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Expected business performance and earnings situation

The comdirect group intends to continue its growth course in both business lines despite the ongoing difficulties in the market environment.

In the B2C business line, comdirect bank aims to once again comprehensively exploit its potential in banking, brokerage and advice in the future. New customer business will continue to centre on banking. Intensifying the marketing campaigns is set to help achieve the same fast-paced growth in the number of current and call money accounts as seen in previous years. Parallel to this, there will be continual improvements in the features offered by the current account and cards, as well as with respect to the security features in direct banking. Plans here include the introduction of the photoTAN. Despite the prevailing low interest rates, the deposit volume should rise further as a result of the growing number of current and call money accounts.

In brokerage, comdirect will further develop its offering for active traders. This relates to technical aspects such as the launch of a new trading front-end, as well as to the number of cooperation partners in LiveTrading and the terms and conditions. The successful flat-fee campaign in ETF trading will be continued. Furthermore, in future the bank will provide even more assistance for investors with regard to self-evaluation and structuring the right asset accumulation solution. In terms of products, processes and services, comdirect is thus well-placed to achieve significant net fund inflows from its customers in 2013 as well.

The initiatives in banking and brokerage will be flanked by measures to further improve the quality of Customer Services – including with regard to particularly active customers – as well as ongoing revision of the website.

In the B2B business line, the launch of the open custody account is scheduled for the first half of 2013. This opens up the opportunity to address additional target groups and thus reach more end customers overall, alongside B2B partners that are already connected. Sales will focus on the open custody account in 2013, along with the ebase Managed Depot custody account introduced in the fourth quarter of 2012 (see Business model, strategy and management) and company pensions. ebase is planning to increase the number of institutional partners in all of its existing customer segments and to develop the non-financials segment as well. As a result, the number of end customers, accounts and custody accounts should also outstrip the figure for the previous year.

We expect market conditions to remain challenging in financial year 2013. Persistently low market interest rates and bond yields will lead to a decline in net interest income. In the subsequent quarters, we expect net interest income to be slightly down on the level in the fourth quarter of 2012. Following a very cautious year 2012, we anticipate an upturn in trading activity by private customers in 2013. Coupled with projected higher sales follow-up commission due to higher prices in general, we consequently expect net commission income to improve. However, experience has shown that there is greater forecasting uncertainty when it comes to net commission income, and the absence of any impetus from the market for example, could adversely impact the trading behaviour of our customers. The other result, which primarily comprises the components result from financial investments and other operating result, was particularly dominated in financial years 2011 and 2012 by positive effects from tax appeal proceedings which were decided in the bank’s favour; we are not expecting contributions of this nature in 2013. As in previous years, if appropriate we will exploit positive market opportunities as part of the active management of our Treasury portfolio.

Despite the trend towards weaker earnings overall by comparison with financial year 2012, we will continue to maintain our profitable growth course in order to utilise growth opportunities that arise in the changing retail business segment. Consequently, expenses for marketing and IT in particular will be significantly higher than the respective figures for 2012. In this respect, as in previous years, we will closely monitor our earnings development and cap the rise in administrative expenses if necessary.

Overall, as things presently stand, we assume that pre-tax profit in 2013 will be lower than the result for 2012. We will also continue to maintain our growth course beyond 2013 and at the moment have to assume that market conditions for this period will be largely unchanged. We therefore expect the result for financial year 2014 to be on a par with the level in 2013.