Cooperative Banks

Climbing the Ranks of German Banks

  • Why it matters

    Why it matters

    Cooperative banks and credit unions have become significant players on the German banking landscape. As mergers and regulations increase, however, their future is in question.

  • Facts

    Facts

    • Since the financial crisis, no other banking group has performed as well as Germany’s roughly 1,000 cooperative banks and credit unions.
    • This year alone could see 80 mergers of credit unions and cooperative banks; jointly, the banks have become Germany’s second-largest banking force after Deutsche Bank and ahead of Commerzbank.
    • In 2016, credit unions, cooperative banks and Raiffeisen banks took in a combined $7.6 billion before taxes. For DZ Bank alone, this figure stood at $2.5 billion.
  • Audio

    Audio

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Bank
The sky looks bright for Germany’s booming cooperative banks. If it weren’t for all those pesky clouds. Source: Picture Alliance

Angela Merkel usually has other priorities than to attend the annual conference of the National Association of German Cooperative Banks (BVR). But this year, however, the chancellor will honor the annual banking bash in Berlin on Wednesday. Not to be upstaged, Ms. Merkel’s electoral challenger, Social Democratic leader Martin Schulz, will also come to the conference.

There’s good reason behind the unusual attention lavished on the BVR on behalf of Germany’s political A-listers: no other banking group has performed as well as Germany’s roughly 1,000 cooperative banks, Raiffeisen banks and credit unions and their central institute, the Frankfurt-based DZ Bank. Since the outset of the global financial crisis, these banks have together grown at a stronger clip than their competitors – and that without scandals and trials.

This development is particularly noteworthy in that cooperative banks, Raiffeisen banks and credit unions were long viewed as minor, provincial institutions in the German financial world. In the meanwhile, however, DZ Bank has become Germany’s second largest financial institution behind listed rival Deutsche Bank and ahead of the former number two, Commerzbank.

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