Germany’s co-op banks have warned that they expect profits to fall this year, as the impact continues from Donald Trump’s tariff war, global tensions and a weak economy.
With the sector – comprising more than 672 lenders with €1.2tn in assets – already hit by a 25% drop in 2024, this would mark the second consecutive year of decline after record profits in 2023.
“The 2025 financial year will continue to be characterised by geopolitical tensions and a weak domestic economy,” Tanja Mueller-Ziegler, a board member of the National Association of German Cooperative Banks, told Reuters.
A rise in risk provisions resulted in a decline in 2024 pre-tax profit to €10.8bn, down from €14.4bn in 2023.
Mueller-Ziegler warned that earnings in 2025 would be “slightly lower“, predicting that Germany’s economy will stagnate this year and grow only by 1% the next.
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However, the association says, the €10.8bn profit is still the second-highest figure in the more than 20 years since the first consolidated financial statements were prepared, and is in line with the average for the past five years, demonstrating the network’s sustained high level of profitability.
Equity rose by around 5% to €150.3bn. The network significantly increased its loss allowances to €4.9bn in 2024, predominantly to ensure that it is well equipped to deal with the weak macroeconomic conditions.
“Our network has notched up one of its best profits ever,” said Marija Kolak, president of the association. “The results underline the trust shown by more than 30 million customers and around 18 million members.”
She added that the network was investing strategically in innovation and digitalisation, including digital codetermination, AI-optimised processes, and the introduction of a cryptotrading product offering.
“We are shaping the banking of the future, modernising our membership, and creating products and services that will make the co-operative principle appealing to younger target groups too.”
Kolak also highlighted the challenges of demographic change. “Some regions are growing, while others are battling with sharp declines and an ageing population. The Cooperative Financial Network plays an active role in regional life. We therefore believe that we too have a responsibility to ensure that communities continue to thrive, remaining economically strong and attractive.”
To this end, the network has teamed up with the Institut der deutschen Wirtschaft (IW) [German Economic Institute] in Cologne to develop forecasts and scenarios that drill right down to district level.
In view of economic policy, Kolak stressed the importance of dependable and investment-friendly structures. She said Germany’s new government was sending a clear pro-business message and had pledged its commitment to institutional protection and the three-pillar model. It is now crucial, she warned that the announced plan to reduce bureaucracy – such as reforming the mechanism for amending general terms and conditions – is implemented in a “swift and workable manner”.
