Cooperative banks make substantial profits
2022, the rapid interest rate increase hit the balance sheets of the cooperative banks, but the situation has significantly improved since then. The financial group can now rejoice in swelling billions in earnings. The result has increased fivefold.
The cooperative financial group overcame the interest shock in the previous year and significantly increased profits. 14.4 billion Euro before taxes represent a significant leap from 4.2 billion Euro the previous year. Under the hood, the group around the Volk- and Raiffeisenbanks now expects nearly fivefold results of 10.8 billion Euro for 2023, compared to 2.3 billion Euro the year before, as they announced in Frankfurt.
The rapid interest rate increase led to market losses for government bonds, which make up a large part of the assets of the institutions. As a result, the papers had to be revalued, causing a significant loss of 6.8 billion Euro in the balance sheet. The result from financial assets returned to the positive area in 2023 with 1.34 billion Euro. Classical banking business also contributed to the recovery, as reported by the group. The deposits in the lending business grew by 2.4 percent.
"The cooperative financial group is ready for investments in the future and is stable. The result for 2023 is also an expression of the successful joint strategic work," explains Marija Kolak, President of the German Federation of Volksbanken and Raiffeisenbanken (BVR).
The economic challenges are enormous, and Germany needs a change in economic policy. The planned easing of write-off conditions falls far short. "We need a tangible corporate tax reform to remove the investment brake and not fall behind internationally," demands Kolak.
To the cooperative financial group belong, among others, 697 (previous year: 737) Volksbanken and Raiffeisenbanken, the Sparda-Banken, and the DZ-Bank Group. They report serving more than 30 million customers, of whom 17.8 million are also shareholders.
The cooperative banks in Germany, along with traditional banks, have faced challenges due to the interest rate increase, but they've managed to bounce back. The group's earnings before taxes increased from 4.2 billion Euro in 2022 to an anticipated 10.8 billion Euro in 2023, demonstrating a significant improvement.
Despite the success in overcoming the interest rate shock, Marija Kolak, President of BVR, emphasizes the need for a corporate tax reform in Germany, stating that it's crucial to remove the investment brake and maintain competitiveness internationally.
