Value-driven strategy and management system
Value-driven strategy and management system
Value-driven strategy and management system
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38|> <strong>Value</strong>-<strong>driven</strong> <strong>strategy</strong> <strong>and</strong> <strong>management</strong> <strong>system</strong>The <strong>strategy</strong> of the comdirect group is aimed at utilising the opportunities in the direct banking market, in both theB2C <strong>and</strong> B2B segments, on a value, growth <strong>and</strong> yield-oriented basis, but with a manageable level of risk at all times.We invest a significant portion of our income in establishing <strong>and</strong> extending customer relationships through the <strong>system</strong>aticexpansion of our range of products <strong>and</strong> services, as well as intensive marketing. We control the level ofthese growth expenses on a flexible basis. We are guided here by the assessment of the respective marketopportunities on the one h<strong>and</strong>, <strong>and</strong> our dem<strong>and</strong>ing targets for return on equity <strong>and</strong> risk-bearing capability on theother. The aim is to always maintain a balance between long-term increase in value <strong>and</strong> short-term return in everyreporting period.By pursuing this <strong>strategy</strong>, the comdirect group aims to exp<strong>and</strong> its market leadership in online securities business formodern investors in Germany <strong>and</strong> gain market shares in the banking segment. We intend to increase the number ofcustomers to 3 million <strong>and</strong> assets under custody to €50bn by the end of 2013.To reach these targets, we have tailored our products <strong>and</strong> services to address the needs of the different marketsegments <strong>and</strong> types of investor. Initiatives to improve our range of products <strong>and</strong> services are flanked by targetedmarketing campaigns. We use these to convey performance advantages to the various target groups <strong>and</strong> also toenhance the already high level of awareness of the comdirect <strong>and</strong> ebase br<strong>and</strong>s.We are exp<strong>and</strong>ing the spectrum of securities, order functions <strong>and</strong> our analysis <strong>and</strong> information tools for active tradersto enable them to implement their trading strategies without restriction; current examples here are the start ofCFD trading (see page 64 <strong>and</strong> 65) <strong>and</strong> introduction of limit trading in LiveTrading.In addition to a comprehensive choice of products <strong>and</strong> favourable terms <strong>and</strong> conditions, fund investors <strong>and</strong> securi tiessavers especially want support when making investment decisions. Our quality-checked investment proposals canbe implemented at considerably reduced front-end loads.With regard to financial investments <strong>and</strong> payment transactions, customers set great store by competitive interestrates on call money, fixed-term deposit <strong>and</strong> time deposit accounts, a current account that is convenient, secure <strong>and</strong>fee-free, favourable financing solutions <strong>and</strong> personal service. For this customer group, we offer a broad range ofinvestment accounts as well as fee-free cash withdrawals in Germany <strong>and</strong> abroad, <strong>and</strong> we are continually improvingthe security <strong>and</strong> convenience of online transactions. In addition to the comprehensive <strong>and</strong> readily comprehensibleinformation offering on our website, our expert Customer Services staff are available around the clock every day.Moreover, our customers can use our multi-award-winning building finance advice service. To sum up, we aim toencourage even more customers to make the switch from branch banks to our direct bank model, as well as to breakdown any reservations that may still exist. B2B-type banking products are also very important for our institutionalpartners as a complement to securities investments when it comes to attracting customers <strong>and</strong> retaining them longterm.Strategic milestones in the B2C business lineIn the B2C business line we have pooled the key strategic measures in the “complus” programme that covers afive year period (to the end of 2013). As part of “complus”, comdirect bank has significantly exp<strong>and</strong>ed its attractiverange of products <strong>and</strong> services for securities traders <strong>and</strong> savers as well as banking customers. Of particularnote in the reporting year are the ETF buy campaign encompassing 150 very popular index funds from fundcompanies ComStage, ETFlab <strong>and</strong> UBS that has been running since March <strong>and</strong> the more attractive terms <strong>and</strong>conditions for Tagesgeld PLUS. In addition to further exp<strong>and</strong>ing the ETF offering (see page 64 <strong>and</strong> 65), the focusin 2012 will be on making the current account even easier to use.Direct <strong>and</strong> individual contact with specific customer groups, especially active traders, was a focal point in 2011.The most significant measures were the launch of integrated trading with CFDs on more than 1,200 underlyingassets <strong>and</strong> the development of the convenient order functions for OTC trading (LiveTrading) as part of our “Germany’s
