It is so amazing how sad: Although the German economy is booming for the past eight years, the credit hunger of the company is large and dramatic bankruptcies are not pretty long ago, to torment the banks in this country.
return on equity, expense ratio, stock market valuation: Wherever you look, Germany’s credit institutions rank at end of table. According to the Bundesbank, the savings banks, public banks and private institutions to achieve an average return on equity of just two percent. The total number of banks and branches declined since 2007 across the country to 25 percent, of the jobs by 13.5 percent to 573.000. And the end is not in sight.
Particularly gloomy, it is when looking at the share prices of banks, especially Deutsche Bank and Commerzbank. From a “disaster” speaks to Walter Sinn, Germany-chief of the consulting firm Bain, which also released this year, your big Bank study. It is the so-called price-to-book ratio (KBV) scares. The market valuation of the Institute (course) sets in relation to their equity capital (book). This rate is for listed German banks just 0.3 – that is, they are not even a third of their equity value.
“Who buys shares of German banks, can hardly do something wrong”
This significant under-valuation, it is also the sense of something brave look into the future: “Who buys shares of German banks, can actually make hardly anything wrong. The floor is practically achieved,” says sense. This is also the reason that some of the us financial investor Cerberus has bought both the Commerzbank and the Deutsche Bank and HSH Nordbank has acquired, though the latter was not listed on the stock exchange. The former Landesbank has a Portfolio lazy boat loans sell the financial juggler Cerberus to the highest bidder.
a Little better, but only on the second glance, it looks like the other two major banking groups, the Sparkassen and the Volksbanken. Officially yields to a mere 1.7 or 2.8 per cent in amount to your Equity. But the fact is, you don’t have the majority of their profits, but to lead him to the reserves for bad times. Alone in 2017, around eight billion euros have been invested in the “special item for General banking risks”. Taking into account these reserves, the picture looks friendly: savings banks so currently, to 6.5 percent rate of return, public banks at seven per cent. Significantly more than private institutions.
However, The times are likely to be worse. Because already in the autumn quarter of 2018, the German gross domestic product was 0.2 percent compared to the summer quarter decreased. In 2019, the Brexit could be a tough one, and probably the next round in the global trade dispute with the United States.
the savings banks and people’s banks, which are not exposed to the pressure of the capital market, to be able to cushion a possible recession better than the two of Frankfurt’s big banks, make a note of their shares on the stock exchange. You could lose, in spite of all already priced in risks to soil, which is why a merger of Commerzbank and Deutsche Bank also conceivable, if the operation is more economically nonsensical.