You are here: Management report Management report B2C business line


B2C business line

Business development in brokerage

With new products and an enhanced information offering as part of our “Germany’s performance broker” umbrella campaign, we have significantly further developed our brokerage field of competence. In addition, traders and investors benefit from attractive terms and conditions. The extended range of investments and new functions have made our platforms for OTC trading in particular considerably more attractive.

For traders, comdirect has been offering integrated trading with CFDs since September 2011. Our customers can participate real time in the movement in prices of equities, indices, commodities, futures and currencies using contracts for difference on more than 1,200 underlying assets. The customisable trading platform features excellent quotations via market maker Commerzbank as well as reliable execution. For the majority of CFDs there are no order fees.

Given the high potential gains and losses on CFDs, comdirect provides comprehensive investor information via a dedicated portal. A special Customer Services team is also available. Free CFD seminars were held for potential and existing customers in eight cities. Moreover, if customers so request we can set up risk limitation at no charge, thereby excluding any obligations to provide further funds. The response from customers considerably exceeded our expectations. At the end of 2011, there were already more than 3 thousand CFD accounts at comdirect, almost 50% of which with risk limitation.

Since November 2011, customers have been able to use the simple limit and stop functions in LiveTrading that were previously restricted to stock exchange trading. Advanced limit functions such as trailing stop, stop limit and one cancels other can also be used at no charge. These can be utilised to replicate individual investment strategies on a targeted basis and comprehensively control risks. The range of securities available for OTC limit trading currently comprises warrants, certificates and reverse convertible bonds from 17 issuers, making it one of the most extensive offerings in the market.

Traders benefited from the flat-fee partnership in LiveTrading again in 2011. Commerzbank joined as a new cooperation partner, adding over 60 thousand mini-futures, reverse convertible bonds and warrants to the range available. In addition, selected certificates and warrants from BNP Paribas and Société Générale could be traded for €3.90 per order.

In stock exchange trading, all same-day part executions have been aggregated into one settlement since the end of August 2011. This enables traders with comdirect to avoid all charges relating to part executions.

We have been providing the ETF Informer an enhanced information offering on exchange traded funds, for long-term securities investors since March 2011. The new Informer section is available to all users of comdirect’s website free of charge. To accompany the launch of the ETF Informer, investors benefited from an ETF buy campaign which was extended to the end of 2011. The campaign covered around 150 ETFs from fund companies ComStage, ETFlab and UBS.

We updated our selection of AktivSparpläne savings plans in the second quarter and expanded it to include 15 asset management and 10 lifecycle funds.

Securities trading

The order volume in the B2C business line was particularly affected by external events in the reporting year. In the first quarter, the tsunami and nuclear disaster in Japan triggered massive dislocations in the equity markets, in conjunction with an above-average number of securities transactions. In the third quarter, the worsening of the European sovereign debt crisis led to strong price fluctuations, which also prompted a sharp rise in the number of executed orders. Mainly as a result of these extraordinary developments, our generally trading-oriented customers were considerably more active in securities trading in financial year 2011 than in the previous year. The number of orders executed climbed by 17.0% to 9.15 million (previous year: 7.82 million), the highest level for three years.

The comdirect Brokerage Index, which is calculated monthly and published in a press release, showed a steep increase in the buying of equities and warrants in the third quarter in particular. The fluctuating demand for bonds over the course of the year largely reflected the unfolding of the debt crisis. While buying was still strong in the second quarter, many investors disposed of their bond investments in the third quarter. For funds (without savings plans), the selling trend continued in the first three quarters but the situation stabilised in the fourth quarter. ETFs remained popular with investors and their appeal was further boosted by the ETF buy campaign. The new CFD trading started with a higher number of trades than expected.

Executed orders B2C
Brokerage Index (December 2010 – December 2011)

The flat fee for the full year on numerous investment products and the launch of CFD trading in the fourth quarter also led to additional trades on our OTC trading platforms. Over the year, 40% (previous year: 37%) was attributable to OTC trading platforms.

Trades by type of securities (in %)

  2011 2010
* excluding securities savings plans
Equities* 30.5 32.0
Warrants 7.6 6.8
CFDs 4.3 -
Certificates* 25.7 25.6
Funds including ETFs* 6.9 7.7
Securities savings plans 23.0 25.6
Bonds and other 2.0 2.3

Portfolio volume

Customer assets fell in the reporting year and at the year-end totalled €14.32bn, a decline of 11.1% compared with the end of 2010 (€16.11bn). This was due to the sharp price corrections in the equity markets which overshadowed the ongoing pleasing level of net investments by customers of around €1.41bn. New business, which was strengthened by the revision of the custody account model carried out in the previous year as well as two custody account transfer campaigns, made a major contribution to net fund inflows. During the campaigns we paid customers a bonus for transferring investment fund units into a comdirect custody account.

The portfolio volume is attributable to 783.6 thousand (previous year: 748.2 thousand) custody accounts. The stronger increase in the number of custody accounts compared with the previous year is due above all to cross-selling on the part of our heavily promoted current account and our “Germany’s performance broker” campaign.

Portfolio volume B2C as of 31.12.
Custody accounts B2C as of 31.12.

Business development in banking

In banking, comdirect bank once again outperformed the strong growth of the previous year. Through our marketing campaigns we convinced a large number of new customers of the benefits of our current account and range of financial investment products.

