Ladies and gentlemen, welcome to our conference. With me today is our CFO, Reinhard Loose. He will guide you through our numbers, and of course, we are happy to take your questions after the presentation. Please go ahead, Reinhard.
Thank you, Frank. Good afternoon, ladies and gentlemen. The MLP Group continued on its growth course in the first nine months of what has certainly not been an easy financial year, considering the economic challenges. Our sustainable, highly diversified business model in particular, has had a very positive effect. As a result of this positioning, we not only benefit more than average in economically dynamic phases. Rather, in phases of overall economic strain, such as at present, the fact that our business rests on several interlinked pillars proves to be strategically prudent. It's certainly not a given to achieve a plus in turnover and earnings in such times, which we have succeeded in doing in the first nine months of this year. The environment is, as you know, characterized by significant recessionary tendencies in the economy, as well as increasing strains on the markets.
We have no influence over such external negative effects, but we have a good grip on all things we are able to influence as a company. In addition, we are currently experiencing just how much importance our clients attach to comprehensive and independent support from a personal advisor, especially in times of crisis. We, as the MLP Group, are especially active in high quality and solvent client segments. This gives us further stability, also in view of the further increased fundamental strains in our markets, which we pointed out repeatedly and early on in the past months. In light of this pressure, we remain very vigilant and for good reason. Yet we continue to be generally optimistic for this year and also have a close eye on our medium-term planning for 2025. You can find an overview of revenue development on slide five of the presentation.
The month January to September 2022, MLP increased total revenue by 7% to a new record level of EUR 674.7 million. Commission income, in other words, revenues from commission and fees, is now at EUR 611.6 million after the first nine months. The commission income shows just how closely and ably our consultants serve their clients, fulfilling their task as the contact person for all financial matters. These business figures reveal something else, too. Because we have continuously developed the MLP Group, we are now established with client groups that we only served in very small numbers just a few years ago, including high-net-worth individuals and institutional investors, plus corporate clients whom we advise on occupational pension provision as well as industrial insurance.
We have worked hard to win the trust that all our client groups place in us, especially in these difficult times, and we are very aware of how significant this is. A glance at the individual consulting field shows that we were able to record particularly strong growth in real estate and non-life insurance in the first nine months of 2022. The real estate field, which includes real estate brokerage and real estate development, recorded a particularly significant increase of 66% in the period from January to September 2022. This is due especially to the successful project business of the MLP subsidiaries in the Deutschland.Immobilien segment. What's more, real estate brokerage, primarily by MLP consultants, contributed to the positive development over the past nine months.
As at the end of the reporting period, real estate brokerage experienced a market-related dip, which we were unable to avoid. Nevertheless, real estate continues to be a very good option as protection against inflation in the highly diversified portfolios of our clients. Non-life insurance also grew considerably by 17% from January to September 2022, rising to EUR 142.1 million. The first-time consolidation of the entities in the industrial broker segment in the first quarter also had an effect here. RVM has been fully consolidated since the second quarter of 2021. DOMCURA and MLP's private client business also displayed positive developments in the first nine months. Health insurance also performed modestly positively, with growth of 2% to EUR 41.6 million after nine months in 2022.
Particularly in the third quarter, there were signs of an increase in business. This was due especially to the so-called option tariffs, which allow clients to secure rights to access private health insurance early and to subsequently switch to the private system. Not least due to the effects of the pandemic, more and more clients are inquiring about high-quality private health insurance. Loans and mortgages business too achieved slight growth of about 2% to EUR 16.1 million after nine months, despite very gloomy market conditions. The recent sharp rise in financing interest rates had already caused many people to refrain from considering the purchase of a property before the third quarter. While it is to MLP's advantage that our interested clients enjoy above average income and wealth, we too felt the pressure on the market in mortgage lending in the third quarter.
In old-age provision , revenue saw a stable development in the first nine months and stood at EUR 136.3 million. Market-related challenges were also felt at the start of the second quarter in this consulting field. This applies for both private and occupational pension provision. This can be attributed to the current uncertainties for consumers and the strain that numerous companies are currently facing, in particular due to natural gas supply crisis, ongoing disruptions to supply chains, as well as rising inflation. Nevertheless, the topic of occupational health insurance in particular is increasingly in demand. More and more SMEs are recognizing this as another good instrument to increase their employee retention, especially in this competitive market for skilled workers. At the same time, it has been an extremely welcomed extension of their own health coverage for many employees.
Development of our revenue and wealth management, too, must always be viewed in the light of developments on the capital markets. Just as in the second quarter, this was characterized in the third quarter too, by geopolitical crisis and tensions, inflation, high energy prices, and not least by ongoing supply chain issues. Recession can no longer be avoided. It's simply a question of how long and how severe it will be. In this increasingly gloomy climate, MLP has performed more than respectably. The relevant key figures in asset management have shown how strongly we are positioned in this area. Despite the challenging situation of a very significant decline in performance-based compensation associated with this, the MLP Group was able to achieve almost constant development in wealth management in the past nine months.
