Frankfurt The Volks- and Raiffeisenbanken closed branches on a large scale during the corona pandemic. The 349 Volks- und Raiffeisenbanken, which belong to the regional cooperative association, gave up 425 and thus a good nine percent of the branches last year.
The development, which has been going on for a long time, will continue in the future. According to a survey by the association, 36 percent of banks plan to close branches in the next two years.
“Due to Corona, customers have approached the online channels even faster than expected,” said association boss Ingmar Rega. The proportion of customers who use branches fell from a quarter to a fifth last year.
From his point of view, banking and consulting topics have become more complex, and the trend is “towards well-trained staff in central positions”. “The Volksbanken and Raiffeisenbanken remain present in the area primarily through such advice centers,” said Rega. The change was not only triggered by the corona crisis, and branch closings will continue gradually and not as strongly as at large banks, which have some catching up to do.
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The Commerzbank intends to cut 340 of the current 790 branches in Germany in the next four years. The Deutsche Bank announced in autumn that one in five of the last 500 business outlets will be closed.
There are essentially two reasons for the banks’ increasing pace in reducing branches. On the one hand, the increasing use of online banking means that branches are orphaned. On the other hand, the cost pressure continues to rise. The negative interest rates in the euro zone are considered a permanent burden. In addition, the financial institutions must expect more bad loans and shrinking profits as a result of the corona pandemic.
No major burdens from the credit business feared
The 349 Volks- und Raiffeisenbanken of the cooperative association increased the risk provisioning for loans significantly in the past year. The valuation result was 300 million euros, it largely relates to loans. The operating result after valuation fell to 3.9 billion euros. Vice association boss Siegfried Mehring said: “The institutes try to balance their accounts very carefully. We are very confident that the lending business will not lead to extreme burdens. ”The cooperative association represents almost half of the roughly 800 Volks- and Raiffeisenbanks nationwide. There are regional associations in Baden-Württemberg and Bavaria.
Bank regulators warn of rising loan defaults. The Bundesbank sees the German financial institutions facing an acid test in the corona crisis. Many Volksbanks and savings banks, on the other hand, have so far been relatively relaxed. Lobbyists of the regional credit institutes also repeatedly point out that the financial institutions have increased their equity capital significantly in recent years and thus have high safety buffers.
The corona pandemic is slowing down the mergers. In 2020 there were only eleven associations in the cooperative association. In the two previous years there had been twice as many, and in 2017 even 28. “Compared to previous years, the merger rate has slowed down, certainly also because of the acute challenges posed by the pandemic,” says Rega. For the current year 16 merger intentions were reported.
The pace of merger among Volksbanks and Raiffeisenbanks has also slowed down across Germany. According to the consulting firm Zeb, the number of cooperative banks fell by just 27 from January to the end of November 2020. In the three previous years, the decline had been between 34 and 57 – so there were sometimes twice as many mergers.
More: Savings banks consider loan defaults to be manageable.