The high pressure for mergers in German banks and savings banks continues: In 2023, the number of banks in the country decreased by 56 to 1,333 institutes, as recorded by the ECB. This corresponds to a decline of 4.0%. In the preceding year of 2022, 56 addresses ceased to exist, and in 2021, the number was even higher at 63. During the initial year of the pandemic in 2020, the decrease was limited to 25.

Thus, the consolidation in Germany is progressing faster than in the entire Eurozone. Spain, Italy, and France have already undergone deep cuts. The absolute number of banks is much lower there than in Germany, but the decline is much slower. Conversely, in Austria, like in Germany, there are remarkably many credit institutions, but the number decreased by 21 to 423 (minus 4.7%) in 2023. Volksbanks in particular have merged over the years, while there are still many Raiffeisenbanks.

The trend of joining forces is expected to continue in Germany, according to the research firm Barkow Consulting, which analyzed the data. "The structure cries out for consolidation," says Managing Director Peter Barkow. His argument is that the more banks there are, the more well-paid individuals are in management boards and advisory boards, and the more tasks are duplicated. Banks willing to consolidate often refer to the burden of regulation. The impending retirement of long-serving executives also often precedes a merger.

The other major countries in the Eurozone have already undergone profound consolidation: In Spain and France, the number of institutes alone decreased by 22.1% and 20.4% in 2014, and Italy lost 10.6% of banks in 2017. In Spain, many savings banks (Cajas de Ahorro) disappeared after getting into trouble in the real estate crisis, while in Italy, numerous struggling cooperative banks (Banca Popolare) were taken over by larger institutions.

Credit cooperatives merge particularly actively in Germany. Last year, the number of cooperative banks decreased by 40 to 697, as reported by the BVR association. This gave rise to a new giant with the Volksbank Darmstadt Mainz. The VR Bank RheinAhrEifel emerged from the institutions in Koblenz and Neuwied, and the Volksbank Kraichgau in Wiesloch took over the neighboring bank in Bretten. The projects are not always successful. The institutions in Wolfsburg and Magdeburg, as well as in Rosenheim and Ingolstadt, canceled a merger.

In the new year, Frankfurter Volksbank will acquire Raiffeisen-Volksbank Aschaffenburg. Cooperative banks in Siegburg and Rheinbach, Bielefeld and Herford, or Görlitz and Cottbus are also merging. In the savings bank sector, Münsterland-Ost and Beckum-Wadersloh banks are joining forces.

The consolidation trend has been going on for decades. In 1970, there were 7,096 banks alone in the cooperative group. For over two decades, the entire German industry has also seen a decrease in the number of employees, which stood at around 536,000 at the end of 2022, compared to 775,000 in 2000, as per the employer association of the private banking sector.