| FOREWORD | THE BOARD OF MANAGING DIRECTORS | CORPORATE GOVERNANCE | GROUP MANAGEMENT REPORT | CONSOLIDATED FINANCIAL STATEMENTS | 39performance broker” umbrella campaign. Since November 2011, customers have been able to contact our CustomerServices team directly on a local telephone number; useful video clips also help customers execute their onlinetransactions. In 2012, our contact with customers is set to be even faster <strong>and</strong> more direct, including through greateruse of social media platforms.We further developed our modern <strong>and</strong> effective banking platform in financial year 2011. Visible results for ourcustomers include in particular the new CFD trading platform, as well as the fundamental revision of our websitein the fourth quarter. Despite extraordinarily active trading on some trading days, as in the previous year weachieved a very high level of <strong>system</strong> availability of 99.9% thanks to our continually modernised IT infrastructure.We further improved our independent <strong>and</strong> transparent advisory models. The launch of our innovative onlinelive advice service, where customers can follow each step of the advisory process online, made our BaufinanzierungPLUS building finance advice even more transparent <strong>and</strong> more popular. In the space of a year, we increasedthe number of financing partners from around 150 to over 250. We also further developed our AnlageberatungPLUS investment advice as well as Vorsorgeberatung PLUS provisioning advice. Priority in 2012 will be to continueto exp<strong>and</strong> Baufinanzierung PLUS.Strategic milestones in the B2B business lineIn the B2B business line, ebase has set itself the overriding objective of supporting the business models of itscooperation partners with a comprehensive spectrum of tailored <strong>and</strong> B2B-type banking products <strong>and</strong> services.This centres on exp<strong>and</strong>ing custody account services <strong>and</strong> supplementing them with B2B-type banking solutions, aswell as partner-specific configurations <strong>and</strong> white labelling variants of the product offering. This allows partners tointegrate <strong>and</strong> offer all key services for their end customers from one source. This is aimed at attracting new partners,end customers <strong>and</strong> assets in the respective target segments, <strong>and</strong> at retaining existing m<strong>and</strong>ates long term.Through growth in the volume of customer assets managed by its partners, ebase intends to position itself asGermany’s leading integrated brokerage <strong>and</strong> banking platform for institutional partners (B2B direct bank).ebase is already well positioned in the insurance companies <strong>and</strong> banks target segment. After the custodyaccount solution for collective premium reserve accounts was supplemented in the reporting year by a solutionfor individual premium reserve accounts, which means that even more fund unit-linked insurance contracts cannow be supported by custody account solutions from ebase. Already introduced in 2010 as an attractive follow-onproduct for the reinvestment of funds paid out on the maturity of life insurance policies, the account solution wasfurther developed as a white label variant (see page 70). For this reason, ebase can provide insurance companieswith accounts that have the company’s own look <strong>and</strong> feel. Furthermore, the partner insurance companies arenow able to offer their own interest rate sponsoring for these accounts (see page 70). As a result of changes ininvestor behaviour, the interlinking of custody account <strong>and</strong> account solutions is also meeting with great intereston the part of investment companies.For the target groups comprising independent financial advisers (IFA) <strong>and</strong> asset managers, ebase has extendedits product spectrum for ETFs <strong>and</strong> savings plans. In conjunction with the settlement account <strong>and</strong> an accountwith external payment functions that will be available by mid-2012, IFAs can access all of the major services forthe comprehensive support of their end customers – regardless of their main bank.In all target segments, ebase supports its partners in the sales process. ebase is exp<strong>and</strong>ing the services for itsinvestment custody accounts in order to meet the increased service requirements of its partners that arise fromchanges in the regulatory framework conditions amongst other things.
