customers in first quarter
  • Third time in a row: Crowned “Best Bank”, “Best Direct Bank” and “Online Broker of the Year”*

comdirect group has closed the first quarter of 2020 with a pre-tax profit of €77.9m, up significantly on the figure for the previous year (€12.5m**). The extraordinarily strong profit for the quarter is thanks to unusually high trading activity on the part of customers as a result of market conditions. “Our customers traded more in the first quarter of 2020 than ever before,” said Frauke Hegemann, CEO of comdirect bank AG. “Net commission income rose sharply as a result, while our administrative expenses remained stable thanks to the greater scalability of our digital business model.”


Very high growth in new customers, custody accounts and net fund inflows
The number of customers was 2.83m as of the end of the first quarter of 2020. With 87k net new customers, the growth is therefore slightly higher than the very strong same quarter of the previous year (84k). “Compared to the previous year, we invested less in growth with new customers in the first quarter of 2020 and still achieved our strongest new customer growth in more than ten years,” said Hegemann. The number of custody accounts in particular climbed robustly – the opening of 102k new custody accounts brought the total to 1.66m as of the end of the quarter. The number of current accounts rose by 29k to 1.72m. Total assets under control declined from €80.2bn as of the end of the year to €75.1bn. While the volume of deposits increased by €2.2bn to €31.1bn, the portfolio volume declined by €7.3bn to €44.0bn on account of negative market value effects of €10.2bn. Total net fund inflows amounted to €5.2bn, with custody accounts making up €3.0bn of this figure.

“The numbers show that we have been able to further expand our position as the top address for saving, investing and trading with securities in this currently highly dynamic market. The accelerated trend towards digitalisation is increasingly playing to our business model,” said Hegemann. “Banking and brokerage should fit customers’ lives and be as easy, quick and convenient as possible. As the bank on your mobile phone, we are therefore working systematically to expand our mobile services.” One example of this is the expansion of the prize-winning comdirect app, which will be enhanced by several new trading functionalities, among other things.

comdirect receives accolades for third time in a row
In Germany’s biggest test of banks, €uro magazine has declared comdirect to be the country’s “Best Bank” and “Best Direct Bank”. comdirect has thus defended this top spot since 2018. The company was also victorious in the test categories “Service” and “Digital services and online security”. In addition to the €uro magazine awards, comdirect already brought home another title for the third time in a row just a few weeks ago: The “Broker Test” portal crowned comdirect the Best Online Broker of the Year 2020.*

Net commission income increases significantly – net interest income stable
comdirect’s income increased by 73% to €150.9m in the first quarter of 2020 (previous year: €87.3m). Its main source of income was net commission income, which more than doubled as against the previous year to €110.1m (€50.1m). At 12.0m, the number of orders executed is 110% higher than in the previous year (5.7m) against the backdrop of extreme market volatility. Despite the persistently negative interest rate environment, comdirect was able to keep its net interest income after provisions for possible loan losses almost stable year-on-year at €30.0m (€31.8m). Other income climbed from €5.3m in the previous year to €10.8m, essentially thanks to a higher result from financial investments in conjunction with price gains on proprietary investments.

Administrative expenses down slightly year-on-year thanks to greater scalability
At €73.0m, administrative expenses remained slightly lower than the previous year’s level despite the high volume of trades and customer enquiries (€74.8m). In addition to reduced sales expenses, this was due to the effects of the Bank’s greater scalability. In the past year, comdirect has digitalised its processes and made them more cost-effective by the systematic use of new technologies. Examples of this included the advanced search function on its website, the use of a hybrid chat bot, the implementation of a voice dialogue system and robotic process automation (RPA). comdirect group’s pre-tax profit amounted to €77.9m in the reporting period, clearly bettering the prior-year figure (€12.5m**). The consolidated net profit amounted to €55.9m (previous year: €10.3m**).

Forecast for financial year 2020 is increased
Because of the extraordinarily strong pre-tax profit in the first quarter, as well as unexpected high trading activity of the customers throughout April, comdirect increases its forecast for the financial year 2020 and now expects a pre-tax profit of €130-150m. After analysis of multiple scenarios, the bank expects to exceed the last published forecast for financial year 2020 (pre-tax profit of €100-120m), despite the current macro-economic situation and significant uncertainties.

Merger of comdirect with Commerzbank planned
Commerzbank announced at the end of September 2019 that comdirect is to be fully integrated into Commerzbank. comdirect shareholders will receive an appropriate cash compensation for their shares as part of the intended squeeze-out. The merger squeeze-out is set to be resolved at the annual general meeting, which will be held virtually for the first time for all shareholders on 5 May 2020. The merger agreement and report were published on 20 March 2020.

comdirect announced on 1 April that the Board of Managing Directors and the Supervisory Board will be proposing at the 2020 annual general meeting that no dividend is to be paid for the 2019 financial year. comdirect is thereby adhering to the European Central Bank’s recommendation for banks of 27 March 2020 not to distribute dividends for 2019 and 2020 until at least 1 October 2020 owing to the uncertainty as a result of the coronavirus pandemic.

Overview 

in €k Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q1 20 vs. Q1 19
Net interest income
after provisions
31,830 31,008 31,445 29,251 30,002 -5.7%
Net commission income 50,149 53,777 57,369 58,421 110,071 119.5%
Other income 5,307 4,540 7,678 2,666 10,810 103.7%
Administrative
expenses
74,798 70,876 66,824 75,397 73,024 -2.4%
Pre-tax profit** 12,488 18,449 29,668 14,941 77,859 523.5%
Profit after tax** 10,332 14,152 19,816 11,504 55,861 440.6%


* €uro magazine, issue 05/2020; 33 financial institutions tested and www.broker-test.de/online-broker

** In connection with the agreed sale, the business of ebase is reported as “discontinued activity”. The previous year’s figures were adjusted accordingly.

Contacts for this press release
Annette Siragusano
Tel. +49 (0) 41 06/704-1960
E-Mail: annette.siragusano@comdirect.de

Ullrike Hamer
Tel. +49 (0) 41 06/704-1545
E-Mail: ullrike.hamer@comdirect.de