Savings Banks recorded highest inflow of deposits in 2020 - Loan commitments to enterprises also at record level
10.03.2021 - Press release Nr. 06
For Germany’s Savings Banks, the last fiscal year brought record levels for inflows of deposits and for the lending business, although the operating result declined because of interest rates. “Last year was an exceptional year. The focus was not on increasing market shares or profits; instead, Savings Banks gave top priority to helping their customers get through this difficult period”, said Helmut Schleweis, President of the German Savings Banks Association (DSGV) at the financial press conference of the Savings Banks Finance Group in Berlin.
Last year, Savings Banks posted an increase in deposits of EUR 79.1 billions, a rise of 7.9 percent. “This record level is an expression of enormous customer confidence in times of crisis. However, during a period of negative interest rates, this loving embrace by our customers has increasingly deprived our business of air. For this reason, Savings Banks need to adopt countermeasures”, said Schleweis. For every credit institution, additional deposits have cost money in real terms. Alternatives to investing in non-interest-bearing term and sight deposits include, for instance, investments in real estate and in the capital markets.
In 2020, the Savings Banks’ new business in residential housing loans hit a record mark of EUR 67 billion – another significant increase of EUR 8.1 billion over the previous record high in 2019. Schleweis: “One of the key social challenges in the next few years will be to enable more people to acquire their own four walls, be it a traditional single-family home or a freehold flat.
In Germany, no-one helps more people to acquire their own four walls than Savings Banks and Landesbausparkassen.”
In times of negative market rates, accumulating savings by investing in securities is one of the few options for broad segments of the population to participate in overall economic value growth. In 2020, the number of investment accounts managed by Savings Banks and DekaBank increased to a total of 238,000. At EUR +19.1 billion, net sales of securities were higher than at any time in the past 20 years. Customers mainly invested in funds (EUR +14.1 billion), but net sales of equities were also substantially higher at EUR +4.7 billion.
During coronavirus year 2020, Savings Banks made a special focus of providing quick loan and liquidity assistance to small and medium-sized business clients. Savings Banks made new loan commitments of EUR 106.4 billion to enterprises and self-employed persons, which was EUR 13.1 billion or 14.1 percent more than in the previous year. Commitments of KfW promotional loans totalled approx. EUR 8 billion. “Even if the funding programmes backed by Germany’s state-level governments are included, it is obvious that Savings Banks covered the major share of this support for their customers from their own resources”, said the DSGV President. Aside from loan commitments, the unbureaucratic suspension of payment obligations was also very helpful. In over 160,000 cases, loan payments by business clients were deferred, providing quick temporary financial relief.
Last year, the financial assets of Savings Banks customers rose once again over the previous year. Taking into account the home loan and savings business and the life assurance business, the financial assets of Savings Bank customers expanded by EUR 100.2 billion – an increase by 69.4 percent. Private individuals accounted for EUR +70.9 billion, equating to an increase by 43.7 percent.