The deposit growth of the savings banks nationwide fell drastically in the first half of 2022. While there was an additional 25 billion in the previous year, only 600 million euros have flowed in this year.
(Photo: dpa)
Frankfurt Many Sparkasse customers are unable or hardly able to save any more. “Half of our customers need all of their income to cover their monthly expenses,” said Baden-Württemberg savings bank president Peter Schneider on Thursday in Stuttgart.
Nationwide, new deposits collapsed. At the more than 360 German savings banks in the country, customer deposits increased by just 600 million euros in the first half of 2022. In the same period of 2021, the savings banks had received 25 billion euros, and in 2020 it was almost 30 billion euros.
Peter Schneider has a clear explanation for the dramatic drop in net deposit inflows of 97.6 percent: the ability to save is declining due to high inflation. In other words: Because of the increased expenses caused by ever higher prices, many customers are simply no longer able to put money aside.
According to Schneider, around 40 percent of private customers can no longer save anything. “Now the number is shifting towards 50 percent,” he said. “That’s a dramatic number.” In addition, many people will probably only have to pay for the higher energy costs in the course of the year or in the coming year.
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At the 50 savings banks in Baden-Württemberg, deposits are no longer growing at all. While private and corporate customers had deposited seven billion euros with public banks in 2021, there were no net inflows in the first half of 2022. The bottom line is that companies have already withdrawn deposits.
Higher interest rates on call money and time deposits for saving again
Overall, the growth in deposits has only fallen and is now zero, said the association’s managing director Joachim Herrmann. According to Herrmann, deposits have always increased over the past ten years.
Ebb in deposits
600
Million Euros
of new customer deposits flowed to the 360 savings banks nationwide in the first half of 2022. In the same period last year it was 25 billion euros.
The development comes at a time when a particularly popular form of saving could soon be worthwhile again. Peter Schneider expects that interest on short-term deposits such as call money will soon be paid again in the industry. “That will certainly come with a time delay.”
A week ago, the European Central Bank decided to raise the deposit rate, which is crucial for banks, from minus 0.5 percent to zero percent. In addition, the key interest rate rose from zero to 0.5 percent.
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In view of the turnaround in interest rates, the savings banks must expect high write-downs on securities that they hold themselves. “The turnaround in interest rates will have a full impact on the valuation result,” explained the Savings Banks Association of Baden-Württemberg. He expects write-downs of several hundred million euros.
A similar assessment had only come from the Bavarian savings banks at the beginning of the week. According to the Bloomberg news agency, other regional savings bank associations are currently issuing similar warnings. However, they are reluctant to make specific estimates.
At many savings banks, customer deposits are higher than the volume of loans granted. For this reason, institutions traditionally invest part of their excess funds in the capital market, mostly in bonds and covered bonds. The value adjustments are caused by price losses of shares, but mainly because fixed-income securities are worth less.
“We have insecurities like we’ve rarely seen.” Peter Schneider, President of the Savings Banks of Baden-Württemberg
However, savings banks usually hold the bonds until the end of the term, when the paper is repaid in full. “The savings banks therefore do not expect any credit rating-related defaults, but the write-downs from this year will be made up again in the coming years – then as write-ups,” according to the Savings Banks Association of Baden-Württemberg.
Schneider considers a forecast for the business development of the savings banks in 2022 to be “very difficult”, even if the banks would benefit from the interest rate turnaround in terms of their interest income. “We have uncertainties that we have seldom seen.” The amount of risk provisioning for loans at risk of default and ultimately the savings banks’ profits depend on how energy prices and the economy as a whole develop.
More: Inflation in Germany is falling slightly – but economists are already seeing the next price surge