DGAP-News: Varengold Bank AG / Key word(s): Half Year Results/Miscellaneous
Hamburg, 31st July 2018 - The business development of Varengold Bank AG in the first half of 2018 was in particular affected by the persistently low interest rate landscape, increasing regulatory requirements and continuing digitization in the general competition of the financial services sector. In this situation, Varengold Bank has consequently and successfully continued to pursue its current strategy to become a leading bank for the marketplace lending sector.
In the first half of 2018, the total assets increased significantly from EUR 445.2 million to nearly EUR 665.5 million. Customer deposits continue to be the dominant amount on the liabilities side with EUR 599.3 million and therefore 90%.
The company's interest result increased due to the expanded lending volume from TEUR 2,047 in the first half of 2017 to TEUR 3,429 in the first half of 2018. The commission result remained almost constant at TEUR 8,108 in the first half of 2018 (30th June 2017: TEUR 5,818). The net result from trading portfolio increased by TEUR 69 to TEUR 105. Uther operating income decreased from TEUR 144 to TEUR 97.
The general administrative expenses of the company increased by TEUR 403 (from TEUR 6,676 to TEUR 7,079). This was due to an increase in personnel costs from TEUR 3,620 to TEUR 3,682 and IT costs from TEUR 658 to TEUR 883. Likewise, contributions and insurances increased from TEUR 295 to TEUR 528, which essentially results from a provision for a one-off payment to the Compensation Scheme of German Banks. In addition, audit and consultancy costs fell by EUR 90 thousand, mainly due to lower consultancy costs.
Depreciation and value adjustments on receivables and certain securities as well as additions to provisions for loans and advances increased significantly to TEUR 3,426 (30th June 2017: TEUR 670). This provision resulted from a general requirement due to the expanded lending volume in marketplace lending. The reported amount is not offset by any individual risks that have become significant percussive.
The tax expense is very high compared to the pre-tax result, as the aforementioned provision does not represent a tax expense. Furthermore, additions to fund investments in the amount of approx. EUR 0.89 million had to be made in the first half of the year, which lead to a further tax expense but do not represent income according to German accounting standards.
In total, the result of ordinary business activities of Varengold Bank AG in the first half of 2018 amounted to TEUR 1,208 (30th June 2017: TEUR 675) with a net loss of TEUR 464 at the reporting date (30th June 2017: net profit TEUR 219).
To be able to meet the requirements for regulatory capital focussing on the planned expansion of business volume in the future, the share capital of the company was increased from EUR 4,140,282.00 to EUR 6,210,423.00 (premium TEUR 3,726) as part of a rights issue. The capital increase was entered in the commercial register on 16th February 2018.
The Management Board is convinced that Varengold Bank's business model has a solid foundation and has set the right course to meet the future requirements and needs of financial market players.
Based on the successful implementation of the business strategy and the increase in operational efficiency, the forecast of between EUR 1.7 million and EUR 2.2 before taxes announced at the beginning of this year is expected for 2018.
Varengold Bank AG will publish its half-yearly report at the end of September 2018.
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, Frankfurt (Basic Board), Stuttgart|
|End of News||DGAP News Service|