The German Sparkassen: A Commentary and Case study - Civitas

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THE GERMAN SPARKASSEN deutsche Mittelstand ist kerngesund und investiert ordentlich weiter’ – ‘The German Mittelstand is in good health and continues to invest at a sensible level.’ 2. A Brief History of the Savings Banks The concept of the original Savings Banks goes back to the eighteenth century when they were first founded with the philanthropic aim of providing the poor with the opportunity to deposit small amounts safely, earn interest and thus have funds available to combat the adversities of illness and old age. These schemes were progressively developed to include support for local tradesmen and businesses. The first Savings Banks recognisable in a modern context were founded in Hamburg and other northern German cities in the late part of the eighteenth century. By 1836 there were some 300 Savings Banks and this progressed further so that by 1913 there were over 3,000 Savings Banks in operation. Most of these were founded by local communities. There was a period of modernisation in the twenties, reflecting the wider use of cashless transactions. In the Nazi period, the number of Savings Banks was radically reduced and in the post-war years the Savings Banks were divided between East and West Germany. In the 1990s a period of consolidation commenced with the objective of achieving more efficiencies and the centralisation of IT and other facilities, which has allowed them to deliver all the products and services associated with a major banking group. The name ‘Sparkasse’ (Savings Bank) is protected under the Kreditwesengesetz (German Banking Act). 3. The Structure of German Banking Basically, it is split into three main elements: 3.1. Credit Banks comprising: Large clearing banks Regional banks private banks Foreign bank subsidiaries 3.2. Credit Institutions under Public Law comprising: Savings Banks Landesbank companies Regional building societies 6
3.3. Co-operative Banks comprising: Volksbank companies Raiffeisenbank companies And their controlling institutions Part I: A commentary All credit institutions in Germany are subject to the Kreditwesengesetz (KWG) – the German Banking Act and to the supervision of the Bankaufsicht der Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) – the Federal Financial Supervisory Authority. Each of the three elements referred to above has its own guarantee system and its own business model. The cumulative size of the Sparkassen and Landesbanken 5 can be ascertained by reference to the following chart. It indicates their financial strength seen in an international context. Balance Sheet Totals of Selected Institutions in in € billions Sparkassen and Landesbanken 2,760 BNP 1,998 Deutsche Bank 1,958 HSBC 1,837 Crédit Agricole 1,766 Barclays 1,738 Royal Bank of Scotland 1,696 Bank of America 1,695 4. Organisations within the Savings Banks Finance Group Savings Banks are essentially credit institutions under public law; their responsible public bodies (but not owners) are the municipalities. Savings Banks are not a consolidated group and each Savings Bank is an independent credit institution. They operate within their own defined business territories and where co-operation with others is required, this is organised within the DSGV. They do, however, have regional associations which incorporate all Savings Banks in each state. The Joint Liability Scheme provides protection for all Savings Banks. The banks are public welfare-oriented 7
Page 1: THE GERMAN SPARKASSEN (SAVINGS BANK
Page 4 and 5: First Published January 2013 © Civ
Page 6 and 7: Author Christopher Simpson is Manag
Page 8 and 9: THE GERMAN SPARKASSEN 20 Lending Le
Page 11: PART I A COMMENTARY
Page 14 and 15: THE GERMAN SPARKASSEN with its own
Page 18 and 19: THE GERMAN SPARKASSEN institutions
Page 20 and 21: THE GERMAN SPARKASSEN Landesbanken*
Page 22 and 23: THE GERMAN SPARKASSEN In principle,
Page 24 and 25: THE GERMAN SPARKASSEN UK lending fi
Page 26 and 27: THE GERMAN SPARKASSEN Finance of of
Page 28 and 29: 18 THE GERMAN SPARKASSEN 7. Financi
Page 30 and 31: 20 THE GERMAN SPARKASSEN If the Joi
Page 33: PART II THE CASE STUDY
Page 36 and 37: THE GERMAN SPARKASSEN ticeships, tr
Page 38 and 39: THE GERMAN SPARKASSEN The company h
Page 40 and 41: THE GERMAN SPARKASSEN This rating m
Page 42 and 43: THE GERMAN SPARKASSEN It is interes
Page 44 and 45: THE GERMAN SPARKASSEN There is conf
Page 46 and 47: THE GERMAN SPARKASSEN Management of
Page 49: PART III Conclusion and Appendices
Page 53 and 54: Appendix I PART III: Conclusion and
Page 55 and 56: Appendix II PART III: Conclusion an
Page 57 and 58: Appendix III Definition of the Rati
Page 59: PART III g) Equity Ratio = Eigenkap

The German Sparkassen: A Commentary and Case study - Civitas

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