Volksbanks and Raiffeisenbanks are feeling the consequences of the financial downturn | EUROtoday
DThe virtually 700 Volks- und Raiffeisenbanks needed to put aside as a lot for dangerous loans in 2023 as they did within the 2005 monetary 12 months. Nevertheless, the native cooperative banks earned considerably extra final 12 months than within the earlier 12 months, primarily due to the elevated rates of interest. The complete pre-tax revenue climbed by virtually 6.2 billion euros to round 10.7 billion euros, because the Federal Association of German Volksbanks and Raiffeisenbanks (BVR) introduced on Wednesday. The stability sheet complete of the 697 banks remained virtually fixed at 1,175 billion euros. For comparability: Commerzbank made a pre-tax revenue of three.4 billion euros in 2023 with complete belongings of 517 billion euros.
Returns will not be the deciding issue, BVR board member Tanja Müller-Ziegler instructed journalists when requested why extra individuals didn't wish to turn out to be members of a financial institution cooperative. The institutes pay their members a median dividend of an excellent 3 % on their cooperative shares, however Müller-Ziegler emphasised that member help and cohesion are much more necessary for cooperatives than returns. In 2022, the variety of members who acquired shares in a cooperative financial institution fell to fewer than 18 million for the primary time since 2013 – as a result of extra members died than new ones have been acquired.
This decline in membership continued a little bit additional in 2023. But the BVR is assured that it might probably cease it with the assistance of the banking app and focused focusing on of youthful prospects. Currently, lower than half of shoppers are members and subsequently house owners of a Volksbank or Raiffeisenbank. Müller-Ziegler needs to extend the share to 65 % within the medium time period.
Many prospects hand over due to the paperwork
BVR President Marija complained that amongst their prospects – the VR banks are robust with a market share of twenty-two.4 % within the company lending enterprise – there isn’t a nice willingness to speculate as a consequence of typically “unwise economic policy”, however relatively an inclination to surrender the enterprise in view of the prosperity they’ve achieved Kolak. The BVR expects zero development in German gross home product for 2024. He is much more skeptical than the federal authorities with its development forecast of 0.3 %. “The mood remains depressed, especially among medium-sized companies,” mentioned Kolak. In view of the excessive bureaucratic burden, she spoke of a “crisis of the state, which is unable to ensure the necessary efficiency of state trade in a federalist system”. In view of the weak economic system and the expiration of corona protecting measures, the variety of firm bankruptcies in Germany will enhance, mentioned Kolak.
All-clear for industrial actual property loans
In this respect, the availability requirement for dangerous loans amounting to 1.5 billion euros, which the VR banks have recorded for the primary time since 2005, is not any shock, mentioned BVR board member Daniel Quinten. The danger of loans vulnerable to default will increase significantly within the building business, commerce and providers. With a view to the tense marketplace for industrial actual property, wherein undertaking builders akin to Signa have run into difficulties as a consequence of elevated rates of interest, the affiliation gave the VR banking group the “all clear”. At an excellent 68.4 billion euros, the share of business actual property loans solely quantities to eight.8 % of all buyer claims.
After the excessive write-downs on bonds within the earlier 12 months, there have now been write-ups and will increase within the worth of personal securities investments amounting to 1.4 billion euros as a result of the costs have risen once more. With a median time period of the papers of 5 years, one can “assume that value increases will continue to occur in the next few years,” mentioned Quinten. In 2022, the speedy rise in rates of interest led to excessive bond value losses and induced the cooperative banks to write down off a complete of 5.7 billion euros.
The working end result earlier than the evaluation of credit score and securities dangers in relation to the stability sheet complete was round 1 % of the common stability sheet complete in 2023. In the earlier 12 months it was solely 0.81 %. Measured by this indicator, the VR banks have at all times been higher than the financial savings banks lately, mentioned Müller-Ziegler. Whether this will even be the case in 2023 will turn out to be clear subsequent week, when the German Savings Banks and Giro Association will current the enterprise figures for the municipal financial savings banks.
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