Status: 08.09.2021 12:26 p.m.
For years, Sparkasse President Helmut Schleweis has been pleading for closer cooperation with the Landesbanken. We are talking about mergers and a common central institute. But the project is stalling.
Helmut Schleweis, President of the German Savings Banks and Giro Association (DSGV), continues to promote the establishment of a central institute together with the Landesbanken. There has been little progress since he took office in 2018, when he first campaigned for closer cooperation in the public banking sector. The merger between the Hessische Landesbank (Helaba) and the central fund company of the Sparkassen, Deka, which was initiated at the beginning of last year, was also quickly put on hold. The merger was supposed to form the nucleus of a savings bank central institute, which other Landesbanken could later have joined. Because of the pandemic, negotiations have been suspended – and are likely to remain so for the foreseeable future.
Comments from Bavaria and Baden-Württemberg, which are among the largest shareholders in Deka, recently indicated that there are also fundamental concerns and reservations about a merger with Helaba. Hamburger Sparkasse, the largest in Germany in terms of total assets, also voted against the project. Abstention came from East Germany. The shareholders warn against giving up the functioning business model of the fund provider Deka carelessly. In addition, some stakeholders point out that a merger would be extremely complex.
Talks are unlikely to resume
It must be clarified which role the state of Hesse should play in the future in a merged institute. The background to this debate is that the Landesbanken are owned by the federal states, but none of the large territorial states would like to relinquish sovereignty over “their” institute. In addition to Helaba, there are three larger Landesbanken: LBBW in Stuttgart, BayernLB in Munich and NordLB in Hanover.
Thus, it also seems unlikely to Sparkasse President Schleweis that the talks between Helaba and Deka will be resumed. “Successful talks can only be held if there is the necessary will of all owners who have to agree,” he told the “Handelsblatt”. Since this does not exist, it currently does not make sense to continue to deal with a merger. “I do not waste management capacities on something that necessary parts of the owners expressly do not want,” said the DSGV President.
Helaba and LBBW as role models?
Nevertheless, the aim of consolidating the Landesbanks should not be given up entirely. “My opinion is that the Landesbanken would have it easier to compete together than alone,” Schleweis said. The goal of increasing efficiency in the Sparkassen-Finanzgruppe is also easier to achieve with a central institute. In many business areas you need a certain amount of expertise and economies of scale in order to be able to operate them effectively. And of course, consolidation is always about cutting costs. “That’s why I advise not to put the issue on the back burner.”
In fact, some of the Landesbanken offer identical services. Some Landesbanken have recognized very well that this is also about size and the bundling of competencies. At the beginning of August, for example, Helaba and LBBW decided to work more closely in the Sparkasse business. The plan is to merge interest, currency and raw material management with savings banks and their customers in LBBW. Conversely, Helaba is also to handle international payments for LBBW’s Sparkassen. In addition, Helaba is to take over LBBW’s foreign exchange and precious metals business.
Association president Schleweis welcomes the project because it increases the efficiency of the banks. “Many individual measures are already on the way. I am convinced that in the end there will be a central institute,” said the DGV President in the “Handelsblatt”.
Also Deutsche Bank for Consolidation
Deutsche Bank boss Christian Sewing also drums for mergers. “We must finally use the economies of scale Europe,” he said at a banking conference of the “Handelsblatt”. It could not be in the interests of the local banks for all global institutions to have their headquarters outside of Europe. The importance of size in the financial world is increasing exponentially. A joint capital market union is therefore urgently needed, demanded Sewing, who has also been president of the private banking association BdB since this summer.
However, he is not specifically looking for a partner bank for his own company. “We are preparing to go into a merger on an equal footing,” said Sewing. The largest German financial institution, however, does not scratch its feet, but wants to get fit first and focus on its own strategy. “The best preparation is to be fit yourself.” Deutsche Bank is on the right path thanks to the restructuring that began around two years ago and is getting fitter from quarter to quarter. Sewing had shut down entire departments and cut risky business in investment banking. 18,000 jobs will be lost worldwide. The renovation should be finished by the end of 2022.