finance
Volksbanks see themselves prepared for setbacks
After an increase in profits in 2021, the German Volks- und Raiffeisenbanken see themselves well prepared for possible economic setbacks in the current year. Photo: Marijan Murat/dpa
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Germany’s cooperative banks did better business again last year. Looking ahead is difficult in view of the Ukraine war.
After an increase in profits in 2021, the German Volks- und Raiffeisenbanken see themselves well prepared for possible economic setbacks in the current year.
In view of the war in Ukraine, it is difficult to highlight the successes of the past financial year, said the President of the Association of German Volksbanken and Raiffeisenbanken (BVR), Marija Kolak, on Tuesday in Frankfurt.
“We are aware that the economic impact in Germany can only be a minor factor in view of the suffering in the war zones. Therefore, at this point only to point out that the immediate consequences for the cooperative banks are very manageable, »said Kolak.
BVR board member Daniel Quinten explained that the institutions’ commitment to Russia through their own investments such as funds was “in the per thousand range in relation to equity”. He doesn’t expect any problems from this.
Well prepared
Thanks to a solid equity base and increased reserves, the cooperative institutes see themselves well prepared to be able to cope with possible operational burdens resulting from a weaker economy. The 772 (previous year: 814) Volks- und Raiffeisenbanken recorded increases in both interest and commission income within a year. The institutions’ pre-tax profit totaled around EUR 7.7 (6.4) billion. According to preliminary figures, the surplus rose to around 1.9 (1.2) billion euros.
From their point of view, the punitive measures against Russia are appropriate, emphasized Kolak. However, the consequences of the sanctions are a major challenge, especially for small and medium-sized companies with limited international business. “Companies that have gotten into economic difficulties through no fault of their own as a result of the Russian sanctions should receive state aid in a timely manner,” demanded the BVR President. Similar to the corona pandemic, this can be done with loan programs from the state development institutes.