The data and information available seem to indicate that the emergency phase can be considered closed for the German banking system. The problems to be solved are still numerous and of significant size but their management appears to be part of a broadly defined evolution. This is an important result: of the 11 banking groups at the top of the German banking system in 2009, as many as seven had to apply for state aid; in two cases, however, the intervention was not sufficient to avoid liquidation.
Two important indications can be drawn from the 2013 final balance of the major German banking groups. The first is the strong reduction in assets, a trend noticeable in many countries especially for large banks, but decidedly intense in Germany. The second indication relates to the economic result: in a context lacking in satisfactions, the delay of the banks in difficulty is growing. The recovery process of the German banking system has benefited (and will continue to benefit) from a favorable macroeconomic context.
Furthermore, unlike many other countries, the real estate market is not characterized by significant excess supply, both in the residential and commercial components. The extent of this bonus can be seen in terms of the quality of the loan portfolio, where the deterioration appears to be very limited. Of this favorable context, however, there are only limited traces in terms of profitability. Partly due to short-term circumstances (for two thirds of the system the interest margin constitutes approximately 80% of total revenues). However, a particularly onerous cost structure also weighs.
The origin of revenues at the geographical level highlights the dual profile of Deutsche Bank. In Germany and to a lesser extent in the rest of continental Europe, the commercial banking activity is dominant; elsewhere (United Kingdom, United States, Asia), on the other hand, the most important revenue stream comes from the division engaged in financial intermediation. At group level in 2013 it is the latter activity that prevails.
Attachments: Focus no. 23 – 08 July 2014.pdf
