The deposit volume increased by 13% to €28.9bn, while the portfolio volume grew by 40% to €51.3bn. The very strong growth in the portfolio volume was chiefly due to the high net fund inflow to custody accounts. “At €6.5bn, we reached a new record for net fund inflows to custody accounts,” explains Hegemann. “More and more customers are using securities for their long-term accumulation of wealth. Here, securities savings plans and our digital asset management solution cominvest are particularly popular with newcomers.” cominvest was introduced by comdirect in 2017 and had total assets under control of approximately €580m as of the end of 2019.
Growth in net commission income and net interest income
Income in comdirect’s core B2C business increased by 9% to €363.4m (previous year: €334.3m). The main source of income was net commission income, which exceeded the previous year’s level (€206.3m) by 6% at €219.7m. The number of orders executed in 2019 amounted to 24.4m, which was 11% higher than in the previous year (21.9m). Hegemann comments: “The number of trades is an important income driver and it reached a new record in 2019. This resulted from increased trading activity, partly due to steady growth in securities savings plans, combined with a higher customer base.”
Net interest income after provisions for possible loan losses rose by 6% from €117.0m in the previous year to €123.5m despite the still clearly negative interest environment. This was particularly attributable to increases in the credit volume and optimised deposit modelling. Other income climbed from €11.0m in the previous year to €20.2m.
Administrative expenses went up by 3% – a slower rate in comparison to the income performance – from €279.6m in the previous year to €287.9m, essentially as a result of growth. In addition to higher staff costs, mandatory contributions for the deposit insurance schemes also climbed once more. The higher depreciation was mainly due to the first-time application of amended accounting provisions (IFRS 16). The fact that other administrative expenses decreased at the same time is also thanks to the bank’s improved scalability. The reasons for this are further modernisation of the IT infrastructure and the digitalisation and optimisation of additional work processes along the customer interface. The latest example is the option for customers to carry out simple services for themselves – such as cancelling a VISA card – quickly and directly in the voice dialogue system. “Services like this create a better customer experience, as simple matters can be handled more quickly while on the other hand our customer advisors gain time for more complex activities in contact with customers,” says Hegemann.
Good result in core business despite continued high investment
comdirect posted a good pre-tax profit of €75.5m (previous year: €54.7m) in its core business (from continued activities) despite continued high investment in growth. The contribution to earnings from discontinued activities, including the gain on the disposal of ebase to FNZ Group in mid-July 2019, was €115.1m before tax. comdirect group’s pre-tax profit thus amounted to a record figure of €190.6m in total (previous year: €70.7m), clearly achieving the profit target which was raised to more than €185m before tax in October 2019.
Increased dividend of 35 cents per share
comdirect group’s profit after tax amounted to €164.1m as against €50.4m in the previous year. The dividend proposal to the Annual General Meeting is 35 cents per share (previous year: 25 cents).
Smart financial companion bundles offers relating to finance
As a smart financial companion, comdirect supplements its banking and brokerage services with a platform for other financial topics for its customers. “Many people don’t particularly like dealing with their finances. We want to make it possible to handle all financial topics easily and conveniently, at any time and any place – with digital and smart solutions,” says Hegemann. In addition to banking, brokerage and home loans, this has also included insurance since the end of last year. Customers can use a new portal to both compare and manage insurance services. comdirect’s cooperation partner is JDC, a leading pool of brokers in Germany. Another innovation is the intelligent savings assistant in cooperation with the fintech OptioPay, which automatically gives users individual savings tips and bonus vouchers from traders based on their account transactions.
Merger of comdirect with Commerzbank announced
At the end of September 2019, Commerzbank announced that comdirect was to be fully integrated into Commerzbank. After acquiring the share package of the institutional investor Petrus Advisers Ltd., Commerzbank holds more than 90% of the shares in comdirect. Commerzbank has thus reached the necessary shareholding threshold for a squeeze-out in accordance with merger law. As part of the planned squeeze-out, comdirect shareholders will receive a cash settlement for their shares. The amount of the cash settlement will be announced ahead of the Annual General Meeting to be held on 5 May.
The full annual report for 2019 will be published on 20 March 2020. The figures presented here are unaudited.
|in €k||2018||2019||2019 vs. 2018|
|Net interest income after provisions||116,967||123,534||5.6 %|
|Net commission income||206,320||219,716||6.5 %|
|Other income||10,977||20,191||83.9 %|
|Administrative expenses||279,586||287,895||3.0 %|
|Pre-tax profit from continued activities||54,678||75,546||38.2 %|
|Pre-tax profit from discontinued activities||16,045||115,056||617.1 %|
|Pre-tax consolidated profit||70,723||190,602||169.5 %|
|Consolidated net profit||50,369||164,139||225.9 %|