The management does a few things there differently than other cooperative banks.
(Photo: PR)
Frankfurt Raiffeisenbank Hochtaunus likes to step out of line. Last year, the money house closed its four branches. Only the headquarters in Bad Homburg in front of the height remained. Instead of advising customers on site, the bank advertises with Sebastian Rode, midfield star at Bundesliga club Eintracht Frankfurt, for the free online account for customers throughout Germany. Most recently, the money house raised the interest rate on the call money account – from 1.5 to 2.1 percent for deposits of up to 100,000 euros for four months.
For several years, the bank has been granting loans for commercial real estate nationwide, deviating from the usual Volksbank course. This raises concerns among other cooperative institutes. Normally, the 700 or so Volks- und Raiffeisenbanken nationwide confine themselves to their regionally limited business area.
The unusual course may upset other cooperative banks, but it pays off for Raiffeisenbank Hochtaunus, as was evident at the balance sheet press conference on Wednesday. Last year, the institute increased its operating result before valuation by 38.6 percent to around 26.8 million euros. The balance sheet total also rose by 36 percent to more than 1.4 billion euros, after having exceeded one billion euros for the first time in 2021.
Raiffeisenbank Hochtaunus is not only more ambitious than most other cooperative banks when it comes to collecting deposits or granting real estate loans. The money house also breaks with the conventions of the sector when it comes to acquiring customers who subscribe to shares and thus become owners of the bank.
The maximum investment sum of the institute in Bad Homburg is 25,000 euros – a multiple of the norm, shares of a maximum of 500 or 1000 euros are common. In recent years, the bank has even allowed its members to subscribe for shares of up to EUR 50,000. The company has 8874 shareholders.
This strategy has met with criticism in the cooperative sector. An insider complains that Raiffeisenbank Hochtaunus is taking a “kind of credit bond” from other cooperative banks. If the bank ran into trouble with its business model, it would eventually be bailed out by the entire cooperative sector.
Because the joint guarantee scheme of the cooperative banks not only protects customer deposits, but also the existence of the banks. In the event of an emergency, a bank that is in difficulty receives help from the guarantee system so that it can meet all its obligations.
Criticism from your own camp
Ultimately, the bank would not only take advantage of other Volks- und Raiffeisenbanken with a view to the promise of security. Since the Raiffeisenbank Hochtaunus has abolished branches, its customers would only access ATMs from other cooperative banks. The institute still operates a single ATM – in the remaining headquarters. Customers can withdraw their money from other ATMs 52 times a year free of charge. For the bank in Bad Homburg, there are no fees for this, which vary depending on which bank the customer withdraws money from.
>>Read here: Volksbanks and Raiffeisenbanks want to reform their security system
The industry association of the German Volks- und Raiffeisenbanken recently announced that it would reform deposit insurance. Some of these changes can also be interpreted as follows: The BVR wants to control cooperative banks that opt out more strictly. The unusual banks include not only the Raiffeisenbank in the Hochtaunus, but also the VR-Bank Bad Salzungen Schmalkalden, which, among other things, hired the former national player Stefan Effenberg as a specialist for football financing.
The CEO of the Taunusbank, Achim Brunner, does not see the industry association’s move as an affront to his company, he has been in charge of the Raiffeisenbank in the Hochtaunus for 15 years. According to his assessment, the bank and the BVR are on the same page.
The bank wants to continue as before. The nationwide business with real estate loans should continue to grow. Last year it rose by 24.9 percent and cracked the billion mark. Brunner can also imagine financing more private real estate if politicians should promote new buildings. In addition, the online business is to be further expanded and many new customers are to be attracted. Footballer Sebastian Rode will continue to promote the Raiffeisenbank in the Hochtaunus. The unusual bank will not be integrated into the ranks of other cooperative banks that quickly.
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