Menu Expand

Still Overbanked and Unprofitable? Two Decades of German Banking

Cite JOURNAL ARTICLE

Style

Koetter, M., Nestmann, T., Stolz, S., Wedow, M. Still Overbanked and Unprofitable? Two Decades of German Banking. Credit and Capital Markets – Kredit und Kapital, 39(4), 497-511. https://doi.org/10.3790/ccm.39.4.497
Koetter, Michael; Nestmann, Thorsten; Stolz, Stéphanie and Wedow, Michael "Still Overbanked and Unprofitable? Two Decades of German Banking" Credit and Capital Markets – Kredit und Kapital 39.4, 2006, 497-511. https://doi.org/10.3790/ccm.39.4.497
Koetter, Michael/Nestmann, Thorsten/Stolz, Stéphanie/Wedow, Michael (2006): Still Overbanked and Unprofitable? Two Decades of German Banking, in: Credit and Capital Markets – Kredit und Kapital, vol. 39, iss. 4, 497-511, [online] https://doi.org/10.3790/ccm.39.4.497

Format

Still Overbanked and Unprofitable? Two Decades of German Banking

Koetter, Michael | Nestmann, Thorsten | Stolz, Stéphanie | Wedow, Michael

Credit and Capital Markets – Kredit und Kapital, Vol. 39 (2006), Iss. 4 : pp. 497–511

1 Citations (CrossRef)

Additional Information

Article Details

Author Details

Michael Koetter, Groningen

Thorsten Nestmann, Mainz

Stéphanie Stolz, Frankfurt/M.

Michael Wedow, Frankfurt/M.

Cited By

  1. When Measuring the Same Leads to Different Conclusions – A Critical Review of Measures Applied to Assess the Degree of Competition in Banking Systems

    Richter, Toni

    Müller, Holger

    Gischer, Horst

    Credit and Capital Markets – Kredit und Kapital, Vol. 53 (2020), Iss. 1 P.43

    https://doi.org/10.3790/ccm.53.1.43 [Citations: 2]

References

  1. Bikker, J. A. and J. W. B. Bos (2004): Trends in Competition and Profitability in the Banking Industry: A Basic Framework. SUERF Series, 1-62.  Google Scholar
  2. Boot, A. and A. V. Thakor (1997): Financial System Architecture. Review of Financial Studies 10, 693-733.  Google Scholar
  3. Deutsche Bundesbank (2005): Financial Stability Review. Frankfurt a.M.  Google Scholar
  4. ECB (2000): EU Bank's Income Structure. Frankfurt a.M.: European Central Bank.  Google Scholar
  5. ECB (2005): EU Banking Structures. Frankfurt a.M.: European Central Bank.  Google Scholar

Abstract

We analyze by means of descriptive evidence the widely held claims that Germany is overbanked and that German banks perform badly in an international comparison. We find that, despite a major merger wave, Germany continues to be more densely bank-populated than France, Italy, and the US. Measured by costincome ratios, non-interest income, and return on assets, German bank performance deteriorated continuously, being particularly affected by the economic slowdown in the very beginning of this century. This relatively poor performance is not driven by one particular banking pillar alone. Instead, all pillars perform badly in international comparison. At the same time, however, Germany's threepillar system exhibits considerable heterogeneity with regard to market structure and performance not only across commercial, savings and cooperative banking sectors but also within each respective pillar. (JEL G21)