Business model of the comdirect group

Organisational structure, segments and locations

With 1.7 million custody accounts and 19.2 million executed securities transactions (as at the end of 2013 in each case), the comdirect group is the market leader in online securities business for modern investors as well as one of the leading direct banks in Germany with more than 1 million current accounts. The group is managed on the basis of two business segments which operate independently of each other and pursue their own business model and associated tailored strategy.

As the parent company of the comdirect group, comdirect bank AG is directly responsible for direct business with private customers. Together with its five special funds, comdirect bank constitutes the business-to-customer business line (B2C). Its subsidiary ebase GmbH (European Bank for Financial Services) is in charge of business with institutional partners and their end customers (B2B business line).

The registered office of comdirect bank AG is in Quickborn near Hamburg and the registered office of ebase GmbH is in Aschheim near Munich. In addition, face-to-face local advice for the placement of building finance is offered at the four locations in Berlin, Frankfurt/Main, Hamburg and Munich.

Management and control

The comdirect group is managed by the Board of Managing Directors of comdirect bank AG, which currently comprises three members – Dr Thorsten Reitmeyer, Holger Hohrein and Martina Palte. With effect from 1 October 2013, Holger Hohrein (42) succeeded the previous CFO and HR Director, Dr Christian Diekmann (47), who resigned from office on 30 September. In addition to Finance & Controlling and Risk Management, Holger Hohrein is responsible for HR, Business Development, Compliance & Money Laundering Prevention as well as B2B activities. Since 1 October 2013, Mr Hohrein has also been Chairman of the Supervisory Board of ebase.

Responsibilities of the members of the Board of Managing Directors (at the end of 2013)
Dr Thorsten Reitmeyer
Chief Executive Officer
Information Technology
Marketing & Sales
Produkt Management & Treasury
Internal Audit
Corporate Communications
Holger Hohrein Business Development
business partners/ebase (B2B)
Compliance & Money Laundering Prevention
Finance & Controlling
Risk Management
Human Resources
Martina Palte Advisory Services
Customer Services
Organisation & Consulting
Legal Services & Data Protection

The Supervisory Board works closely with the Board of Managing Directors and monitors and provides advice to the Board of Managing Directors on a regular basis on all material issues relating to the management of the company. Personnel changes on the Supervisory Board and its committees are outlined in the Report of the Supervisory Board. The main features of the compensation system for the Board of Managing Directors and the Supervisory Board as well as the breakdown by individual members are shown in the compensation report.

Corporate Governance statement

Management and control of the comdirect group comply with generally accepted high standards. These are summarised in the Corporate Governance statement pursuant to 289a of the German Commercial Code (HGB). This statement includes the Declaration of Compliance pursuant to Section 161 of the German Stock Corporation Act (AktG) as well as the Corporate Governance report in accordance with Section 3.10 of the German Corporate Governance Code, which contains information on our compliance standards.

The Corporate Governance statement can be viewed and downloaded from the website at Previous versions of the published documents are also available on the website.

Inclusion in the Commerzbank Group

The comdirect group is quoted on the Prime Standard (Regulated Market) and with a market capitalisation of €1.17bn (as of end 2013) is listed in the SDAX. 81.13% of the shares are held by Commerz Bankenholding Nova GmbH, a wholly-owned subsidiary of Commerzbank AG. As a result, 18.87% of the shares are in free float. Commerzbank AG provides services for comdirect bank, such as the processing of securities trading transactions as well as some payment transactions and part of the processes in risk management. In addition, the Treasury department of comdirect bank works closely with Commerzbank and generates interest income mainly from money market and capital market transactions with Commerzbank AG or its affiliated companies.

A detailed overview of the business relations can be found in the group notes.

B2C business line

Products, services and business processes

In the B2C business line, the range of products and services is designed to enable customers to make better financial decisions – both with regard to financial and securities investments as well as payment transactions and financing. The offering is pooled in the brokerage, banking and advice fields of competence.

Online business activities are carried out primarily via the website and to a growing extent via mobile banking. The bank offers round the clock Customer Services for contact with customers by email, telephone, fax or letter.

In the brokerage field of competence, comdirect facilitates speedy, secure and cost-effective stock exchange and OTC trading and provides a continually expanded and optimised selection of products for medium and long term investing. In brokerage, comdirect primarily generates commission income from the securities trading of its customers and associated services on the one hand, and from front-end loads and sales follow-up commission in its funds business on the other. In addition, there is interest income from loans against securities and settlement accounts.

