„The customer business is the essence“
Mr. Dießl, what do you aim to achieve with the Sparkassenverband Bayern?
With my assumption of office, the German Savings Banks Association (DSGV) presented a new business strategy, which I consider very good and which we ultimately want to implement in Bavaria as well. As an association, we will help the local savings banks to evaluate their own strategy and achieve their goals based on the approach of the DSGV.
Which topics do you consider important?
We are placing a stronger emphasis on customer satisfaction. In the past, we had to invest a lot of time and resources in regulatory issues. Now it's good to focus on the essentials, and that is customer business. High customer satisfaction automatically leads to maintaining and expanding a certain market relevance and stability.
Have the savings banks in Bavaria recently lost market share?
Overall, we are market leaders. Of course, all other competitors are trying to nibble away at our market share. There are various developments. Sometimes you lose a bit, sometimes you gain something. For example, in mortgage financing, our market share has decreased slightly by 0.6 percentage points to 33.6% over the last five years, while it has increased by 4.6 percentage points to 76% in artisan loans.
Should the savings banks in the future open more branches than close?
First of all, we are very efficient as a group on the internet, and this is in high demand. Our app has also consistently performed well in all reviews. The 59 savings banks in Bavaria are, of course, all operating regionally differently, including their respective branch structures. In recent years, costs have burdened us, so there has been higher pressure in that regard. There will continue to be changes. For instance, because old structures need to be adjusted to current demand. But this goes in both directions, as new branches are also opened in different locations from time to time.
How can the association support the local savings banks in increasing customer satisfaction?
First, we help with surveys to determine the current status. From there, we can deduce what matters. How can we place products well? Maybe there needs to be a change in our central IT? As an important link, the association can provide ideas and support the implementation in the savings banks. However, we will not publish the levels of ambition.
What other goals do you derive from the DSGV strategy?
The demographic-related shortage of skilled workers is a major issue for us as well, as this trend is evident everywhere. At the savings banks, 28% of employees are scheduled to retire in the next ten years. Without countermeasures, a gap of nearly 7,000 unfilled jobs could arise. Thus, we naturally consider how to deal with this.
What are your plans?
The employer brand ranges from the local savings bank with its regional workplace to the securities specialists at Deka. Demonstrating this variety, that's what motivates me. I work with my association to inspire people for us. Nowadays, social media channels play a special role in this, where we also tell other stories and offer attractive insights into the diverse job opportunities within the Sparkasse financial group.
Is this enough?
We will not only be able to offset the departures with new employees. We are currently working on many questions: What can IT contribute? Where can we work in an automatised manner? Where and how can we sensibly use artificial intelligence to achieve efficiency gains and prevent potential gaps?
Do you need to offer women better career opportunities?
Yes, because 62% of our workforce are women. However, in the management levels, we have room for development. We stand at 22% in that regard. It is important for us to provide targeted support, for example, through mentoring programs. This also applies to the board committees. For instance, by 2030, we want to have at least one female deputy board member in each house, so that there are as many eligible women as possible in Bavaria. From my experience, active engagement with potential female candidates is crucial.
The savings banks had a successful year in 2023. What is the new earnings normal level after the interest rate turnaround?
It's essential to stabilize the result. Before the low-interest phase, the interest result was over 2% of the average balance sheet total. In 2023, there was a profitability leap, but with 1.8% of the average balance sheet, we are still lower than before 2015.
And where is it heading?
We will end up somewhere between the levels before the low-interest phase and in 2023. Whether this level is 1.7 or 1.8%? We assume that it will settle at least at a level in this range because the last few years have been challenging for the group. Due to declining revenues, we had to work a lot on the cost side.
Are the savings banks sufficiently prepared for the deteriorating economic situation on the risk side?
We are well-prepared to cope with more loan defaults than in recent years. Not least in 2023, we were able to make significantly higher risk provisions with our higher earnings.
Haven't the savings banks, like all banks, lost a bit of their feeling for loan defaults over the past decade?
The risk awareness of the savings banks has always been there. This is also evident in the fact that they were not particularly affected by recent developments in the real estate sector. But even though we were risk-conscious in recent years, new risks are now becoming apparent in construction and trade – we all need to keep a close eye on the commercial real estate market.
In the public eye, the impression has arisen that the savings banks pay too little interest on deposits.
The public discussion has focused very much on the daily interest rate. However, daily accounts are just one of many aspects. Our approach is to offer an overall package of balanced conditions. For example, we have helped our customers secure the favourable interest rates from fixed-term deposits and savings certificates for the long term, even though interest rate cuts are imminent. This allowed many funds to be reallocated. If someone can invest money long-term, then they are completely on the wrong track with daily money.
Are mergers of top institutions on the horizon?
We naturally pursue meaningful synergies. One example is the merger to form LBS Süd last year. Of course, it may go a step further at some point. But that's not something that has to happen next year or the year after.
The Bavarian State Bank would not be led into a merger by the state anyway.
Exactly. In addition, the state banks have extremely different share ratios. The savings banks sometimes play a larger role and sometimes a smaller one.
And what about the public insurers?
The Versicherungskammer Bayern is already present in different regions. We can maintain a decentralized structure with different companies and still leverage efficiencies in collaboration. If something arises there, then we will consider it. But there is nothing planned at the moment.
Does the Sparkassenverband need to become more efficient?
We are also naturally considering our setup. We are currently testing the consequences of the new DSGV business strategy: Where should we make changes in the association so that we are also on the right track? There are no fundamental interventions planned, but nuances can be adjusted. We intend to strongly address the areas of demand that arise from our customer-centric focus within our organization.
How will the savings banks perform in 2024?
The year is still too young to make concrete statements. After the new business in 2023 declined, we can see a slight increase so far this year, especially in housing loans, although these only refer to the secondary market – the primary market is still not active, as people do not want to build but to buy. New business with corporate customers is still slightly declining at the moment. Overall, we expect to be slightly below the – excellent – level of 2023 in terms of operating results.
