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Savings banks rely on customer satisfaction

Savings banks rely on customer satisfaction

According to information from the Handelsblatt, the public-law savings banks in Germany will in future focus more on gains in market shares and higher customer satisfaction. According to this, the rigid requirement of a return on equity before taxes of 15 percent, which has been in force since 2002, is collected and replaced by a flexible calculation that results in a significantly lower value.

According to a new strategy paper from the savings banks, the German Savings Banks and Giro Association (DSGV), as the umbrella organization, continues to adhere to a cost-income ratio of 60 percent. This means that no more than 60 cents should be spent in the coming years to earn one euro. According to statements by a spokesman for the DSGV, talks are still being held about the strategic direction.

Although the two indicators should continue to be used as benchmarks for business success, they should be expanded to include market, risk and liquidity indicators. For communication, the future focus should be on the cost-income ratio, supplemented by return on equity, customer reach, main bank account and customer satisfaction. The previous return on equity of 15 percent will now be replaced by a flexible formula that is based on the long-term capital market interest rate and is considered to be the “absolute lower limit for securing a livelihood”. According to the Handelsblatt, observers assume that this will lead to returns between six and eight percent in the future.

Former DSGV President Dietrich Hoppenstedt issued the benchmark of 15 percent for the more than 400 savings banks in Germany in response to Deutsche Bank, for which CEO Josef Ackermann had formulated a return target of 25 percent. In reality, however, very few institutions in the public sector would have ever achieved this goal – and if so, then only with losses in market share.