By Alexandra Edinger
Germany's cooperative banks managed to outshine industry giants
such as Deutsche Bank AG (DB) last year, in terms of pretax
earnings, private credit issuance and cost ratios, the industry
association BVR said Tuesday.
The industry data come as the group steps up lobbying efforts to
ensure Germany's government protects the cooperative banks'
interests as plans for an EU banking union unfold. BVR represents
one column of Germany's three-pillar banking system. The banks'
business model focuses on a low-cost, low-return approach and none
of the banks had to ask the government for support using taxpayer
money during the financial crisis.
The traditionally smaller cooperative banks' market share is set
to rise this year, BVR added, but not enough to prevent a slight
decline in profit, given prevailing low interest rates. The
country's savings banks haven't offered specific guidance.
Pretax profit at Germany's 1,101 cooperative banks reached 7.4
billion euros ($9.62 billion) in 2012. Last week, the country's
group of 422 savings banks said they attained pretax profit of
EUR4.4 billion last year. Both figures compare well with Deutsche
Bank's EUR1.4 billion in pretax profit last year.
Likewise, cooperative banks' private credit issuance rose 4.4%
last year to EUR443 billion and the banks' cost ratio was 66.9%,
more favorable than Deutsche Bank's 76% or Commerzbank AG's
(CBK.XE) hefty 89.9% in 2012.
Both cooperative banks and savings banks have asked the German
government to be keep them under the scope of domestic regulators
rather than EU ones. They also wish to remain independent from any
liabilities arising from the EU's plans for a banking union,
specifically the potential risk that they might in future be forced
to guarantee deposits in other, less robust, banks elsewhere in the
euro zone.
Separately, earlier in the day, European Central Bank governing
council member Jens Weidmann downplayed the role of a European
banking union in combating the crisis, noting that it is a future
project that won't solve banks' immediate problems. Weidmann is
also president of the Deutsche Bundesbank.
(Geoffrey T. Smith contributed to this item.)
Write to Alexandra Edinger at alexandra.edinger@dowjones.com