Let me now turn the floor over to your host, Pascal Löcher.
Thank you very much, and welcome to MLP's conference call to our results for the first nine months and the third quarter of 2023. With me today is our CFO, Reinhard Loose. He will guide you through the presentation, and of course, we are happy to take your questions after the presentation. So please go ahead, Reinhard.
Thank you, Pascal, and good afternoon, ladies and gentlemen. Despite significant external pressures associated with overall economic developments, uncertainty among consumers, as well as factors such as inflation, interest rate rises, and global crisis, MLP was able to maintain its successful course in the first nine months of the financial year. The high stability of the overall business once again showed its positive effects. Thanks to its broad and strategic interlink positioning, our group enjoys a USP over the competition. With this systematically developed diversification, the group is capable of continuously driving forward its business, as so often demonstrated, particularly during tough economic times. In the period from January to September, we were able to increase total revenue to EUR 684.6 million, which represents a new record.
At EUR 209.7 million, Q3 revenue also surpassed the figure from the same quarter in the previous year. The decrease in earnings before interest and taxes during the first nine months compared to the same period in the previous year can be attributed to various factors that are both understandable and, among other things, also unrelated to operational activities. We already presented most of these in previous quarters, including one-off balance sheet effects, as well as the key impact of foreseeable cost increases due to inflationary pressures. In August, I also gave a detailed report on our new trainee program that aims at acquiring more MLP consultants. Our investment in this program, which are already taken into account in our annual forecast, have started. The program itself has now also been successfully launched.
At the same time, we continue to operate an effective cost management system. Our operational development is successful, and we are now anticipating a strong closing quarter, above all, in old age provision and the interest rate business. We are also happy to once again confirm our EBIT forecast of EUR 75 million-EUR 85 million for the year. In the midterm, we are adhering to our plan of recording an EBIT of EUR 100 million-EUR 110 million for the group, with more than EUR 1.1 billion in sales revenue by the end of 2025. Thanks to strategic further development of the group, we are continuing to make progress along this ambitious growth path. We have been continuously optimizing and strategically diversifying the MLP Group since 2005.
Above all, the latest phase of our ongoing further development is characterized by enhanced value creation and consistent digitalization. I've already reported on this topic on several occasions in the last few months. The intelligent end that comes from personal support provided by our consultants continues to sit at the heart of our digitalization strategy, coupled with the digital self-service that our clients demand in addition. Our client portal, which we recently optimized from the ground up, is a visible sign of this. In the background, we are working hard on further automating work processes, particularly for repetitive activities. At the same time, we are also continuously improving the consultant portal, which can be seen as a kind of cockpit for our highly qualified consultants. The objective with all of these activities is to free up more time for challenging and ambitious client topics.
In other words, the core of our consultancy services. In addition to this, we are extending our service offering within the MLP group and also entering new business areas with a digital focus. As a high-grade digital platform for employee benefits, Textra is a prime example of this. We are also further tapping into the field of artificial intelligence. Our group-wide AI task force has been supporting the first applications in the MLP group and is working hard to determine new potential uses in collaboration with the subsidiaries. Speech recognition is likely to play a key part here, particularly in our service units, and we are proactively advancing this topic in a very targeted way with professional partners. You can find an overview on revenue development on slide five of the presentation.
Total revenue rose to EUR 684.6 million in the period from January to September 2023, which represents another new record. Income from commissions and fees was EUR 603.3 million. The interest rate business at MLP Banking also enjoyed particularly strong growth, with an increase of 264% to EUR 45.7 million. As expected, in light of current market developments, real estate development revenue displayed a significant decline to EUR 60 million after the first nine months of 2023, compared with a very strong equivalent period in the previous year. In non-life insurance, MLP was able to record a particularly strong increase in revenue, with a 14% rise after nine months. The industrial broker segment, DOMCURA, and MLP's private client business, all contributed to this.
Growth also continued in old age provision, where revenue increased by 6%. The good development in occupational provision is having a particular impact here. In addition to this, our young consultant area has continued to display good development. In health insurance, MLP was also able to record further significant growth with an increase of 8%. This reflects the increased awareness among many citizens of the importance of securing their own health. In addition to this, we are observing increasing interest in occupational health insurance. To this end, we are offering consultancy and implementation services for companies via our TPC business. As expected, the challenging market developments continued to negatively impact both the real estate brokerage and loan and mortgages consulting after nine months.