40|In addition, ebase is looking at new target groups beyond the existing market segments. The main focus herecentres especially on big companies with large customer bases that are looking for solutions to make customerrelationships profitable <strong>and</strong> to retain customers. Working together with ebase, they can offer their customersbanking services <strong>and</strong> integrate these with their core business to provide added value for end customers.Financial <strong>and</strong> risk <strong>strategy</strong>The strategic financing measures of the comdirect group are described starting on page 76, while our risk strategiesare explained in the risk report starting on page 89.ManagementIntangible assets of the comdirect groupThe value-<strong>driven</strong> <strong>management</strong> of the comdirect group is based on its fields of competence <strong>and</strong> intangible assets.In addition to the assets reported in the balance sheet, these intangible assets determine the value of the company<strong>and</strong> as such form the basis for successful business development <strong>and</strong> earnings performance.The most important intangible asset is the quality of our customer relationships. By targeting customers throughmarketing campaigns, our website, Customer Services <strong>and</strong> investment, building finance <strong>and</strong> provisioning advisers,we intend to intensify these relationships <strong>and</strong> increase both customer satisfaction (see page 55) <strong>and</strong> customeractivity. In addition, our institutional partners are serviced by key account managers.The high level of awareness of the comdirect <strong>and</strong> ebase br<strong>and</strong>s <strong>and</strong> the values associated with the br<strong>and</strong>s are akey competitive factor in existing <strong>and</strong> new customer business. We therefore strive to continually improve thesebr<strong>and</strong> values. Details of the comdirect group’s presence in the capital market <strong>and</strong> its activities in Investor Relationsin the reporting year are given on pages 80 to 82.Operating excellence in our largely automated yet individualised contact approach tailored to the different customergroups is a strength that impacts positively on the value of the company. This refers to the acquisition ofnew customers <strong>and</strong> the ongoing servicing of customers as well as the efficient execution of campaigns. Thispresupposes a high level of customer-related knowledge, professional <strong>and</strong> flexible Customer Services <strong>and</strong> a highperformingIT <strong>system</strong>.The <strong>management</strong> quality, service expertise, process intelligence <strong>and</strong> innovative power of the bank essentiallydepend on the expertise of its employees. We enhance our employees’ skills as part of our personnel development<strong>and</strong> <strong>management</strong> training measures. We promote expertise <strong>and</strong> create framework parameters for thepositive development of teams, are involved in training <strong>and</strong> continued professional development <strong>and</strong> offer performance-related<strong>and</strong> success-oriented compensation (see pages 86 to 88).Internal <strong>management</strong> <strong>system</strong>To <strong>system</strong>atically further develop our core competences <strong>and</strong> intangible assets for the benefit of our shareholders<strong>and</strong> stakeholders <strong>and</strong> thus to increase the value of the company <strong>and</strong> achieve a permanently attractive return onequity, we manage the entire bank on a holistic basis, taking account of all opportunities <strong>and</strong> material risks. In thisregard, we focus our attention not only on the development of financial performance indicators, but also on nonfinancialperformance indicators, which have an impact on the earnings situation <strong>and</strong> company value of the bank.The monthly overall bank <strong>management</strong> reporting shows whether the bank’s financial <strong>and</strong> operating performanceindicators are within the target range or whether unexpected variances have occurred. Selected performanceindicators are monitored <strong>and</strong> managed at shorter intervals.
| FOREWORD | THE BOARD OF MANAGING DIRECTORS | CORPORATE GOVERNANCE | GROUP MANAGEMENT REPORT | CONSOLIDATED FINANCIAL STATEMENTS | 41The financial situation for both the comdirect group <strong>and</strong> the business lines is illustrated by the return on equitybefore tax <strong>and</strong> the cost/income ratio amongst others. Additional important financial performance indicators arethe net interest <strong>and</strong> net commission income as well as earnings per customer.With regard to the non-financial performance indicators, we distinguish between customer, market <strong>and</strong> productrelatedindicators, as well as efficiency, risk <strong>and</strong> process-related indicators. We also use certain performance indicatorsthat make it possible to measure the sustainable development of the comdirect group. These sustainabledevelopment key performance indicators (SD-KPI) are tailored to the business model of the B2C <strong>and</strong> B2B directbank <strong>and</strong> as such are only comparable with the key indicators of a traditional commercial or investment bank toa limited extent. Selected indicators are used in external reporting.Customer <strong>and</strong> market-related indicators, such as trades or the number of different deposit accounts, are largelyoperating, company-specific leading indicators that have a delayed impact on our financial ratios, <strong>and</strong> in theevent of deviations from forecasts enable us to implement countermeasures early on, for example by adjustingterms <strong>and</strong> conditions.Sustainable development of the comdirect groupCorporate responsibility decisively guides our day-to-day actions in the comdirect group. This responsibility goesfar beyond our operating activities, encompassing community <strong>and</strong> social aspects as well.Supporting investorsProviding