Kreissparkasse Herzogtum Lauenburg (KSK) Achieves Solid Results Despite Challenging Market Conditions in 2023

Mölln. The board members of the Kreissparkasse Herzogtum Lauenburg (KSK) call the general conditions in the 2023 financial year rather unfavorable. Despite the challenging market situation, the KSK secured its balance sheet total of 4.1 billion euros. The operating result before valuation was over 40 million euros in 2023. This was successful because the company consistently focused on the needs of its customers during the financial year. The KSK announced at the annual press conference that the difficult initial situation was mainly caused by high inflation, the increase in interest rates and the weak real estate market. The board of directors described this as a solid result. Stefan Kram achieved this result under rather poor conditions.

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Construction business collapsed: But there are still many real estate offers

“It was a year that challenged us,” explained Kram. The dynamic interest rate development was demanding for everyone – for investors and private customers and especially for home builders. The construction business collapsed. The range of properties on the Kreissparkasse homepage is now large and wide. But due to the increased interest rates, many people could no longer afford property. The offer is greater than the number of interested parties.

Sellers would increasingly notice that prices are no longer sustainable. That’s why prices are falling. “But I believe that the lowest price level will soon be reached,” says Kram. This is again due to the sharp increase in construction costs. “Prices will rise again. Now is a good chance to buy your dream property,” explained the CEO. With expertise and quick loan commitments, the financing advisors would have supported private developers with a loan amount of 150 million euros in 2023. Almost 500 customers were able to realize their dream homes with the help of KSK.

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New loan business: willingness to invest remains cautious

Overall, however, there have been severe declines in the lending business. “Demand for new financing fell from both commercial and private customers,” says Kram. Due to the tense economic situation with increased loan interest rates, the volume of customer loans granted fell by 36 percent last year from 482 million euros to 307 million euros. “We assume that the willingness to invest and the propensity to consume will recover once companies and consumers regain new confidence in the development of the economy.”

In addition to building financing, buying and selling real estate has also become challenging due to price developments. Prices on the real estate market would have risen continuously for a good ten years. But the market has turned around in the last few months. Interest rates are rising and real estate prices are falling. As is the case nationwide, there is an acute housing shortage in the Duchy of Lauenburg. This is confirmed by a study commissioned by the KSK. “The results of the renowned ‘Pestel Institute’ show that we are on the right track with our strategy of creating living space in the Duchy,” said Dr. Stefan Kram.

Non-profit activity

The KSK Foundation supported organizations and projects with a total of 574,900 euros in 2023. Social engagement in the community was encouraged. Through the “KSK Club Prize”, 100,000 euros were distributed to clubs that applied for the prize with sponsored projects. The award ceremony was crowned with the summer festival on the premises of the main office in Mölln. The club award is scheduled to go into the third round in 2024.

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As the client, the savings bank founded the subsidiary “Lauenburgische Sparkassen-Immobilien GmbH” (LSI). In the 2023 financial year, LSI completed the construction of ten energy-efficient and modern terraced houses, four end terraced houses and six middle terraced houses with carports and outdoor facilities in the new development area “Lippenkuhle” in Escheburg and began sales. This is intended to counteract the housing shortage.

Securities remained important despite higher interest rates. Although the inflation rate for 2023 was below the historically high level of 2022, it remained significant at just under 6.0 percent. “Due to the high price increase, savings are constantly losing purchasing power and therefore value,” says board member and securities expert Udo Schlünsen. Building and maintaining wealth can only be achieved with appropriate distribution. That’s why KSK shows customers the way to invest in real assets. Over 900 million euros in customer securities investments are now managed by KSK partners.

Branch of the future presented in Wentorf

In 2023, online banking usage increased by 12.0 percent. Around 80 percent of customers now use online banking. With the recent reopening of its branch in Wentorf, the KSK is relying on a new, customer-centered concept: “Our branch has become a multifunctional place that, in addition to service and advice, also offers space for customer events and presentation space for regional products,” explained the CEO . The concept will also serve as a template for further conversions and new construction of branches.

LN

2024-03-11 18:53:55
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