Sparkasse (Germany)

The ''Sparkassen-Finanzgruppe'' ("Savings Banks Financial Group") is a network of public banks that together form the largest financial services group in Germany and in all of Europe. Its name refers to local government-controlled savings banks that are known in German as , plural . Its activity is overwhelmingly located in Germany.

History

The first savings banks in Germany were founded in the 18th century in its major trading cities. One of the first institutions with the business model of modern savings banks was the ''Ersparungscasse der Hamburgischen Allgemeinen Versorgungsanstalt'' in Hamburg in 1778. Founders were rich merchants, clerks and academics. They intended to develop solutions for people with low income to save small sums of money and to support business start-ups. In 1801 the first savings bank with a municipal guarantor was founded in Göttingen to fight poverty. In 1838, Prussia adopted the first savings banks legislation (), which subsequently served as a model for other German jurisdictions. Between 1850 and 1903 the idea of the municipal savings banks spread and the number of savings banks in Germany increased from 630 to 2834.

During World War I, the Imperial German government leveraged the network of Sparkassen to place war bonds, marking the beginning of their activity in the securities space. In 1934, all savings banks were designated as credit institutions under new banking legislation following the crisis of 1931. The savings banks group, designated from 1935 as , again participated in war financing before and during World War II. The savings banks in East Germany were nationalized and separated from the rest of the network in 1945, but reintegrated into it in 1990.

Key concepts

The Sparkassen-Finanzgruppe is highly idiosyncratic, and its description requires understanding of key notions that are unique to its German context.

''Träger''

The German word ("holder", plural also ''Träger'') refers specifically, in the context of the Sparkassen-Finanzgruppe, to the specific owner-like relationship between a local government, e.g. a municipality (german: Gemeinde), union of municipalities ('' Gemeindeverband'') or district (german: Kreis, Landkreis, kreisfreie Stadt or Stadtkreis), and a public-sector institution (german: ), e.g. a . ''Träger'' implies a form of control that is not legally a form of ownership but is practically akin to it, given that the Sparkasse is itself an independent public entity but the ''Träger'' has ownership-like governance rights over it, with the consequence that most Sparkassen are chaired by local elected politicians. The ''Träger'' position (german: Trägerschaft) cannot be sold, however, and does not entail rights to the Sparkasse's financial surplus which is typically retained or used for local public welfare projects.

Until the early 21st century, the ''Träger'' also provided explicit financial guarantees to the institutions they controlled, but these guarantees were mostly phased out under an agreement concluded on between a group of German negotiators and the European Commission represented by Competition Commissioner Mario Monti, known in German as the .

Regional principle

The Regional Principle (german: ) stipulates that entities of the Sparkassen-Finanzgruppe such as Sparkassen or public insurers have a local monopoly within the group within the geographical area in which they are established, namely the territory of their ''Träger''. It is established in the Sparkassen legislation (german: , German acronym SpkG) which is specific to each of the states of Germany (german: Länder) except Hamburg, which has no SpkG. The states of Hesse of Schleswig-Holstein have less restrictive legislation on the Regional Principle than the other German ''Länder'', linked to the fact that, as in Hamburg, they have Sparkassen under the legal-form of joint-stock companies (''Aktiengesellschaft'') as opposed to public-sector entities.

Group entities

In late 2020, the Sparkassen-Finanzgruppe included 520 member entities, as described in its 2021 Annual Report:
* 376 local savings banks (german: Sparkassen): 200,676 employees
* 6 regional banking groups (german: Landesbank, including Landesbank Berlin which is directly owned by the DSGV): 33,502 employees
* 9 public insurance groups (german: ): 26,680 employees
* 8 regional building societies (german: , abbreviated as LBS; sometimes translated into English as "building and loan associations") and 7 LBS real estate companies: 7,392 employees
* DekaBank (asset management and wholesale financial services): 4,711 employees
* (IT services): 4,474 employees
* Deutsche Leasing and other leasing companies: 3,441 employees
* (publishing and other group services): 2,100 employees
* Berlin Hyp (property lending): 593 employees
* (car loans and consumer credit): 530 employees
* 3 factoring companies: 403 employees
* Sparkassen Rating und Risikosysteme GmbH (risk management): 311 employees
* SIZ GmbH (IT security): 281 employees
* 51 capital investment companies: 179 employees

National and regional associations

The Deutscher Sparkassen- und Giroverband (DSGV, self-translated as "German Savings Banks Association") is a nonprofit association, based in Berlin and founded in 1924. It operates as an umbrella organization to facilitate decision-making processes, coordinate strategy, and represent its members' political and regulatory interests at the national and international levels.