Accordingly, revenue was significantly lower in these two fields, although a slight upturn could be observed in loans and mortgages in the third quarter, with a revenue contribution of EUR 3.3 million. Wealth management revenue after nine months was at EUR 228.5 million. This figure displayed quarter-to-quarter improvement. At EUR 78.1 million, Q3 was already at the previous year's level. In light of volatility on the capital markets in the preceding quarters, only very limited performance fees have been collected so far this year. Nevertheless, the investment concepts displayed good performance. Assets under management remained virtually constant. At EUR 55.9 billion as of the 30th of September 2023, the figure is slightly higher than at the end of the first quarter and only slightly below the record high from the second quarter.
The MLP Group is therefore operating on a par with renowned private banks. The non-life insurance portfolio volume managed in the group once again set a new record at EUR 689 million as of the 30th of September. This figure is in line with medium-sized non-life insurers in Germany. You can find the current income statement on page eight of the presentation. Despite operating in conditions that remain challenging in parts of the markets, above all in real estate, EBIT after nine months was at EUR 45.2 million. The start of investment in our new training program for attracting MLP consultants, one-off effects, and in particular, inflation-based cost increases, were all factors that led to EBIT remaining lower than the same period in the previous year.
We are responding to this with a consistent cost management approach, which we are continuing both resolutely, resolutely, and in a highly targeted way. The negative one-off effects we have seen for this financial year have already been processed in the first nine months of 2023. With the trainee program already mentioned, we are further accelerating our acquisition of young MLP consultants in the midterm. More than ever before, we feel certain that this will help us win over the best talents to our company. After all, only these talents actually are capable of delivering MLP service commitment to our discerning clients. At the same time, we are actively addressing the challenges that all companies are now facing as a result of demographic developments. In other words, the trainee program represents a key strategic step with which we are once again making highly targeted investments for our own future.
The next slide shows our balance sheet. At 20%, the core capital ratio remained at a high level on the reporting date. The liquidity coverage ratio, LCR, which serves as a benchmark for the short-term liquidity situation of stress scenarios, and as such, is an indicator of resilience, is 1,618%. It is therefore well above the ratio of 100% required by the supervising authorities. The consultants in the MLP Group were serving 578,200 family clients as of the 30th of September. The gross number of newly acquired family clients in the period from January to September rose to 14,100. The number of corporate and institutional clients as of 30th of September was 27,100.
The number of consultants in the MLP Group at the 30th of September was 2,030. This also reflects a knock-on effect in the context of our new trainee program for aspiring consultants, which we successfully launched in mid-July. As already announced in our figures for the first half of the year, this will then also be visible in the comparison of consultant numbers at the end of the year. In the midterm, we are still anticipating a further and substantial increase in consultant numbers. Above all, thanks to our new training program... Ladies and gentlemen, please now allow me to move on to the forecast. Despite continuing to operate in challenging conditions in part of the market, we are happy to confirm our forecast for the current financial year, and still expect to record EBIT in the range of EUR 75 million-EUR 85 million.
Above all, we are anticipating the interest rate business to remain strong, as well as a strong fourth quarter in old age provision, where increased dynamics over the same period of the previous year could already be observed in the last nine months. The same applies to the health insurance consulting field, in which we are now anticipating more positive revenue development for the full year, with a slight increase being forecasted. Demand for insurance to protect their own health remains high, particularly among our customer clientele. In wealth management, as already mentioned, we achieved a quarterly improvement in the current year. Regarding continuation of this, the future development of the capital markets will obviously also play an important part.
Based on the assumption that aside from the recent setback, no significant disruption will occur in this field, we stick to our forecast for this consulting field, which we indicated as stable. In the loans and mortgages consulting field, we observed a slight improvement in the past quarter of the preceding quarter. Now, in real estate brokerage, indicators such as the number of visits and notary appointments are also giving an indication that things are likely to improve somewhat in the final quarter. I've already spoken about the development of costs and our cost management. The only thing to add at this point is that the investments of the last few years, in particular, including those in the IT infrastructure, are having a significant positive effect on the cost items.
