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Baader Bank continued on its course of strong profitability and earnings potential in the second quarter of 2020 - pre-tax profits increased to EUR 24.0 million and operating result to EUR 51.9 million for the first half of 2020

DGAP-News: Baader Bank AG / Key word(s): Half Year Results
30.07.2020 / 08:00
The issuer is solely responsible for the content of this announcement.

Press release:

Baader Bank continued on its course of strong profitability and earnings potential in the second quarter of 2020 - pre-tax profits increased to EUR 24.0 million and operating result to EUR 51.9 million for the first half of 2020

All figures preliminary and unaudited

Unterschleissheim, 30 July 2020: The second quarter of 2020 saw Baader Bank continue to build on the performance achieved in the first quarter of the year. Consolidated net income before tax for the first quarter was at EUR 10.7 million, but the second quarter outperformed this figure at EUR 13.3 million. This resulted in cumulative consolidated net income before tax of EUR 24.0 million for the first half of 2020 (first half of 2019: EUR -31 thousand). Some EUR 15.0 million has already been allocated to the fund for general banking risks* (first half of 2019: EUR 0.00). Earnings per share amounted to EUR 0.39 (first half of 2019: EUR -0.01). The operating result increased to EUR 51.9 million (first half of 2019: EUR -1.8 million).

The main drivers are the market developments in securities trading, where the considerable volatility and high trading volumes continued in the second quarter of 2020, as well as the impact on earnings and costs associated with the strategic realignment at Baader Bank. Together, these drivers have led to total consolidated earnings of EUR 112.0 million in the first half of 2020. This represents an increase of 130.0% on the first half of 2019 (EUR 48.7 million).

All three subsidiaries of the Baader Bank Group - Swiss companies Baader Helvea Group and Baader & Heins Capital Management AG as well as Selan Group - delivered positive financial results that outperformed expectations partially and thus contributed to the Group's half-year results.

Significant increase in the Market Making earnings contribution alongside market success with new and existing customer business

At EUR 84.7 million, the trading income of Baader Bank almost quadrupled in the first half of 2020 compared with the same period of the previous year (first half of 2019: EUR 23.2 million). This disproportionately high increase is due to trading volumes that have at times reached historic highs and to the impact that the strategic measures implemented. These measures are driving the long-term structural development of the trading set-up and the quality of trading in Market Making.

Net commission income increased by 25.4% or EUR 4.5 million by half-year comparison, to EUR 22.2 million (first half of 2019: EUR million 17.7). Net commission income increased considerably again in the traditional brokerage business of Baader Bank and Swiss company Baader Helvea, fuelled by further consolidation of international customer relationships and the resulting increase in market share.

In Banking Services - the Account and Custody business - Baader Bank continues to enjoy the growth rates seen in previous years. As at the end of the first half of 2020, custody account volumes had increased by 41% to EUR 5.5 billion and the number of custody accounts had risen by a further 129% to 73,080 (in each case compared to the figures as at 30/06/2019). This increase is due both to the acquisition of additional online and traditional asset managers as well as to the launch of new, fee-optimised brokerage offerings in which Baader Bank is a cooperation partner. As at 30/06/2020, a total of 74 asset managers are using Baader Bank services in this segment. The figure at the end of the first half of 2019 was 64.

In Asset Management Services, the number of fund mandates managed has increased from 58 at the start of the year to 60 as at the end of the first half of 2020. In the same period, volumes in the funds declined slightly, from EUR 7.1 billion to EUR 6.7 billion, due primarily to outflows from funds. The number of trading desk mandates has increased from 53 as at 31/12/2019 to 55 as at the end of the first half of 2020.

Despite the IPO market remaining subdued, Baader Bank's Equity Capital Markets team implemented and successfully placed the first transactions in 2020. Continuing the strong performance seen in 2019, Baader Bank's Special Execution division, part of the Capital Markets segment, is also following a record course in 2020.

The Baader Bank Group's revenues of EUR 5.6 million in the first half of 2020 are attributable entirely to the Selan Group and the feed-in remuneration for electricity generated by the wind farm. The figure is down by comparison with the EUR 6.2 million achieved in the previous year.

Baader Bank generated net interest income of EUR -1.7 million in the first half of 2020, which is down on the previous year's level of EUR -0.6 million. Current income has also declined slightly, sitting at EUR 0.2 million (first half of 2019: EUR 0.4 million).

