“One focus remained the interest in single and two-family houses, which made up a large part with 21 properties,” said a press release from Sparkasse Herford. The demand for housing loans was just as unbroken. “The historically low interest rates mean that more and more customers prefer to finance their own four walls instead of paying rent,” reported Peter Becker, CEO of the Sparkasse.
The Sparkasse Herford regularly informs the Zweckverband – the association of the municipal sponsors of the financial institution – about its business development. The municipal sponsors of the Sparkasse are the Herford district and the cities of Herford, Bünde, Löhne and Vlotho. Important for the finances of the sponsors: On the basis of the balance sheet for 2020, the association assembly decided to distribute 3.98 million euros to the sponsors.
“Against the background of the special circumstances, we are satisfied with the course of the 2021 financial year so far,” said Becker. This is mainly due to a very good credit business with both corporate and private customers. The loan commitments to companies are mainly medium-term loans.
“As a result, the loan portfolios of the companies rose again this year,” said Becker happily. And the chairman of the board further explained: “With the growth of more than 28 million euros, we were able to further strengthen our commitment to financing the domestic economy.”
In addition, there was the intensive use of corona aid. “In the past year alone, 236 financing applications with a volume of more than 79.5 million euros from the Corona funding programs were applied for,” Becker reported.
Another effect of the low interest rates: Investors were looking for alternatives in the securities business. At around 225 million euros, securities turnover was well above the previous year’s figure of 189 million euros, which corresponds to an increase of 19 percent.
As a result of the growth in the lending and deposit business, the total assets of the Sparkasse increased to more than 5.7 billion euros as of December 31, 2020. “With a relative operating result of 0.76 percent of the average balance sheet total, we are below the previous year’s result of 0.80 percent for 2020, but slightly exceed our budgeted figure,” said Becker. The main reason for the declining operating result is the decline in net interest income.
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