In the banking field of competence, comdirect offers products for short through to long term investment as well as daily money transactions. In banking, comdirect generates interest income by reinvesting customer deposits in the money and capital markets and to a lesser extent from interest on credit lines and overdrafts. There is also commission income from placing consumer loans.

The advice field of competence comprises Baufinanzierung PLUS and Anlageberatung PLUS as well as the provisioning products offered together with the cooperation partner CosmosDirekt. Advisory services are predominantly provided by telephone, via co-browsing or by video telephony. Face-to-face local advice on building finance is additionally available at four office locations. In its advisory services, comdirect earns commission income from placing building finance and provisioning products as well as fees from investment advice.

comdirect bank’s product range
Brokerage Custody account offering (comdirect Depot, JuniorDepot and VL-FondsDepot)
Trading platforms (OTC trading, CFD trading)
Trading services
Loans against securities
Banking Current account with Visa card
Investment accounts (Tagesgeld PLUS, fixed-term deposit account, time deposit account and currency investment account)
Money savings plan
Consumer loans
Advice Anlageberatung PLUS
Baufinanzierung PLUS

Market, competitive position and key influencing factors

comdirect bank is in competition with other direct banks and online brokers as well as traditional retail banks.

In terms of the number of custody accounts and executed orders, comdirect bank is the market leader in online securities business for modern investors in Germany. Furthermore, in terms of the number of current accounts and deposit volume, it is one of Germany’s leading direct banks.

The development of the money and capital market environment is a material factor influencing the business line’s performance and earnings situation. The level of commission income in brokerage is affected by trading activity on the stock markets as well as in OTC trading and CFD trading. The demand for investment funds and price effects also influences the fund volume and consequently the level of commission on portfolio holdings. In investment advice and provisioning, the general trends in asset accumulation for private households are likewise of particular importance.

The interest margin in the deposit business is primarily affected by the movements in interest rates, spreads and ratings in the bond markets as well as the money market environment. The extent to which an adverse development can be cushioned by adjusting deposit interest rates, or a favourable development can be passed onto customers, also depends on the terms and conditions offered by our competitors. Our building finance activities are impacted by conditions in the real estate markets and the building finance terms and conditions of our financing partners.

The main industry-related factors refer to the level of acceptance of direct banking models among bank customers in Germany, the intensity of competition in our market segments as well as technical aspects such as the penetration of broadband technology. The long term industry trends are positive: direct banks have gained a large number of new customers in the past few years and still possess significant growth potential, including as a result of cuts in branch bank networks and the growing use of interactive communication channels.

B2B business line (ebase)

Products, services and business processes

ebase supports the business models of its cooperation partners with a comprehensive spectrum of tailored and B2B-type banking and brokerage products and services. In the past two years in particular, ebase has made further progress in its development to become a B2B full-service bank with the expansion of its securities offering, standardised asset management and comprehensive account and lending solutions. Since July 2013, ebase has had a new name that reflects its extended portfolio of products and services. “European Bank for Fund Services GmbH” became “European Bank for Financial Services GmbH”, and continues to be known as ebase for short.

Custody accounts, deposit accounts and lending products are available in partner-specific configurations and, on request, as white label variants in the branding of the respective B2B partner.

The B2B partners are subdivided into different segments.

ebase’s partner segments
Insurance companies and banks
Investment management companies
Asset managers, independent financial advisors (IFA)
Corporates (non-financials)
Banking platforms

ebase's multichannel operation provides both end customers and cooperation partners with a comprehensive service and support offering. This includes commission processing and professional data management, as well as support for the partners in marketing, sales and reporting. The online portal and ebase app are increasingly being used for communication purposes.

The earnings model of ebase primarily centres on commission from securities business which is supplemented by custody account management fees and interest income. There is also fee income from asset management.

ebase’s product range
Investment custody account ebase custody account (Order Desk Depot, Managed Depot, custody accounts for company pensions (bAV) and working hours custody accounts)
Savings and drawdown plans
VL custody account (investment of capital-building payments)
Custody account Equities, bonds, certificates, warrants
Investment accounts Daily money account
Fixed-term accounts
Loans Overdrafts
Loans against securities
Asset management Standardised fund asset management

Market, competitive position and key influencing factors

ebase is in competition with other fund platforms and direct banks with B2B activities. In terms of custody assets placed by third parties, ebase has a leading position in Germany among B2B platforms. It is also the partner of first choice in the insurance company and independent financial advisor (IFA) customer segment. Over 200 cooperation partners and their intermediaries and sales organisations use ebase as the partner for maintaining customers’ accounts and custody accounts.