The banking market in Germany is split between different banks and banking groups. A broad division along sector lines is attempted here. Please note that there will always be some niche players who don’t quite fit the pattern described here, but these guidelines will give you a good understanding.
There are about 500 “Sparkassen” in Germany, all of them legally independent. Typically, any one Sparkasse will only operate in a certain geographical area though, there are sometimes regions where several Sparkassen overlap. Even though most banks share the same logo and general strategy, each one is independent and may offer products the next one doesn’t or have a different price structure than the one in the next town.
The typical customers of the Sparkassen are private customers, small- and medium-sized enterprises and public bodies. The market share of the Sparkassen in Germany (in terms of number of current accounts held) is roughly 50%.
A Sparkasse is, with few exceptions, owned by the municipality, who also ultimately backs the assets of the bank should it run into financial difficulties (more often than not, however, two neighbouring banks will merge to bail out the one that has fallen on hard times).
The “Volksbanken” and “Raiffeisenbanken” number about 1450 and again, each Volksbank or Raiffeisenbank is independent. Co-operative banks will only operate in a certain geographical area though there are sometimes regions, where several banks overlap. Even though most banks share the same logo and general strategy, each one is independent and may offer products the next one doesn’t or have a different price structure than the one in the next town.
The typical customers of a Volksbank or Raiffeisenbank are private customers and small- and medium-sized enterprises. The market share of the co-operative banks (in terms of number of current accounts held) is roughly 25%.
A co-operative bank is owned by it’s members who provide the capital for the bank and receive an annual dividend payment depending on the annual result.
Commercial and private banks
There are four large commercial banks (in the traditional sense), also referred to as “Grossbanken”, in Germany.
- Deutsche Bank
Typically, these banks have a lower number of private customers and a higher share of the business account market. Apart from traditional banking services these banks also have investment arms or subsidiaries.
These banks are publicly traded stock companies who rely on the issuing of shares for their capital. Shareholders are paid an annual dividend depending on the annual result.