• Warburg Bank's result in 2023 amounts to EUR 10.0 million (previous year: EUR -34.6 million)
• Net interest income increased by around 40% to EUR 98.7 million in 2023
• High cost discipline as part of “Strategy 2024” shows positive effects
• Bank makes targeted investments in digital infrastructure

In the 2023 financial year (reporting date: December 31, 2023), the private bank M.M.Warburg & CO generated a positive annual result of EUR 10 million (previous year: EUR -34.6 million). The main driver was the net interest income, which significantly exceeded the previous year. This more than compensated for the lower than planned net commission income, which declined due to the tense economic climate and a very weak year for capital market transactions.

“Our 225th anniversary year went well overall. This shows us that we are on the right track and that the measures we have taken as part of our strategic realignment are taking effect. In the past financial year, we focused not only on our customers but also on our transformation, reducing costs and investing in our digital infrastructure. The great commitment and dedication of our employees is paying off,” says Markus Bolder, member of the Management Board and responsible for the M.M.Warburg & CO back office divisions. “The 2023 profit will not be distributed, but will strengthen our equity base - which is important for our client business.

As a corporate bank, we want to support our clients in this phase of economic transformation,” explains Stephan Schrameier, the M.M.Warburg & CO Management Board member responsible for the market divisions.

Cost sensitivity supports upward trend

In addition to earnings growth, the consistent implementation of “Strategy 2024” and a high level of cost discipline also contributed to Warburg Bank's good performance. The cost-income ratio improved significantly by 9.2 percentage points to 96%. The medium-term target is 80%. The decisive factors for the cost savings were also a volunteer program, which reduced personnel expenses by around ten percent compared to the previous year, as well as the closure of two branches and adjusted rental agreements. “Without the necessary investments in our future digital infrastructure, operating expenses in 2023 would have been significantly lower than in the previous year; they are now slightly higher,” emphasizes Bolder. Warburg Bank invested a double-digit million amount in 2023 for the change of the core banking system, which is planned for 2026. The new partner is Atruvia, the IT service provider and digitalization partner of the Volksbanken and Raiffeisenbanken, which has already successfully completed numerous IT migration projects. This investment was offset by the proceeds from the sale of Warburg Invest AG, Hanover, which was completed in 2023.

Additional stability through risk reduction

Warburg Bank also made significant progress in 2023 with regard to potential credit risks: Overall, non-performing loans were significantly reduced. “We have consistently reduced the Bank's risk further over the last few years and are therefore not affected by the current turmoil on the real estate financing market,” says Bolder. “Our goal is to make Warburg Bank as stable as possible and at the same time enable sustainable profitable growth.”

Outlook: Financial year 2024

Warburg Bank will continue on its chosen course in 2024. “We want to inspire our clients in the three core business areas of Private Banking, Asset Management and Corporate and Investment Banking with services and products tailored to their needs,” says Schrameier. The recent awards for asset management, for example from the independent institute firstfive AG and the foundation information platform “Renditewerk”, provide a tailwind for Private Banking. In Asset Management, the range of funds offered by Warburg Invest KAG and the administrative services of the custodian, particularly in the area of closed-end special real estate funds, are impressive. In addition to the capital market business and excellent research, Corporate and Investment Banking is increasingly focusing on private markets: “We want to further link the credit requirements of our clients with the investment needs of investors and are planning to launch additional products,” explains Schrameier. “As a competent solution provider away from mass business, however, all our services focus on one thing: personal service for our customers.”

About M.M.Warburg & CO:

Founded in 1798, M.M.Warburg & CO is an independent private bank with headquarters in Hamburg and other locations throughout Germany. The company uniquely combines traditional and modern banking. Consistent factors such as competence, experience and reliability are paired with a modern digital service offering that provides customers and business partners with real added value.

The core business areas include Private Banking, Corporate & Investment Banking and Asset Management. Here, M.M.Warburg & CO offers individual solutions and personal, holistic advice for wealthy private clients, foundations, medium-sized, private and listed companies, the shipping industry as well as institutional clients and financial investors. Independence, confidentiality, reliability and consistency are the hallmarks of our cooperation.