Annual press conference 2016
Good start to the present financial year
"We got off to a good start to the new year and are optimistic about the development of our core business areas in 2016", reported Emmerich Müller, partner in Metzler Bank, at this year’s annual press conference in Frankfurt/Main, Germany. Metzler focuses on reliability, sustainability and continuity. Independence remains the key success factor in all areas. This means that Metzler is able to act entirely in the interests of its clients stressed Müller, who was able to report on a successful financial year.
As usual, Metzler will be paying a dividend of just EUR 2.3 m to its shareholders. Commission income rose 22% from EUR 150 m to EUR 183 m. Alongside commission income from asset management, there was a particularly strong rise in transaction-related commission income. This was due to the very satisfactory development of new business, as well as a pleasing increase in assets under management and a general upturn in business with existing clients. Net interest income was EUR 16 m in 2015, slightly below the previous year’s level of EUR 18 m as expected.
General administrative expenses, including depreciation of property, plant and equipment, were slightly below the previous year’s level at EUR 160 m. The average headcount increased slightly over the year – by 2% to over 780. The equity shown on the balance sheet is still approx. EUR 200 m. The regulatory equity of the bank and the Metzler financial holding group remains well above the minimum requirements at EUR 196 m and is comprised entirely of core capital. "With a core capital ratio of over 20%, we believe we are still in a good position to meet present and future regulatory requirements", said Müller. As has been customary at Metzler for many years, in 2015 further allocations were made to reserves established under § 340f of the German Commercial Code (HGB).
The Asset Management segment increased total assets by a good 11% to EUR 64 bn in 2015. The increase was due to both institutional mandates and mutual funds. In addition, the business volume handled via the Metzler Fund Xchange (MFX) trading platform rose to over EUR 14 bn. The focus was on institutional clients and financial intermediaries, who were looking for individual portfolio management concepts in the wake of low returns and regulatory requirements.
Pension Management bundles Metzler Asset Management’s capital market expertise with Metzler’s role as a depositary bank and its IT expertise, and manages assets totalling nearly EUR 2 bn on behalf of around 60 clients. In 2015, Metzler Pensionsfonds AG concluded contracts for more than 4,000 beneficiaries. Bayer AG retained Metzler Trust e. V. to act as an independent trustee for all pension arrangements relating to the carve-out of Bayer MaterialScience.
Fund-based asset management remains popular: a number of variants of this concept for the flexible management of the equity quota are now offered to banks and other financial intermediaries.
In the North American real estate business, Metzler Asset Management’s offices in Seattle and Atlanta serve clients at all stages in the value chain: acquisition, asset management and the sale of commercial property. This business area participated in the very dynamic development in the USA, in terms of both the number of transactions and their volume, and achieved very good results in collaboration with its clients.
Müller reported that clients value the extensive services offered by Metzler Capital Markets as a single-source provider for equity, bond and foreign exchange business. 2015 was a challenging year for the equities business due to the general stagnation of traditional cash equities markets. Metzler’s clients also valued the expertise of the independent research team, especially with regard to the German equity market and its specific features. Alongside DAX stocks, coverage now includes a broad spectrum of mid and small caps. Metzler Capital Markets mainly acquired new clients in the UK.
Earnings from fixed income operations were well above budget. This business developed well, partly due to an increase in staff, and extended its client base of insurance companies, pension funds and other pension institutions. Corporate bond research was particularly well received as the low-interest environment meant that clients were increasingly looking for alternative investments.
The foreign exchange business posted a very good performance in 2015 and grew revenue substantially despite the difficult conditions. Müller reported that Metzler benefited from its stable customer relations, which it also managed to extend. In the course of their international business, companies and institutional clients were exposed to higher foreign exchange risks, which required targeted and disciplined management. In view of this, FX risk management developed particularly positively. In this field, Metzler offers currency overlay, an innovative package comprising risk analysis and an individual hedging strategy for the management of foreign currency positions, allowing systematic management and minimization of foreign exchange risk. Metzler considers that it has very good future growth prospects in the management of foreign exchange risk, especially against the background of low interest rates and the associated internationalisation of investment.
The German mergers and acquisitions (M&A) market lagged the international trend in terms of the number of transactions in 2015. Thanks to its extensive insight into the industrial landscape, in this environment Metzler Corporate Finance benefited to an above-average extent from the perceptible rise in Asian investment in Germany and from its traditionally close links to small and mid-sized enterprises in Germany.
Metzler advised Schott AG, a leading international technology company in the areas of speciality glass and glass ceramics, on the divestment of its majority stake in the listed Japanese subsidiary Schott Moritex Corporation to the leading Chinese investor CITIC Capital Partners through a public takeover offer. It also helped Daido Life Insurance Company, one of the biggest insurers in Japan, raise its minority interest in Nürnberger Beteiligungs-Aktiengesellschaft again. This has further strengthened the extensive strategic cooperation between these two companies. Metzler also acted as advisor to the buyer and as tender agent for a further cross-border deal between Japan and Germany: the acquisition of 50.1% of the shares in ifa systems by Topcon Corporation of Japan via its European subsidiary Topcon Europe B. V. through a public takeover offer.
Metzler’s Private Banking segment offers its services nationwide from its offices in Frankfurt/Main, Munich, Stuttgart, Cologne/Düsseldorf and Hamburg. Here too, Müller reported a positive development in assets under management. This segment’s core business is portfolio management and structuring and controlling substantial assets for enterprises, entrepreneurial families, foundations and private individuals.
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Please download Fiscal 2015.