News and financial reports

Baader Bank continues strong growth in first quarter of 2021

All figures are preliminary and unaudited

Baader Bank's positioning as a platform provider in securities trading with an extremely sound and future-oriented integrated business model is underpinning further growth this year following a very successful 2020. The Bank closed the first quarter of 2021 with earnings before tax of EUR 32.8 million (Q1 2020: EUR 10.7 million), which equates to triple the earnings generated in the first quarter of 2020 and around 60% of the total earnings for 2020, even at this early stage in the year.

Sustained customer growth in the cooperation business, above-average trading activity from private investors and institutional investors

The excellent quarterly results are supported largely by the earnings contribution of Baader Bank AG and in particular by the considerable and further increasing trading activities of private and institutional investors, plus the continuing growth of the fintech cooperation business. This has seen the number of securities deposits held by Baader Bank increase to around 240,000 (Q1 2020: 60,000), with corresponding effects on the number of trades and on trading volumes. The number of custody accounts has already almost doubled compared to the end of 2020.

The result is further supported by the above-plan contributions from the subsidiaries Baader Helvea AG and Baader & Heins Capital Management AG. The result of the wind farm in Croatia is on track for the first quarter of 2021, despite lower wind levels.

Total income increased by 50% to EUR 91.8 million (Q1 2020: EUR 61.0 million), driven by a significant increase in net trading income to EUR 76.8 million (Q1 2020: EUR 43.4 million) and in commission revenues to EUR 30.9 million (Q1 2020: EUR 27.8 million). The high trading volumes triggered commission expenses, which, for structural reasons, lead to a lower overall net commission income of EUR 8.4 million (Q1 2020: EUR 14.6 million). The operating result is an impressive EUR 49.1 million (Q1 2020: EUR 36.6 million).

Net interest income is shaped by the low interest rate environment and, like current income, is not of material significance to the Group. The total for the first quarter of 2021 is EUR -0.3 million (Q1 2020: EUR -0.6 million). Revenues fell slightly to EUR 3.1 million (Q1 2020: EUR 3.2 million). Other income increased to EUR 3.8 million (Q1 2020: EUR 0.4 million).

Constant running costs through economies of scale, personnel costs in sync with earnings and growth

At the end of the first quarter of 2021, total expenses amounted to EUR 58.9 million. The increase was disproportionately low against the growth in income and earnings at 17% (Q1 2020: EUR 50.4 million). This is primarily due to the higher variable personnel costs, which are in sync with the further increase in earnings. Personnel expenses are up overall for the first quarter, to EUR 24.9 million (Q1 2020: EUR 11.3 million). Other administrative expenses remain almost unchanged at EUR 12.6 million (Q1 2020: EUR 11.9 million) due to considerable economies of scale, likewise, the costs for depreciation and amortisation of intangible assets and property, plant and equipment at EUR 1.96 million (Q1 2020: EUR 1.97 million).

Expenses for other depreciation, amortisation and for risk provision are down significantly, by 89%. The figure for the first quarter of 2021 is EUR 1.1 million (Q1 2020: EUR 10.2 million). This reflects the fact that significant risk positions have been reduced in the past. The quarterly result also includes expenses in the amount of EUR 18.4 million for the transfer to the fund for general banking risks.¹

As of 31 March 2021, the Group's total number of employees (in full-time equivalents) is 410 (Q1 2020: 382).

Capital strength extended, balance sheet total exceeds EUR 1.0 billion for first time

The growth is also reflected in the expansion of the balance sheet total. At EUR 1.15 billion as at the reporting date of 31 March 2021 (31 December 2020: EUR 888.6 million) and with a balance sheet equity ratio of 12.8% (31 December 2020: 13.6%), Baader Bank is thus underpinning its capital strength, which also supports future growth and investment phases. At the end of March 2021, the Common Equity Tier 1 ratio (CET 1) was 18.7% (31 December 2020: 14.6%).

Outlook for 2021

Thanks to the solid capital and liquidity base, the consistently high trading volumes can be handled reliably even during particularly volatile market phases. With its powerful, fail-safe IT and process infrastructure, Baader Bank is a resilient partner in the global capital market environment and in securities-related trading and banking services.

An excellent market position in on- and off-exchange Market Making in Germany as well as the successful cooperation business with fintechs such as neo-brokers and digital asset managers has allowed Baader Bank to develop a highly profitable, integrated business model that is unique and can tap into the market and earnings potential of the newly created trading culture, in Germany in particular. This is accompanied by a moderate expansion of business in the traditional business divisions. The outstanding start to 2021 shows that focusing on this business model is positioning Baader Bank well for future income and earnings growth.

If framework conditions remain consistent as 2021 continues, the Board of Directors expects that trading activity from private investors and institutional investors will continue to be above average, that the cooperation business will grow significantly and that uptake of account and custody account services will remain strong. So it expects earnings before tax at Group level for this financial year to exceed the 2020 result of EUR 56.0 million. However, trends from the first quarter of 2021 cannot necessarily be extrapolated to the year as a whole.

Overview of key figures²
 

Reported in accordance with the provisions of the German Commercial Code (HGB).

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

Tel. +49 89 5150 1013
Mobile +49 160 7188826

florian.schopf@baaderbank.de
https://www.baaderbank.de

Baader Bank AG
Weihenstephaner Strasse 4
85716 Unterschleissheim, Germany