We are adhering to our midterm planning of recording EBIT in the range of EUR 100 million-EUR 110 million, with revenue of more than EUR 1.1 billion by the end of 2025. This planning continues to be essentially based on the three key strategic success factors that you are already aware of. A further increase in assets under management in the group, ongoing development of non-life insurance portfolio volumes, and sustainable growth in all parts of the MLP group. At the same time, we are keeping a close eye on actively managing our costs. Ladies and gentlemen, please now allow me to come to the summary. Firstly, the last nine months underline the stability of our group, whose strong pillars mutually support and complement each other. This strategically developed positioning enables us to continuously drive forward our business.
Secondly, we've already made good progress in our operating business. We are anticipating a strong fourth quarter, particularly with a view to our interest rate business and the ongoing dynamics in old age provision. And thirdly, in the midterm, we are still planning to increase sales revenue and profit of the MLP Group significantly by the end of 2025. We are already making good progress on this ambitious growth path. Many thanks for your time and your interest. I'm now happy to take any questions.
Ladies and gentlemen, if you want to submit a question, please press nine, followed by the star on your cell phone. If you want to remove your question, please press nine, followed by the star again. Please press nine, followed by the star now. The first question comes from Fabien Le Disert from Kepler Cheuvreux.
Yes, thank you. Good afternoon, good afternoon, everyone. So Fabien Le Disert from Kepler Cheuvreux. I have several questions. The first one is on FERI and the level of performance fees. Did you see significant shifts in terms of asset allocation requests from your client base in wealth management in Q3? And what was the exact amount of performance fees in Q3? Second question regarding the banking business: Do you expect an uptick in the cost of risk in the coming quarters, in the banking segment, given the macro environment in Germany? Third question, in non-life insurance, do you expect the strong dynamic seen over the last few months to continue into 2024?
The final one on guidance: Do you see the lower hand of the guidance as a more probable outcome? And don't you think that the guidance could be challenged by investors if the macro environment were to deteriorate further in Q4? Thank you very much.
Thank you. Thank you for the questions. The first question, performance fees and FERI. I'll start with the figure. In Q3 itself, we only had performance fees and FERI together from only a little more than 100,000 EUR, which led to overall performance fees and FERI of EUR 2.1 million for the whole year. Concerning the question, asset allocation, obviously we see a little shift towards more bond business and a bit less request concerning the question of alternative assets than we saw, especially in the last strong year. And therefore, yes, definitely there are obviously other questions from our clients in the FERI business. The next question was concerning bank and cost of risk.
In general, in let's say, in our internal plans, yes, we expect a little uptick in cost of risk, but not too much. Why? Our clients in the banking business are, as you know, clients of little upper middle class, and there might be more problems than we had in the past, where we had extremely low cost of risk. But we don't see too many cost of risk. Therefore, overall, for the banking performance, we don't see this as huge negative impact. Non-life insurance, we had a very strong development in June this year, and the question was if this will continue in 2024.
Let's obviously, we will give you more guidance about on in 2024 in the beginning of the year. But just as an outlook, part of this positive development in 2024 was also inflation on the contracts which we had with our customers, especially in the real estate. In the real estate sector, there were increases overall on the market between 15%-25%, and this increases in the conditions toward the customer also increase our revenues. And for next year, let's stick with the real estate sector. For next year, the perception of the increase in 2024 is more between 7%-10%, and therefore, positively speaking, we expect an increase and a very interesting increase also in revenues.
But at least one, there are some factors which will not support as much as they supported in 2023. But nevertheless, our overall dynamic, our overall positive outlook for the sector, stays in place. Therefore, I'm relatively sure that we will see very nice figures also for the sector in 2024. And concerning guidance, let's see, from the past, we all know that the last quarter in many areas, in the areas of FERI and the areas of old age provision, is relatively volatile. And therefore it's still a little open question, how the last quarter obviously will end. Therefore, definitely there are some pressures from the market.
As we said, or as I said right now, we believe that we'll come out, we'll finally finish in the range of our guidance, which is between EUR 75- EUR 85, and then let's see in which area of the guidance we will finally land.
