Sparkassen Local Public Banks More than an Option ! Dublin - - PowerPoint PPT Presentation

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Sparkassen Local Public Banks More than an Option ! Dublin - - PowerPoint PPT Presentation

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Finanzgruppe Sparkassenstiftung fr internationale Kooperation Sparkassen Local Public Banks More than an Option ! Dublin September 24th, 2014 Niclaus Bergmann, Managing Director Savings Banks Foundation for International Cooperation

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

Finanzgruppe Sparkassenstiftung für internationale Kooperation

Sparkassen – Local Public Banks – More than an Option !

Dublin September 24th, 2014

Niclaus Bergmann, Managing Director

Savings Banks Foundation for International Cooperation Simrockstraße 4 53113 Bonn E-Mail: office@sparkassenstiftung.de www.sparkassenstiftung.de

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Finanzgruppe Sparkassenstiftung für internationale Kooperation Seite 2

Since 1992: over 150 projects in more than 60 countries today: 5 projects in the EU und 34 projects in 31 other countries worldwide

International Cooperation: Savings Banks Foundation

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

German Banking System

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Financing of trading companies and industry

Private commercial banks

In the 19th century Shareholders, profit maximization – shareholder value

Credit cooperatives

In the 18th century Financial services for members and SMEs,

  • esp. farmers

Member-oriented

Sparkassen (public savings banks)

In the 18th century Financial service for low income people and SMEs public welfare and task-

  • riented

–stakeholder value

Origin Objective of foundation Orientation

  • f interests

The three pillars of the German banking system

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

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Sparkassen – independent but integrated into the Savings Banks Finance Group

Institutions: Business volume: Branch offices: Staff: ATM: 600 3,030 billion EUR 20,400 345,600 25.700

Leasing, factoring and insurance companies, etc.

8 Landesbank- Konzerne Regional Banks

Business volume: 1,495 bn € Staff: 48,464

10 Landesbauspar- kassen Building Societies

Business volume: 55 bn € Staff: 8,940

DekaBank Investment House

Business volume: 134 bn € Accounts: 4.4 mn Staff: 3,957

Others

12 Regional Savings Banks Associations Savings Banks Academies External Audit Providers Deutscher Sparkassen- und Giroverband (German Savings Banks Association) 1 Management Academy 1 University 1 IT coordination centre (SIZ) 1 IT provider (FI) Sparkassenstiftung für internationale Kooperation (Savings Banks Foundation for International Cooperation)

Finanzgruppe

417 Sparkassen (Public Savings Banks) Business volume: 1,106 bn € Branch offices: 15,300 Staff: 245,000

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Finanzgruppe Sparkassenstiftung für internationale Kooperation page 5

The Common Basis of the Group’s Structure Ensures the Success of its Business Model The Sparkassen Finance Group

Public Service Obligation Public Legal Form Decentralised Group Structure Co-operation within the Group Regional Principle Operational Efficiency Municipal Trusteeship

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Finanzgruppe Sparkassenstiftung für internationale Kooperation page 6

Number of Sparkassen IT Service Providers 1 11 Service Provider until 1998

Consolidation of IT Service Providers: Efficiency and Reduction of IT Costs

Result of consolidation process:

IT support is standardised and extended,

Economies of scale and further reductions in IT costs,

Efficiency is further increased (faster roll-out of new products etc.)

Service Provider since 1.1.2008

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

The Sparkassen Model - Focus on real economy

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Sparkassen have a 42% market share

  • f business financing

70% market share in SME finance Germany: Local businesses (esp. SME) are financed by local banks: Cooperative Banks and Sparkassen

Sustainability – Professionalism – Public Welfare

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

Sparkassen and Company Loans – No Signs of a Credit Crunch

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69.9 66.7 64.2 62.1 58.9 75 50 25 2008 2009 2010 2011 2012

New loan commitments of Savings Banks to companies and Self-employed, in billion €, change in %

+9.4 +5.5 +3.4 +3.8 +4.8

* Including residential construction; excluding other

financial intermediaries and insurance corporations, source: Deutsche Bundesbank

Market Shares for Loans to Companies and Self-Employed* in %, 2012

*Without commercial housing

Source: Bankenstatistik Deutsche Bundesbank and own calculations Stand 31.12.2012 Rest of the banking sector (other commercial banks, foreign banks, KfW etc.) 4 largest commercial banks Cooperative banks Sparkassen-Group 42,1 27,5 14,0 16,4

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

Sparkassen: large and small, but independent !

Total volume of business is huge, BUT Each individual Sparkasse can be relatively small

  • smallest with total assets of Euro 130 mn
  • largest with total assets of Euro 45 bn

Most of the 420 Sparkassen have total assets of around Euro 1 bn (average about Euro 2.4 bn) ANYWAY: cooperation is the basis for sustainability

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

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Sparkassen are close to their customers

Typical branch location

Figures as of 31.12.2012

 417 Savings Banks  245,000 employees  19,100 trainees  15,300 branch offices

Sparkassen in Germany:

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

Sparkassen serve the Municipalities

Economic function… – Local employers 245,000 employees, 19,000 Trainees – Local taxpayers € 2.7 billion in taxes (2013) … guaranteed by specific structural elements: – Public mandate: non-discriminatory provision of financial services with appropriate conditions for all citizens, particularly for SMEs reinvestment of profits for local social commitment – Regional principle:

  • nly branches within their business district,

loan activities focus on that district, creating local business cycles

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

Special features of the German Sparkassen

The public mandate of German Sparkassen:

  • part of the state laws and statutes
  • nationwide supply with all kinds of financial services
  • supply of SMEs with loans and other financial services
  • motivation of a culture of savings and entrepreneurship
  • ensuring a balanced regional economic structure

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

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Regional Principle as an engine for regional economic development

− Local deposits are transformed into local loans − Sparkassen are taxed as local businesses − Stong link with the local economy: no speculative activities, no quick growth, „down to earth“ philosophy − Customer proximity and knowledge of the regional market as a basis for risk management − Local staff understands the local situation mutual dependency between Sparkasse and its region !

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Finanzgruppe Sparkassenstiftung für internationale Kooperation

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Concept: Network of Local (Public) Banks

National Association (Central Service Provider)

IT-Center

  • wner: Banks /

Association (or external partner)

Specialized entities, e.g. for Leasing, Factoring

  • wner: Banks /

Association Local Bank Local Bank Local Bank Local Bank Local Branches Number dependent on size of country and potential business volume