Baader Bank records positive result in the first half of 2022, with growth in the B2B business on the European market

All data is based on provisional and unaudited consolidated figures

 

For the first half of 2022, Baader Bank recorded earnings before taxes of EUR 11.0 million within the Group. The 5.2 % increase in commission income amounted to a total of EUR 56.0 million, illustrating the growth trajectory in new business. However, the difficult market environment impacted trading income, which was moderate at EUR 68.7 million (HY1 2021: EUR 115.0 million). In the first half of 2022, EUR 8.7 million was allocated to the fund for general banking risks (HY1 2021: EUR 18.4 million).¹

 

The positive contributions to earnings made by the three subsidiaries of the Baader Bank Group – the Swiss Baader Helvea Group, Baader & Heins Capital Management AG and the Selan Group – bolstered the Group's half-year results.

 

Further growth in the B2B platform business with a focus on European markets

 

Baader Bank's account and custody business continued to record strong growth. Despite market fluctuations, the Group's volume of deposits under management rose by 14 % to a total of EUR 14 billion (31/12/2021: EUR 12.3 billion). (ETF) savings plan offers in particular attracted a great deal of interest from private investors. The number of securities accounts increased by a further 39 % since the beginning of the year, totalling around 700,000 by the end of the first half of 2022 (31/12/2021: 502,000 securities accounts).

 

In addition to the constant acquisition of new B2B partners, the development of European markets played a particularly important role in this. In France, Italy, Spain and Poland, corresponding B2B partnerships are already in the process of being implemented. Baader Bank's strategic orientation aims to enable cost-effective neo-broker models beyond the GSA region, with Baader Bank acting as a platform and positioned as one of the leading partners for securities and banking services in Europe.

 

Challenging Market Making environment characterises earnings development

 

Trading income was significantly influenced by a strong first quarter, followed by a very challenging environment for market makers in the second quarter in particular. This was due to weak economic growth, supplemented by global fears of a recession and sky-high inflation as well as ongoing uncertainties in the context of the Russia-Ukraine conflict and the associated impending energy crisis.

 

In addition to fluctuating volatility, comparatively stable trading volumes – albeit slightly lower in second quarter – shaped the environment. However, the activities of the trading participants lacked direction in Q2, which presented the biggest challenge for market makers.

 

Operating earnings dominated by directionless trading in the second quarter

 

In line with the development of the net trading result, the Group's total earnings of EUR 84.8 million were around          37 % lower compared to the same period in the previous year, which recorded a very strong performance (HY1 2021: EUR 135.6 million).

 

Net commission income amounted to a total of EUR 8.6 million (HY1 2021: EUR 9.7 million) and was impacted structurally by trade-related commission expenses. Commission expenses rose slightly due to the increase in business volume.

 

Current income and interest income approached positive territory in the first half of 2022, amounting to EUR -0.1 million. It is expected that this trend will be consolidated over the course of the year.

 

 

 

Investments in employees, IT infrastructure and innovation consistently sustained

 

Total expenses were reduced in the first half of 2022 in line with the overall development and also decreased compared with the first half of the previous year. They amount to a total of EUR 73.8 million (HY1 2021: EUR 91.8 million). Despite the moderate increase in the number of employees, personnel expenses fell by 23 % to EUR 32.7 million compared with the same period in the previous year.

 

Other administrative expenses and other operating expenses increased by 22 % to EUR 31.3 million. This increase is mainly due to further investments in IT infrastructure to optimise platform functionalities.

 

As at 30/06/2022, the total number of Group employees (in full-time equivalents) was 480 (31/12/2021: 448).

 

Strong capitalization supports growth path

 

As at 30/06/2022, Baader Bank's total assets increased by around 32 % compared to the end of the previous financial year, growing to EUR 2,4 billion (31/12/2021: EUR 1,8 billion). As a result of the retention recognized in the first quarter, Baader Bank continues to have a high CET1 ration (the Common Equity Tier 1 ratio) of 21.13 % (31/12/2021: 22.1%).

