The Savings Bank Sector and the Financial Crisis — Answers Given by Dr. Markus Thiesmeyer
The savings banks seem to be less affected by the crisis. Do you share this view?
Absolutely. The fundamental business model of the savings banks proved well, especially in this crisis. However, the savings banks are not completely immune to contagion. For example, they had to absorb in part considerable losses recorded by the Landesbanken. Several institutions also have problems with their own investments and treasury surpluses. Therefore, the savings banks have to adjust their business strategy to the new rules of the game. Hence, they also have to adapt to the market environment and re-assess risks and opportunities.
Where do you see the biggest need for actions among savings banks?
First of all, savings banks should also give priority to risk reduction, if necessary. Then, they should focus on strengthening retail business. The customers currently just long for a reliable business partner. The savings banks now have the opportunity of further strengthening customer ties. In parallel, there is an urgent need for exploiting efficiency potentials in their processes. After all, the earnings that are lost in the course of risk reduction, for example, have to be offset by raising efficiency.
Which consequences do you see for the Landesbanken?
The Landesbanken certainly have to take massive restructuring measures. The business of practically all Landesbanken has to be reviewed. Especially in this segment, we are also likely to see mergers of financial institutions in the future. In this context, the Landesbanken have to identify sustainable strengths and synergies. Without the readiness to push for change, even if it is painful, measures designed to ensure survival do not offer sound prospects.
