ECB tender dope Stadtsparkasse Düsseldorf | Stock exchanges newspaper

bn Frankfurt – Stadtsparkasse Düsseldorf grew strongly in 2021 through active use of the long-term ECB pandemic tenders. As CEO Karin-Brigitte Göbel explained on Thursday, the institute subscribed to a volume of EUR 1.7 billion last year as part of Targeted Longer-Term Refinancing Operations (TLTRO). The program thus made a significant contribution to the balance sheet total, which increased by around one-fifth to EUR 16.1 billion.

The balance sheet also expanded thanks to a thriving lending business and rising deposits. While the loan portfolio rose by 5.8% to EUR 10.2 billion, customer deposits, the increase in which the institute has actually been tackling for some time with negative interest rates, increased by 8.8% to EUR 11.1 billion. Without the tender program, the balance sheet total would have increased at about the same pace as in the previous year, said Göbel. The institute does not quantify the TLTRO contribution to net interest income.

Even if almost three quarters of the deposits in Düsseldorf are sight and time deposits, the prospect of a turnaround in interest rates does not deter the manager, according to her own statements. The Stadtsparkasse has secured itself with swaps, the proportion of maturity transformation is “very small” and “not a strategic factor,” she says in the Börsen-Zeitung. Like other institutes, the savings bank tries to convince customers to invest in securities, for example. In the past alone, a good 1,700 customers have been written to, as Göbel reports. “Customers who leave their money lying around are getting poorer every day when money is due on demand,” she sums up in view of the current inflation rates.

The efforts seem to be paying off. Net commission income increased by 12.6% in 2021. Above all, however, a brilliant valuation result gave the Stadtsparkasse a powerful boost in profits last year. While the operating result before valuation rose by just 2.1% or EUR 1.3 million in view of a slight fall in net interest income, after valuation it shot up by 51.6% or EUR 30.1 million. According to Göbel, this not only reflects the release of pandemic-related general risk provisions, but also an individual value adjustment of around EUR 22 million, which, contrary to expectations, has recovered.

Even if the company reduced its personnel expenses by 2% as part of a restructuring program in 2021, the cost level remains high. The cost/income ratio was 74.3% in 2021 after 74.6% in the previous year. Göbel refers to investments in the digitization of the offer for private and corporate customers amounting to 8 million euros in 2021 alone. Such expenses will also be reflected in 2022 before the expense ratio should fall in 2023.

The distribution to the city of Düsseldorf in 2022 should be higher than in 2021, when 14.3 million euros flowed. In recent years, the city and Sparkasse had argued about the distribution policy.