Variable personnel costs increase in parallel with the increase in earnings; efficiency confirmed with current cost positions

The Group's total administrative expenses amount to EUR 54.3 million, which is an increase of 22.4% or EUR 9.9 million on the previous year (first half of 2019: EUR 44.4 million). The increase is due primarily to the rise in variable personnel expenses, which reflect the very strong earnings. Current personnel costs have even fallen slightly. At EUR 21.0 million, other administrative expenses for the first half of 2020 are consistent with the previous year (first half of 2019: EUR 20.9 million), underlining Baader Bank's operational efficiency and cost control.

Depreciation, amortisation and write-downs on intangible assets and property, plant and equipment stem entirely (EUR 4.0 million) from scheduled depreciation. This is essentially a decline of 10.0% or EUR 0.4 million, driven by the total depreciation of individual order books and goodwill in 2019 (first half of 2019: EUR 4.4 million).

Total assets as at 30/06/2020 amount to EUR 669.1 million, equating to an 8.4% increased on the figure achieved as at the balance sheet date of 31/12/2019. As at 30/06/2020, Baader Bank has balance sheet equity of EUR 92.6 million (31/12/2019: EUR 74.8 million). The balance sheet equity ratio is 13.8% (31/12/2019: 12.1%) and the modified equity ratio is 17.8% (previous year: 14.0%).

As at 30/06/2020, the Group had 395 employees (30/06/2019: 409).

Outlook

In addition to further optimising and consolidating the trading business, which demonstrated its enormous earnings potential in sales increases in the markets in the first half of 2020, it is of central strategic importance to Baader Bank that the customer business be successfully expanded. The successes achieved in the first half of the current year show that Baader Bank is on a very positive trajectory.

Looking ahead to the result for 2020 as whole, it is important to note that it is not possible to predict the impact of the continuing COVID-19 pandemic on global economies and international financial markets. As such, it is not feasible to extrapolate market, sales and earnings developments in the first half of 2020 to the entire financial year for Baader Bank. The Baader Bank Board of Directors is of the opinion that the second half of 2020 will bring the continued normalisation of trading activities among investors and volatility levels in the financial markets. Looking at the 2020 financial year as a whole and based on the first half of the year, the Board of Directors expects a significantly positive operating result. In addition, the Board of Directors expects to be able to pay a dividend to the Baader Bank shareholders for the current financial year**.

* The allocation to the fund for general banking risks also takes account of the statutory allocation of funds for general banking risks in accordance with Section 340e) German Commercial Code [HGB] as at year end.

** Subject to appropriate approvals from committees and bodies and applicable supervisory provisions or other legal provisions.

 


Overview of key figures
All figures are preliminary and unaudited

BAADER BANK GROUP
Key P&L figures
01/01-30/06/2020 01/01-30/06/2019 Delta
  EUR'000 EUR'000 %
Income 112,025 48.665 >100.0
of which net interest income and current income -1,505 -154 >100.0
of which net commission income 22,175 17.727 25.1
of which net trading income 84,690 23.220 >100.0
of which revenue 5,606 6.199 -9.6
of which other income 1,036 1.642 -36.9
of which net income from interests in associates 23 31 -25.8
Expenses -87,988 -48.696 80.7
of which personnel expenses -33,346 -23.455 42.2
of which administrative expenses and other operating expenses -22,691 -22.218 2.1
Depreciation, amortisation and write-downs on intangible assets and property, plant and equipment -3,981 -4.422 -10.0
of which other amortisation and depreciation/risk provision -12,970 1.399 -
Depreciation, amortisation and write-downs on receivables and certain securities as well as allocations for provisions in lending business -12,970 3.284 -
Depreciation, amortisation and write-downs on equity investments, shares in affiliates and securities treated as assets 0 -1.885 -
Expenses from the addition of the fund for general banking risks -15,000 0 -
       
Earnings before taxes (EBT) 24,037 -31 -
       
Operating result 51,891 -1.818 -
 
BAADER BANK GROUP
Key balance sheet figures
30/06/2020
EUR'000
31/12/2019
EUR'000
Delta %
Total Assets 669,121 617,375 8,4
Balance Sheet Equity Ratio 13.8% 12.1% -
 

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
https://www.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: https://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



30.07.2020 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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