By Andreas Kissler
BERLIN (Dow Jones)–The savings banks’ lending business developed positively in the first half of 2024, according to the German Savings Banks Association (DSGV). A total of 65.7 billion euros in new loans were approved. This corresponds to an increase of almost 2.0 percent compared to the same period last year. “We are thus above the admittedly weak figures of the previous year. While demand in the corporate lending business has been very subdued so far, we are seeing an upward trend in loans to private individuals – albeit at a still low level,” said DSGV President Ulrich Reuter.
According to the DSGV, a total of 24.8 billion euros in new loans were approved for private individuals. This corresponds to an increase of 16.3 percent. There has now been a reversal in the trend for private real estate financing. According to the information, new commitments here were 21.5 percent higher than the previous year in June. Since the beginning of the year, 19.3 percent more private real estate financing has been approved than in the same period last year. However, this is still around 50 percent less than the average for 2021 and 2022. “Interest rates have recently fallen slightly again and wages have risen sharply in some cases. This makes the decision to buy your own apartment or house fundamentally easier,” says Reuter.
In this context, the DSGV President pointed out that construction costs, especially ancillary construction costs, urgently need to be reduced. “Around 37 percent of construction costs are caused by the public sector. Real estate transfer tax and sales tax, requirements for social housing, municipal requirements, technical regulations as well as norms and quality standards.” Effects could be achieved quickly with real estate transfer tax, requirements and more standardization. “Housing must become a real political priority,” demanded Reuter.
Demand for credit in the commercial lending business has been very subdued so far. In a half-year comparison, new loans for companies and the self-employed totaling EUR 37 billion were approved, EUR 2.1 billion less, a decrease of 5.4 percent. At least in June, with an increase of over 4.0 percent, more loans were approved than in the same month last year. Overall, according to the DSGV, working capital/investment loans fell by 9.7 percent, while business with commercial housing loans increased again by 6.3 percent. The loan portfolio at the savings banks was stable, with an increase of 0.2 percent or EUR 2.2 billion, and stood at EUR 1,022.7 billion.
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DJG/ank/apo
(END) Dow Jones Newswires
August 01, 2024 04:31 ET (08:31 GMT)
