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Financial Services Report Germany 1st Quarter

  • ID: 2139170
  • Report
  • Region: Germany
  • 32 Pages
  • The Economist Intelligence Unit
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The resilience of Germany's banking sector has improved since the global financial crisis, as lenders have significantly restructured some operations and bolstered their capital and liquidity positions in response to tighter regulation. However, clear risks still persist. Deutsche Bank-the country's largest financial institution-completed an EUR8bn capital increase in March 2017, but posted a third successive annual loss in 2017, amid falling revenue, litigation costs, asset disposals and a major restructuring programme involving widespread job cuts. New scandals emerged in 2018, as revenue declined and its share price fell to a record low. A turnaround in the bank's fortunes is not certain. Commerzbank, another major domestic lender, is also undergoing extensive cost-cutting.

Concerns will persist about the stability of Deutsche and of the state-owned regional lenders (Landesbanken) amid weak profitability in the post-crisis low interest-rate environment and ongoing regulatory pressure for higher capital buffers. A state-backed merger of Deutsche and Commerzbank is possible over the coming years, but may not address structural flaws. Given Deutsche's size, a fall in investor confidence could pose potential risks to euro zone financial-sector stability.

The financial services sector is important in Germany, although, at about 3.5% of GDP in 2017 it is smaller relative to the size of the economy than in the US, the UK and Japan (and below an EU average of 4.4%), according to Eurostat. The sector employs about 2.6% of the German labour force, similar to the EU average. Employment has fallen in recent years, mainly in response to the substantial cost-cutting programmes of the major banks.

Industry List: Asset management, Financial Services, Banking, Financial Services, Financial markets and instruments, Financial Services, Financial regulation, Financial Services, Financial Services, Financial Services, Insurance
Industry Codes (NAIC): 52
Industry Codes (SIC): 60
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Financial Services Report Germany 1st Quarter

Overview

Banks

Insurers

Asset managers

Financial markets and instruments

Financial regulation
Overview
Regulatory watchlist

Monetary and currency policy: Monetary policy

Monetary and currency policy: Exchange rates

Germany at a glance

Fundamental indicators

Key contacts
Note: Product cover images may vary from those shown
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