Okay, thank you very much.
I hope this answered your question. You're welcome.
Yes, yes, thank you.
The next question comes from Philipp Hässler, from Pareto Securities.
Yes. Hello, Philipp Hässler from Pareto. I have a few questions. Firstly, on the interest rate expenses, which were stable quarter-on-quarter, which surprised me somewhat. Maybe you could comment a little bit on the reasons why the interest expenses were stable and not increased due to the higher interest rates. And given outlook, how do you expect interest expenses to develop in the next quarters? Then secondly, net liquidity went up by EUR 70 million, quarter-on-quarter. This is quite a high number. Is there any special reason for this? Thirdly, your financial result or financial cost, how you call it, was positive in Q3. Normally, it's negative. Is there any specific reason for this? And last but not least, my favorite question: Could you give us the net flows for Q3, please?
Yes, hello, Hässler. Sorry. Start with your favorite question, the net flows of the... and as always, I will answer with the gross inflows and outflows, which is very easy, not too positive, but very easy this time, because we had EUR 3.7 billion gross inflows from 1st of January to the 30th of September, and we had EUR 3.7 billion also outflows. That means the net flow for the first nine months were zero. But the performance, by the way, for our concepts and for the whole assets under management, were at EUR 1.7 billion for the first nine months... This was the first question, then the last question.
When the first question, I'm, let's say, fighting a little bit with your question because you said your interest rate expenses were stable, which-
The interest expenses from the banking business, if I'm correct?
I don't think so. In my numbers, the interest, we had a little bit more than EUR 400 thousand or EUR 300 thousand interest expenses in the bank in the first nine months of 2022.
Oh!
EUR 9.9 million in the first nine months of 2023.
Yeah. Sorry, sorry. I mean, Q3 versus Q2 this year. I mean, sorry for not being-
Oh, okay.
- precise.
Okay. The quarter-to-quarter was more or less stable due to the fact that we had some increases. We were a little bit earlier in the market in Q2, and we in general were more or less stable in Q3. You will see an upturn there in Q4 because end of Q3, we increased interest rates. We are at the moment for one-year Festgeld at 3.5%, and for daily accounts for Tagesgeld at 1.5%. The interest rate for Festgeld was increased at, I be- as far as I remember, end of September. Net liquidity went up also quarter-to-quarter. In Q2, we had a dividend payment, which was, is always a negative impact in Q2, and which we haven't in Q3.
And that was, I think, quarter to quarter was the reason for the net liquidity increase. And the financial results positive was that due to the fact that some liquidity was in the non-banking business was let's say profitably put to some banks, and therefore we received some nice interest rates for the liquidity of the non-banking business. And that is the main reason as far as I know right now, why our financial results went up.
But this was, one-off, or we cannot expect this to continue in the next quarters?
In general, the positive effect in general will continue.
So we can expect rather positive than a negative financial result going forward on a quarterly level?
Yeah.
Okay.
Yeah.
Okay, and the increase in net liquidity was only due to this, due to the dividend. Okay. I thought there may have been some other reasons, but there weren't any.
No. No, there were no, no main reasons. No.
Okay. Thank you.
You're welcome.
The next question comes from Henry Wendisch, from NuWays.
Hi, everybody. Thanks for the presentation. Basically, yeah, my colleagues have already been quite detailed, but I have one more follow-up question on the real estate business. I saw in Q4 2022 that the Deutschland.Immobilien segment made a rather large EBIT loss in Q4. Was that probably due to some depreciation that you had to do on the real estate? Is that something we can look at and expect at Q4 as well, or is that basically yeah, already been done with?
Overall, as we all know, the real estate segment stays in a difficult condition, but we see some tailwind there. In Q4 2022, we had to do some depreciations and also some loss protection. In the last quarter of 2023, we expect there a positive more positive development. Therefore, Q4 2022 was a one-off effect.
Okay, thanks.
You're welcome.
At the moment, we have no further questions, so I will hand over back to you.
Okay. If there are no further questions, I would like to thank you for taking part in our conference call. Of course, you can reach us if any further questions arrive later. Thank you, and goodbye.