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Cash, electronic or online: How do Germans pay?

December 20, 2018
Region:
Germans are known as heavy cash users. In 2017, they paid cash for most of their purchase transactions. If they do not use cash, they prefer to pay by direct debit or card. Credit transfers and e-money payments are used less often. Germans initiated almost one fifth of cashless payments via the internet. Mobile payments were rarely used but this will likely change given a number of new mobile payment services came on the market in 2018. In Q3, German households took out an impressive EUR 16 bn in net new loans, the highest quarterly figure since the introduction of the euro. Of this, EUR 13 bn came from mortgages, while consumer lending lost some pace. Deposit inflows were buoyant for a Q3 and German households increased their savings rate to 10.7%. [more]

More documents about "Banking and financial markets"

170 (13-24)
February 10, 2020
Region:
13
After very weak December data a small drop in Q4 GDP seems likely. Looking forward, the coronavirus provides a substantial risk for the expected global recovery, as hopes were pinned on an improvement of the Chinese economy. We assume that the corona outbreak will shave off 0.2pp of Germany's Q1 GDP, making a technical recession quite probable during the winter half. [more]
December 19, 2019
Region:
14
European banks continue to strive to not fall further behind. Revenues and costs in the first three quarters of 2019 were flat compared to their levels a year ago. Remarkably, interest income rose despite even lower interest rates. Loan loss provisions edged up from record lows. Net profits fell moderately but remained solid. Balance sheet growth was the strongest in years as banks fight to hold their ground against an array of new competitors. Along with the struggle to improve revenues, 2020 may be shaped by Basel IV implementation, continuing geopolitical risk and a fragile macroeconomy. [more]
December 18, 2019
Region:
15
ETFs have gained in popularity among private investors who have expanded their ETF investment multiple times in recent years to approximately EUR 35 bn. Nonetheless, ETFs remain a niche product for private investors considering that their total mutual fund assets amount to EUR 622 bn. ETFs have been introduced as passive investment vehicles, but active ETF management is on the rise. The sustained low-interest rate environment could allow ETFs to tap into new client segments. In Q3, loans to German households were up by a record EUR 17.9 bn qoq, driven by a record surge of EUR 16.3 bn in mortgages. Deposits grew by EUR 13.6 bn – the smallest increase in seven quarters. The fact that some banks impose negative rates on deposits seems to create negative sentiment among German savers. [more]
November 21, 2019
Region:
16
In the lending and deposit-taking business with retail customers, there are substantial differences between the federal states. 30 years after the fall of the Berlin Wall, per capita loan volumes in east Germany are significantly lower than in the west. The latter, in turn, is characterised by a certain north-south divide. Savings banks have a market share of 25-35% throughout the country, whereas cooperative banks have a much stronger presence in the south and west than in the east and north. The large banks achieve an above-average market share of 20-25% in the city states and east Germany. The spread between the federal states is smaller for deposit volumes than for credit volumes. Primarily the savings banks, cooperative banks and other commercial banks have to cope with a considerable deposit overhang and thus an "investment plight" in the negative interest rate environment. In east Germany, the deposit overhang is particularly large. Due to digitisation, changes to the established regional focuses might now be possible. [more]
November 20, 2019
Analyst:
17
Trading volumes in foreign exchange instruments have increased significantly across the board in 2019 compared to the last global FX survey three years ago. Surprisingly, the pivotal role of London as the main trading location was reconfirmed, despite fears around the impact of Brexit. Yet a general move to central clearing might challenge this after the UK leaves the EU. [more]
September 30, 2019
Region:
Analyst:
18
The future of bank branches has been under scrutiny for some time due to the increased usage of online and mobile banking. On top of the general trend, regional differences in demand for branch services may have important implications for the future of branch networks. Structurally fewer client visits in certain regions may exacerbate the pressure to close branches. Within Germany, the number of bank branches has declined sharply from around 40,000 in 2007 to some 28,000 in 2018. [more]
September 23, 2019
Region:
19
Improved performance in the second quarter has given European banks hope that 2019 may still end on a more conciliatory note and that longer-term prospects are not quite as gloomy as some fear. In H1, net interest income rose year-over-year, despite unrelenting margin pressure. Other revenue components were mixed, with fee and commission income disappointing again. Loans and total assets in general increased. Banks cut expenses further, while loan loss provisions picked up from record lows. In the end, profitability and capital levels remained largely stable. Once more, the transatlantic gulf in performance widened slightly, as US banks reported another rise in net income to a new all-time high. [more]
August 30, 2019
Region:
20
The number of bank branches in Germany has declined sharply, to 28,000 in 2018 from around 40,000 in 2007. With 33 bank branches per 100,000 inhabitants, branch density in Germany is still relatively high. Almost 70% of Germans visit a branch at least once per month. Clients who have a loan or a private pension plan or are a FinTech user are more likely to visit a bank branch, in contrast to Millennials and less wealthy Germans. In Q2, loans to German households were up by a record EUR 16.9 bn qoq and 4.4% yoy. Mortgages surged by EUR 13.2 bn and consumer loans grew dynamically by EUR 2.9 bn, too. Deposits again rose strongly by EUR 34.4 bn. [more]
July 22, 2019
Analyst:
21
Facebook’s Libra project aims to establish both a private digital currency backed by a basket of hard currencies and a global payment network. It is thus challenging many established players in the financial system, including central banks, credit institutions and payment providers. Facebook can integrate Libra services into its digital platforms and benefit from strong network effects. In Europe, Libra would enter a competitive but fragmented digital payments market. As a currency, Libra will carry a foreign exchange risk for Europeans. But if the ECB drove interest rates deeply below zero, Libra could offer an easy digital way out. The flipside, though, would be a loss of sovereignty for Europe. [more]
July 2, 2019
Analyst:
22
By providing a high degree of privacy in payments, cash helps to slow the growing information asymmetry between consumers and companies as well as between citizens and public authorities. As knowledge about your counterparty is power, privacy is crucial for individuals to safeguard their position when dealing with organisations which are more powerful than a single person. [more]
June 18, 2019
Region:
23
Mortgage loans in Germany have risen to EUR 1,240 bn in recent years (+29% since 2011) thanks to the strong economy and falling interest rates. To account for increased risks for the banks, supervisory authorities decided at the end of May to activate the countercyclical capital buffer for the first time. E.g., almost half of all new loans now have a rate fixation period of more than 10 years. Banks’ business with private households got off to a strong start in 2019. Net lending in the first quarter amounted to EUR 8.8 bn and deposits increased by EUR 21.8 bn, both record figures for the beginning of the year. Both mortgages and consumer loans grew strongly. [more]
June 4, 2019
Region:
Analyst:
24
Artificial intelligence (AI) is a significant step forward in the digitalisation and transformation of modern businesses. Investors are lining up to be part of the imminent change. AI attracted USD 24 bn in investments globally in 2018, a twelvefold increase since 2013. Within Europe, Germany, France and the UK are the frontrunners in experimentation and in the implementation of AI. Similar to earlier examples of information technology (IT) implementation in financial services, AI promises great efficiency gains and potential revenue increases and its potential contribution to bank profitability should not be underestimated. [more]
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