1 Annual Report 2009
2 > Key figures of comdirect bank group Change in % comdirect group as of * Customers number 2,150,563 2,078, Custody accounts number 1,419,037 1,427, Executed orders number 14,661,234 17,682, Total assets under custody in million 35,572 30, of which: portfolio volume in million 26,463 20, of which: deposit volume in million 9,110 10, comdirect business-to-customer (B2C)** business line as of Customers number 1,450,720 1,349, Custody accounts number 719, , Current accounts number 533, , Tagesgeld PLUS ( call money plus ) accounts number 960, , Advisory customers number 54,477 46, Executed orders number 7,319,045 9,231, Average order activity per custody account number Order volume per executed order in 4,512 4, Total assets under custody in million 22,241 20, of which: portfolio volume in million 13,158 9, of which: deposit volume in million 9,083 10, Credit volume in million comdirect business-to-business (B2B)** business line as of Customers/Custody accounts number 699, , Executed orders number 7,342,189 8,450, Total assets under custody in million 13,331 10, Earnings ratios* Net commission income in thousand 148, , Net interest income before provisions in thousand 108, , Administrative expenses in thousand 198, , Operating result in thousand 84,938 82, Pre-tax profit in thousand 75,993 82, Net profit in thousand 56,624 60, Earnings per share in Balance sheet key figures as of * Balance sheet total in million 9,785 11, Equity in million Equity ratio 1) in % Regulatory indicators under Basel II 2) as of Risk weighted assets 3) in million Eligible amount for operational risks in million Core capital in million Own funds for solvency purposes in million Own funds ratio 4) in % Relative ratios* Return on equity 5) in % Cost/income ratio 6) in % Employees figures as of 31.12* Employees number 1,155 1, Employees full-time basis number 1, , *) Previous year s figures adjusted to include contributions of ebase GmbH **) B2C: comdirect bank AG and comdirect private finance AG; B2B: ebase GmbH, excluding contributions from branch customers of Commerzbank AG 1) Equity ratio = Equity (excluding revaluation reserve) / balance sheet total 2) These figures are calculated on the basis of internal calculations; publication is voluntary and based on national implementation conversion and the figures are not reported to the Supervisory Authority 3) Risk weighted assets in accordance with Section 10c of the German Banking Act (KWG) (intragroup receivables are zero weighted) 4) Own funds ratio = own funds for solvency purposes / (risk weighted assets x eligible amounts for operational risks) 5) Return on equity = operating result / average equity (excluding revaluation reserve) in the reporting period 6) Before restructuring expenses
3 > Contents : Strong growth good result 02 Foreword by the Board of Managing Directors 03 My Plus 19 Report of the Supervisory Board 23 Group management report 24 Key developments 26 Business activities and framework parameters 31 Value-driven strategy and management system 36 Market environment 41 Business performance and earnings situation at the comdirect group 47 B2C business line 56 B2B business line 58 Financial situation and assets of the comdirect group 61 The share 64 Personnel report 66 Risk report 74 Opportunity report 76 Outlook 79 Supplementary report 80 Corporate Governance statement 88 Details in accordance with Section 315 (4) of the German Commercial Code (HGB) 89 Explanations of the Board of Managing Directors on details in accordance with Section 315 (4) of the German Commercial Code (HGB) 90 Declaration of the Board of Managing Directors on Section 312 of the German Stock Corporation Act (AktG) 91 Consolidated financial statements 94 Income statement 95 Balance sheet 96 Statement of changes in equity 97 Cash flow statement 98 Notes 148 Declaration of the Board of Managing Directors 149 Auditor s report 150 Glossary 154 Six-year overview of comdirect bank group 156 Financial calendar Contacts
4 > 2009: Strong growth good result Number of customers of comdirect group as of (in thousand) Total assets under custody of comdirect group as of (in billion) 2,079 2, , * * * excluding ebase * excluding ebase Operating result of comdirect group (in million) Dividend (in ) * * ** * excluding ebase * excluding ebase ** Dividend proposal Total income of comdirect group (in million) Administrative expenses of comdirect group (in million) * * * excluding ebase * excluding ebase
5 Through organic growth and the acquisition of ebase, in 2009 com direct achieved the strongest growth in its history. The number of customers increased by 800,000 to around 2.2 million, and assets under custody rose by 75% to 35.6bn. With 1.4 million custody accounts, the comdirect group is the clear No. 1 in online securities business. The complus programme has started well. Our current account has convinced 109,000 additional customers. 48% of customers already have 2 or more comdirect products. With our pioneering Anlageberatung PLUS investment advice service, we are establishing a new benchmark in the market. ebase, our brand for B2B business, recorded a rise in port folio volume of more than 25% to 13.3bn. Strong growth and a strong result: at 84.9m the operating result before tax was up 2.6% the previous year. The reduction in administrative expenses to less than 200m contributed to this development. Our shareholders will continue to benefit from dividend continuity and we will be proposing a distribution of 0.41 per share for 2009.
