Berenberg reaps second highest profits in 2010

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Germany’s oldest private bank Berenberg Bank has reported its second highest ever annual profits for 2010.

Berenberg made profits of €61.5m, down €3.6m on the previous year’s level of €65.1m. However, this came as the bank saw a surge in assets under management, up 16.4%, or €3.6bn to €25bn.

The bank invested heavily it its own infrastructure last year, including its London branch led by Ross Elder and Fred Hervey, formerly of Barclays Wealth.

An expansion of the bank’s workforce came alongside the move, with 58 of its 83 new hires in 2010 going to London. Its total number of employees is now 977.

The bank captured around 1,000 new clients in 2010, while its net new funds were the highest in the bank’s 451-year history, reaching €3bn.

Equity returns delivered for the bank’s investors dropped slightly against the previous year, from 53% to 45.3%.

Berenberg saw its gross income rise, from €233.9m to €237.3m.

Net interest income, measuring the difference between revenues generated by the bank’s interest-bearing assets and the cost of servicing its liabilities, fell from €42.2m to €32.9m.

Net commission income meanwhile jumped to €150m from €130.9m. The change in the ratio between its net interest and net commission income signals a greater concentration on its services business, said the bank. Its net trading income sank however, from €42.3m to €29.6m.

The core capital ratio improved to 15.1% from 13.1% the previous year. Berenberg’s solvency ratio also increased to 18.8% from 16.5%, signalling the bank’s readiness for adjustments necessary under Basel III, it said.

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