Germany: Financial Sector Assessment Program-Technical Note-The Determinants of Bank Profitability

August 16, 2022

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Germany: Financial Sector Assessment Program-Technical Note-The Determinants of Bank Profitability, (USA: International Monetary Fund, 2022) accessed December 22, 2024

Summary

German bank profitability is low by international standards. Although German banks rank more favorably in risk-adjusted terms, as low profitability is partially compensated by lower volatility of returns, their profitability ratios remain low. On other measures (such as returns on assets, equity, and risk-weighted assets), German banks, on aggregate, rank among the least profitable in Europe. Several factors affect bank profitability, including a complex tiered industry structure with barriers to entry and an explicit mandate of a large part of the banking system – cooperative and savings banks – to maximize welfare of stakeholders rather than profits.

Subject: Bank soundness, Commercial banks, Cooperative banks, Financial institutions, Financial sector policy and analysis, Income, International organization, Loans, Monetary policy, National accounts

Keywords: Asset productivity, Bank soundness, Commercial banks, Commission income, Cooperative banks, Europe, FSAP's finding, Germany FSAP, Global, Income, Income component, Loans, Net fee

Publication Details

Pages:

46
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2022/273
Stock No:

1DEUEA2022010
ISBN:

9798400218118
ISSN:

1934-7685

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