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Unchanged despite the crisis: Savings banks see good payment behavior

There is great concern about increasing bankruptcies in the Corona crisis. So far, however, the savings banks see medium-sized companies as well equipped. From the point of view of the Sparkasse President, however, it is questionable whether the economy will recover quickly and strongly as hoped.

According to the savings banks, the payment behavior of consumers in Germany has not suffered during the Corona crisis so far. “We are currently seeing no extraordinary development, neither in the repayment of loans nor in the use of overdraft facilities,” said Sparkasse President Helmut Schleweis. “The savings rate is currently still growing. People are taking more precautions. Certain expenses, for example for travel, are being postponed during the pandemic,” Schleweis explained.

Financial institutions were able to defer customers in distress due to the crisis from April 1 on the payment of interest, principal or loan repayment for three months. According to Schleweis, some savings banks granted a longer period of six to nine months. In total, the savings banks enabled 367,000 customers to defer payments by the end of July, 198,649 private customers and 180,005 commercial customers.

The President of the German Savings Banks and Giro Association (DSGV) sees medium-sized companies as well prepared for a longer dry spell. “Most companies are still very resistant to crises thanks to a good capital cushion,” said Schleweis. According to the latest data from the association, the average equity ratio for medium-sized companies is 39 percent. To this end, the DSGV evaluates business balance sheets and credit figures from medium-sized corporate customers with an annual turnover of up to 250 million euros.

Loan Default Reserves

However, some sectors such as the hotel and catering industry are under significant pressure. Schleweis expects the number of insolvencies to rise in the coming year. The savings banks could cope well with that. “The savings banks have used the last few years, which were practically without loan defaults, to keep adding to their reserves. Overall, the banking industry has become more resilient since the financial crisis in 2008. “Financial institutions have more equity and regulation has made banks more resilient.”

Schleweis does not expect a steep upswing after the economic crash in the Corona crisis – a so-called V scenario. He expects things to slowly pick up again, “so rather a broad U. I assume that we are not finished yet.”


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