As private banks falter under the financial crisis, state-owned Sparkasse savings banks are enjoying a flood of new business as Germans deposit their money in the institutions based on a traditional bank model.
Germans are looking at all their savings options in tumultuous times
According to a survey conducted by the mass-market daily Bild, deposits at Germany's 443 savings banks have increased by more than 1 billion euros ($1.4 billion) in the past two weeks.
The country's largest Sparkasse, Hamburg's Haspa, has reported new deposits totaling more than 500 million euros. Cologne's savings bank is also enjoying a sharp rise with 355 million euros in new deposits, Bild reported on Friday, Oct. 10.
Although Germany has issued state guarantees for deposits on savings and checking accounts, Germans seem to remain anxious. A survey released earlier this week showed 45 percent of Germans feel their savings are not totally safe.
Stability and simplicity
A spokesperson for the German Savings Bank Association (DSGV) credits the local banks' stabile and traditional characteristics coupled with the insecurity currently plaguing private banks for the boom in business.
A Sparkasse branch isn't hard to find in Germany
"Awhile ago, banks could not be international enough and the only ones that were 'modern' were those that were active on international markets," Michaela Roth told the AFP news agency. "But now there is quite clearly a change in awareness taking place and the image of this very conservative, very solid business model is improving."
Comfort in tradition
This business model is, in essence, investing individual's deposits in the form of loans to local small and medium-sized companies, Roth added. Although it may lack international flair or extensive financial savvy, at the moment the principle seems to be offering some comfort to Germans in financially uncertain times.
With 16,000 branches, Sparkasse is the institution where more than half of Germans keep their main account, according to AFP.