Revenue amounted to EUR 240.1 million, compared to EUR 249.8 million in the same period of the previous year. However, revenue did drop in the second, and particularly in the third quarter of 2022, as we expected. Following a significant contribution to revenue in the same period of the previous year, particularly in the third quarter of 2021, negative capital market developments in the second quarter of 2022 meant that almost no performance-based compensation were collected in the period under review. Indeed, these fees were already significantly lower in Q1 2022, than in the same quarter of the previous year. Having once again successfully compensated this effect particularly highlights MLP's stability and strength.
The continued net cash inflows at FERI and MLP Bank show just how well-positioned we are with our expertise among our clients, both at FERI and in MLP's private client business. The volume of assets under management in the group reached EUR 54.4 billion as of September 30, 2022. This puts us just slightly above the figure of EUR 54.2 billion for the previous quarter. The fact that the non-life insurance portfolios managed by the MLP Group have once again seen an increase is equally pleasing. At EUR 623.2 million as of September 30, 2022, we are now operating more than ever before at the level of a medium-sized non-life insurer. Such portfolio volumes as we manage in the group are another important stabilization factor, all the more in difficult economic times.
You can find the current income statement on page eight. At a value of EUR 52.2 million, MLP succeeded in significantly increasing EBIT after nine months, thanks to its broad diversification. This was driven primarily by the strong increase in EBIT in the first quarter of 2022 to EUR 34.6 million. Q3 EBIT totaled EUR 8.2 million in 2022, under significantly less favorable economic conditions. By comparison, the figure for 2021 was EUR 15.9 million, while in 2020 it was virtually identical to 2022 at EUR 8.1 million. The far higher EBIT in the third quarter of 2021 was marked by high performance-based compensation. Our net profit rose from EUR 31.2 million to EUR 34.9 million after the first nine months of 2022. The next slide shows you our balance sheet.
As of the balance sheet date, shareholder equity rose slightly from EUR 496.2 million to EUR 511.1 million. The equity ratio was 17.9% at the end of the reporting period. This puts us in a very good position. We are anticipating a comparable level of the course of the year. The consultants in the MLP Group were serving 568,400 family clients as at September 30, 2022. The gross number of newly acquired family clients was 13,700. We also served 25,100 corporate and institutional clients. The number of consultants in the MLP Group as of September 30 was 2,040. This now brings me to our forecast.
Despite further increased risk in the markets, we are still aiming to achieve an EBIT of between EUR 75 million and EUR 85 million for 2022. Yet we remain highly vigilant in view of the pressures I mentioned at the beginning and the possibility of them worsening. Over the past years, we have specifically developed MLP's strategic position. In phases of external economic strain, in particular, the group's business model is able to offset declines in individual areas against growth in other areas, or even to overcompensate for them. As such, MLP continues to expect ongoing satisfactory development in revenue. For 2022 as a whole, we have slightly adjusted our revenue expectations in individual consulting fields. In view of the current market situation and the strong fourth quarter in the previous year, MLP now anticipates stable to slightly downward development in old age provision.
In light of the very steep decline in the building economy due to the increased interest rates and building inflation, MLP now expects to see a slight downward trend in revenues for 2022 as a whole in the loans and mortgages business. In terms of health insurance, however, MLP has raised its expectations and now reckons with slightly positive development in revenue. This is based on the increased demand for private health insurance cover following our clients' experiences over the pandemic and clients' gradual transitions to private health insurance using option tariffs. MLP continues to expect significant growth in revenue in real estate and non-life insurance. Although the current market situation is slowing our growth in the real estate business segment, a relatively new area for us, it should still remain at a considerable level for the year.
As I already mentioned, buying property as protection against inflation is also an important topic, especially for our clients. With this in mind, we do not hold with the recently expressed and sometimes extreme pessimism with regard to the real estate market. After the boom comes not the crash, but a new normal. This is also the conclusion of a recent study by real estate experts from the Institut der Deutschen Wirtschaft. Regarding the interest rate business at MLP Bank, we are reckoning with a significant increase in revenue for 2022 as a whole. In our banking business, the normalization of interest rate is having exactly the opposite effect on construction financing and real estate. Previously, we had to pay negative interest rates for deposits with the Bundesbank, but now we are again generating a reasonable interest contribution here.
