These are uncertain times. The corona pandemic and the war in Ukraine are not only a burden on people, but also on the world economy and consequently have an impact on the regional economy. Nevertheless, the Kreissparkasse (KSK) Verden was able to increase its turnover again last year. This was announced by the Management Board at a balance sheet press conference. “We are still on course for growth,” said Silke Korthals, CEO.
In the last financial year, the district savings bank “grew extremely” with 3.7 percent more sales compared to the previous year. The board of directors stated that the balance sheet total was 3.3 billion euros. “This sum is fed primarily from the lending and investment business, i.e. from the core areas of the savings bank,” explained Korthals. Despite the magnitude of the gains, she described the growth as “healthy.” The financial institution was able to grant a large number of loans, both to private customers for house construction or real estate purchases and to companies that wanted to invest.
profit is stagnant
Despite the growth, the bank’s balance sheet profit did not increase last year and remained at 2.4 million euros. “A satisfactory result,” says Korthals. The Executive Board sees the reasons for the stagnation in the low interest rate policy of the European Central Bank (ECB) and in the custody fees that banks would have to pay for their deposits. Nevertheless, according to its own statements, the KSK is one of the largest taxpayers in the Verden district. 4.1 million euros corporate income tax and 4.2 million euros trade tax are on the balance sheet.
The corona pandemic did not make 2021 an easy year either, according to Silke Korthals. However, there were also positive effects. Digitization has progressed enormously, meanwhile digital payment and online banking have become commonplace. “We are seeing an increase in contactless payments of 30 percent. We are also seeing a significant increase in use of mobile payments with smartphones. The number of people with a digital card on their cell phone has increased by 53 percent compared to the previous year,” reported Korthals .
However, the number of customers in the branches has decreased. When asked whether this could lead to closures, Korthals did not want to commit himself. “We keep checking the branch network to see if the distribution still makes sense.” In addition, the conversion to self-service terminals began years ago in order to take account of this development. There will also be a reaction to the blowing up of ATMs in recent years. This is how the machine in Verden-Walle is closed. “These gangs are also causing enormous damage to the house and endangering the residents of the upper apartments. We also have a protective task there,” emphasized the CEO. During the corona pandemic, the Sparkasse was able to keep all branches open, thanks to a high vaccination rate among employees and regular testing.
increase in lending
A significant increase in lending is also a sign of growth in the region, said Deputy CEO Matthias Knak. “The lending business performed exceptionally well in 2021. We expanded our loan portfolio by six percent to EUR 2.4 billion,” said Knak. In addition, the KSK again advised numerous companies that had been affected by the financial consequences of Corona and supported them in applying for Corona aid programs from KfW and N-Bank. Many companies have invested to expand their warehousing or to realign their business models.
According to Knaks, a total of around 380 million euros in new commercial financing was promised. This is an increase in the commercial loan portfolio, after deducting annual amortization, of 61 million euros or 4.5 percent. “These figures do not indicate any restrictions on lending. Despite this confidence, we view the further economic development of our business customers with a certain concern. To date, however, no excessive default risks can be identified in our loan portfolio,” said Knak. The loan portfolio of private customers was expanded by EUR 94 million. This is an increase of 9.5 percent over the previous year. According to the Management Board, the continued high demand for residential real estate is responsible for the growth. Around EUR 239 million in new loans were promised to private customers last year.
In the financial year, the brokers at Kreissparkasse Verden brokered 66 properties with a purchase price of almost 18 million euros. Building plots are also still very popular. In the course of the year, 26 building plots of the company’s own development company IVV were marketed with a purchase price volume of over 2.5 million euros. Knak sees a problem in the rising prices for real estate. “More than half a million euros for a detached single-family house are now normal. It often takes 30 years for the house to be debt-free.” Investments in rental houses are unproblematic as long as demand and prices are high. “The danger is that that will change at some point,” he said.
New building in Achim
The Kreissparkasse is also building on the former Lieken site in Achim. A few weeks ago, the foundation stone for a new advice center was laid there, which should be ready by the end of 2023. Around 50 employees will advise customers there on financial matters and real estate financing. Around 2,000 square meters of office space are planned, as well as a new locker facility with around 4,000 safe deposit boxes. There are also plans for the office in Achimer Obernstraße. After the sale, after partial demolition and new construction, the KSK intends to continue using the location as a central city branch.
According to board member Dennis Gläß, it was also a good financial year for the Sparkasse’s investment business. Seen over the year 2021, the savings rate was again comparatively high at 15 percent. Many households would have parked their money in a checking account during such times. “Therefore, our portfolio of customer deposits increased last year by 104 million euros to over 2.4 billion euros,” reported Gläß. This corresponds to growth of 4.3 percent. More and more customers would also invest their money in shares, which led to securities turnover of well over half a billion euros. Including the price gains, the securities portfolio under management increased by 35 percent to EUR 801 million. The savings bank also benefited financially from this. Commissions increased by 7.6 percent through the brokerage of insurance, home savings products, securities, real estate, leasing contracts and payment transaction services.
Finally, Silke Korthals addressed the lack of skilled workers, which is now also causing problems for the KSK. In order to counteract this, young professionals are being trained, and twelve prospective bank clerks started their training this summer. For this purpose, ten junior staff from other commercial professions were hired, who are pursuing a second-chance education qualification
go through savings bank clerk.
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