 

With increasing equity and the further growth in total assets, Baader Bank’s capital base remains strong, ensuring that future growth ambitions are adequately supported by equity. Earnings per share amounted to EUR 0.12 (HY1 2021: EUR 0.79). On 7 July 2022, the shareholders' meeting approved a dividend payment of EUR 0.35 per share with dividend rights for the 2021 financial year.

 

Uncertainty expected to ease in the second half of the year

 

In the second half of 2022, the Bank's business activities will focus on the medium- and long-term strategic goals. Baader Bank has positioned itself as one of the leading partners for securities and banking services in Europe and accordingly as a quality provider as well as a competent partner and operator of a leading platform in terms of its technology and processes. In doing so, the prerequisites for the planned growth track have been met.

 

In addition to strong capital resources, the powerful IT and process infrastructure guarantees reliable delivery capabilities, cementing Baader Bank's position as a resilient partner in the global capital market environment.

 

Thanks to a solid capital and liquidity base, continued high trading volumes can reliably be handled, even during particularly volatile market phases. This value proposition represents a new type of banking – high performance banking.

 

Assuming that markets normalize in the second half of the year, the Board of Directors continues to adhere to the forecast announced at the beginning of the year. For the remainder of the year, the Board of Directors anticipates a rather weak market development in the third quarter due to seasonal factors and finally a reviving market impulse in the fourth quarter. It should be noted that, in view of unpredictable, exogenous factors, the Board of Directors believes that reliable forecasts of business performance can only be made with certain constraints.

 

 

 

 

 

 

Overview of key figures – 1st half-year 2022 ^²
All figures are preliminary and unaudited

 

BAADER BANK GROUP Key P&L figures	1st half-year 2022 EUR mn	1st half-year 2021 EUR mn	Change   in %
Income	84.8	135.6	-37.4
Of which
Net interest income and current income	-0.1	-0.5	87.3
Net commission income	8.6	9.7	-10.5
From commission revenue	56.0	53.2	5.2
Net trading income	68.7	115.1	-40.3
Revenue	5.2	5.7	-8.7
Other income	2.3	5.6	-58.2
Expenses	-73.8	-91.8	-19.6
Of which
Personnel expenses	-32.7	-42.3	-22.8
Other administrative expenses and other operating expenses	-31.3	-25.5	22.4
Amortisation and depreciation on intangible assets and property, plant and equipment	-5.0	-4.2	19.6
Other amortisation and depreciation/Risk provision	3.8	-1.4	> 100
of which write-downs/write-ups of loans and advances and certain securities as well as additions to provisions in lending business	3.8	-1.4	> 100
Additions to the fund for general banking risks	-8.7	-18.4	-52.7
Earnings before tax (EBT)	11.0	43.8	-74.9
Operating result³	14.6	59.4	-75.5

 

BAADER BANK GROUP Key balance sheet figures		30/06/2022 EUR mn	31/12/2021 EUR mn	Change in %
Total assets		2,401.9	1,819.7	32.0
Common Equity Tier 1 ratio (CET 1)		21.13 %	22.1 %	-

 

 

¹  The transfer to the fund for general banking risks also takes into account the statutory transfer to the fund for general banking risks in accordance with Section 340e HGB at the end of the year.                

²  Financial figures of the Baader Bank Group; all figures preliminary and unaudited; reported in accordance with the provisions of the German Commercial Code (Handelsgesetzbuch - HGB).

³  Gross profit (= net interest income + current income + net commission income and trading income + revenues) less personnel expenses and other administrative expenses as well as amortisation/depreciation on intangible assets and property, plant and equipment.

 

 

 

For further information and media enquiries:

 

Florian E. Schopf

Managing Director

Company Spokesperson

Head of Group Strategy & Communication

 

T +49 89 5150 1013

M +49 160 7188826

 

[email protected]

https://www.baaderbank.de

 

Baader Bank AG

Weihenstephaner Strasse 4

85716 Unterschleissheim, Germany