That would not have existed before: the Wiesbadener Volksbank now has its own department that only takes care of the transformation of the bank.

After the business of the financial institutions had been stable for many years, the rate of change in the industry has increased over the past decade: the usage habits of customers are changing, as are the requirements of employees;

at the same time, the general conditions in the industry are changing, especially in 2022.

Daniel Schleidt

Coordinator of the economics department in the Rhein-Main-Zeitung.

  • Follow I follow

Matthias Hildner calls the current development a "paradigm shift".

With a view to 2022, the CEO of Wiesbadener Volksbank, with around 150,000 customers in and around the state capital, speaks of an extraordinary year that, in view of the energy crisis, volatile markets, climate crisis and rising consumer prices, actually only had one good thing for his bank: " The interest rate is finally positive again.”

For years, the boards of regional banks have complained about the low interest rates when presenting their balance sheets.

Now the ECB's interest rate hikes have two immediate consequences for the Wiesbadener Volksbank: Firstly, the interest surplus, which results from the difference between lending and deposit rates, is likely to be higher again, "that will benefit us," says Hildner.

Conversely, however, the house is already feeling the decline in the real estate business, which is traditionally important for the company, because financing costs rise with interest rates - and according to Hildner, many interested parties are therefore withdrawing from investments.

The volume of construction financing for private customers has already fallen by a quarter in the past year, and that for commercial customers by a tenth.

"The market has clearly lost momentum",

The bank's result, with which the institute's board of directors was satisfied, suffered from special effects last year.

For example, the extreme increase in administrative expenses is due to inflation-related provisions for pensions, which have to be automatically adjusted to the consumer price index.

Without this effect, expenses would even have fallen slightly, despite increased energy costs.

Despite the difficult overall economic situation, the customer volume under management, which includes customer deposits as well as the securities and brokerage business, rose by one percent to 14.4 billion euros, which Hildner interpreted as follows: The bank's business model has proven to be adaptable and robust.

Demand for green investments is increasing

Adaptation and transformation: This has been the case for banks for years, also with regard to the number of branches, which is steadily falling in most banks.

Hildner says that the 21 branches staffed by employees, together with the advice centers, are the face of the bank - a unique selling point in a market in which, for example, digital groups are catching up, especially in niches such as payment transactions, "there is noticeable competition here".

But in the core business of consulting and credit business, Volksbanks like those from the state capital are still ahead, "customers value it and that's why they come to us," says Hildner.

Even if more and more classic banking business is done online, he believes that people are reluctant to handle a securities or corporate customer transaction anonymously on the Internet with three clicks.

"The branches are still important, and nothing will change in principle."

In the consultations held there, the Volksbanker found that more and more customers were asking about sustainable investments - the proportion of sustainable funds sold last year was 40 percent.

At the same time, the company can still see little nervousness among its corporate customers in view of the global crises.

Hildner therefore expects a manageable number of loan defaults in 2023.

ATMs additionally secured

The CEO is more worried about the demolitions of ATMs, which affected the bank twice in the past year.

"Most of the perpetrators belong to professionally run groups from the Netherlands who are specifically trained for these raids," reported Hildner.

An act lasts no longer than 90 seconds and is carried out with the greatest brutality and a large amount of explosives, "it is life-threatening".

The bank has therefore examined all of its locations to see how endangered they are, and additionally secured individual machines, and the branches also remain closed at night.

In the course of its transformation, the bank is now paying particular attention to its reputation as an employer.

Numerous employees of the bank, whose workforce has an average age of 45 years, will retire in the next few years.

Filling these gaps will not be easy, according to Hildner, also in view of the declining number of applicants, especially since the company wants to maintain the number of around 750 employees.

The company was successful in recruiting new people last year, also because the human resources department had been expanded.

“Today, as an employer, you have to be more resourceful and invest more,” Hildner knows.

The younger employees expected an offer of mobile work, for example, "the banking profession is no longer the most attractive".

In order to approach the employees, the Management Board recently issued a new dress code.

No one has had to wear a tie at the Volksbank for a long time now, and now the expectation of men to come in suits has also been relaxed.

"It's also possible to wear trousers and a jacket, in summer just a shirt." Internally, even casual wear is permitted.

That, too, did not exist at the bank before.