Branch bank

from Wikipedia, the free encyclopedia

Branch banks are credit institutions that maintain a network of branches . Opposite are the direct banks .

General

Branches, subsidiaries or branches are of the seat geographically separate, legally and economically, however, dependent asset components of an enterprise . A branch is therefore a bank branch subordinate to a central office, which represents an organizationally independent unit and reaches a minimum company size . The idea is not only a business location to entertain at the headquarters of the company, all resulted for business sectors of the marketing strategy , customer proximity at the residence to have a presence of customers. Its purpose is to improve customer reach. The customer reach in terms of sales line and target group provides information about how many potential customers can actually be reached by a branch:

.

When choosing a location for a branch, the number of possible customers (customer potential, market potential ) is the most important criterion.

species

The regionally based retail banks , particularly savings banks and cooperative banks , cover one or more regions of the state from. Internationally operating banks have branches or branches at least at financial centers abroad. In Germany one can differentiate between “one-man branches” and branches with several employees according to staffing. Another distinction concerns the regulation of competencies in branches, depending on whether or not competencies are available in a branch . Stationary bank branches are housed in buildings , mobile branches are mobile and serve structurally weak rural areas.

history

The term branch has focused since the late 19th century from the church area ( branch church ) to the commercial area as a branch, branch of a chain of stores or a bank or insurance company. One of the first branch banks was the Second Bank of the United States , founded in Philadelphia on January 7, 1817 , which had a total of 25 branches in the United States in 1832.

In 1837, several residents of the city of Flensburg submitted a request to the management of the National Bank to set up a branch bank in this city. It was not until February 23, 1844 that the state government granted a “patent on the establishment of a branch bank in Flensburg with the authority to create one of the same subordinate Comtoirs in Rendsburg…”. On March 13, 1846, the Deutsche Bank in Dessau received the license for the banking business , whereby it had to "expand its sphere of activity as far as possible across Germany". As early as June 15, 1846, the Allgemeine Preußische Zeitung stated contradictingly that the institute was not permitted to set up branch banks and agencies within the Prussian state. Overall, however, the establishment of branches in the major German banks could no longer be stopped. There have been four large Berlin branch banks since 1851, which in addition to Deutsche Bank consisted of Dresdner Bank , Commerzbank and Disconto-Gesellschaft .

In Switzerland , the "Regulations on the Cantonal Bank" of November 12, 1846, in Section 3, stipulated that the Berner Kantonalbank had its seat in the capital, and the "Grand Council decided on the possible establishment of branch banks in the canton's territory".

It was only after 1914 that the major Berlin banks established more branches. The actual expansion of the branch network of the big banks - i.e. the time in which they became branch banks - did not begin until after 1914 and lasted until around 1926. During this period, they took over the provincial banks connected to them by interest groups and converted their branches into their own. The Banking Act (KWG) of December 1934 introduced, in view of the overstaffed banking system in the Weimar Republic, with sections 3 (1) and (2), section 4 (1b) of the KWG 1934, a needs test for the establishment of bank branches, according to which the local Required for a bank branch by the banking supervisory authority . The needs test was seen as a suitable means of keeping the credit apparatus healthy and of protecting the economic fabric from shocks.

Deutsche Bank branch in
Halle-Neustadt after the fall of the Wall (August 1991)

The annual banking statistics of the Deutsche Bundesbank have been documenting the development of the banking industry in Germany since 1953 . In addition, a report on the development of the bank branch network is published once a year. Due to the needs test, the expansion of the branch networks was restricted. Due to the “pharmacy ruling” of the BVerfG of June 11, 1958, the needs test had to be abolished in the credit system too . The Federal Administrative Court took over this requirement and in July 1958 also abolished the license requirement for the banking industry. The case concerned the opening of a branch of a partial payment bank in Ludwigshafen, which had been rejected by the Federal Banking Supervisory Office by orders of June 8 and October 30, 1953 because no local and macroeconomic need was to be recognized. The lower instance, the Higher Administrative Court of Rhineland-Palatinate , had argued that the unlimited number of head offices and branches of credit institutions would endanger the currency and the supply of money and credit, because a translation of the credit industry would lead to increased competition between the institutions, an inappropriative one Expansion of the credit volume, the risk of careless money and credit manipulation, and ultimately the collapse of underperforming institutions and thus a disruption of the public's confidence in the state monetary system. The BVerwG countered this by stating that new branches would only be established if the entrepreneurs were convinced of the profitability of their project after a thorough examination of the macroeconomic situation and local conditions .

From then on, branches could be opened on a purely commercial basis. Between 1957 and 1967 the number of branches increased by 12,135, the so-called extensification phase of retail business . The effects of the administrative and regional reform in 1965 led to an intensification phase of stationary branch operations, especially at savings banks. The reform-related savings bank mergers left the branch development trend almost unaffected. There was a second wave of branch network expansions in Germany from 1967 onwards, even if the invention of the ATM made the important branch function of cash management largely obsolete. The first ATM was put into operation in Germany on May 27, 1968 by the Kreissparkasse Tübingen .

The electronic banking and the increase in direct banks , and related withdrawal from the area have contributed to a significant reduction of the branch network, because since 1995, a downward trend of 47%. The branches have ceded the top position as the most frequent customer contact point to online banking. Between 2003 and 2013 there was a further thinning of the bank branches by 20%. The big banks closed more branches than the regional institutions. According to the Deutsche Bundesbank's 2014 branch report , the total number of credit institutions in Germany (including legally dependent building societies ) fell by 1.9% in 2014 from 2,029 to 1,990 credit institutions (2012: 2,053 institutions, 2011: 2,080 institutions). The largest branch network continues to be maintained by the savings banks with 11,951, followed by the cooperative banks with 11,072 and the major banks with 7,433 branches. The consolidation process that has been going on for years has thus continued compared to the previous year. In 2009 and 2010, the percentage decline in credit institutions in Germany was 1.9%. However, over the past 20 years the total has decreased by around 53%. This trend is likely to continue in the future due to increasing online banking and digital sales.

