horrendous year in 2008, in sharp contrast to the country’s more
sedate – and ever-more established – savings and co-operatives
banks.
The country’s 438 savings
banks – the Sparkassen – posted a combined profit of €1.3
billion for 2008, despite losing some market share (see bar
chart, right). Total assets increased by 2.5 percent to €1.07
trillion ($1.4 trillion), the highest growth since 2001, according
to the Association of German Savings Banks (the DSGV), while
customer loans increased by 2.3 percent to €631.4 billion.
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Heinrich Haasis, president of the DSGV,
stated: “Customer deposits increased by €24.8 billion to €742.3
billion, the highest inflows since the introduction of the
euro.”
The five largest Sparkassen ranked by deposits
are Hamburger Sparkasse, Sparkasse Köln-Bonn, Kreissparkasse Köln,
Stadtsparkasse München and Frankfurter Sparkasse. The number of
banks has come down slightly, from 446 in 2007, though total branch
numbers remain high at, collectively, around 17,000.
Haasis added: “It is important to make it
clear that for the savings banks, customer satisfaction is a
business result, and we achieve customer satisfaction through
customer loyalty. That is the basis for good business results.”
The DSGV stated that Germany’s building
societies – the Landesbausparkassen – had their second
best year: 1.52 million net new accounts, up 12.5 percent, while
total savings rose 6.4 percent to €35.8 billion.
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By GlobalDataThe country’s 1,197 co-operatives, which have
13,586 branches in all, also had a strong 2008. Annual income
before tax was just under €2 billion, while lending increased by
2.7 percent to €377 billion. Membership of these credit unions rose
by 140,000 to 16.2 million.
Overall, the Sparkassen ended 2008 with a
market share of retail deposits of 36.9 percent, down from 38
percent in 2007, compared to 38.9 percent for the commercial banks
(up from 37.5 percent in 2007). Co-operatives had a share of 24.2
percent.
A return to retail
banking
Unsurprisingly, the key trend in
German financial services is a return to retail banking: all the
major commercial institutions are reinvesting in consumer banking
in 2009, as evidenced by Allianz’s ambitious plans, mere months
after disposing of Dresdner Bank to Commerzbank, to reignite a
pan-German retail banking franchise under the Allianz brand.
Deutsche Bank’s €6.22 billion loss in the
fourth quarter alone was the stand-out bad performance of the year,
though Dresdner Bank’s full-year result of -€4.7 billion and
Deutsche Postbank’s near billion-euro annual loss were also
dispiritingly poor.
Like many banks across the world, relatively
good retail banking figures were dragged down by murderous
investment banking losses: Deutsche Bank’s full-year loss of €5.74
billion hid a profit of €945 million for its Private Clients unit,
while Deutsche Postbank’s retail banking profit was flat
year-on-year at €912 million.
The renewed importance of retail
banking is clear from the results of the commercial banks.
Commerzbank, for instance, stated that in spite of the turbulence
in the financial markets, the number of retail customers its
Private & Business Customers unit rose by 574,000 to more than
six million, while deposits were up 25 percent to €101.1
billion.
Deutsche Bank’s head of private and business
clients, Rainer Neske, reiterated in February that his bank plans
to add about 400 new branches in Europe by 2012 (mainly in Germany,
Italy and Poland) (see RBI 600).
Deutsche plans to add around 1,250 new
consultants and 150 branches in its home market during the period,
Neske added; he also said that Deutsche’s purchase of a 25 percent
plus one share stake in rival Deutsche Postbank, completed in
February this year, was not a merger as both banks will maintain
separate brand identities – though the two will share products and
distribution platforms.
Deutsche Postbank, with access to around 5,000
post offices, has the largest distribution network of any single
German bank. It is aiming to grow its customer base from 4.9
million people at end-of 2008 to 5.2 million by the start of 2011,
and raise the percentage of customers with more than three products
from 39 percent to 47 percent over the next two years.
A number of transformative
deals
The Deutsche Bank/Deutsche Postbank
deal was one of a number of transformative deals in 2008 that
significantly reshaped the German banking industry.
