Shrinking Sparkasse

Saving the Savings Banks

Garbenheim will soon lose one of its main attractions. Source: Handelsblatt/Bostelmann
Garbenheim will soon lose one of its main attractions.
  • Why it matters

    Why it matters

    Often considered the bank of the little guy, the cost-cutting plans and branch closures of Germany’s savings banks could undermine their long-term future.

  • Facts


    • Low interest rates are weighing on banks across the euro zone – but especially those retail banks that rely on deposits and customers.
    • Experts predict a massive reduction of bank branches in Germany – about a quarter by 2020 compared to 2007.
    • Savings banks in some regions have turned buses into mobile banks, rolling from village to village. Others are joining forces with cooperative banks.
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Waldemar Dross only needs a few minutes to walk to his local savings bank branch. To the left, then two blocks down the hill, past the renovated primary school and then to the right.

The branch of the state-backed savings bank, known as “Sparkassen” here in Germany, is located next to a dentist, a baker and a grocer in the middle of Garbenheim.

But this provincial town in the central German state of Hesse will soon loose one of its main attractions. The bank will soon close its doors for good.

The decision has enraged Mr. Dross, a measured man with white hair and a cleanly cropped beard, who since 2011 has been the councilman of this 2,000-strong town, which lies on the outskirts of the larger city of Wetzlar.

“Sparkasse has made big profits for years. Then there’s a bit of a rough patch and suddenly its closing branches,” he said.

Mr. Dross is disappointed. “What Sparkasse is now doing is a good method to lose customers.”

His local branch is part of the regional savings bank group, Wetzler Sparkasse, one of hundreds of independently-run savings banks across Germany that function as a loose network, often backed by regions or communities, which pool resources and can even bail each other out in times of need.

But these are difficult times. Norbert Spory, the head of Wetzlar Sparkasse, is hoping that closing 15 of the city’s 49 branches will be enough to face the harsh reality of the situation.

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