6 2 After strong growth and a good result in 2009, we are on the way to achieving new aims: to become a main bank for our customers through brokerage, banking and direct bank-type advisory services, as well as the leading B2B direct bank for our institutional partners. Michael Mandel, CEO of comdirect bank AG
7 Michael Mandel CEO Quickborn, March 2010 In 2009, the comdirect group recorded the strongest growth in the history of the bank. At the year-end, we directly and indirectly reached around 2.2 million investors in Germany, some 800 thousand more than in the previous year, and managed 1.4 million custody accounts. This growth was enhanced by a good result. Despite the unfavourable interest rate and capital market environment, the operating result stands at almost 85m, exceeding the previous year s figure. We compensated for the market-related decline in net interest and commission income with a positive result from financial investments and consistent cost management in all areas of the bank. Consequently, we are able to propose a dividend of 0.41 per share to the annual general meeting. In a year such as 2009 with one of the worst recessions for decades, this is a remarkable result. It shows that with the systems we have in place and our range of products and services, we can maintain our course in every market phase. Behind this success stands a strong team: the employees of the comdirect group. Whether the financial market crisis really is over and the recession behind us remains a matter of debate at the moment. In times such as these, gaining customer trust is a priority. This is why we are the only bank in Germany to have introduced a satisfaction guarantee for a product where competition is probably at its fiercest the current account. Anyone not satisfied and closing the account after a year of active use will receive 50. On top of that, we have redefined the particularly controversial issue of investment advice with a consistent focus on advising rather than selling, fair, system-backed advice that is both independent and non-pushy and very easy to access. We are ready to rise to the challenge, were my words at the launch of our complus programme. The two milestones already achieved the current account with satisfaction guarantee and our Anlageberatung PLUS investment advice service highlight what was meant by this: understanding customers needs, setting new standards in the market with convincing solutions, thereby attracting more and more modern investors. In 2009, we gained more than 100,000 customers. Moreover, we reached even more customers with our product offering: the number of current accounts, Tagesgeld PLUS ( call money PLUS ) accounts and custody accounts rose by 275,000. But comdirect has not only grown organically. With the acquisition of ebase, we gained around 700 thousand end customers with assets under custody of around 13bn at year-end As a result, we have not only consolidated our market leadership in online securities business, but also extended our business model with additional services for institutional partners.
