The profit of German banks in the third quarter of 2019, with only around twelve million euros on the Greek money houses, so the "Supervisory Banking Statistics" of the ECB. What are the reasons for the poor Performance of German credit institutions? The experts agree.

banking expert: Conventional banking under the existing framework successfully

Hans-Peter Burghof, a renowned banking expert and business Professor at the University of Hohenheim, barely possible, said exclusive to wallstreet:online: "If individual banks fail, you can make the Management a charge, but all of them? Apparently, it is in Germany, under the existing conditions, hardly possible to perform a conventional Bank. The regulation leaves no air to Breathe, the interest rate policy and devalued the economic allocation function, and Bank bashing remains a favorite pastime of moralizing politicians and the Public. The realization that we need for the German economic model, our own banks, then may be too late.“

Deutsche banks generate in the third quarter of 2019, only a meager profit of 668,32 million euros. In order to be on the level of Greek banks, because they came in the same period, to a profit of 656,37 million euros. For comparison: The income of French banks for the same period stood at 22,862 billion euros, the "Supervisory Banking Statistics" of the ECB. With Stock Selection in Europe, you will be able to achieve excess Returns with the System. You put on the strongest trend signals from Germany and Europe. Long and Short. So make your investment a success, regardless of the DAX level. (Partner quote) Here is an exclusive free trial!

financial market researchers: safety Deposit box Are at least two reasons for the lower profitability of the banks in Germany

Jan Krahnen, Director of the Leibniz-Institute for financial market research, explained exclusive to wallstreet:online: "The profitability of banks in Germany for at least two reasons as: a hard to change the low price culture and a cost-intensive production process, especially in the private customer business. In the traditional bread-and-Butter business, i.e. deposits and lending, has reduced the margin between Funding and lending interest rates in the last 30 years by 200 basis points in the 1980s to an average of 100 basis points today. Other banking products such as payment services that were traditionally offered for free or at very low fees for the customer. In fact, the competition between the community-owned savings banks and the commercial banks, has led traditionally to a free account services as the Foundation of customer relationships.“

And further, "The low-price competition in connection with a much too slow process of Consolidation – that is, the fact that only a few banks withdrawing from the market – is likely to be for a long time to a low profitability of German banks. Add to that a huge investment needs to fend off the digital competition – this is another reason for the low level of earnings in the German banking system.“

Otmar Lang, chief economist, TARGOBANK, also makes a wide variety of causes for the low competitiveness of German banks. Exclusive to wallstreet:online Long, said: "The reasons for the relatively weak Performance of German financial institutions are many and varied. On the one hand, Tech companies like Apple , Amazon or Google to make the banks competition, on the other hand, the number of the floor Fintechs, the established Player shooting put pressure on it.

developments and policies after the financial market crisis is different in Europe and USA

Historically, it has missed the financial supervision after the financial market crisis, to ensure a solid Foundation for European banks. While in Germany the rescue of the banks was the focus, followed in the United States a different strategy. There, the members of the management Board of the major banks have been downgraded by now to a simple command receivers of the Central Bank heads of the quasi-transition to the leadership of all the US institutions took over. Were added to the regulations for European banks, the profit margin in international comparison have to shrink. That the Fed, unlike the ECB does not operate with "criminal interest rates", is a further qualitative difference, the you can as a competitive disadvantage to call.

And finally, German banks have to do it in comparison to other European and non-European competitors, with location-specific idiosyncrasies. The Germans, for example, are a nation of savers. In times of low interest rates, in the Spread between savings and lending rates has significantly narrowed, this investment mentality to the Problem.“

author: Ferdinand Hammer

This article was written by editorial w:o

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*The contribution of "German banks are more profitable than Greek – Top experts reveal the reasons" is published by wallstreet:online. Contact with the executives here.

hyo/Wallstreet-online.de Date Of Update: 05 February 2020, 18:00