“The low interest rate environment is taking an especially high toll on German banks” that depend more on interest income and less on fees than many other banks, said Andreas Dombret in an interview with The Wall Street Journal.
Germany’s 25 largest banks are sufficiently capitalized to weather a potential crisis, according to health-checks of the European industry from the ECB and the European Banking Authority released Sunday.
Mr. Dombret, a board member of the Bundesbank in charge of banking supervision, also warned in a separate press conference earlier Sunday of existing overcapacities in the German market, saying the domestic sector’s profitability trails behind other countries. He therefore pledged for the domestic sector to consolidate by mergers, a move that could boost profits.
Only one German bank, Muenchener Hypothekenbank, a small real-estate lender, failed the stress test based on end-of-2013 figures. But the bank has already more than compensated for that shortfall with a capital increase.
German banks, many of which were saddled with vast amounts of bad loans after the collapse of Lehman Brothers, took steps early on to improve their business models, Mr. Dombret said. They were given the necessary breathing room to do that by a sharp recovery in Germany’s economy, which is Europe’s largest, in the aftermath of the global financial crisis.
Full article on Wall Street Journal
Full interview on Wall Street Journal Deutschland (German)
© Wall Street Journal
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article