Talking Point

Jochen Moebert, Julius Schumann

Topic:

Real estate

Analyst:

Once again, some see Germany as the “sick man of Europe”. This week, the 2023 ranking of the Global Innovation Index is released with Germany at rank 8, again. It does not only provide a good measure for innovation but also gives important insights into a country’s competitiveness. Indeed, there are numerous challenges especially with respect to digitalization and demographics. But Germany is also still a powerhouse in providing excellent R&D. [more]

September 28, 2023

Historic first half for European banks: More profitable than ever

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The banking sector in Europe is benefiting from a set of conditions which have allowed for the strongest bottom-line result on record, even surpassing the pre-financial crisis peak of 2007. Rising interest rates have led to a surge in net interest income, asset quality remains sound and provisions therefore contained, and banks maintain tight cost discipline. Capital and liquidity levels continue to be robust, considerable returns to shareholders notwithstanding. European banks have also caught up with their US peers with regard to profitability ratios, for the first time in many years. Further gains in this benign environment may be harder to achieve though. [more]

September 13, 2023

A long-term view on the (German) office market

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Analyst:

The historical trend towards more office workers and offices could peak in a couple of years. Three mega trends the climate crisis, demographics and digitalization will have a striking and lasting impact. [more]

August 1, 2023

More and older cars in Germany

Region:

Germany

Topic:

Sectors and resources

Analyst:

Eric Heymann, Jule Mau

Germany is a car-loving country. With a density of 578 cars per 1,000 inhabitants, more than one in two people in Germany owns a car (including children and the very elderly). The number of cars has risen steadily in recent years and shows that - despite the climate debate, congested inner cities and the supposedly car-critical Generation Z - there seems to be no car fatigue in Germany. [more]

July 6, 2023

European autonomy in payments: Digital euro is not the only option

Region:

Banking and financial markets, Digital

Topic:

Analyst:

Heike Mai

To strengthen the EU’s strategic autonomy, its authorities are also pushing for a retail payment solution provided by European players. A market-backed project and a state-backed project have emerged. While the European Payments Initiative (EPI) will build on existing instant payment infrastructure and the wallet is supposed to go live early next year, the legal and technical foundations for the digital euro are still under development. As both solutions could easily cannibalize each other, better coordination would benefit Europe. [more]

June 23, 2023

Current water level of the Rhine brings back memories of the year 2022

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Analyst:

The current development of the Rhine's water levels brings back memories of the previous year, when there were massive problems for Rhine navigation during summer. Since June, the level has fallen by a similar rate as last year or in 2018, which also saw a draught. Should the water levels approach or reach the lows of 2018 or 2022, this could impair the recovery of the German economy, which we already expect to be very modest. [more]

June 9, 2023

European bank performance - As good as it gets, despite recent wobbles?

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Analyst:

European banks are running at full steam, achieving the best start to a year since the financial crisis – the stress in March notwithstanding. Revenues have been buoyed by exceptional growth in interest income, while provisions for loan losses have fallen back again and costs remain in check. Capital and liquidity positions continue to be very robust, in spite of ample returns to shareholders and TLTRO repayments to the ECB. There are some clouds on the horizon though: interest rate increases are likely coming to an end and loan growth may slow further. [more]

June 7, 2023

Is lending tight? Financing conditions for German companies

Region:

Germany

Topic:

Analyst:

Corporate lending is slowing substantially but this is primarily a normalization and due to subdued demand at least as much as it is due to supply conditions, i.e. banks’ tighter credit standards. At +8% yoy, credit expansion is still substantial. Only two industries are currently seeing a contraction. More worrying is the drying up of the corporate bond market where net issuance has collapsed since autumn. It is suffering from the double whammy of much higher interest rates and the disappearance of its dominant buyer of recent years, the ECB. [more]

May 3, 2023

History tells us: Housing markets do offer inflation protection

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We showed in March that, in Germany, house prices have kept up with inflation during periods with high inflation and that, over decades, house prices have increased even faster than consumer prices. Here, we extend the analysis to other countries. [more]

April 6, 2023

European banks: Solid fundamentals

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