8 We intend to continue our profitable growth and after five years of complus and successful implementation of our B2B strategy, we aim to achieve a result of between 150m and 170m with 3 million customers and assets under custody of 50bn in We want to achieve this through our consistent dual brand strategy for B2C direct business with modern investors (comdirect) and B2B business via financial partners (ebase). In the B2C business line, we will further improve our product and service offering and are working for example on additional direct bank-type advisory services. Consequently, we are more than honouring our claim to be a main bank a key precondition for gaining market share in banking. In online securities business, we aim to maintain our position as market leader. After expanding our fund and savings plan business in the previous year, we are focusing on new functionalities and products for ambitious and professional traders. In the B2B business line, we are strengthening the power of the Sales division in order to convince even more financial intermediaries and their end customers with our custody account solutions and services. The range of products and services is being expanded on a targeted basis to include B2B-type brokerage and banking products. The course here is clear: through ebase, our partners can use excellent products to manage their customers liquidity and the end customers receive the best of both worlds the attractive terms and conditions of a direct bank via their trusted contact while we are cultivating an additional and attractive target group through our range of products and services. The further development of comdirect as a main bank for our customers and ebase as the leading B2B direct bank is supported by optimisation of our IT architecture. Through the cooperation of comdirect and ebase at market, product and technology level, we will also leverage the earnings and cost synergies identified. However, difficult measures are also required if we are to expand our strengths in the competitive market place on a sustainable basis. At ebase, the aim in particular is to align personnel numbers in Customer Services with market requirements. In the B2C business line, after expanding our direct bank-type advisory models, we are withdrawing from local advisory services through the offices of comdirect private finance; this does not affect building finance advisory services at selected locations. We have recognised corresponding provisions for both measures. We have already achieved a great deal and the road ahead is very promising. I would like to take this opportunity to thank you as a shareholder for continuing to accompany us on this journey. Sincerely yours, CEO of comdirect bank AG
9 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 3 > My Plus 2009 did not offer banks an easy business environment. Nevertheless, comdirect achieved stronger growth in financial year 2009 than ever before. comdirect bank gained over 100,000 new private customers and at the same time successfully implemented key projects under the complus programme. 700,000 end customers were indirectly gained through the acquisition of ebase, our new force in business activities with professional financial intermediaries. Directly and indirectly we now reach around 2.2 million investors in Germany with 1.4 million custody accounts. Assets under custody in the group also reached a new record at 35.6bn at the year-end. Despite the adverse market environment, we achieved a good operating result of 84.9m and with pre-tax profit of 76.0m, we even slightly outperformed our target of 75m before tax. This achievement is essentially down to a very simple maxim: deliver real plus points and inspire customers, and you will achieve a respectable result in difficult times.
11 Fee-free current account, fee-free ec/maestro and VISA card, fee-free cash withdrawals almost anywhere in the world, feefree Tagesgeld PLUS ( call money plus ) account and a bonus of 50 after three months if the current account is actively used because our current account offers more plus points than virtually any other account it came out top in the test carried out by Stiftung Warentest in (Finanztest, issue 7/2009, in a test of 67 current accounts, 17 completely feefree). For more information, see page 14. 5
12 6 First class services, personal support, top class offering comdirect first is the special service commitment for our top clients. Regardless of this however, all our customers have access to professional tools. From analysis to custody account management, comdirect covers every requirement. As the market leader in online securities business, we believe we owe our customers this level of service. For further information on our direct and individual customer contact, see page 15.
15 Over the last years, modern online brokerage has become the standard and as market leader we play a key role in driving innovation. This is why we were again voted Online Broker of the Year in For further information on online brokerage, see page 16. 9
16 10 Our Anlageberatung PLUS investment advice service is a unique offering. Individual advice, a choice of products covering more than 3,000 securities not tied to any provider and continuous system-backed portfolio monitoring all at attractive prices with no sales commission. Anlageberatung PLUS has what it takes to set a new benchmark in investment advice. For more information on Anlageberatung PLUS, see page 16.
