During the recent banking turmoil, Deutsche Bank saw its share price plunge and the cost to insure its debt against the risk of default hit a more than four-year high. Investors were nervous because Germany’s biggest lender had been through various restructurings and leadership changes in an effort to restore profitability.
But when The Banker’s performance methodology is applied to the 10 largest German lenders (excluding Volkswagen Bank), Deutsche Bank saw some of the biggest gains, moving from eighth place in last year’s best-performing banks ranking to third in 2023, with a table-topping result for liquidity, as well as good scores for operational efficiency and asset quality.
Another German bank that appears to have benefited from recent restructuring efforts is second-largest lender Commerzbank, which moved up two places to fourth in this year’s overall best-performing table. Following years of low profitability in the wake of the global financial crisis, Commerzbank underwent a harsh restructuring, which entailed significant job losses.
But the bank has turned a corner, with pre-tax profits in 2022 rising by more than 1600%, to $2.13bn, the highest level in 10 years. In the country’s best-performing table, Commerzbank’s highest scores were in areas such as operational efficiency and soundness, placing second in both categories.
But neither Commerzbank nor Deutsche Bank’s remarkable turnaround was enough to wrestle the performance crown from Hamburg Commercial Bank (HCB), which retained its number one ranking as Germany’s best-performing bank out of the country’s 10 largest lenders for the third year running. The private commercial bank recorded a 13.66% increase in pre-tax profits, to reach of $386m. It also saw the second highest return on capital ratio of 13.49%, just behind regional private bank, Oldenburgische Landesbank (13.96%).
Landesbank Baden-Württemberg, which ranked fifth for performance last year, inched up into second place for performance this year, ranking first for growth, profitability, operational efficiency and return on risk. Last year saw the “Mittelstand-minded universal bank” report a 114.62% boost in pre-tax profits, to $1.99bn, its highest since 2006.
DekaBank, which ranked second overall last year, fell to sixth spot in this year’s best-performing table for Germany. It has place first among its peers in the soundness category, which evaluates year-on-year improvement in a bank’s capital assets ratio.
