German economy well equipped

According to the President of the Sparkasse, Helmut Schleweis, many domestic companies have provided “with liquidity and credit lines” for the economy to restart. There is no sign of a credit crunch.

The President of the Sparkasse, Helmut Schleweis, gave the German economy good marks for coping with the crisis.

Dhe German economy is well prepared for a new start after the virus crisis, according to Sparkasse President Helmut Schleweis. “Many companies have made provisions with liquidity and credit lines in order to be prepared for when production starts up again after the shutdown,” Schleweis told the Süddeutsche Zeitung, according to a preliminary report from the Monday edition. The corporate customers of the 377 savings banks had deposits of 157 billion euros in their accounts at the end of April, 8.2 billion more than in the same period of the previous year. There is no sign of a credit crunch. “Since we do not have increased inquiries from customers of other banks, I assume that it will be similar with other banks.”

There could also be no question of banks and savings banks holding back on loans, as some politicians feared, Schleweis said: “With an average of around 40 percent, the equity base of medium-sized companies is very good.”

According to previously unpublished figures, the savings banks had committed to companies and self-employed loans for 10.3 billion euros in April, 40 percent more than in the same month last year. Since the beginning of the year, 34.4 billion euros in loans have been committed, twenty percent more than in the previous year. Never before would the savings banks have granted such a high volume of credit after four months.

Despite the crisis, the demand for private housing loans at the savings banks has surprisingly continued to rise sharply. In April, the savings banks issued an additional 5.5 billion euros in loans to home builders, an increase of twelve percent within a year. In the case of consumer loans, new business in April fell by 26.3 percent compared to the previous year. Instead, citizens rely on security: In April alone, the savings banks received deposits of 17.6 billion euros from private individuals, 11.8 billion more than in the previous year. This is due to the uncertainty of private households, says Schleweis. The savings banks would have last seen deposit growth of this magnitude in the 2008 financial crisis.