Hamburg, 15 August 2017 - In the first half of 2017, business development at Varengold Bank AG was characterised in particular by the expansion of commercial activities with existing customers in the Commercial Banking business area, as well as the development of new customer relationships primarily with institutional customers, the focus of which is on the "Short-term property loans" and "Receivables purchases" asset classes. These customers stand out due to their strong affinity to technology and use the services provided by Varengold Bank as an innovative provider of services for newly established companies enjoying rapid growth.
 
In the first half of 2017, the balance sheet total rose by 10.4% from EUR 634.1 million to EUR 699.8 million, a figure that represents a slight increase. At EUR 666.7 million, or 95.3%, customer deposits continued to represent the dominant item on the liabilities side.
 
The interest income of the Company increased from TEUR 2,545 in the first half of 2016 to TEUR 3,035 in the first half of 2017. The increase of TEUR 490 is primarily due to the increase of TEUR 666 in the interest income from the lending business for loans extended to institutional customers.
 
Net commission of TEUR 5,819 remained constant in the first half of 2017 (figure as at 30 June 2016: TEUR 5,720). In addition to the Prime Brokerage business area (TEUR 4,939), the Commercial Banking business area also contributed to the net commission amount to the value of TEUR 943.
 
The net result for the trading portfolio fell by TEUR 3,901 to TEUR 36. This heavy fall was due to the strategic decision to cease activity in the Capital Markets Brokerage business area in 2016 and thus to stop the proprietary trading. Other operational income fell from TEUR 927 to TEUR 144.
 
The general administration expenses of the Company fell by TEUR 1,684 (from TEUR 8,359 to TEUR 6,675). The reason for this were in particular the decrease in personnel costs from TEUR 4,021 to TEUR 3,620, audit and consulting fees from TEUR 1,291 to TEUR 982 as well as the IT costs (from TEUR 881 to TEUR 658). In addition, the remaining administrative expenses decreased from TEUR 1,151 to TEUR 469; this was mainly associated with the reduced sales costs in the Commercial Banking segment as well as reduced subcontracting and outsourced services. Furthermore, expenses for premiums and insurance increased by TEUR 179, which can primarily be attributed to the increased contribution rate for the Entschädigungseinrichtung Deutscher Banken [German statutory compensation scheme for depositors and investors].
 
In total, income from the normal business activities of Varengold Bank AG amounted to TEUR 675 in the first half of 2017 (figure as at 30 June 2016: TEUR 1,847) with an annual profit as at the reporting date of TEUR 219 (figure as at 30 June 2016: TEUR 1,651).
 
Given the ever-increasing number of regulatory requirements, it is essential that the Bank continues to strengthen its equity position in the medium term, including during the course of the since end of 2015 ongoing realisation of the strategic reorientation. It is for this reason that the Bank implemented a capital increase from the existing Authorised Capital Bank at the end of the first half of the year. The Company's share capital was increased against cash contributions by EUR 1,217,730.00 from EUR 2,922,552.00 to EUR 4,140,282.00 by issuing 1,217,730 new shares in a public subscription offer and a subsequent private placement. The planned further strengthening of the Bank's own capital base, that will be proposed to the Annual General Meeting to be decided on 23^rd August 2017, is intended to provide a solid foundation for extending business activities in order to exploit and flexibly respond to growth opportunities.
 
Due to the strategic refocussing and operational improvement measures in place, the Management Board is viewing the further activities of the second half of 2017 with confidence.
 
Varengold Bank AG will publish its half-yearly report at the end of September 2017.


Contact:
Ms. Sanja Szabo (Head of Corporate Development)