Germany's Fintech Group has highlighted its long-term partnership with Morgan Stanley as one of the causes for its strong performance during the first half of 2016 and expects that issuance of exchange-traded products (ETPs), including structured certificates and warrants, jointly with Morgan Stanley will further increase the profitability of the company.

Assets under management (AUM) increased by 66%, compared to the first half of the previous year, to €9.4bn, according to the company's half-year results. The group reported that, in the first half of 2016, its high-margin securities trading & financial services, including its online brokers Flatex and ViTrade, achieved earnings before interest, taxes, depreciation, and amortisation (Ebitda) of €7.4m and revenues of €11.6m.

Since the end of 2015, the number of Flatex clients in Germany and Austria increased by approximately 11,000, to more than 161,000, an annualized increase of about 15%. 'Newly launched products have met with strong demand', stated the company in its half-year report. 'This is true for both the exchange-traded products (ETPs) issued jointly with Morgan Stanley under the Flatex brand and launched mid-year, as well as the new Flatex flex-credit launched in April,' stated the group.

The company, which plans to become Germany's largest executor of securities transactions, also stated that its European expansion 'is in full swing'. 'We were able to further increase profitability significantly, and we still see great potential to improve our margins, leverage synergies, and scale up our business,' said Frank Niehage (pictured), chief executive officer of Fintech Group, in a statement. 'Our unique combination of strong B2C and strong B2B business means that we are not only well-diversified, but also that the interplay of these two segments will lead to a unique growth cycle, since it allows us to develop and profitably market disruptive solutions.'

The company's transaction processing & white-label-banking services, which includes IT system providers XCOM AG and Bank biw, achieved Ebitda of €12.3m and revenues of €36.5m in the first half of 2016. 'Demand for B2B services was strong throughout the year, and further increased as a result of potential Brexit as many London-based banks might need operations in continental Europe/Germany,' stated the company.

Morgan Stanley's first foray into Europe's exchange-traded products (ETP) market was recorded on May 2015, when it was accepted as a new member of the Nordic Growth Market (NGM) structured products specialist exchange and started issuing mini futures and bull & bear certificates on the Swedish exchange.

Since the agreement with Flatex was announced, the US bank's issuance of flow and leverage products in the German market has rocketed, with over 1,900 products marketed via the online broker year to date, alongside 10 other traditional structures sold through advisers. Despite Morgan Stanley's ETP expansion, the bank is no longer a top player in the European structured products space and plays a marginal role in the few markets in which it is still active.

Flatex is the only platform in Germany providing investors with a comprehensive range of products, such as certificates, warrants, funds and deposits from various banks. There are 10 issuers offering structured products on Flatex, mostly leverage certificates and warrants, including Deutsche Bank, BNP Paribas, Societe Generale, Commerzbank, HSBC, DZ Bank, Vontobel, Citi, UBS, Unicredit and Vontobel. At of end of June 2015, Fintech Group had €5.68bn of assets under management (AUM).

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