German banks still have work to do

8th June 2004, Comments 0 comments

8 June 2004 , BONN - German banks have worked hard to revamp themselves up after the earnings downturns and losses of recent years but the industry still had no grounds for celebration, the country's top financial overseer said Tuesday. Jochen Sanio, president of the federal financial supervisory authority BaFin in Bonn, said the problems were still not yet completely overcome. In presenting BaFin's report for 2003, he credited German banks last year for having taken the "painful" step last year of underta

8 June 2004

BONN - German banks have worked hard to revamp themselves up after the earnings downturns and losses of recent years but the industry still had no grounds for celebration, the country's top financial overseer said Tuesday.

Jochen Sanio, president of the federal financial supervisory authority BaFin in Bonn, said the problems were still not yet completely overcome.

In presenting BaFin's report for 2003, he credited German banks last year for having taken the "painful" step last year of undertaking a thorough readjustment of the bookkeeping worth of their holdings to reflect a more realistic market value on the stock market.

Even the rise in the DAX towards the end of the year had not been enough to ease the pain, Sanio said.

But the banks had "worked hard" to revamp themselves, and "many banks have in the meantime considerably lowered their costs".

The results of these efforts were starting to become evident, he said, with many banks showing "clearly better" earnings in the first quarter of 2004.

But the problems were still far from resolved.

"What we see today still gives us no cause for celebration," Sanio said. It would be shown in the course of this year whether German banks would be able to show noteworthy progress in solving their chief problem of low earnings power.

As long as the economy does not pick up steam, he added, "the banks will find it doubly difficult to get rolling again".

 

DPA

Subject: German news

 

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