Commerzbank swallowed Dresdner from insurance
giant Allianz in a rushed, controversial €5.1 billion deal while
France’s Crédit Mutuel became a rare foreigner in the market with
the completed acquisition of Citigroup’s profitable German
franchise (see RBI 598).
At the start of March, Commerzbank said it
would inject €4 billion into Dresdner Bank after massive losses in
the fourth quarter. German financial daily Handelsblatt
reported that Dresdner’s core capital ratio had slipped to just 3.7
percent at the end of 2008.
Allianz, which bought Dresdner Bank in 2001
for €21 billion and struggled over the next seven years to
integrate the business into a wider ‘bancassurance’ giant, has
announced plans to beef up its retail banking business.
In June this year, its network of more than
10,000 Allianz agents will start to offer customers banking
products through Allianz Bank, a branch of Oldenburgische
Landesbank (OLB), a member of the Allianz Group. Allianz is also
launching a direct banking subsidiary.
A spokesperson for Allianz told RBI
that Allianz’s agents had sourced one million retail banking
customers for Dresdner, all of which had been transferred to
Allianz Bank, and that, with OLB, it will develop a “competitive
range of easy-to-understand and solid”
banking products for the German mass market.
| Country snapshot | |||||
| Germany – main commercial banking groups, ranked by FY2008 profit |
|||||
| Total pre-tax profit |
Retail banking profit(1) | ||||
| Q408 (€m) | FY08 (€m) | y-o-y % change | FY08 (€m) | y-o-y % change | |
| ING Direct Diba(2) | 89 | 297 | -17 | 297 | -17 |
| Commerzbank (Group)(3) | -822 | -403 | n/m | 551 | 37.4 |
| HypoVereinsbank(4) | -665 | -595 | n/m | 213 | -27.8 |
| Deutsche Postbank | -866 | -974 | n/m | 912 | -2.46 |
| Dresdner Bank(3) | -2,806 | -4,701 | n/m | 537 | -37.7 |
| Deutsche Bank (Group) | -6,222 | -5,741 | n/m | 945 | -18 |
| Country snapshot | ||||
| Germany – main commercial banking groups, ranked by FY2008 profit |
||||
| Total assets |
Retail deposits |
|||
| FY08 (€bn) | y-o-y % change | FY08 (€bn) | y-o-y % change | |
| ING Direct Diba(2) | n/d | n/d | 63.24 | 2 |
| Commerzbank (Group)(3) | 625 | 1.5 | 101.1 | 24.7 |
| HypoVereinsbank(4) | 458.6 | 8.6 | 115 | 6.5 |
| Deutsche Postbank | 231.3 | 14 | 65 | 5.7 |
| Dresdner Bank(3) | 421 | -15.8 | n/d | n/d |
| Deutsche Bank (Group) | 2,202 | 14 | 83 | 29.7 |
| Notes: (1) retail banking figures refer to business units either wholly or partially focused on consumer financial services and, if not clearly stated on the balance sheet, may be an estimate figure derived by RBI; (2) covers Germany and Austria; (3) Dresdner Bank reported separately for the final time; (4) subsidiary of UniCredit Source: RBI |
||||
|
Country snapshot |
||||
|
Germany – main commercial banking |
||||
|
Nos of branches |
Nos of retail |
Cost-income ratio (%) |
Return on equity (%) |
|
|
Deutsche Postbank |
5,000(1) |
4.9(2) |
129.8 |
-21.3 |
|
Deutsche Bank (Group) |
1,981 (981 in Germany) |
14.6 (10.1 in Germany) |
134.6 |
-16.5 |
|
Commerzbank (Group)(3) |
1,646 (820 in Germany) |
9.19 (6.07 in Germany) |
77 |
-2.6 |
|
HypoVereinsbank |
852 |
4.1 |
88.5 |
-9.5 |
|
Dresdner Bank(3) |
720 |
5.12 |
n/d |
n/d |
|
ING Direct Diba(4) |
0 |
6.68 |
n/d |
n/d |
|
Notes: (1) includes post office branches; |
||||
