Germany has too many banks, more than any country in the world.
That’s especially true of its savings banks, which are often run by local cities and municipalities.
Take the one in Bad Sachsa in northern Germany, with just 40 employees.
After 129 years of proud independence, it is contemplating the unthinkable — a merger.
It’s brutal out there for small banks in the euro zone’s near-zero interest rate deep freeze. Their returns are miserable and their costs are rising, and often, their customers are dying off in Germany’s aging society.
“We are well aware that the savings banks landscape is changing fast,” said the chairman of Bad Sachsa’s supervisory board, Axel Hartmann, who is also the town’s mayor. “We are totally open to possibilities.”
But Bad Sachsa is an exception.
The leaders of Germany’s vast “Sparkassen” sector are not as open as Mr. Hartmann is to moving with the times, it appears. Many in wealthier communities want to preserve their comfortable independence, despite signs some in the industry see of a coming crisis.