Report: Annual Report of Baader Bank Group 2023

Baader Bank AG

Banking & Trading.

Annual Report 2023

www.baaderbank.de

Key figures Baader Bank Group

	2022	2023
	EUR mn	EUR mn	Delta
Result from interest business	4.9	35.8	30.9
Result from commission business	73.6	79.5	5.9
Result from trading activities	53.2	37.4	-15.8
Revenue	21.3	11.4	-9.9
Other income	6.5	6.7	0.2
Income	159.6	170.8	11.2
Personnel expenses	65.0	72.6	7.6
Other operating expenses	75.6	90.6	15
Risk provision	6.8	3.7	-3.1
Expenses	147.4	166.9	19.4
Earnings before taxes (EBT)	12.2	4.0	-8.2
Taxes	3.2	1.1	-2.2
Minorities	0.2	0.0	-0.2
Group results	8.7	2.8	-5.9
Earnings per share in EUR	0.18	0.06	-0.12
Return on equity after tax in %	5.3	1.7	-3.6
Return in investment	0.5	0.1	-0.4
Total Assets	2,376	3,938	1,562
Equity capital	164.9	165.5	0.6
CET 1/Total capital ratio in %	24.3	23.0	-

Key data and other information

		Board of Directors	Supervisory Board
		(as at 31/12/2023)	(as at 31/12/2023)
WKN	508810	Nico Baader	Helmut Schreyer
ISIN	DE0005088108	(Chairman)	(Chairman)
Oliver Riedel	Prof. Dr. Georg Heni
Reuters	BLMG.MU
(Deputy Chairman)	(Deputy Chairman)
Bloomberg	BWB@GR		Christoph Mast
Ticker	BWB		Dr. Louis Hagen
Sector	Banks		Michael Frank
Stock market listing	1/8/1994		Timon Hauser
Admission segment	Outside market
Home stock exchange	Munich / m:access
Other stock exchanges	Berlin
	Dusseldorf
	Frankfurt	Baader Bank AG
	Hamburg		28,26 % free float
		5,40 % Ubtrend
	Stuttgart
		GmbH & Co. KG
	XETRA		66,34 % Baader
		Beteiligungs GmbH

Baader Bank

2 Annual Report 2023

Banking & Trading

under one roof

as a unique setup

usable through our

high-performance platform

Dear Shareholders,

The capital markets were characterised by high inflation and the declining growth

of the global economy during the 2023 financial year. It was a challenging and politically turbulent year overall. Trading volumes in particular, which have a significant impact on Baader Bank's earnings, remained at a historically low level in 2023. This was accompanied by selective performance on the stock markets as well as a shift in investor preferences towards interest-bearing securities, prompted by the rate hikes.

Over time and in spite of the difficult environment, the deflection of sales volumes away from the ­traditional stock exchanges with renumeration models to free trading venues continued in 2023. Fee-optimised best execution platforms, such

as the electronic market place gettex, have gained increased market shares from traditional German regional exchanges, especially since the exceptional years of 2020 and 2021.

In order to actively shape this change in the securities business, in the 2023 financial year Baader Bank focused once more on making the optimisations and investments that would allow systematic implementation of its strategic objectives. We remain on track with our ongoing High Performance Banking strategy programme, and offer our clients a unique trading and banking setup using a single powerful platform that offers optimum access both to trading and to the capital markets using a secure, automated and scalable approach. We are one of the leading European partners for investment and banking services. With this in mind, we have positioned ourselves as a quality service provider and a reliable and professional partner in the securities trading and capital market business, operating a scalable interface-based platform that uses market-leading

technology and processes. It goes without saying that our overall banking strategy is closely tied to our long-termfinancial objectives.

Based on our clearly defined and further developed business unit strategies, we also derive measures for achieving targets at the overall bank level

and measure progress on the basis of our relevant strategic KPIs for each business line.

In the current year, our efforts to achieve growth are focused on building on the successes and progress we have already achieved. We are constantly opti­ mising our internal processes as well as our external customer interfaces in order to be able to properly handle the increasing volume from a technical point of view and in compliance with regulatory require- ments, and we are extending our capital strength in the interests of our stakeholders. In 2024, Baader Bank is a bank that is growing profitably and promises the highest quality in terms of performance and delivery capability for its ­partners.

Baader Bank

2 Annual Report 2023

With a net profit (before taxes) of EUR 4.0 million, Baader Bank closed the financial year successfully in this economically­ and politically difficult environment and maintained its level of investment. The return on equity was 1.7 % for the year, with all four quarters of 2023 showing a positive result. Earnings per share amounted to EUR 0.06. As such, the Board of Directors does not intend to pay a dividend for the 2023 financial year, subject to the relevant committee decisions and supervisory requirements.

