Frankfurt The savings banks fear that the Ukraine war will put a heavy strain on companies and consumers in Germany. “There will be significant second and third round effects,” said Sparkasse President Helmut Schleweis on Wednesday. “These are only slowly becoming noticeable, but they will probably weigh on us in the longer term.”
It is not only about the rapidly increasing oil and energy prices, but also about the role of Russia and Ukraine as wheat exporters. The logistics industry and thus the supply chains would also be affected by the war. Schleweis assumes that inflation will continue to rise this year as a result. “Price increases of up to six percent cannot be ruled out.”
Consumers would also feel the economic consequences of the war: “We expect that around 60 percent of German households will have to use their entire disposable income – or more – every month.”
Schleweis expressed satisfaction with the development of the 367 savings banks in the past year. Your surplus rose by almost 25 percent to 1.8 billion euros. One reason for the increase in earnings was that for the first time the Savings Banks succeeded in increasing net commission income more than net interest income declined. A minus of 314 million euros in interest income was offset by commission income of 560 million euros.
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However, Schleweis emphasized that the forecasts for the coming years do not confirm this trend: “The savings banks have not yet bottomed out, there will still be a few difficult years. In particular, the indirect consequences of the war will lead to significant burdens.”
Schleweis: The Central Institute “is not dead”
Schleweis wants to continue to work for a consolidation among the public-law central institutes, which in his view should merge into a central savings bank institute. “I presented a target image in the group, I also presented a transaction path that is possible,” explained the head of the German Savings Banks and Giro Association (DSGV). “I can not do more at this point.”
Ultimately, the shareholders of the state banks would have to decide on mergers. These are the federal states and the savings banks in the respective regions. Among these there is resistance to a central institute in many quarters. The talks promoted by Schleweis about a merger between the Landesbank Hessen-Thüringen (Helaba) and the savings bank fund provider Deka, which would have created a nucleus for a central institute, were put on hold in 2020.
“As far as I can see, there is currently no willingness to talk about the subject,” said Schleweis. This is partly understandable, because the savings banks have to stand by their customers in the face of the crisis and cannot deal with themselves. In principle, however, the 67-year-old has not given up hope of creating a central institute. “The topic is not dead.”
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Instead of merging, the bundling of competences among the leading public institutes is “a possible way”. He supports corresponding efforts, said Schleweis – but made it clear that this is not the path he prefers.
Many within the Savings Banks Finance Group are also of the opinion that the formation of competence centers will not be enough to position all Landesbanken for the future. LBBW and Helaba recently announced that they want to merge interest rate, currency and commodity management with savings banks and their customers at LBBW. In return, international payment transactions for these customer groups are bundled at Helaba.
Savings bank boss is skeptical about cryptocurrencies
Schleweis rejects the offer of cryptocurrencies. “Personally, I can’t imagine that we encourage customers to buy cryptocurrencies like Bitcoin.” He referred to the high volatility that investors have to endure. “It’s a bit like going to the casino. That will not take place with advice from the savings banks.”
The Savings Bank President is skeptical not only about advice, but also about services such as trading and custody of cryptocurrencies. “My gut feeling tells me that it’s not a good idea for savings banks.” However, no decision has yet been made in the savings bank committees.
At the end of last year it became known that the savings banks were considering enabling their customers to trade in cryptocurrencies. At the time, it was said that the savings bank subsidiary S-Payment was examining “the opportunities and risks offered by a wallet in which savings bank customers can safely store crypto assets”. Decisions should be made in the first half of 2022.
The savings banks are the market leaders in business with private customers and run almost 37 million private current accounts, but not all customers access online banking or smartphone apps.
DSGV continues to believe in EPI
With a view to the failed attempt to create a pan-European payment system, Schleweis was combative: “We will not give up promoting it, because it is strategically immensely important.” have in your hands”. Especially against the background of Russia’s war of aggression against Ukraine and the dependence on energy imports from Russia, EPI is also a strategic decision.
In 2020, around 30 European financial institutions, including the German savings banks, started the joint payment project European Payment Initiative, EPI for short. The aim was to set up its own payment system with a European payment card and make payment transactions more independent of US groups such as Mastercard, Visa and Paypal. With their system, Mastercard and Visa ensure, among other things, that you can pay with your bank card and withdraw money in other countries.
Since the end of February it has been clear that more than half of the original participants are withdrawing, including the German cooperative banks. Eleven banks and two payment service providers want to continue, but with a new, slimmed-down model. DSGV board member Joachim Schmalzl explained that they are now working together on the second-best solution. “Once we’ve designed a solution, we’ll ask the others who dropped out along the way if they don’t want to pull themselves together and join in.”
According to Schmalzl, the targeted alternative is a so-called wallet, i.e. a digital purse that should work with real-time payments and probably national bank cards. “The big and best solution does not exist, we still mourn behind it,” said Schmalzl, who is the head of the supervisory board of the EPI intermediate company.
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