A merger of savings banks impacts everyone
Proposed mergers of savings banks (Sparkassen) frequently end in tears. Recently, two such initiatives have fallen through. In Bavaria, the city council in Kelheim thwarted the merger of the local Kreissparkasse with the Ingolstadt Eichstätt Institute. Consequently, a proposed Sparkasse Mittelbayern with around 10 billion euros in total assets and 1,300 employees will not materialise for now. Simultaneously, the sponsors of Sparkasse Kraichgau decided to discontinue merger talks with the larger Sparkasse Karlsruhe.
For savings banks, the failure of a merger is painful. But the engagement of mayors, district councils, and city councils has a positive aspect. It compels merger-friendly savings banks to prepare strong arguments, bringing the discussion into the public sphere. Since savings banks are publicly owned, a merger concerns everyone.
Legitimate rejection
The Kreissparkasse Kelheim responded defiantly. Not only had the boards of directors, supervisory boards, and association councils approved the merger, but also the district councils in Freising, Pfaffenhofen, Eichstätt, and Kelheim, as well as the city council in Eichstätt. The subtext is clear – a small city council brought down a widely supported deal at the last minute.
But a merger of savings banks entails a loss of control for smaller sponsors. It is legitimate for a local parliament to reject a major deal. In the Karlsruhe case, the potential Cum-cum transactions of the Sparkasse have come into focus. Merger proposals stimulate public interest, which can be beneficial after past missteps.
Other potential merger partners must also make an effort. Sparkasse Dieburg, aiming to merge with its sister institution in Darmstadt, plans to approach 16 municipalities over the summer, as it recently informed the „Darmstädter Echo“. Sparkasse Hannover is advocating for a merger with the smaller Stadtsparkasse Wunstorf, which is reportedly suffering from a staff shortage. In the south, Sparkassen Dillingen-Nördlingen and Donauwörth are exploring a merger. Good arguments are essential in all these cases.
Pressure from large cooperative banks
Pressure on savings banks often comes from credit cooperatives. Although generally smaller than local savings banks, some regional giants like Volksbank Darmstadt Mainz, Volksbank Villingen-Schwenningen, and Meine Volksbank Raiffeisenbank in Rosenheim have surpassed their local savings bank rivals in terms of total assets. Highlighting this fact can help raise awareness among local politicians. Cooperative bank mergers also affect everyone.
