•     Client portfolios record above-average performance
•     Further growth in assets under management
•     Corporate transaction services bear fruit
•     Net income for the year up 8%
•     Business in first quarter of 2015 exceeds expectations
  

 
Hamburg, April 15, 2014 – M.M.Warburg & CO continued its unwavering course in 2014, once again generating healthy results. Going forward, the Bank will maintain its traditional focus as a family-run, private universal bank rooted in a tradition of continuity. Its balanced business model prevents one-sided approaches, ensuring independence by avoiding inappropriate risks.

Warburg Bank’s Asset Management saw the value of almost all of its investment strategies rise by over 10% in 2014. Joachim Olearius, spokesman for the partners and responsible for the realignment of the division over the past few years, says that the good results are important to customers: “We have established a highly systematic investment process and, after good years in 2012 and 2013,have now closed another year with healthy asset growth for our clients.”

Customer funds again increased on the back of the Bank’s performance and its reputation as a solid, reliable partner: Total assets under management grew from EUR 50.1 billion in the previous year to EUR 56.0 billion. The Warburg Banking Group also manages a custodian bank volume of EUR 36.8 billion.

Within the Investment Banking division, the Corporate Finance unit successfully completed over 20 transactions and advisory mandates in fiscal 2014. Further important mandates were implemented at the beginning of 2015. Trading transactions initiated by customers, in particular with fixed-income securities, made an above-average contribution to net fee and provision income in the Sales and Trading unit. The continuation of the lending business with private and corporate clients as well as financing in the real estate and shipping areas offset the negative trend in net interest income and lifted its contribution to earnings in the past year.

Figures
M.M.Warburg & CO (Warburg Bank) posted net income before taxes of EUR 25.0 million (previous year: EUR 23.2 million) in what is currently a difficult environment for banks. Aggregate income before taxes generated together with its subsidiary institutions in Germany, Luxembourg, and Switzerland (the Warburg Banking Group) amounted to EUR 27.7 million (previous year: EUR 25.5 million).

Net interest income increased despite the increasingly entrenched low interest rate environment. Aggregate net interest income in the Warburg Banking Group amounted to EUR 80.1 million (previous year: EUR 72.3 million); aggregate net fee and commission income rose to EUR 140.4 million (previous year: EUR 132.6 million). This encouraging increase in the operating result confirms the Warburg Banking Group’s solid profitability.

The further deliberate reduction in recognized assets saw Warburg Bank’s total assets decrease to EUR 3.68 billion (EUR 3.81 billion). Total assets in the Warburg Banking Group declined from EUR 8.03 billion to EUR 7.94 billion.

Warburg Bank’s liable capital rose to EUR 365 million in 2014 (previous year: EUR 339.1 million) in anticipation of the release of a silent partner’s contribution in the amount of EUR 25 million planned for 2015. The Warburg Bank’s good capital position is demonstrated by its total capital ratio of 14.0% and Common Equity Tier 1 capital ratio of 11.2%. The Warburg Banking Group’s own funds are reported in accordance with the new requirements set out in the CRR for the first time as of year-end 2014. As a consequence, they declined from EUR 427 million to EUR 342 million as forecast, although quality improved thanks to a stronger Common Equity Tier 1 Capital Ratio.

The Warburg Banking Group recorded a moderate increase in headcount. It employed 1,275 people (previous year: 1,230) as of the reporting date.

Switch to Supervisory Board
Dr. Christian Olearius and Max Warburg stepped down as general partners of Warburg Bank in 2014 after almost three decades of both intensive and successful work for the Banking Group, the Bundesverband deutscher Banken, and the interests of northern Germany as a business center. In the future, Dr. Olearius and Max Warburg will guide and support the next generation of partners as Chairman of the Supervisory Board and member of the Supervisory Board, respectively.

Outlook
The low interest rate environment as a deliberate political solution to the debt crisis will remain a challenge for investors and banks for some time. Banks have already responded with adjustments to their deposit policy. Negative interest rates are being introduced, although these will initially be limited to deposits from institutional clients.

Continuing the lending business has proven a successful move for the Warburg Banking Group. The operating net interest income it generated is more than satisfactory given the prevailing interest rate environment. However, non-interest-bearing business is becoming increasingly important. The realignment of Asset Management and a streamlining of the structures of the German asset management companies in the Warburg Banking Group will enable growth in this key business area to continue in the current year.

A stronger Equity Sales presence in Frankfurt is improving the reach of Warburg Bank’s research and brokerage services, which focus on small- and mid-cap German shares. The Corporate Finance unit will be based not only in Hamburg in the future – it will also serve middle-market companies in southern Germany from Munich.

Its broad expertise in ship financing enables Warburg Bank to profitably leverage opportunities arising in the current market environment and hence to deepen existing customer relationships. The Corporate Finance unit advises a large number of shipping companies on modern ship financing options.

Joachim Olearius on the current fiscal year: “The reliability and solidity of the Warburg Banking Group inspires trust: the volume of both private and institutional client funds continues to increase. The transactions completed at the end of 2014 and the beginning of 2015 show that independent entrepreneurs and family shareholders in particular value the support provided by an independent private bank. My partners Dr. Henneke Lütgerath, Eckhard Fiene, Dr. Peter Rentrop-Schmid and I are therefore confident about the current year – we will exploit the many business opportunities that arise in the best possible interests of our clients, employees, and our owners.”