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Sparkasse Herford distributes 5 million euros to cities

“Against the background of the special circumstances, it is difficult to assess the further course of the 2022 financial year,” said Peter Becker, CEO of Sparkasse Herford.

“On the one hand, there is very good lending business with our private customers, on the other hand, there is a sense of restraint among our corporate customers.”

Due to growth in the lending and deposit business, the Sparkasse’s balance sheet total increased to almost EUR 5.8 billion as of December 31, 2021. The balance sheet profit for 2021 is 6.1 million euros. Loans to companies increased by around 25 million euros by the end of April.

These were primarily medium-term loans. “The war in Ukraine is presenting companies with new challenges: drastically increased energy costs, delivery bottlenecks and slumps in sales due to the sanctions imposed on Russia are affecting business and creating uncertainty. Some companies are therefore reluctant to invest for the time being. Necessary investments are increasingly being made from the results of previous years, other companies do not need any loans due to the Corona bridging aid,” explains Becker. “This is reflected in a restrained lending business.” At the end of the year, the savings bank had spoken of profiting from the strong lending business – that was before the outbreak of war in Ukraine.

The Kreditanstalt für Wiederaufbau has set up a special loan program for companies that are economically affected by the acts of war or the EU sanctions enacted in this context. The savings bank brokers the KfW funds, applications can be made directly to them. “Together we will find solutions for our corporate customers in this challenging situation – for example when it comes to bridging liquidity bottlenecks,” assures Becker.

In the first four months of 2022, the Sparkasse recorded a very strong real estate business. 50 plots of land, apartments and houses with a volume of around 13 million euros were brokered by our own brokers. One focus remained the interest in detached and semi-detached houses, which accounted for the majority with 36 objects. Demand for housing construction loans was just as unbroken. The commitments in this area amounted to around 80 million euros.

Savings bank boss Peter Becker. Photo: Moritz winds

“Interest rates have risen by more than one percentage point in recent months. Many customers would like to quickly fulfill their dream of owning their own home because they fear further increases in interest rates,” speculates Becker.

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Due to the low interest rates, investors are still looking for alternatives in the securities business. The main sales areas were investment funds with EUR 80 million and direct investments in shares with around EUR 35 million. The war in Ukraine led to turbulence on the securities markets. Significant price losses were recorded on the stock market in particular.

Against this background, securities turnover of EUR 214 million was down on the same period of the previous year. On this basis, the association’s meeting decided on a distribution to the supporting municipalities in the amount of 5.16 million euros.

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