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26 Related party disclosures

Relations with affiliated companies

The parent company of comdirect bank AG is Commerz Bankenholding Nova GmbH, Frankfurt/Main. The ultimate parent company is Commerzbank AG.

comdirect bank AG uses services provided by Commerzbank AG through a general agreement effective as of 1 January 1999, as well as through service level agreements on this basis.

On 6 August 2007, a master agreement was concluded with Commerzbank AG which superseded the existing general agreement. The individual contracts concluded under the general agreement remain in place until expiry of their respective term. New individual contracts will be concluded based on the master agreement.

On the basis of the general agreement and the master agreement, the following services were provided during financial year 2012:

  • Trading and processing services
  • Payments and cash dispenser service
  • Printing services
  • IT services
  • Internal audit
  • Use of “Intelligence Commerzbank” (ICOM) securities trading system
  • Risk management
  • Handling of financial instruments in own trading and credit services
  • Compliance
  • Cooperation for the “Contract for Differences” product
  • Placement of building finance loans
  • Project services, e.g. final withholding tax, expanding tax master data
  • Other services

In total, the expenses for the above services amounted to to €24.9m (2011: €25.9m) in the financial year.

In the reporting year, the earnings generated from these agreements totalled €4.0m (2011: €0.4m).

Outside of the general agreement, there are also the following significant business relations with Commerzbank AG:

In connection with the general agreement on liquidity transfer concluded in August 2010, there is also an assignment agreement between comdirect bank AG and Commerzbank AG for a customer loan portfolio consisting of retail loans. Claims are assigned from Commerzbank AG to comdirect bank AG as security for all existing, future and conditional claims by comdirect bank AG against Commerzbank AG and/or its group companies arising from the general agreement or other loans. Commerzbank AG was paid a fee of €1.3m (2011: €1.2m) due to this assignment agreement.

As part of money market and capital market transactions, comdirect bank AG makes investments with Commerzbank AG and its affiliated companies.

As at the balance sheet date, the nominal value of call money and fixed-term deposits as well as promissory notes totalled €7,670m (2011: €6,413m). During the year under review, comdirect group generated total interest income of €147.7m (2011: €129.7m) from these transactions with Commerzbank AG and €0.4m (2011: €0.7m) with its affiliated companies. There is a separate general agreement between comdirect bank AG and Commerzbank AG for these money and capital market transactions.

As at the balance sheet date, bonds and notes in the portfolio from affiliated companies amounted to €2,258m (2011: €2,663m). The interest income on this item amounted to €77.1m (2011: €87.5m) for the financial year as a whole.

Bonds in the portfolio from the affiliated companies were purchased during the reporting year with a nominal volume of €608.3m (2011: €133.3m). As in the previous year, no bonds were sold to affiliated companies.

A general agreement on security loans was concluded with Commerzbank AG on 16 May 2000, on the basis of which comdirect bank AG can lend securities to Commerzbank AG. In the reporting year, income of €2.9m (2011: €3.7m) was generated on the average portfolio of lent securities amounting to €2.0bn (2011: 2.3bn).

Through its connection to Commerzbank AG, comdirect bank AG offers its customers new issues and a range of certificates for subscription. These sales are remunerated in line with the commission for the banking syndicate or issuing institution. In addition, comdirect bank AG receives pro rata commission for carrying out capital measures. As in the previous year, commission from these areas in financial year 2012 totalled less than €0.1m.

In joint campaigns with Commerzbank AG, comdirect bank AG offered its customers the opportunity to buy and sell Commerzbank warrants and certificates OTC for a limited period of time, whereby comdirect bank AG waived the commission payable by the customer on all transactions with a defined maximum volume. In return, comdirect bank AG received a refund of the lost order commission from Commerzbank.

comdirect bank AG and European Bank for Fund Services GmbH (ebase) offer their customers a large number of funds from a variety of investment companies, including investment companies of the Commerzbank Group. In financial year 2012, the comdirect group received sales and sales follow-up commission at prevailing market rates from the investment companies of the Commerzbank Group.

