For the current year, the DZ Bank Group expects a result of 1.5 to 2 billion euros.
(Photo: dpa)
Frankfurt The cooperative DZ Bank has to accept a significant drop in profits in the crisis year 2022. The leading institute of the Volks- und Raiffeisenbanken earned 1.8 billion euros before taxes. In 2021 it had made a record profit of 3.1 billion euros.
This put DZ Bank in third place among the major German commercial banks in terms of profit: Commerzbank earned two billion euros before taxes in 2022, Deutsche Bank 5.6 billion euros.
In previous years, when Deutsche Bank and Commerzbank went through extensive restructuring programs, DZ Bank was often the most profitable major German bank. In terms of total assets, the DZ Bank Group is the second largest bank in Germany. It includes the insurer R+V, the fund company Union Investment and the building society Schwäbisch Hall.
DZ Bank is the central institute of around 730 German Volksbanks and Raiffeisenbanks as well as other cooperative banks, which are also shareholders. The cooperative credit institutions as a whole form the second largest financial group in Germany behind the public money houses, the savings banks and state banks. The consolidated result reflects the development of all companies in the DZ Bank Group.
Co-CEO Cornelius Riese emphasized that the DZ Bank Group exceeded earnings expectations last year despite the challenges. The result of DZ Bank is particularly linked to the development of the capital markets.
R+V Versicherung is in the red
In the wake of high inflation and rising interest rates, prices on the stock and bond markets slipped last year. DZ Bank slightly reduced its profit forecast for 2022 after the outbreak of the Ukraine war in the spring, from around two to around 1.5 billion euros.
This leaves its mark most clearly on the R+V insurance company. She was in the red in 2022. The pre-tax loss was 268 million euros. In 2021, the insurer had still earned 772 million euros.
In addition to losses from capital investments, temporary valuation effects from an adjustment to the IFRS accounting regulation put pressure on the R+V figures. DZ Bank expects opposite positive effects by the end of June this year.
The profit of the fund subsidiary Union Investment also shrank significantly. She earned almost 700 million euros after 1.2 billion euros a year earlier.
Co-CEO Riese will lead DZ Bank alone from 2024
For the current year, DZ Bank expects a result of 1.5 to 2 billion euros for the group. The bank’s economists expect the gross domestic product to fall by 0.2 percent for the year as a whole. In addition, fluctuations on the capital markets are likely to remain high.
>> Read here: Hans-Joachim Reinke remains head of Union Investment
Riese will manage DZ Bank alone from 2024. The previous co-boss Uwe Fröhlich will then retire as planned, DZ Bank announced last week.
Cornelius Riese (left) and Uwe Fröhlich have jointly managed the second largest German bank since 2019.
(Photo: imago/sepp spiegl)
Riese and Fröhlich have jointly managed the second largest German bank since 2019. While a dual leadership didn’t work for many other corporations, the interaction at DZ Bank works well – also thanks to a clear division of tasks.
The 48-year-old giant is concentrating on managing the holding company with subsidiaries such as R+V Versicherung and the fund company Union Investment. Fröhlich takes care of the association and commercial bank. As ex-president of the Association of Volks- und Raiffeisenbanken, the 62-year-old also ensured that there was no major upset in the cooperative sector after the merger of WGZ and DZ Bank in 2016.
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