Germany's Sparkasse, Cited by Korea's Presidential Office, Thrives on Mortgage Lending

Sparkasse, the German savings bank cited by Kim Yong-beom, chief of the Korean Presidential Office's policy office, as a counterexample to "cruel finance," has been identified as the top player in Germany's private mortgage market. In Germany, commercial banks focus on corporate lending while savings banks concentrate on household credit and regional small and medium-sized enterprises based on relationship banking, filling gaps in the market and providing tailored services. According to the financial industry on Sunday, Germany's outstanding private mortgage loans stood at 1.1164 trillion euros (approximately 1,907 trillion won) as of the end of 2024. Sparkasse accounted for the largest share at 35.1%. Cooperative banks followed with 29.8%, while major commercial banks including Deutsche Bank held just 18.9%. Sparkasse provides deposit and lending services to local residents and small and medium-sized enterprises. Local governments participate as founding and supervisory entities. As a result, its business objective is not profit maximization but rather maximizing the public interest of local residents. As of the end of April this year, there are 339 Sparkasse institutions across Germany (with more than 11,000 branches), serving approximately 50 million customers. About 60% of the German population uses Sparkasse. In contrast, in Korea, deposit-taking banks accounted for 65.9% of mortgage loans as of the end of last year. The combined share of savings banks and mutual finance institutions was 11.4%. "In Germany, savings banks contribute to household lending and the public interest based on the stability of mortgage loans, but in Korea, banks sweep up everything, so financial institutions for ordinary citizens cannot play their proper role," a financial industry official said. ▷See Page 9...