Germany’s largest private sector retail
bank, the 6,000-branch-strong Deustche Postbank, has released
details of its ‘Postbank4Future’ three-year recovery programme.

The bank, 29.75 percent owned by rival German
giant Deutsche Bank, has improved its performance in 2009 after
posting a €1 billion ($1.5 billion) loss in 2008, though it remains
under pressure in a German market dominated by the country’s
state-owned savings banks (Sparkassen), co-operatives and
building societies (Bausparkassen).

Like many banks across the world, Postbank is
embarking on a ‘back to basics’ strategy. It is cutting the number
of retail banking products by a quarter, and focusing efforts on
sales and customer service. One of the first measures will be a
revamped, “more attractive” current account, while product
developments will be supplemented by an increased number of ATMs,
shorter processing times and “optimised” complaint management.

Postbank expects to cut administrative
expenses by €145 million, or around 5 percent compared with the
level of 2008, by 2012. These “efficiency-oriented measures” will
lead to job cuts of up to 700 staff per year to the end of 2012,
bringing total staff numbers down to 19,000.

In addition, it is continuing to reduce its
capital market-oriented holdings. The aim is to “significantly”
reduce the volume of assets from the current level of €79 billion
by the end of 2012. The bank’s Tier I capital ratio is targeted to
rise to around 10 percent.

Stefan Jütte, chairman, said in a statement:
“We are making Postbank fit for the future… Simple and profitable
savings products and a free current account were the basis for our
success with customers in the recent past. We will pick this up

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Nevertheless, Postbank – as well as other
commercial banking groups like Deutsche Bank and Commerzbank – will
face very stiff competition from Germany’s savings banks, co-ops
and building societies which together control over 75 percent of
the retail banking market.

Last month, Thomas Keidel, of the German
Savings Banks Association, told RBI that: “The low-risk,
straightforward model [of the savings banks] has proved to be
totally resilient and resolute in sharp contrast to the commercial
banking sector (see RBI