We further improved the features on our current account with satisfaction guarantee in 2011. Since 2011, we have been successively switching the comdirect girocard over to Visa Europe’s V PAY European payment system. In this technology, transactions – with the exception of payments by direct debit – are no longer based on the magnetic strip but are carried out throughout Europe via the integrated chip. This makes cashless payments even safer. To further improve security for online banking, we introduced the mobileTAN during the reporting year. The transaction number is sent to the customer by SMS and has only limited validity. However, banking using iTAN will still be possible in the future.

Our free banking app for the iPhone and iPad has been available for customers on the go since February 2011. Furthermore, the innovative application was extended to include a budgeting book with multi-bank capability. Sorting transactions by category gives our customers a more precise overview of their incoming and outgoing payments.

We adjusted our interest rate tiers for Tagesgeld PLUS during the year, making our call money offering even more attractive for many customers. The highest interest rate is now paid on investment sums up to €10 thousand compared with the previous maximum of €5 thousand. We responded promptly to the intervening increase in market interest rates by raising our deposit interest rates by 25 basis points for all investments up to €50 thousand.

Deposit business

Despite the challenging environment for financial investment products, as a result of the increase in the number of current and investment accounts, the deposit volume was up 3.6% on the previous year (€10.21bn) at €10.57bn.

Deposit volume B2C as of 31.12.
Number of current accounts and Tagesgeld PLUS accounts as of 31.12.

At the year-end, 60% of the deposit volume (end 2010: 63%) was attributable to 1,235.8 thousand Tagesgeld PLUS accounts (end 2010: 1,131.0 thousand accounts).

The deposit volume in fixed-term deposit accounts (maturity 1 – 6 months) increased by 13% during the reporting period, while at the same time medium to long-term deposits in time deposit accounts were popular with investors because of their attractive interest rates. The volume in currency investment accounts continued to rise, with investments in Swiss francs, Norwegian krone and US dollars dominating. However, the volume in currency investment accounts is of minor importance overall.

The number of current accounts rose from 647.0 thousand to 774.5 thousand. At the same time, there was an increase in deposits in current accounts on average for the year. As in 2010, as a result of the convenient features offered with the account, hardly any customers took advantage of the option to close the account after a year of active use and receive a bonus of €50 in return.

Of the liabilities to customers, 90.4% (previous year: 90.9%) were attributable to deposits due on demand. The reinvestment of customer funds is adjusted in line with the economic holding period of the deposits.

Lending business

The volume of utilisation of loans against securities and draws on overdraft facilities by our customers fell slightly as compared with year-end 2010 (€198m) to €189m. This was due to the decrease in the volume of loans against securities; here collateral values have dropped significantly due to the movement in prices over the course of the year (see Credit risk). Greater use was made of overdrafts as a result of the increased number of accounts; the lending volume also increased moderately.

comdirect bank acts as an intermediary for building finance and consumer loans. Both offerings therefore had no impact on the bank’s lending volume.

Business development in advice

In April 2011 we became the first bank in Germany to place building finance offerings via an online live advice service as well. Customers access the service during the phone consultation by logging in using a special link; via the internet they can then follow the steps to optimise their individual financing structure on the adviser’s screen from the comfort of their own home. A comdirect survey confirms: many people find this level of transparency in advice very important and almost one in two (46%) see selecting the product together with the adviser as a decisive advantage. Consequently the response of customers to our online live advice service has been positive, with particular praise for the transparency, comprehensibility and convenience of the offering.

Concerns over inflation and expectations in the meantime of higher mortgage rates lead to strong demand for financing products. Despite the ongoing turmoil in the financial markets and weaker economic data, this growth momentum continued even when interest rates changed. On average, the Building Finance Sentiment Index was up on the previous year. The volume of building finance placed climbed by around 15% to €465m (previous year: €406m).

In addition to the telephone advice service, the face-to-face local advisory services provided in the building finance offices in Berlin, Frankfurt/Main, Hamburg and Munich contributed significantly to this success. The software for online live advice was also successfully used in these offices. The number of financing partners increased during the year from around 150 to over 250. As a result, we have further improved our regional coverage and expanded the range of financing variants on offer.

At the end of the year, our Anlageberatung PLUS investment advice service was being used by more than 1,800 customers (end 2010: around 1,300 customers). Assets under advice totalled more than €121m.

Earnings situation in the B2C business line

With record pre-tax profit of €99.5m, the B2C business line outstripped the figure for the previous year (€72.6m) by 37.0%. The cost/income ratio of the segment improved from 70.7% to 66.2%.

The earnings components related to the comdirect group’s deposit business – net interest income, trading result, result from financial investments and the result from hedge accounting – stem almost completely from the B2C business line. For further details, please see the explanation of these items at comdirect group level (see Business performance and earnings situation at the comdirect group).

Pre-tax profit B2C
Cost/income ratio B2C

Net commission income climbed to €141.4m, up 8.3% on the previous year (€130.6m), reflecting the higher number of orders in particular. The disproportionately low increase in commission from securities business compared with trades is primarily due to reductions in transaction fees as part of the flat fee campaign that ran throughout the year.

The other operating result amounting to €13.6m (previous year: €6.0m) includes the interest received on the tax refund mentioned earlier (see Business performance and earnings situation at the comdirect group). Excluding this effect, the other operating result almost matched the level in the previous year.