DGAP-News: Varengold Bank AG / Key word(s): Final Results/Miscellaneous
Hamburg, 31st March 2017 - Over the past 12 months Varengold Bank AG has continued to develop its business strategy and made adjustments to drive forward the bank's growth and to establish a stable and lasting value for shareholders, customers and employees. As part of these adjustments, a decision was made in March 2016 to relinquish the Capital Markets Brokerage segment and to instead focus on sustainably expanding the Prime Brokerage and Commercial Banking segments. Operations processes continued to be optimised positively throughout the year.
The interest income earned by the bank rose from TEUR 1,326 in 2015 to TEUR 4,474 in 2016, while interest expenses fell due to the fall in interest rates, resulting in an interest surplus of TEUR 1,578. The rise in interest income is mainly attributable to interest income from the Prime Brokerage segment and interest income from fixed-income investment securities in the liquidity reserve. The rise in commission income from TEUR 5,243 to TEUR 20,927 due to increased Prime Brokerage activities is accompanied by a rise in commission expenses from TEUR 1,335 to TEUR 15,211. The net income from the trading portfolio fell from TEUR 11,117 to TEUR 5,685. The decline is due essentially to reduced business activities in the Capital Markets Brokerage segment, which was closed at the end of October 2016.
In the financial year, an extraordinary result of TEUR 1,062 was accrued. The general administration expenses of the Company decreased by TEUR 5,415 to TEUR 15,547. The decrease was significantly contributed by lower personnel expenses and consulting costs in the Prime Brokerage segment. Income from the ordinary business activities of Varengold Bank in the past financial year 2016 totalled -TEUR 2,478 (previous year: -TEUR 5,818). This resulted in a preliminary net loss for the year of TEUR 1,486 (previous year: -TEUR 13,218).
In the Commercial Banking segment, Varengold Bank has established a solid customer base for Trade Finance transactions over the past three years, and in future aims to develop further as a specialist provider for business customers with a focus on trading in the regions of Eastern Europe and the Middle East. Varengold aims to utilise this customer potential and further expand its current product portfolio, for example, when forfaiting of letters of credit.
In 2016 the focus of the business activities of the Primer Brokerage segment were on the equities asset class. Varengold expects that this asset class will become less attractive to customers in the coming years. From the second half of 2017 onwards, the bank will therefore gradually switch its focus to the real estate and short term receivables asset classes to exploit existing business opportunities there.
In recent months Varengold Bank has also been involved in potential financing and product solutions for FinTechs and intends to exploit these opportunities, as it anticipates substantial growth opportunities and innovation steps through a cooperation with FinTechs.
The bank's equity position will also be further strengthened in the medium term to exploit and flexibly respond to growth opportunities. Due to the strategic refocussing and operational improvement measures that have been introduced, the Management Board is viewing the 2017 fiscal year with confidence.
Ms. Sanja Szabo (Head of Corporate Development)
|Company:||Varengold Bank AG|
|Große Elbstraße 14|
|Phone:||+49 (0)40 / 668649-0|
|Fax:||+49 (0)40 / 668649-49|
|Listed:||Regulated Unofficial Market in Berlin, Dusseldorf, Stuttgart; Open Market (Basic Board) in Frankfurt|
|End of News||DGAP News Service|