Less growth at domestic regional banks

In 2023 and 2024, regional banks still benefited from the high interest rates. But interest rates have fallen sharply since the previous year and with them interest surpluses, says zeb expert Oliver Rosenthal. The risk costs that remain at a high level would also burden the earnings situation this year and next year. A recovery is expected from 2027. The bottom line is that Andreas Sumper, Managing Partner at zeb, only expects annual growth of one percent for corporate customers and two percent for private customers by 2030.

“I see a few storm clouds,” summarizes Schneider. Without countermeasures, results would decrease by an average of 25 percent. The regional banks are therefore forced to optimize income, customer and process aspects in parallel. In 2024 there were only 10 institutes with a negative result, this year there will hardly be more. However, the proportion of banks with insufficient results doubled to 14 percent.

However, according to zeb, there is little reason for concern when it comes to equity capital. In 2024, the core capital ratio of 97 percent of the institutions was over 15 percent. Even with simulated, larger failures, the number hardly decreases.