Financial expert analyzes: Savings banks in Baden-Württemberg are making good profits despite challenges - but with a bleak outlook

Financial expert analyzes: Savings banks in Baden-Württemberg are making good profits despite challenges - but with a bleak outlook

According to a report by www.stimme.de, the 50 savings banks in Baden-Württemberg have had a decent year in 2023 despite economic problems and political uncertainty. Total assets rose slightly to 244.8 billion euros, and customer deposits increased by 1.5 percent to 171.5 billion euros. Particularly noteworthy is the increase in deposits from private individuals to 38 percent of the market share, as well as the fact that the institutions in the country were able to record a higher loan amount.

However, the fact that loan commitments have plummeted - from 32.9 billion euros at the end of 2022 to just 22.1 billion euros at the end of 2023 - is also a matter of great concern. The willingness to invest is declining across the board, and this affects both private construction projects and projects by companies and traders. This development could have a significant impact on the market and the financial industry.

The Sparkasse President is alarmed and hopes for noticeable incentives and predictable framework conditions from politicians. Despite this uncertainty and reluctance in the construction and real estate sector, the savings banks in the country increased their real estate loan portfolio by 1.8 percent to 89.9 billion euros. Around 80 percent of this comes from private customers. An increase in building permits and the economic outlook in this sector are urgently needed.

It is clear that the current developments on the credit and construction financing market are of great importance and that both politicians and financial institutions are required to stabilize the situation. Despite the savings banks' generally good earnings situation, President Schneider emphasized the importance of tax incentives and political action in this area.