At the same time, we are continuing with our consistent cost management in the entire MLP Group, not least in view of the development in inflation. Based on the forecast for the current year, we therefore reaffirm our medium-term planning. By the end of 2025, our EBIT is set to increase to EUR 100 million-EUR 110 million, paired with revenue of more than EUR 1.1 billion in the same year. This planning is still essentially based on three central strategic success factors, which I have explained in detail over the past months. Today, I will just mention them briefly. A further increase in assets under management in the group, sustainable growth across all consulting areas, and the continued expansion of our real estate business, even under worsening conditions. Ladies and gentlemen, allow me now to move on to the summary.
Firstly, the first nine months, we continued our growth trajectory, increasing sales revenue and earnings, and this in a continually gloomy market environment. More than ever, the MLP Group is benefiting from the great stability we have created with our strategic development in the past years. Secondly, the result achieved after nine months forms a very solid basis for achieving our annual goals in the final quarter. We are generally confident that we will be able to manage this. Yet we are very aware of the risks that may potentially increase further in our markets. Thirdly, we have reaffirmed our medium-term planning for 2025 today. We have already entered this further growth phase, which does not necessarily have to be linear. We are consistently pursuing the path to our goal of raising turnover and earnings for the MLP Group to the next level.
Many thanks for your time. I'm now happy to take any questions.
We'll now take our first question at the phone. Please state your name and company before posing your question. Your line is open. Please go ahead.
Yes. Fabian Leditscher from Kepler Cheuvreux. Thank you very much. Good afternoon, everybody. I have four questions. The first one on performance fees. What was the exact amount of performance fees in Q3, and what do you see for Q4? The second one, in the banking business, could we expect the same kind of impressive growth in the coming quarters, nearly 27%? The third one, in the industrial broker segment, given the difficult situation, are you still looking for suitable targets in this segment? Or are these projects on hold pending, maybe better visibility on the macro picture? The final one, I noticed that the number of consultants was slightly down at the end of September.
Do you still expect the number of consultants to grow in the coming quarters given the environment or will you become more conservative? Thank you very much.
Thank you for the questions. I'm trying to ask them in the order of your questioning. Number one, the performance fees for Q3. In Q3, we had performance fees and carries together of around EUR 0.3 million. That means for the whole year, meaning one to two, Q3 together, we are now at performance fees and carries together of around EUR 5 million. Your question concerning Q4 obviously is a little guess. Seeing the market conditions, we would not expect any significant performance fees there. Perhaps a smaller number, but no significant number. Your second question was if we could see a banking growth similar to as in Q3 in the next quarter.
I would also say there, yes, we will see a growth number there. We will see very comfortable results in Q4. I wouldn't think that's exactly the same growth number, but I think the direction is good and the overall earnings for the whole year in the banking segment will be quite good. Your third question was concerning the industrial broker segment. We are growing there, and our intention definitely is also to grow not only organically but also inorganically. That means we are still in M&A discussions and talks with other participants in the market. Obviously, no one knows if they will be finally successful, but our intention there is to continue the growth.
Like in many other segments, we are in interesting times there because obviously interest rates and prices are linked together. At the moment, I think the turn in interest rates, the different conditions in the market are not understood by everyone in the market, let's say this way. Therefore, the discussions are intense, and finally, we'll see if we find targets for reasonable prices, which is very important for us, you know. That for us it's important that they fit to us, the culture, obviously the segment, but finally, for us it's important that the price is the price which we see as a reasonable price. Number four, the number of consultants. Yes, there was a small decline in the last quarter.
At the moment, I think we also talked about this also already in the last quarter. We have the market conditions where new starters in the market or employees overall are in a very good situation, and that makes it very difficult for us to find enough consultants or as many consultants, as many good and fitting consultants as we would like to have. We are struggling to see a growth in Q4, but at the moment, it's not realized. That means, we are looking forward, and our plan definitely is to grow consultants at the year-end. As I said, it's a tough competition at the moment in the market outside. With this, I hope I answered your questions.
Yes, thank you very much.
You're welcome.
Thank you. We'll now move on to our next question. At the tone, please state your name and company before posing your question. The line is open. Please go ahead.
Yes. Hello, Philipp Hässler from Berenberg. Three questions, please. Firstly, on the net flows, could you please give us a figure for Q3 or rather the first nine months? Secondly, on the real estate brokerage business, you sound quite optimistic. Other developers don't sound that optimistic. Maybe you could explain again why you are more optimistic and maybe differentiate a little bit between the developer business and the demand among your customers for real estate brokerage. Last but not least, maybe it's possible to dig a little bit more into the to your net interest income expectation. I think you once said you used to pay around EUR 5 million of negative rates. How has this changed in 2022? And how do you see or what do you expect for the next year? Thank you.