The 12 regional associations (german: Sparkassenverbände) are statutory bodies, of which savings banks ''Träger'' are statutory members. They are responsible for coordination between savings banks in a region, and manage the regional sub-funds that participate in the Sparkassen-Finanzgruppe's institutional protection scheme (except in Berlin where a special arrangement is in place). They also act as auditors and operate regional savings bank academies for educational and training purposes.

They are, from north to south:
* with head office in Kiel, covering Schleswig-Holstein;
* in Hamburg, covering Bremen and Hamburg;
* in Berlin, covering Berlin;
* also in Berlin, covering Brandenburg, Mecklenburg-Vorpommern, Saxony, and Saxony-Anhalt;
* in Hanover, covering Lower Saxony;
* in Münster, covering the northeastern part of North Rhine-Westphalia;
* in Dusseldorf, covering the southwestern part of North Rhine-Westphalia;
* in Frankfurt and Erfurt, covering Hesse and Thuringia;
* in Mainz, covering Rhineland-Palatinate;
* in Saarbrücken, covering Saarland;
* in Stuttgart, covering Baden-Württemberg;
* in Munich, covering Bavaria.

In addition, a dedicated association, the (VFS), exists for Sparkassen that are (or recently were) joint-stock companies. The latter are members of both the respective regional ''Sparkassenverband'' and the VFS.

File:Berlin, Mitte, Behrenstrasse, Berliner Bank 05.jpg, DSGV head office in Berlin
File:Gebäude des Sparkassenverbands Westfalen-Lippe (SVWL).jpg, Sparkassenverband Westfalen-Lippe head office in Münster
File:RSGV-Gebäude.JPG, Rheinischer Sparkassen- und Giroverband head office in Dusseldorf
File:Mainz - Vordere Synagogenstraße 2 - LBS Südwest - 2018-05-06 18-34-08.jpg, Sparkassenverband Rheinland-Pfalz head office in Mainz
File:Landesbank Stuttgart AmHbf2.jpg, LBBW building in Stuttgart, hosting the head office of Sparkassenverband Baden-Württemberg

''Sparkassen''

The ''Sparkassen'' work as commercial banks in a decentralized structure.DSGV-Website-Organisation-Sparkassen
accessed: 13.06.2011 Each savings bank is independent, locally managed and concentrates its business activities on customers in the territory in which it is situated under the Regional Principle. In general, ''Sparkassen'' are not profit oriented. The ''Träger'' of the savings banks are usually single municipalities or several municipalities within a district.

As banks under public law, the vast majority of Sparkassen have a public mandate which requires that they serve their local stakeholders and local communities. Five institutions known as "free Sparkassen" (german: freie Sparkassen) are or recently were joint-stock companies. They are: , , Hamburger Sparkasse, Sparkasse zu Lübeck, and Sparkasse Mittelholstein. Their ''Träger'' are charitable foundations. They are members of the VFS, as is despite its current public-sector legal status.

Fulfilling public interests is still one of the most significant characteristics of public banks in general and the savings banks in particular. Although public interest is very unspecific, objects of those companies are usually:
* providing financial and monetary services in economically underdeveloped regions;
* supporting saving processes and accumulation of capital;
* strengthening competition in the banking industry.

The total assets of the ''Sparkassen'' amount to about €1 trillion. The 431 savings banks operate a network of over 15,600 branches and offices and employ over 250,000 people.''Das Profil'', Publisher: Deutscher Sparkassen- und Giroverband, P.3

; accessed: 13.06.2011 Savings banks are universal bank

HOME


Content is Copyleft
Website design, code, and AI is Copyrighted (c) 2014-2017 by Stephen Payne


Consider donating to Wikimedia



As an Amazon Associate I earn from qualifying purchases