investors with comprehensive <strong>and</strong> readily comprehensible information to support them in their investmentdecisions is very important to us. In brokerage, we offer our customers an extensive range of information<strong>and</strong> analysis tools. Our customisable information platforms for the respective securities class are of note here. Forexample, there is a separate Informer for ETFs. We make a large share of these tools available to non-customersas well.All users of our website can find information on our new CFD trading on the cfd.comdirect.de portal. This providesdetailed information on how CFDs work <strong>and</strong> explains the risks, opportunities <strong>and</strong> methods available to limit risk.On average in 2011, our model portfolio <strong>and</strong> information pages recorded over 100.1 million page impressions amonth, which is around 51% of all of the page impressions for our website.With the aim of providing securities investors with tips on how to adequately diversify their portfolios, weprovide fundamentally suitable investment proposals for specific investor types that have been quality-checkedby independent organisations. Here we apply particularly strict selection criteria to our fund offering. The Fonds-Diamanten not only have to score well in the performance-based rating but also in the Morningstar qualitativerating if applicable. The qualitative rating measures the quality of the fund <strong>management</strong> <strong>and</strong> investment process,amongst other factors, <strong>and</strong> prefers providers that view their unitholders as partners <strong>and</strong> put the long-termprospects of success ahead of short-term profits.To promote the long-term asset accumulation by private households that is important for the economy, we offerparticularly attractive terms <strong>and</strong> conditions as well as financial incentives to encourage customers to invest insecurities savings plans. One such example is financial security for the younger generation via our JuniorDepotjunior custody account.Environmentally friendly banking operationsAs part of our “green comdirect” programme, we continually identify potential energy savings in order to reduceour carbon footprint on a sustainable basis. We already reduce our CO 2 emissions in the previous year by switchingto a green electricity supplier. We are able to make energy savings in IT in particular, as well as in lighting, paperconsumption <strong>and</strong> employee travel. Accordingly, we intend to further reduce our CO 2 emissions by the end of 2012using, amongst other things, energy-saving servers <strong>and</strong> workstation PCs, which automatically switch to powersaving mode at night for example, as well as LED lighting. A better link between our offices in Quickborn <strong>and</strong> the
42|local public transport network is also being piloted at the moment. Other project proposals will be reviewed thisyear <strong>and</strong> will be gradually implemented if practical in ecological <strong>and</strong> economical terms. We aim to achieve additionalCO 2 savings from 2013.Selected financial performance indicatorsPerformance indicator Definition Business line B2C Business line B2B2011 2010 2011 2010Return on equitybefore taxCost/income ratioNet interest income percustomerNet commission income percustomerProfit per customerPre-tax profit/average equityexcluding revaluation reserve (in %) 20.7 15.8 29.5 31.3Administrative expenses/(netinterest income before provisions +net commission income + result fromfinancial investments + other operatingincome + result from hedgeaccounting + trading result) (in %) 66.2 70.7 80.2 80.5Net interest income after provisions/number of customers on average forthe year (in €) 93 68 1 0Net commission income/number ofcustomers on average for the year (in €) 89 87 41 43Pre-tax profit/number of customerson average for the year (in €) 62 48 9 8Social commitmentOur social commitment centres on the Numeracy Foundation (“Stiftung Rechnen”), which was founded <strong>and</strong> initiatedby comdirect bank. Established in 2009, the Foundation aims to promote numeracy in Germany under themotto “Making numbers fun”. As a central point of contact, the Foundation networks promoters of mathematics<strong>and</strong> number skills from the worlds of science, business, politics <strong>and</strong> society <strong>and</strong> initiates activities that drawattention to numeracy <strong>and</strong> help give it a positive image.Since 2011, the Foundation has been supporting the “Come to MINT” initiative which encourages young womento enter the “MINT” professions (mathematics, IT, natural sciences <strong>and</strong> technology).Staff from comdirect bank are involved in the “Mathe4Life” (Maths4Life) corporate volunteering project <strong>and</strong> go toschools in <strong>and</strong> around Hamburg as mathematics speakers to help create a better underst<strong>and</strong>ing of the importanceof maths in professional life. In 2011, the project started at the Scout24 Group in Munich as well.The “Mathe-Meister” (maths champions) initiative supported by the Nummeracy Foundation has been providingmaths software for master craftsmen apprentices since 2011. The new software is intended to help identify <strong>and</strong>close gaps in numeracy skills at an early stage.Furthermore, the Numeracy Foundation was involved in the international “Mathematik ohne Grenzen” (mathswithout borders) competition, supported the “Mathe.Forscher” (maths researchers) programme <strong>and</strong> carried outthe nationwide “Mathe macht das Tor” (score a goal with maths) competition for schools that was so popular itwill be repeated in 2012.comdirect bank views itself as a partner of the Numeracy Foundation. Accordingly, not only did comdirect bank –together with Börse Stuttgart AG – provide the basic assets for the Foundation, but it also supports expansion ofthe Foundation’s activities by having executive comdirect employees on the Management Board <strong>and</strong> Board ofTrustees. comdirect also operates the office for the Foundation.
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