Foreign banks are discovering the gold mine that is Germany. This may surprise because on the surface, Germany is a costly place to do business, where firms face high corporate taxes and statutory contributions, as well as job protection. Germany also sometimes over-regulates financial services. Recent examples include restrictions on hedge funds, the near abolition of banking secrecy and a possible ban on residential property for German real estate investment trusts (Reits).
And perhaps the biggest barrier is that 80% of assets are held by domestic banks that cannot be acquired, namely state-owned sparkassen, landesbanken and co-operatives. With big commercial banks – Deutsche, Dresdner, Commerzbank and HVB – owning most of the remaining assets, it seems that short of acquiring one of them, an expedition to Germany is a fruitless endeavour.
