Frankfurt Despite several setbacks, the savings banks in Hesse and Thuringia continue to rely on consolidation among the leading public institutions. He never tires of ” that we, as a savings bank finance group, are pursuing the path to becoming a central institute and are clearly defining the framework conditions for this,” said the new President of the Savings Banks Association of Hesse-Thuringia (SGVHT), Stefan Reuss, on Tuesday.
The SGVHT is the majority owner of the Landesbank Hessen-Thüringen (Helaba), which, from the point of view of the association, should be the nucleus for a savings bank central institute. However, several planned mergers did not materialize in the past – including with NordLB and Deka.
Helaba also got nothing from the sale of the savings bank real estate provider Berlin Hyp. Instead, LBBW, which doesn’t think much of a central institute, was awarded the contract. Reuss complained that with the decision, the savings bank sector missed a “strategic opportunity” in the direction of a central institute.
However, he does not want to be discouraged and will continue to fight for consolidation among the leading institutes. However, Reuss made it clear that Helaba did not want to bring in two of its subsidiaries, the real estate company GWH and the Frankfurter Sparkasse, in possible mergers. When it comes to these issues, he relies on continuity and is positioning himself like his predecessor Gerhard Grandke, whose successor he succeeded at the turn of the year.
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The President of the German Savings Banks and Giro Association, Helmut Schleweis, had been drumming for the creation of a central institute for a long time, but made little progress due to resistance within the sector.
High provisions for premium savings contracts
In operational business, the 49 savings banks in Hesse and Thuringia are preparing for significant back payments from premium and installment savings contracts. “We expect a burden of around 100 million euros,” said association manager Manfred Üffing. This magnitude resulted from a query at all savings banks.
In the past few weeks, the German savings banks have made a turn in dealing with controversial payments from premium savings contracts. Several savings bank associations and some large savings banks are now showing a willingness to pay customers interest from long-term savings contracts, mostly through settlements.
Savings banks are thus reacting to a ruling by the Federal Court of Justice (BGH). In October 2021, this decided for the first time that savings banks may only adjust the interest rates in premium savings contracts according to clear criteria. In the case, the consumer advice center in Saxony had taken action once morest the Sparkasse Leipzig by means of a model declaratory action. The consumer advocates had calculated average customer claims of 3100 euros.
It is clear that the BGH decision ultimately leads to higher interest payments. The Savings Banks must therefore also use long-term market interest rates as a basis for long-term savings contracts. In addition, there is a relative distance to the reference interest rate, which has a positive effect on customers in phases of low interest rates.
However, the question of the specific calculation of interest is still open. This is to be determined by the lower court, the Higher Regional Court (OLG) Dresden, with the help of experts. However, it might still be some time before the question is finally resolved, because both parties to the dispute might go before the BGH once more following the OLG judgment.
According to the financial supervisory authority Bafin, there are around one million premium savings contracts nationwide. They are also putting pressure on the credit institutions via a so-called general decree and want to induce the credit institutions to make additional payments.
War in Ukraine makes prognosis difficult
Reuss expressed satisfaction with the business development in the past year. The operating result following evaluating the savings banks in Hesse and Thuringia rose by 35 percent to 975 million euros. The financial institutions should therefore be able to cope well with the expected burden from additional interest payments.
In the current year, Reuss continues to expect high demand for credit. “We will probably see further inflows of deposits, but hopefully they will not be as strong as in the two previous years.” Basically, forecasts for the banking business are currently difficult due to Russia’s war of aggression once morest Ukraine and the effects on the economy .
More: Important players in the savings bank camp are driving the idea of a central institute