Significantly more loans and a strong securities trading business

Growth in their lending and securities trading business, significantly improved net commissions income and an increase by EUR 366 million in net income after taxes: in fiscal year 2021, the German Savings Banks put in a respectable performance in a challenging environment. “They are therefore well equipped to meet the challenges of the future. The urgently needed ecological transformation of our economy and our society calls for sound Savings Banks because a major part of the capital required will have to come from our Group. We have prepared the ground to take on these challenges”, said Helmut Schleweis, the President of the German Savings Banks Association, at the Savings Banks Finance Group's financial press conference in Berlin today.

Totalling EUR 197.3 billion, the volume of new loans was once again EUR 5.6 billion higher than in 2020. The volume of new loans granted to private households for home purchases rose by just under ten percent to EUR 73.4 billion. Savings Banks are doing whatever they can to pave the way in a responsible manner for as many people as possible to own their own homes. This is a really encouraging result”, said Schleweis.

In corporate banking, Savings Banks matched their previous year’s strong performance in new business, with a total volume of EUR 106.2 billion. Taking into account loan repayments, the loan portfolio increased by EUR 26 billion or 5.5 percent. “Savings Banks have proven in particular to our business clients that they are dependable – especially in the past two years of the pandemic”, said the DSGV President.

The Savings Banks’ deposit business continued to grow, demonstrating persistently buoyant customer trust. Despite an inflow of EUR 48.8 billion and an increase by 4.5 percent, the growth was nonetheless lower than in 2020. “The Savings Banks were successful”, said Schleweis, “in convincing their customers even more of the benefits of securities trading. Net sales of EUR 29.5 billion were the highest ever achieved in Savings Bank history. This is a great achievement for the securities trading culture in our country.” The DSGV President drew attention to the fact that saving by investing in securities is the only way for broad sections of the population to participate in the growing value of the national economy. It was true that capital markets were currently very volatile because of the war in Ukraine. “However, we assume that markets will calm down again in the course of the year, and we recommend that investors should endure these fluctuations in the market by pursuing a long-term investment strategy.”

At the end of 2021, the financial assets of Savings Bank customers were worth EUR 80 billion more than at the beginning of the year. This was the second highest value growth in history, the highest being the previous year.

Last year, for the first time, improvements in net commission income more than offset the decline in net interest income. While net interest income decreased by EUR 314 million, net commission income increased by EUR 560 million; on balance, this amounted to a rise of approx. EUR 246 million. However, Schleweis pointed out that the forecast for the next few years did not confirm this trend. Savings Banks have not yet come through the worst; some difficult years still lie ahead. Significant burdens can be expected, in particular from indirect consequences of the war.”

Administrative expenses remained stable at EUR 19 billion. The operating result before valuation increased by EUR 262 million to EUR 9.7 billion. Valuation expenses decreased by EUR 1.1 billion, turning out 23.5 percent below the previous year, primarily due to the extremely low provisions of EUR 122 million for contingent losses in the lending business. Compared to the pre-Covid level, the number of corporate insolvencies had fallen significantly.

The cost-income ratio after valuation improved significantly by four percentage points to 67.3 percent, mainly due to significantly reduced loan loss provisions and the positive net commission income. Savings Banks will pay a total of EUR 2.8 billion in taxes for last year, which is EUR 261 million more than in the previous year. Net income after taxes amounted to EUR 1.8 billion, EUR 366 million more than in the previous year.