Not to trade in ethnic stereotypes, but there is some truth to the clichés that Germans are stubborn, tradition-bound, cheap and do things a little differently than almost everybody else. Just ask their banks. You’d think banking in the richest and most economically powerful and vibrant economy in Europe would make Germany a great place for banking. But as Deutsche Bankconsistently reminds us, that is not the case. And one reason is that Germans are stubborn, tradition-bound, cheap and do things differently.
Germany’s banking system is among the most fragmented, least efficient and poorly performing in the eurozone—and it is blighted with about €60 billion of bad loans mainly from the stricken shipping industry….
Fee income is weak because German savers invest little in equities—and that has been declining over time, too—so brokerage fees are low and falling. They also take out fewer unsecured personal loans, which would give banks more regular arranging fees than mortgages for instance….
Even if there were a big merger between shareholder-owned banks, this would do nothing to cut capacity from the savings, cooperative and state-backed commercial banks, or to make customers more financially adventurous and profitable…. Regional and political interests keep public-sector banks protected.