For placement activities for the benefit of ebase, Commerzbank AG received sales and ongoing sales follow-up commission amounting to €11.7m (2011: €12.3m) in financial year 2012.

As part of its processing and management services for custody accounts, ebase procures support and services from Commerzbank AG. In financial year 2012, Commerzbank AG received payment of €1.5m (2011: €1.2m) for these services.

ebase purchased other services from Commerzbank AG in the amount of €0.3m in financial year 2012 (2011: €0.3m).

On 22 March 2000, comdirect bank AG concluded an agreement with Commerzbank AG. Among other things, the agreement relates to support for PR activities, compliance with stock exchange and other obligations resulting from admission to the stock exchange and advice on the holding of the annual general meeting of shareholders.

On 15 March 2005, comdirect bank AG concluded an agreement with Commerzbank AG concerning the cash receiving office and depository service for the shares of comdirect bank AG.

Commerz Direktservice GmbH, whose sole shareholder is Commerzbank AG, provides call centre services for the purposes of gaining and supporting customers and promoting sales, primarily for customers of and on behalf of Commerzbank AG. Commerz Direktservice GmbH does not have its own customer base. comdirect bank AG maintained service agreements with Commerz Direktservice GmbH in the field of operating customer business and provision of operating resources. In the financial year, comdirect bank AG received payment of €0.6m (2011: €2.2m) for these services. Commerz Directservice GmbH’s Quickborn location was closed with effect from 30 June 2012. Due to the early termination of the service agreements, an additional payment of €1.1m was due to comdirect bank AG for the telecommunications systems.

comdirect bank AG and its affiliated companies have insured old-age pension obligations by means of an allocation to trust assets with Commerzbank Pension-Trust e.V. As of 31 December 2012 the market value of trust assets administered in the trust totalled €4.8m (2011: €4.1m).

With an agreement dated 9 January 2003, comdirect bank AG acquired a holding in WST-Broker GmbH, Frankfurt/ Main. WST-Broker GmbH routed customer orders to execution on the trading floors on behalf of comdirect bank AG. With effect from 5 October 2011, its shareholders comdirect bank AG (54%) and Commerzbank AG (36%) resolved to close WST-Broker-GmbH. The company has been in liquidation since then. comdirect bank AG received tax reimbursement in financial years 2011 and 2012 resulting from the retrospective recognition of write-downs on foreign holdings from the year 2001. comdirect bank AG received an amount of €4.0m as part of a settlement in order to meet potential claims of comdirect bank AG vis-à-vis Commerzbank AG resulting from the tax relationship between the companies at that time.

The Board of Managing Directors reports separately on the scope and appropriateness of the intra-group services of comdirect bank AG with affiliated companies as part of its dependency report (Section 312 German Stock Corporation Act (AktG)).

Government-related entity disclosures

The Federal Republic of Germany holds a stake of 25% plus one share in Commerzbank AG, which allows it as the responsible party for the Federal Agency for Financial Market Stabilisation (Bundesanstalt für Finanzmarktstabilisierung – FMSA) to exert a considerable influence over Commerzbank AG. This gives it indirect influence over the comdirect group.

As at the reporting date, the comdirect group held bonds from the government and government-related entities with a book value of €79.0m (prior-year reporting date: €105.6m). The comdirect group generated interest income of €2.5m from these bonds during the reporting year (2011: €2.6m).

Other related party disclosures

In the financial year, there were financial relations with related natural persons (members of the Board of Managing Directors and the Supervisory Board and members of their immediate family), including through the use of products of comdirect group as part of the normal product and service offering. All products and services were carried out at normal third party terms and conditions and are of secondary importance for the company. The related parties did not accrue any unjustified advantage from their position with the comdirect group, nor did comdirect group suffer any financial losses.

In addition to the financial relations as part of the product and service offering of comdirect group, related parties received compensation on the basis of their position as members of the boards (see note (69)). The employee representatives in the Supervisory Board additionally receive payment as a result of their employment by comdirect bank AG in an amount that is usual for the company in accordance with the corresponding works agreement and the associated grading of the respective job profile.

There were no other financial relations with related natural persons in the financial year.