News and financial reports

Baader Bank reports further growth in nine-month period and slightly positive earnings in the third quarter

All data is based on unaudited consolidated figures

In the first nine months of the current financial year, Baader Bank achieved Group earnings before taxes of EUR 12.0 million, representing a modest positive contribution for the third quarter of EUR 1.0 million before tax.

Net commission income for the nine-month period was EUR 12.1 million, up 14% compared to the same period of the previous year (9M 2021: EUR 10.6 million) despite a competitive market. The stock market environment, which remained challenging, shaped the securities trading business in the current year. In particular, low stock market turnover was experienced in the past quarter. In addition, the directionless activities of trading participants were a challenge for market makers. The Group's net trading result for the reporting period was EUR 90.1 million, a decrease of around 39% compared to the same period of the exceptional previous year (9M 2021: EUR 147.1 million). In keeping with this result, the allocation to the fund for general banking risks amounts to EUR 9.0 million (9M 2021: EUR 18.4 million).¹

The positive contributions to earnings made by the three subsidiaries of Baader Bank Group — the Swiss Baader Helvea Group, Baader & Heins Capital Management AG and the Selan Group — all contributed to the Group's nine-month result.

Growth in the European B2B platform business and expanded product range

Baader Bank's account and securities account business continued to grow over the nine-month period. Despite uncertainties in the market, the Group's account volume has increased by 21 % to EUR 14.9 billion since the start of the year (31 December 2021: EUR 12.3 billion). With a total of 772,000 securities accounts, the number has now increased by 54 % since the start of the year (31 December 2021: 502,000 securities accounts).

Growth is being supported not only by the onboarding of new B2B partners onto the Baader Bank platform but also by product innovations. European B2B partners joined the market in the third quarter, for instance, and 24/7 crypto-trading was included in the product range, including as part of a B2B collaboration.

In addition, the Lombard lending business for professional clients was expanded in the third quarter in collaboration with a B2B platform partner. These options are now also offered as product extensions in the B2B2C business and represent an important diversification component given current interest rate development. Intraday loans and direct debit were also created as complementary products from existing partnerships. The latter optimises the user experience for neobroker users, who receive new trading credits in real time without having to leave the mobile application. The US trading time was also extended to 2 am in order to optimise the offering for B2B clients.

In the capital market business, Baader Bank acted in the third quarter as sole global coordinator and sole bookrunner with a capital increase of EUR 80 million as part of the strategic partnership between Heidelberg Pharma AG and Huadong Medicine Co. Ltd.

Operating income shaped by challenging environment in third quarter

In conjunction with the lower trading result, Group revenue totalled EUR 123.0 million, down 28 % on the same period in the previous year (9M 2021: EUR 171.7 million). As expected, current income and net interest income are in the positive range at EUR 1.3 million. It is expected that this trend will further intensify by the end of the year and will benefit from global interest rate trends.

Sales revenues generated by the wind farm reached a record level of EUR 16.4 million in the nine-month period for 2022 (9M 2021: EUR 8.5 million).

Investment in employees, innovation, and IT infrastructure continues

In the nine-month period of 2022, total expenses were reduced in line with the overall trend, falling by around 10 % to EUR 111.0 million (9M 2021: EUR 122.7 million) compared with the same period of the previous year. While the number of employees continued to increase moderately, personnel expenses were reduced by 16 % to EUR 48.0 million compared with the same period of the previous year (9M 2021: EUR 57.3 million). As at 30 September 2022, the Group had 490 employees (in full-time equivalents) (31 December 2021: 448).

Other administrative expenses and other operating expenses increased to EUR 48.4 million, which is explained largely by further investments in the IT infrastructure in order to optimise platform functionality (9M 2021: EUR 38.6 million). In addition, targeted projects for product innovations continue to progress.

Solid capitalisation as a basis for growth and further organisational optimization 

In the current financial year, the Federal Financial Supervisory Authority (BaFin) conducted a special audit at Baader Bank pursuant to Section 44 German banking act (Kreditwesengesetz). As a result, the audit identified shortcomings in the operational business practices of Baader Bank. Accordingly, a capital surcharge for Baader Bank is to be issued, which will not require a capital measure, due to the organisation's solid and comfortable capital position. Baader Bank has already taken the necessary measures to comply with the audit findings within the specified time frame. Among other things, adjustments to the organisational structure of the internal control units have already been implemented. In addition, with a CET 1 ratio of 23.6 %, Baader Bank is very well capitalized, so future growth efforts are adequately secured by equity capital.

As at 30 September 2022, Baader Bank's total assets had increased by around 40 % compared to the end of the previous financial year, growing to EUR 2.6 billion (31 December 2021: EUR 1.8 billion). Earnings per share stand at EUR 0.18 (9M 2021: EUR 0.85).

Earnings expectations adjusted and market recovery expected in fourth quarter

Should there be a revival of the market in the fourth quarter, the Board of Directors of Baader Bank expects a modest positive pre-tax result for the final quarter of 2022. Earnings before taxes are consequently expected to be between EUR 12.0 million and EUR 15.0 million for the year as a whole. It should be noted that the Board of Directors believes that given unforeseeable and external factors, reliable forecasts of business development can only be made subject to certain limitations.

The focus of business activities will be on medium- and long-term strategic goals for the remainder of the financial year. Baader Bank has positioned itself as one of the leading partners for securities and banking services in Europe. It is a professional partner and operator of a platform offering market-leading technology and processes. The foundations for the planned further growth are therefore in place.

In addition to solid 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 its solid capital and liquidity base, even high trading volumes can be handled reliably during particularly volatile market phases. This value proposition underlines Baader Bank's status as a high-performance banking organisation.

Overview of key figures – 9M 2022 ²
All figures are preliminary and unaudited

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 inquiries:

Marlene Constanze Hartz

Senior Manager

Group Communication

T +49 89 5150 1013

marlene.hartz@baaderbank.de 

Baader Bank AG

Weihenstephaner Straße 4

85716 Unterschleissheim, Germany

https://www.baaderbank.de