A major merger is underway between Mainzer Volksbank and Volksbank Darmstadt-Südhessen. As the two cooperative institutes announced on Tuesday, the respective management boards and boards have approved a merger in the coming year. The resulting “Volksbank Darmstadt Mainz”* would be the third largest German Volksbank after Berlin (€17.4 billion) and Frankfurt (€14.7 billion) with a cumulative balance sheet total of €13.3 billion – and also one of the ten largest primary institutions in the cooperative sector (which also includes Apobank and Sparda banks).
The fusions in the recovery camp are anything but unusual. However, it is quite rare for two large Volksbanks to merge (Mainz has total assets of EUR 8.1 billion, Darmstadt-Südhessen EUR 5.2 billion). The motives in the specific case? It does not sound improbable, but at the same time quite unspecific: Given the dynamics of the financial sector “we see it as our responsibility to set the right strategic course at an early stage, in a self-determined way and from a position of strength.”according to the statement from the Volksbanken. “In addition, the new size creates significantly increased stability, also in the event that future challenges become greater than expected.”
“Stable” hits the 2021 key figures for the two houses quite well. At Mainzer Volksbank, the operating profit before valuation compared to the average balance sheet last year was a very respectable 0.83%, at the Darmstadt bank it was at least 0.72%. So it fits into the picture that the Mainz-based company, with an expense ratio of 57.5%, was also more efficient than Volksbank Darmstadt-Südhessen with its 65.8%.
Eye-catching: In Mainz, the total capital ratio of 15.02% at the end of the year was already extremely close to the self-imposed minimum ratio of 15% – which the Volksbanken justified by the strong lending growth (+8% compared to 2020) . In Darmstadt, on the other hand, credit growth was below expectations at +2.8% – and with DKK 53.4 million. EUR net interest income was only about half of the EUR 108 million. EUR from Mainz (while the other key figures compare Mainz and Darmstadt). are more in the ratio of 3:2 to each other).
Also unusual: the merger aims explicitly Does not aimed at reducing the number of future 1,600 employees, but on the contrary should serve to equip the new Volksbank with sufficient staff also in case of “age-related fluctuations in employees”. At least this is how the board members presented it yesterday: You must have “despite many synergies, all employees in our new bank”. In addition, new employees must be hired.
There is obvious goodwill on both sides. However, the merger will only be decided if the respective representative board meetings agree – which must happen in May next year. The merger will then take effect retroactively at the beginning of 2023.
Here are the two Volksbanks in direct comparison:
|Mainz Volksbank||Volksbank Darmstadt-Südhessen|
|8.1 billion||5.2 billion|
|6.6 billion||4.2 billion|
|6.1 billion||3.8 billion|
|707 million||516 million|
|108.7 million||53.4 million|
|43.9 million||36.3 million|
|54.3 million||44.2 million|
|28.1 million||23.2 million|
|Operating profit before valuation in relation to total assets||0.83%||0.72%|
|total capital percentage||15.0%||16.8%|
Source: Annual reports 2021 for Volksbanks Mainz and Darmstadt-Südhessen
*In an earlier version of this article, we incorrectly stated the new name of the merged institution as “Volksbank Mainz Darmstadt” instead of “Volksbank Darmstadt Mainz”. We apologize!