- Commission income increased from EUR 187 m to EUR 193 m
- Balance sheet total rose from EUR 6.3 bn to EUR 8.8 bn due to new pension fund mandates
- Core capital ratio still above 20 percent
“Our business performance in 2021 was well above our expectations. While the pandemic kept the world in check for the second successive year, the economy picked up appreciably despite supply chain problems, and the equity markets also rose to new highs. In this environment, we registered very pleasing growth rates in all four divisions. We increased both commission income and interest income,” reported Emmerich Müller, Member of the Executive Board of the Frankfurt-based private bank B. Metzler seel. Sohn & Co. Aktiengesellschaft. According to Müller, it is difficult to forecast what 2022 will bring due to geopolitical and economic uncertainties as well as the inflation situation. In view of this, he expressed satisfaction with the development of new business in the first few months of this year.
Asset Management acquired very attractive mandates around the end of 2021 and the beginning of 2022, especially for pension management. Furthermore, the first social partner pension model will be introduced soon. The Capital Markets division has secured its first Japanese client for a currency overlay. In addition, the division is continuing its strategic approach to blockchain technology. In the Corporate Finance division, demand for qualitative advice remains high so far in 2022. Thanks to Metzler’s particularly good position in Japan, Corporate Finance advised Daikin on the acquisition of Italian company Duplomatic Motion Solution. Moreover, Corporate Finance supported the owners of the Norderland Group in divesting a portfolio of onshore wind farms to enercity Erneuerbare GmbH. The sale of this portfolio was the largest transaction to date involving onshore wind farms in Germany. In Private Banking, the long-term focus on equity investments paid off and is reflected in another pleasing inflow of new funds in 2022.
Key figures on the 2021 financial year:
Overall, 2021 was a very successful year for the bank. Net profit remained unchanged at EUR 2.3 m. Commission income rose from EUR 187 m to EUR 193 m. Net interest income was on a par with the previous year at EUR 9 m in the reporting period. General administrative expenses were EUR 182 m, about 2 percent above the previous year’s figure of EUR 178 m. Personnel expenses for the approximately 800 employees increased by EUR 4 m to EUR 123 m. Other administrative expenses were in line with the previous year at EUR 59 m. Risk provisioning is the result from securities held in the liquidity reserve, the lending business, and changes in the taxed reserves pursuant to § 340f and § 340g of the German Commercial Code (HGB). Risk provisioning comprised net expenses of EUR -15 m in the reporting period, compared with EUR 3 m the previous year.
The group's balance sheet total and business volume were both EUR 8.8 bn, which was above the previous year’s level of EUR 6.3 bn. This was mainly due to the rise in fiduciary assets as a consequence of success in pension management. In the reporting period, fiduciary assets were EUR 6.3 bn, another very sharp rise compared with the previous year’s figure of EUR 4.2 bn. This item is made up exclusively of managed pension fund mandates, which increased considerably.
The reserve for general banking risks remained unchanged at EUR 70 m. Reported equity was EUR 198 m compared with EUR 201 m the previous year. Overall, the equity components shown on the balance sheet totalled EUR 268 m at year-end 2021. The regulatory capital base of the Metzler Group is still well above the minimum requirements. It is comprised entirely of tier-one core capital. With a core capital ratio of over 20 percent, Metzler believes it is in a good position to meet present and future regulatory requirements.
Development of the divisions:
The positive development of the Asset Management division in recent years continued in 2021. At year-end 2021, total assets amounted to EUR 80 bn, compared with EUR 73 bn the previous year. Portfolio management registered considerable inflows of funds for its multi-asset strategies as well as its global, small caps and European dividend equity strategies.
The developments in pension management deserve special mention. The Metzler Pension Fund, which was established in 2014, became Germany’s largest multi-employer pension fund in 2021 with assets totalling EUR 6.3 bn. Moreover, in February of 2021 the Federal Financial Supervisory Authority (BaFin) approved Metzler’s social partner pension fund. This segregated pension fund is a platform for implementing the social partner model introduced by German legislation to strengthen occupational pensions. Metzler Pension Management has been developing customized solutions for occupational pension provision, lifetime work accounts and phased retirement for more than 20 years. At year-end 2021, it served more than 270 companies with over 100,000 beneficiaries.
In the reporting period, Asset Management continued the systematic development of its ESG expertise. Sustainability has had a firm place in portfolio management for more than 20 years. Since June of 2021, the sustainability funds have been classified in accordance with Article 8 of the EU Disclosure Regulation and in September, the Metzler Global Ethical Values retail investment fund classified in accordance with Article 9 of the EU Disclosure Regulation was launched for specific target groups.
In the Capital Markets division, demand for equities remained high and the conventional equity brokerage business developed very well in 2021. The division increased commission income significantly. On the one hand, established clients were even more active than they had been the previous year, but Capital Markets also acquired further clients in Germany and abroad. The Research department also grew revenues further in 2021. Alongside steadily rising demand from institutional clients, this was due to company-financed analyses of small and medium-sized enterprises. Once again, Equity Research expanded its coverage considerably.
2021 was a very successful year for Corporate Solutions. This department, which was established at the beginning of 2021, supports companies in IPOs, capital increases, share placements and the issuance of bonds and promissory note loans. For example, the Capital Markets division was the sole bookrunner for capital increases by wallstreet:online AG and va-Q-tec AG. The partnership with the French bank Crédit Agricole also developed very satisfactorily in the reporting period. Together with Crédit Agricole, Capital Markets was the only German private bank involved in the IPO of Auto1 Group and was also involved in the IPO of Synlab AG.
The Corporate Finance division acted as exclusive M&A advisor in a large number of transactions in various sectors in 2021 on both the acquisition and the divestment side. Clients included family businesses, financial investors and international corporations. For example, Corporate Finance successfully advised wedi GmbH and its family owners on the sale of the company to Ardex GmbH in the reporting period. wedi is the leading manufacturer of waterproof wet rooms and construction systems in Europe and North America. The acquisition is the biggest in Ardex’ history and an important step in the expansion of its systems expertise. In the software sector, Corporate Finance acted as exclusive M&A advisor to the managing partner of ISB AG on the sale of its company to CONET GmbH. ISB is a leading developer of individual software for process digitization in public administration and industry. In addition, Corporate Finance successfully advised the Klöpfer & Königer Group, Germany’s largest wood marketing company, on the sale of its 15.7 percent stake in the listed company SURTECO GROUP SE. Furthermore, under a purchase mandate, it acted as exclusive M&A advisor to digital and cloud service provider Cloudflight GmbH in its acquisition of macio GmbH. This acquisition was an important step towards Cloudflight's strategic goal of becoming a full-service provider.
Against the background of rising equity markets, the Private Banking division benefited in the reporting period from a high equity weighting in the investment of the assets entrusted to it and successful stock picking. All investment decisions were based on a structured and systematic investment process, which clients find transparent and understandable. Metzler Private Banking has always used an active management approach, covering portfolio management and structuring and controlling substantial assets for enterprises, entrepreneurial families, foundations and private individuals. These clients value continuity in their banking relationship – especially long-term staff continuity. Qualified staff members were hired at all locations in 2021 to strengthen the Private Banking division.