19 With the acquisition of ebase, comdirect has now ramped up the business with institutional partners. As a full-service pro vider, ebase supports financial service providers, asset managers, insurance companies and investment companies with innovative solutions for fund custody account management and increasingly in banking as well, thereby strengthening comdirect s business model. For more information on ebase, see page
20 14 Delivering plus points, inspiring customers Behind comdirect bank s success in what has been a challenging 2009 is one simple question that we have been asking ourselves since our foundation: if modern investors could have their dream bank, what would it be like? Essentially modern investors have one very basic wish. Whether they are direct comdirect bank customers or customers working with an institutional partner and finance professional who we reach through our B2B platform ebase, they all just want the best. In banking, for example, this means a current account that really has no account charges, with worldwide no-cost access to cash via a fee-free ec/maestro and Visa card. Naturally the offering also includes fixed-term deposit and call money products with fair terms and conditions as well as all types of savings plans. In brokerage, the bank stands for professionalism without exception. The bank gives investors and frequent traders access to a range of professional tools they can use to obtain comprehensive information and trade securities both precisely and easily. Anywhere in the world, on the stock market or OTC, twenty four hours a day. In advice, the bank is a pioneer supporting its customers with individual, transparent and product-independent advice on key issues such as finding the right building finance or securities investment. Intelligent solutions at fair terms and conditions that s what modern investors expect here. And just as they generally assume that their bank is available round the clock, they expect their everyday banking transactions to be quick, easy and secure. And they want specially trained experts who can give them support when a question crops up that cannot be answered online. At the end of the day, investors are not only looking for real plus points on all products in banking, brokerage and advice, but also for a bank that in every aspect gives them the good feeling that they are getting the very best there is. Several years ago at comdirect bank, we set out to further develop our bank from an online broker to a full-service bank and then a main bank, covering all the needs of our target group of demanding, modern investors. This development is also at the heart of our complus programme launched at the start of This programme comprises several focal areas. We intend to provide a wider range of even more attractive products that offer clear advantages and are even more closely aligned with the needs of the individual target groups. We aim to further improve accessibility, the quality of our Customer Services and our IT infrastructure. And last but not least, we intend to develop innovative advisory formats that deliver solutions for complex advisory issues with an offering that is independent, transparent and with fair terms and conditions. comdirect is the market leader in online securities business and Germany s leading direct bank for modern investors and with complus we intend to expand this position and increase the value of the comdirect group on a permanent basis. Essentially, the same also applies to ebase. We aim to enable our institutional partners in turn to give their end customers the best the market has to offer. This includes expanding the range of products for banking and asset accumulation, as well as introducing innovative solutions for custody account management. Different methods, same rationale: in the B2B business line too, we are generating growth by helping our institutional partners inspire their end customers. Our aim is clear: by 2013 we intend to directly and indirectly service at least 3 million customers within the comdirect group, with assets under custody of 50bn and achieve a pre-tax profit of between 150m and 170m. And? Are we well on the way to achieving this? Absolutely. B2C: Well on the way with the complus programme After a little over a year of complus, we can see that our programme is working well. This can be clearly seen in our key figures. In the B2C business line, we have gained over 100,000 new customers since the start of Over the same period, assets under custody have risen by around 1.9bn to a total of 22.2bn despite the adverse market conditions. It is also reflected in the fact that we have achieved a great deal in qualitative terms and reached major milestones. Attractive: new highlights in brokerage and banking Our current account with satisfaction guarantee launched in spring 2009 has started well. Hardly surprising given the many plus points: a current account, ec/maestro and VISA card, cash withdrawals from over 7,000 ATMs in Germany and over 900,000 ATMs worldwide, attractive interest rates on deposits when combined with a Tagesgeld PLUS ( call money plus ) account all fee-free for the customer. In addition, every new customer actively using their account receives 50 after three months. In a test, Stiftung Warentest rated our current account top out of 67 comparable products (Finanztest, issue 7/2009). Our Tagesgeld PLUS account, which now pays tiered interest rates according to the sum invested, also continued to be very well received.
