German Cooperative & Savings Banks FY 2022: Resilient Despite Impairments on Securities Portfolios

The commentary analyses the German savings and cooperative banks’ FY 2022 results

Summary highlights from the commentary include:

• Cooperative banks and savings banks have reported 2022 results that appear relatively weaker compared to other German and European banks. However, this is due due to large markdowns on their security portfolios. Excluding these impairments, underlying operating results have clearly improved.

• The markdowns as required by German accounting standards in contrast to IFRS. It is important to point out that most of these writedowns will be income accretive over the next 4 years.

“In our view, the results also underscore the resilience of the cooperative banks and savings banks, which have been able to absorb the impairments while maintaining strong capital ratios.” said Sonja Förster, Vice President from the DBRS Morningstar Global Financial Institutions team.