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Nine-month earnings before taxes of the Baader Bank Group at EUR -1.9 million in 2019 and therefore up 73% compared to the previous year's period

DGAP-News: Baader Bank AG / Key word(s): 9 Month figures

31.10.2019 / 09:00
The issuer is solely responsible for the content of this announcement.


Press release:

Nine-month earnings before taxes of the Baader Bank Group at EUR -1.9 million in 2019 and therefore up 73% compared to the previous year's period

Unterschleissheim, 31 October 2019: In a very difficult market environment for banks and financial and securities service providers, Baader Bank managed to achieve total income of EUR 74.7 million in the nine months of 2019, which is virtually on par with the previous year's level (EUR 74.5 million; +0.3%). This is mainly attributable to strong market positions in the individual business lines and to growth in client business. With significantly lower costs and depreciation, Baader Bank therefore posted earnings before taxes amounting to EUR -1.9 million, which is 73% higher than in the previous year's period (EUR -7.1 million). The EBT is satisfactory in view of the market environment. Strategic adjustment, portfolio review and efficiency programmes are producing the desired effect.

Growth in client business, lower commission income, higher net trade income

The third quarter of 2019 was also characterised by growth in the security account business. The number of accounts and securities accounts held by Baader Bank increased by 55% to 38,000 (31/12/2018 - 30/09/2019). This is associated with an increase in deposits of 31% in the same period from EUR 3.5 billion to EUR 4.6 billion. In the Asset Management Services business line, in which Baader Bank provides financial portfolio management and ancillary services on behalf of investment companies, the managed volume decreased slightly from EUR 7.6 billion to EUR 6.9 billion (31/12/2018 - 30/09/2019) due to cash outflows in individual funds. By expanding its banking and asset management services for asset managers and fund providers, Baader Bank is reducing its earnings volatility because of its reliance on financial and capital markets, and is successfully building up predictable existing client business.

Despite strong growth in the nine-month period of 2019, commissions receivable declined by around 13.0% or EUR 3.7 million compared to the previous year, from EUR 28.9 million to EUR 25.2 million. This decline is a result of lower commission income from the subsidiaries Baader Helvea and Baader & Heins Capital Management, as well as the omission of the contribution to earnings by the former subsidiary Conservative Concept Portfolio Management, which is no longer included in the Group consolidation since the decrease in ownership. The lower commission income from the capital market business is in stark contrast to the pleasing record revenues in Baader Bank's traditional Special Execution. Business in institutional Equity Brokerage developed positively, and revenues and commissions increased compared to the same period in 2018.

Compared to the previous year, net trade income increased by EUR 1.0 million or 3.0% from EUR 33.6 million to EUR 34.6 million. The improvement in earnings is mainly due to an improved business situation in bond trading and Multi Asset Brokerage, revenues and market share were gained. In addition, the newly established business line called Market Making in open order books is contributing positively.

Revenues for the nine months of 2019 are exclusively attributable to the Selan Group. They also increased by 2.4% from EUR 9.5 million to EUR 9.7 million.

At the end of the nine-month period in 2019, net interest income of the Baader Bank Group was slightly below the value of the previous year at EUR -0.9 million. Current income of EUR 0.6 million is EUR 0.6 million below the level posted in the same period of 2018.

Costs and regular depreciation continue to decline

A restrictive spending policy and the review of the entire cost structure have created a situation in which the expenses side of the Baader Bank Group is developing extremely well, even if this is merely a nine-month perspective. At EUR 76.6 million, cumulative total expenses are 6.1% or EUR 5.0 million below the expenses of the nine-month period in 2018 (EUR 81.6 million). At EUR 33.2 million, other management expenses for the first three quarters of 2019 were 0.5% higher than in the first three quarters of 2018 when they amounted to EUR 33.0 million. These are essentially costs incurred for the development of the new Market Making business line in open order books and significantly higher expenses for cost allocation of supervisory authorities.

With a balance sheet equity ratio of 11.1% as at 30/09/2019 (31/12/2018: 10.7%) and total assets of EUR 654.8 million as at the reporting date, Baader Bank remains well capitalised. The total supervisory capital ratio stands at 12.9% as at 30/09/2019 (31/12/2018: 13.6%).

The number of employees fell from 447 on 01/10/2018 to 403 on 01/10/2019.

Outlook

In comparison to the previous year, Baader Bank is continuing to develop positively, driven by strategic adjustment in the business lines and a stringent cost culture. In addition to significant market successes and an expansion of its competitive positions, cost optimisation measures are supporting this development.

However, the market environment remains extremely challenging in economic, political and regulatory terms. For this reason, Baader Bank still expects to post a negative result for the financial year 2019.

Overview of key figures

Baader Bank Group
Income Statement
01/01-30/09/2019 01/01-30/09/2018 Delta
  EUR'000 EUR'000 %
Income 74,698 74,479 0.3%
of which net interest income and current income -294 503 -
of which net commission income 25,172 28,918 -13.0%
of which net trading income 34,623 33,601 3.0%
of which revenue 9,694 9,468 2.4%
of which other income 5,451 1,917 >100%
of which profit/loss from shares in associated companies 52 72 -27.8%
Expenses -76,643 -81,609 -6.1%
of which personnel expenses -34,930 -37,738 -7.4%
of which other administrative expenses and other operating expenses -33,214 -33,047 0.5%
of which amortisation and depreciation and impairment -8,499 -10,824 -21.5%
Earnings before taxes (EBT) -1,945 -7,130 72.7%
       
Operating result -4,002 -4,934 18.9%
 

 

Baader Bank Group
Balance Sheet
30/09/2019
EUR'000
31/12/2018
EUR'000
Delta %
Total Assets 654,836 713,190 -8.2
Balance Sheet Equity Ratio 11.1% 10.7% -
Supervisory Capital Ratio 12.9% 13.6% -
 

In accordance with the provisions of the German Commercial Code (HGB)

Further information is available from:

Baader Bank AG
Weihenstephaner Strasse 4
85716 Unterschleissheim, Germany

Florian E. Schopf
Company Spokesperson
Managing Director
Head of Group Strategy & Communication

T +49 89 5150 1013
M +49 160 718 88 26
florian.schopf@baaderbank.de

About Baader Bank AG:

Baader Bank is the bank for the capital market. It allows its clients to access international capital markets and to invest in financial products in an effective, efficient and secure manner. The bank uses the latest innovations in the banking industry for products, processes and technology to generate added value for its clients. As a family-run, full-service bank with its headquarters in Unterschleissheim near Munich with around 400 employees, it is active in the business lines of Market Making, Capital Markets, Multi Asset Brokerage, Asset Management Services, Banking Services and Research.

Further information can also be found online:

Company website: www.baaderbank.de
Twitter: https://twitter.com/Baader_Bank
LinkedIn: https://www.linkedin.com/company/98924/
Xing: https://www.xing.com/companies/baaderbankag?sc_o=da980_e
YouTube: https://www.youtube.com/channel/UCDJ7PGKWwtafrPSFDI3nmsQ



31.10.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
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