21 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 15 Whether our customers are investing in fixed-term deposit accounts, time deposit accounts or currency investment accounts, making a one-off investment, investing via a savings plan or in a combination of the two, or investing equally in a time deposit account and selected funds as with our fest & fonds fund offering, comdirect bank now offers the perfect solution for almost any configuration. In brokerage, the range of securities savings plans was expanded by almost 150 additional products. There are now over 80 ETF index funds eligible for inclusion in savings plans and are already very popular with investors. A large number of customers were inspired by our AktivSparplan savings plan in 2009 which enables them to invest in 20 extremely attractive actively managed funds from just 25 a month without any front-end load. Direct and individual: offering customers what they want We have always placed great emphasis on understanding our customers and their needs as good as possible not just since the launch of complus. To achieve this aim, we use our meetings with customers, work together with mystery shoppers, evaluate our marketing initiatives and press relations and also build on market observations and industry surveys. We intend to further improve customer satis faction, for example through targeted offers for customers with above-average income or assets (affluent customers) as well as professional traders. This in turn will be a key lever in increasing customer assets over the next few years. Michael Mandel, born 1966, has been CEO of comdirect bank AG since March He is responsible for Business Development and Corporate Communications. Mandel is also Chairman of the Supervisory Board of Commerz Direktservice GmbH and Deputy Chairman of the Supervisory Board of ebase and comdirect private finance AG. He is also the Deputy Chairman of the Exchange Council of the Frankfurt Stock Exchange and Chairman of the Executive Board of the Numeracy Foundation (Stiftung Rechnen). My Plus: Focusing on this goal, we also launched a series of initiatives which will enhance our product spectrum in These include giving private investors access for the first time to funds, which were previously only open to institutional investors due to the high minimum investment amounts. comdirect is also a partner for modern investors who want to gain some experience in investment funds before investing significant amounts or perhaps investing in other asset classes or who would like to accumulate a small amount of assets through monthly savings. To specifically address these needs, in 2009, amongst other things, we halved the minimum order amount for one-off investments in funds to 500. We know that many of our customers who are very capable of dealing with their own financial matters, nevertheless also want advice occasionally. In Anlageberatung PLUS, we have therefore developed an additional advisory format for which we see a great future.
22 16 In 2009 we therefore continued our gradual further development as a bank that understands and serves its particular customer group very well. This makes the time from understanding and wanting to actually delivering plus points as short as possible. Alexander Boldyreff, born 1967, has been the CSO of comdirect bank AG since July Boldyreff heads up Marketing & Sales, Product Management as well as Treasury and is also responsible for Advice. He is also Chairman of the Supervisory Board of comdirect private finance AG and a member of the Supervisory Board of ebase. Operating excellence: our modern and effective banking platform Another important point on our complus agenda is the optimisation of our banking platform. Even better Customer Services, better accessibility and an even more effective IT infrastructure. The upgraded architecture means that new applications can be integrated into the website even more swiftly and the redesigned site is geared to user-friendly Web 2.0 technology. System availability reached a record level of 99.9% in 2009, an improvement of 0.2 percentage points on the previous year. Anyone familiar with operating IT systems will know although such increments may look small, they are the result of complex projects carried out to painstakingly perfect these systems. An ongoing process that never stops. We have also successfully enhanced the accessibility, quality and speed of our Customer Services. In 2009, Customer Services answered more than 80% of incoming calls in less than 30 seconds, a rise on the previous year. My Plus: More direct bank-type advice: Anlageberatung PLUS The introduction of our Anlageberatung PLUS investment advice service represents our further development in terms of advisory formats that offer greater transparency and independence, which is the fourth focal area of our complus programme. After two years of development and an extensive six-month trial, Anlageberatung PLUS was launched in November The customer response to date shows that Anlageberatung PLUS has what it takes to set a new benchmark in investment advice. Comprehensive advice for your custody account right from the start: Our fee-free BeratungsDepot (advice custody account) forms the basis for Anlageberatung PLUS. This is enhanced by ongoing advice tailored to your investment targets. 1. Initial discussion 2. Initial advice with portfolio analysis 3. Ongoing advice 4. Regular review