Hello, Mr. Hässler. Yes, thanks for your questions. Your first question was considering the inflows and the outflows or net flows concerning our assets under management. On the first nine months, we had inflows of EUR 6.4 billion and outflows of EUR 3.4 billion. With this we finally come to the assets under management which we reported with EUR 54.4 billion. Your next question was concerning real estate and why we are optimistic or more optimistic than others in the market. I think we should differentiate there a little bit. Definitely we see that the market conditions have changed drastically, which is, let's say, positive for us. Just figure-wise is that we, as you know, are here in a relatively new business.
That means we have something like a base effect. We start from relatively small numbers, and from small numbers it's easier to grow than if you are an experienced and established player in the market. This is the effect why we, for us and for our business, expect a growth although we are in the same difficult market than everyone else. We see, and you asked for the differentiation between development and demand for brokerage. In the brokerage business, definitely, we see that it will be more difficult to see a growth even on the basis where we are in the last weeks and months. The demand there also dropped within our consultants, perhaps not as much as in many other areas. But definitely it dropped.
What we see positive there is the developer business. There we see that again from the relatively small base we started, we see that the projects which are ongoing, that the projects will deliver additional revenues for us in this year and also the next year. Altogether, this brings us to the forecast which we had and also for the outlook for the next year that we see potential for us in the market although definitely it will be much more difficult than it was one year ago.
Sorry to interrupt. The rising construction costs are not a problem for you or you are able to pass this on to your customers?
At the moment we have contracts where the construction costs are, let's say, the rise is very limited to us because we are not buying, but because we have companies where we have fixed contracts. Obviously there's a risk in it. If you go more into details, definitely there's a risk that they can't take this rise on with. But normally, from the contracts, the risk is not in our books. If we start new project or if we would start new projects, definitely then we would pass the expectation for the building phase, we'll pass this to the prices. Does it answer your question there?
Yes, yes. The impact for higher interest rates, please.
Yeah. Of course. Now you ask for the impact on interest rates. As you mentioned in your question, last year we paid and I mentioned that we paid EUR 5 million negative interest rates. Definitely we will see a number of around EUR 1.5 million also as negative interest rate in this year. Obviously, because in the first half of the year there was still negative interest rate, but this number will be obviously less, and next year there will be no negative interest rate in our P&L. On the positive side, definitely there is a swing and you know that we have a balance sheet volume in the banking of around EUR 3 billion.
A small bank, but nevertheless, if you have an interest in EUR 3 billion. If you see in our books at the year-end, at 2021 we had EUR 1.2 billion just in cash at the ECB. If you just calculate this EUR 1.2 billion last year negative minus 0.5 this year positive, whatever you would like to calculate for next year on, but it will have a positive one at least in front of it. You see that there is an impact to our P&L.
Q1, you mean it's double-digit net interest income for next year can be expected?
Sorry. The one I meant the interest rate because the ECB at the-
Okay.
1.5%.
Okay.
To the cash which we have and therefore I just very easily was giving you the info, the calculation of before minus EUR 0.5 billion or EUR 1.2 billion and now EUR 1.5 billion positive for around EUR 1 billion.
Okay. Understood. Thank you.
You're welcome.
Thank you once again, ladies and gentlemen. If you would like to ask a question, please press star one on your telephone keypad. We'll now move on to our next question. At the tone, please state your name and company before posing your question. Your line is open. Please go ahead.
Thank you. Good afternoon. It's Jochen Schmitt from Metzler. I have one question on MLP Bank. Segmental EBIT was relatively high in Q3. I mean, obviously you had tailwind from interest rates, but I believe that interest rates have probably not been the only reason for the rise in EBIT. Could you please comment on that? Thank you.
No, definitely not. Interest rate was not the only one. We had also like in the quarters before still very good inflow for our assets under management in the bank with the positive impact on the P&L. We have overall especially also in Q3 well-managed cost base. Yeah. Finally, also the risk costs are at the moment very limited and all these four factors together led to the steep increase in Q3 and therefore to the positive result.
Sorry.
Let me perhaps add one thing, because risk costs obviously in times like this and although it's a small bank, nevertheless we talk about risk costs. You might have in mind that our loan volume to individuals is relatively limited there. The total risk is also extremely limited. I from time to time like to underline that in the whole year 2022, we have one new customer where we had a necessity to put risk costs on. Definitely we see the risk that the number will be a little higher next year. Overall I see our credit portfolio is relatively with a relatively low risk.
Sorry if I just may follow up. I mean, obviously you have probably even more tailwind from interest rates for interest result in Q4. Nonetheless, would you say it's a fair assumption that the segmental banking EBIT which you posted in Q3 might maybe be not reached in Q4?
Good question. I would expect, and also tried, to give this a little bit before, I think the Q4 results for the bank will be lower than the Q3 result. That's true.
Thank you very much.
You're welcome.
Thank you. Ladies and gentlemen, once again, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We have no further question in queue. I would now like to hand it back to Frank for any closing remarks. Thank 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 out if any further questions arise later. Have a good day and goodbye.