A lot can happen in one year, but the mood at Wiesbadener Volksbank has apparently changed quite a lot since January 2021.

Because a year ago, CEO Matthias Hildner warned that the framework conditions for financial institutions like the one he ran were "tough" and that many houses were "breathless".

But on Tuesday the company announced a business result that speaks a completely different language, even though the playing field on which Volksbank is active has not changed significantly.

Daniel Schleidt

Deputy coordinator of the business editorial department in the Rhein-Main-Zeitung.

  • Follow I follow

It is still a pandemic, interest rates remain low, and consolidation in the banking market continues as well.

Nevertheless, the Volksbank from the Hessian state capital has improved in all important key figures compared to the previous year.

"And if a meteorite does not strike, I expect that we will continue these results in the current year", Hildner continues.

This stocktaking sounds anything but like the crisis Hildner foresaw last year.

Especially since the assumption that the growth of the cooperative institute depends solely on the merger with the Idsteiner sister named VR Bank Untertaunus, which was completed last year, is in vain, as Hildner said.

Of course, the new merged company now shows the business figures together, which is why balance sheet totals, deposits and loan volumes increase almost by themselves;

but Hildner pointed out that even without the merger, the growth would have been similar in relation to one another - although a lot has been learned from the smaller sister from Idstein.

Synergies should be leveraged together

Hildner called the merger, which was decided in October 2020 and now completed, not only a show of strength, but also as a central event in the past financial year, for which the bank is traditionally the first financial institution in the region to take stock at the beginning of the year. Together, synergies are now to be leveraged, both on the income and on the cost side. Overall, the CEO expects a mid-single-digit million amount, which the merger will in future have a positive bottom line and will be achieved, among other things, by merging departments, but also by cutting jobs.

The number of employees has already fallen within a year, from 795 to 747 employees. However, this fluctuation is normal, calculated Hildner and pointed out that layoffs should be avoided. Instead, the workplace has become unattractive for colleagues from Central Hesse, for example, who previously had long travel times to the office after Idstein and now have to commute to Wiesbaden. "The colleagues preferred to look for a job close to their home," said Hildner, but these are expressly isolated cases.

The fact that, despite the merger effort and despite the pandemic, his company is presenting brilliant figures speaks for the good state of the institute and for the business model.

The Wiesbadener Volksbank traditionally has its strengths primarily in the field of financing and brokerage of real estate, from which the lending business and the commission business benefit.

Hildner said that knowledge of regional conditions was an advantage for the bank, and that the bottleneck in the regional real estate market had driven up demand and prices.

"In the long term, these conditions will not change", prophesied Hildner, the region is popular thanks to its high economic power and quality of life.

Sustainable investments are of greater importance

For the first time, the Volksbank's total assets exceeded the mark of seven billion euros (see graphic), which puts the bank in twelfth place in a nationwide comparison of cooperative institutes;

the volume in customer business grew by 9.1 percent to 14.1 billion euros.

It became clear that in view of the low interest rates, customers were increasingly asking for securities and that sustainable investments were becoming increasingly important.

"Customers are asking more and more frequently about this and expressing the desire to invest in companies that operate sustainably," said Hildner, who assumes that this development will continue to grow.