23 MY PLUS SUPERVISORY BOARD GROUP MANAGEMENT REPORT CONSOLIDATED FINANCIAL STATEMENTS 17 Various aspects that are usually kept separate are sensibly united for the first time in Anlageberatung PLUS. In-depth, individual advice geared to the individual wishes and options of the customer is combined with system-backed, continual and objective portfolio monitoring and management. The investment universe comprises over 3,000 securities and therefore offers a wider range than even a really good stockpicker could monitor closely. Investors can choose to invest in equities and bonds, funds, ETF index funds and ETCs. To ensure that investment decisions remain objective and are not influenced by commission, in Anlageberatung PLUS we consistently waive all sales and sales follow-up commission. Instead we charge a fixed monthly fee based on the average portfolio value or a minimum of Our advisers are permanent comdirect bank employees. Anlageberatung PLUS is therefore very different to most other advisory models to date. These rarely feature consistent systembacking and often take inadequate account of individual personal circumstances. We are confident that Anlageberatung PLUS can close these gaps in quality and serve as a model for a new generation of investment advice. The market potential is correspondingly great. We cautiously estimate there are around 5 million people in Germany for whom Anlageberatung PLUS is of interest. We therefore see considerable potential among both our existing customers and in new business. Dr. Christian Diekmann, born 1965, has been CFO of comdirect bank AG since May In addition to Finance, Controlling & Risk Management, Dr. Diekmann is responsible for Internal Audit, Legal Services & Compliance, Institutional Business and as Chairman of the Supervisory Board of ebase business-to-business activities. Dr. Diekmann is also a member of the Supervisory Board of comdirect private finance AG and Deputy Chairman of the Board of Trustees of the Numeracy Foundation (Stiftung Rechnen). My Plus: With Anlageberatung PLUS we are continuing what we started with Baufinanzierung PLUS building finance advice: the development and introduction of advisory formats for demanding private customers who want to find the best product in the market in each case, rather than be expected to take the first one they come across. The financial crisis has quite clearly demonstrated that there is a significant need for advice, not only with regard to securities investments and building finance, but also for other issues relating to individual asset accumulation and provisioning. We will therefore continue to invest in direct bank-type advisory models for demanding modern investors in the coming years. ebase: we are serious about B2B With the acquisition of ebase, or European Bank for Fund Services GmbH to give it its full name, we have considerably extended our business model in B2B activities and are from now on pursuing a dual brand strategy in the group. In 2009, the priority was naturally to establish the foundation and set the course for future growth through new products and solutions in custody account management and banking. The prospects are indeed very promising.
24 18 As a full-service partner for financial service providers, asset managers, insurance companies and investment companies, ebase is optimally positioned in the market. With the help of ebase, these institutional partners can offer their respective end customers both companies and their employees as well as private customers a comprehensive range of products and services for asset accumulation and provisioning. One such product is the Riester FörderRente flex fund savings plan, which enables customers to invest in various attractive funds as part of their pension provisioning and receive state subsidies at the same time. There are also custody account solutions, such as the bav (company pension) custody account for company pensions, which was being used by employees in over 1,300 companies in Germany at the end of Carsten Strauß, born 1967, has been a member of the Board of Managing Directors of comdirect bank AG since March He is responsible for Customer Services, Human Resources & Organisation, Process Management and IT. In addition, Strauß is a member of the Supervisory Board of ebase, a member of the Supervisory Board of Commerz Direktservice GmbH and Deputy Chairman of the Executive Board of the Numeracy Foundation (Stiftung Rechnen). My Plus: In short: ebase provides top class solutions from under one roof for all finance professionals managing money and assets on behalf of third parties, and enables these partners to offer new products in brokerage, and increasingly in banking, to their end customers, thereby gaining particularly more time to provide individual advice and support. comdirect has gained immediate and excellent access to a market with assets under custody of around 230bn as well as the best opportunities for growth. If that s not a win-win situation, what is? Although ebase did not record significantly strong growth in 2009 due to the difficult market conditions, we have still achieved a great deal. Key IT projects were launched and some have already been successfully completed, the brand strategy was defined, thereby laying the foundation for further growth. We will also be introducing additional banking products and brokerage solutions before the end of the year, creating lots more plus points. Taking both segments together, comdirect bank in B2C and ebase in B2B, with our extended business model and dual brand strategy we have made significant advances after only one year. And this is just the start.