Much of the consolidation that has taken
place has been between the smaller institutions
themselves and past attempts of acquisition
of savings banks by private banks have been
thwarted because of legal issues. However,
the consolidation that has been taking place
in recent months is among the larger players,
namely, sale of Landesbank Berlin (LBB)
and sale of Citigroup’s German consumer
banking unit to France’s Credit Mutuel
Group. Apart from that, the German banking
industry has been buzzing with the recently
announced consolidation activity among the
“Big Five”, Dresdner Bank was acquired by
Commerzbank and Deutsche Bank acquired 30% of Deutsche Postbank with an option of
increasing the stake in the coming months.
- Competition
Competition is intense in the German
retail banking sector. While on one hand,
foreign banks such as Citi and Santander
have established themselves in the highly
competitive consumer finance segment,
direct players such as ING DiBa, an online
subsidiary of ING Bank of Netherlands, have
a strong play in deposits and mortgage
lending. ING DiBa has very successfully
increased its customer base from 1 million
in 2002 to over 6 million today. Another
key player in the retail banking segment is
Deutsche Bank, which for long had focused on
expanding its investment banking operations
abroad. Its retail banking ambitions are now
obvious. In 2006 Deutsche Bank purchased
Norisbank, a consumer bank and Berliner
Bank, an up-market retail bank, and now
has a stake in Postbank, the largest retail bank
with 14.5 million customers in the country.
- Business models
The direct banking model has proved highly
successful in Germany. ING DiBa offers
solely via phone, Internet, and a large network
of ATMs and boasts of the third largest
number of customers in the country. The
financial services subsidiaries of German car
makers such as Volkswagen also operate as
direct banks. Volkswagen for instance, looks
after 3 million private customers in Germany.
Another banking business model gaining
popularity is the cooperation of retailers and
banks. Big German fashion retailer C&A
founded its own bank in the beginning of 2007
and started offering consumer credits online as
well as in its stores. In addition, C&A offers
motor insurance contracts in collaboration
with DA Direkt, a member of the Zurich
Group. Another example of such a collaboration is Tchibo, a big German coffee
bar and shop chain, which offers consumer
credits of RBS, current and savings accounts of
Deutsche Postbank, sight deposits of Comdirect
and insurance products of Asstel. Tchibo sells
these products only online or by phone.
|
