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Wiesloch, February 21, 2017 – The Supervisory Board at MLP AG today approved a change in the group structure proposed by the Executive Board. Through a legal corporate separation, the regulated banking and financial services business will be concentrated in one company and other brokerage and consulting services in the other. Furthermore, the supervisory scope of consolidation will be narrowed down.
These measures are aimed at achieving a significant increase in free own funds. On the basis of the current capital adequacy requirements, MLP expects the free own funds to increase gradually by probably around EUR 75 million by the end of 2021. All client relations will continue under unchanged conditions and the MLP Group will continue to offer all relevant services and products in the banking and wealth management areas.
"Our banking business is at low-risk. Yet despite this, we are still feeling the full effects of the much tighter capital adequacy and supervisory requirements that have been introduced since the financial crisis. By increasing our free own funds, we are significantly extending our entrepreneurial and economic scope for action, primarily for investments and acquisitions, yet also in terms of our dividend distribution," explains Dr. Uwe Schroeder-Wildberg, Chief Executive Officer at MLP AG. "Our clients will continue to receive all services in the familiar high quality."
In addition to this, the new group structure will in future enable MLP to enter into strategic cooperations in the banking sector and also offer banking services for other market members.
MLP expects that the measures will generate one-off exceptional costs of EUR 9 million in 2017. Taking into account these one-off exceptional costs, MLP is anticipating earnings before interest and taxes (EBIT) of at least EUR 36 million for 2017, which represents an increase of 17 percent over 2015 (EUR 30.7 million). This corresponds to a forecasted operating EBIT (before one-off exceptional costs) of at least EUR 45 million in 2017.
The Executive Board intends to base its dividend proposal for the financial year 2017 on the operating net profit and will maintain a distribution rate of 50 to 70 percent. This shall therefore balance out the one-off expenses.
It is anticipated that the measures will be implemented in spring 2018, assuming a successful final coordination with the Federal Financial Supervisory Authority (BaFin).
Via the bank, MLP offers its clients current accounts and instant access savings accounts, as well as credit cards and a securities account. It also issues loans in special fields, such as medical practice financing for physicians.
MLP will also give a detailed report on this during the annual press and analyst conference to be held in Frankfurt on 23rd February 2017.