In terms of the number of accounts held within the Group, the Baader Bank account and securities account business grew by 51 % to 1,277,000 securities accounts over the year as a whole. Since the start of 2023, the securities account volume has increased by EUR 12.5 billion to a total of EUR 28.2 billion. Given the interest rate develop- ments, the B2B business experienced a shift

in investor preferences in the wake of rate hikes in 2023, but the (neo) broker and (online) asset manager business continued to grow, albeit at a slower rate.

In Baader Bank's base case scenario for the

2024 financial year, we expect that given continued growth in terms of customers, market volumes

and products, the account and securities account business will be further scaled up and the number of securities transactions will increase slightly ­compared to the previous year. In terms of the sales volume for 2024, we expect an increase compared to the previous year. Besides the continuing increase in the number of private investors in Germany and

Europe in the retail customer business, the expected slight increase in business volumes across all business areas is also helping to stabilise unit figures and volumes.

Baader Bank has been synonymous with the highest levels of professionalism in securities trading

for over 40 years. To continue offering our clients and partners a first-rate service in the future, we are subsuming our trading activities and services under Baader Trading with effect from the current financial year. For B2B clients this includes direct trading, market making and order book manage- ment, market making on gettex, crypto trading, high­ -touch brokerage, electronic market access and designated sponsoring. We also target B2C clients with our OTC trading via direct trading partners.

In the new financial year we will be focusing in particular on clearly defining our trading offerings so that Baader Bank can position itself on the market even more distinctly and improve its market positioning in order to actively shape the securities trading business.

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Annual Report 2023

Dear Shareholders, The Board of Directors of Baader Bank would like to thank you for your loyalty and confidence in our company as we dealt with the challenges faced in 2023. Last year, a strategically important year, we set the course for the years

to come and invested in future growth. The capitalisation of Baader Bank is proving to be a solid basis.

As at 31 December 2023, Baader Bank's total assets had increased by around 66 % compared to the end of the previous financial year, growing

to EUR 3.9 billion. Baader Bank's equity increased to EUR 165.5 million and the total capital ratio for the past financial year is 23.0 %.

We highly value the continued stable shareholder structure, comprising private and institutional ­investors as well as shareholders from among Baader Bank's management and employees and the Baader family. This gives us structural strength vis-à-vis our competitors.

The Board of Directors has once again decided that the shareholders' meeting will be held virtually. This is scheduled for 4 July 2024. As in the previous year, we will establish all technical and organisational framework conditions in the interests of our shareholders so that our shareholders' meeting satisfies the needs of all shareholders as defined by the amended legal requirements.

The Board of Directors would like to thank all employees of the entire Baader Bank Group for a very challenging and once again busy year in 2023.

We would also like to thank all of our business partners for the trust they have placed in us and for their successful and long-term collaboration, which is a crucial factor in Baader Bank's overall success.

For the current financial year, we have continued to set ourselves the goal of generating long- term participation potential for our stakeholders, achieving market and price leadership in the client business and making further improvements at the organisational and procedural level, as well as actively contributing to shaping the European stock and securities market.

Baader,

Chairman of the Board of Directors

of Baader Bank AG

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Nico Baader | Chairman of the Board of Directors

Responsibility: Group Strategy & Management, Group Legal & Corporate Finance, Human Resources & Corporate Services, Information Technology, Backoffice, Treasury, Riskmanagement & Regulatory Reporting, Compliance, Internal Audit

Baader Bank has been synonymous with the highest levels of professionalism in securities trading for over 40 years. To continue offering our clients and partners a first-rate service in the future, we are subsuming our trading activities and services under

Baader Trading with effect from the current financial year.

In order to actively shape the change in the securities business, in the

2023 financial year Baader Bank focused once more on making the optimisations and investments that would allow systematic implementation of its strategic objectives. We remain on track with our ongoing High Performance Banking strategy programme, and offer our clients a unique trading and banking setup using a single powerful platform that offers optimum access both to trading and to the capital markets using a secure, automated and scalable approach.

Oliver Riedel | Deputy Chairman of the Board of Directors

Responsibility: Distribution, Production / Markets Operation, Capital Markets, Business Management Clients & Markets,

Market Making Stuttgart, Market Making Fonds / ETFs / Equities FFM, Verbriefte Derivate, Market Making Bonds, Client Service Group, Business Management Administration, Fund Services

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Annual Report 2023

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Contents

Combined Management Report	9
1.	General information about the Baader Bank Group	10
2.	Report on economic position	13
3.	Forecast, opportunities and risk report	25
4.	Other disclosures	37

Report by the Supervisory Board	38
Consolidated Financial Statements	41
Consolidated balance sheet	42
Consolidated income statement	44
Statement of changes in equity	46
Cash flow statement	48
Notes to the Consolidated Financial Statements	49
Independent Auditor's Report	70
Information and Service	74

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Annual Report 2023

Baader Bank

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