Deutsche Bank (2790) had most of the branches in 2015 , followed by Commerzbank (1389), Postbank (1066), Unicreditbank (581), Wüstenrot Bausparkasse (500), Targobank (364), Santander (324) and Kreissparkasse Köln (180).

Number of branches including Postbank
2014 2015 2016 2017 2018
37,090 34,115 32,069 30.172 27,993

Since 2014, the number of branches has been reduced by at least 2000 per year. According to statistics, there are around 3700 inhabitants per branch in East Germany , while in West Germany there are only 2500 inhabitants per branch. In addition, a study by the Reconstruction Loan Corporation states that around 14,600 branch banks will be eliminated nationwide by 2035.

Banking aspects

Legal issues

In contrast to the previous authorization requirement, credit institutions now have to report the number of their domestic branches to BaFin every year ( Section 24 (1a) No. 4 KWG). Only the establishment, relocation and closure of a branch in a third country outside of the EU member states is subject to an immediate notification requirement pursuant to Section 24 (1) No. 6 KWG. In contrast, branches of foreign banks in Germany are still subject to authorization under Section 53 (1) KWG.

Branch organization

The branch concept is part of the organizational structure of a bank. It entails a decentralization of tasks , partly through the delegation of decision-making authority ( credit decisions ) in the branches. On the other hand, banks that are more centrally organized operate their branch system with branches that are completely dependent on the head office.

Branches work according to central work instructions and are organized in the same way, their operating and business equipment ( office machines ) is uniform, they have a uniform corporate design . Branches with their own competencies must escalate the decision to the head office in the event of decisions going beyond the competence limits . Big banks have so-called “head branches”, regional central branches to which the smaller branches in a region are subordinate.

Effects of the branch network

The branch calculation reveals whether it is a question of "collection branches" or "credit branches", depending on whether the deposit business or the lending business dominates in a branch . Then there are “passive-heavy” (predominantly deposits) or “active-heavy” (predominantly loans) branches. This results from the socio-demographic composition of the resident population living in the catchment area of ​​a bank branch.

The branch-related clearing transactions are carried out via the head office. Since the branch network actually acquires customer connections and customer accounts through proximity to the customer, the number of bank customers of the entire branch bank increases. This increases the possibility of "internal settlement", because in cashless payment transactions the probability increases that the debtor and the recipient of the payment have an account with the same branch bank. This “internal billing” reduces the liquidity outflows to other branch networks at the head office . In 1969, Hans-Dieter Deppe demonstrated that the extent of the "internal accounting" increases with the expansion of the network, because every new bank branch has a positive effect on the liquidity situation. In terms of banking operations, however, this only applies to the "collection branches".

A branch bank network requires comprehensive management through controlling , branch calculation and financial planning . The parallel production carried out via branches creates additional capacity costs that can be avoided with centralized organization . Customer proximity is today only there still necessary where the banking business a consulting need. Big banks and regional banks are typical branch institutes, big banks and Landesbanken have branches in Germany and are also among the banks with an international branch network. Branch banks in particular contribute to the density of branches in a country. There is no systematic correlation between bank density and profitability , expressed in return on equity .

See also

Individual evidence

  1. ^ Stephan Paul, Lenkungssysteme in Filialbanken , 1987, p. 3
  2. Otto Basler, German Foreign Dictionary , Volume 5, 2004, p. 863
  3. ^ Yearbooks of Literature , January to March 1837, 1838, p. 169
  4. ^ Heinrich Ritter von Poschinger , From the oldest time to the year 1846 , 1971, p. 279 f.
  5. ^ Friedrich Ernst Feller, Die Staatspapier- und Actien-Börse , 1846, p. 282
  6. ^ Laws, decrees and ordinances of the Canton of Bern , Volume 1, 1846, p. 199
  7. Manfred Pohl, Baden-Württembergische Bankgeschichte , 1992, p. 122
  8. BVerfGE 7, 377 ; the court considered the licensing procedure for pharmacies to be incompatible with the fundamental right of free choice of occupation under Article 12 (1) of the Basic Law
  9. BVerwG, judgment of July 10, 1958, Az .: IC 177.54
  10. Harald Brock / Ingo Bieberstein, Multi- and Omnichannel-Management in Banken und Sparkassen , 2015, p. 33 f.
  11. Börsen-Zeitung issue 178 of September 17, 2014, The bank branch: Dead people live longer , p. 5
  12. Deutsche Bundesbank , Bank Office Report 2014 of December 31, 2014 , p. 1 ff.
  13. Deutsche Bundesbank, Bank Office Report 2011 of December 31, 2011 , p. 1 ff.
  14. Die Bank, Top 100 of the German Banking Industry 2018 , edition 8/2016, 2016, p. 9
  15. Deutsche Bundesbank, Payment and Securities Settlement Statistics in Germany 2014 - 2018 , 2019, p. 5
  16. Study: Branch banks are dying out. September 9, 2015, accessed March 14, 2017 .
  17. Gerhard Müller / Josef Löffelholz, Bank-Lexikon: Concise Dictionary for Banks and Savings Banks , 1973, Sp. 248 f.
  18. ^ Karl Friedrich Hagenmüller, Banking Operations and Banking Policy , 1959, p. 223
  19. ^ Armin Wagner, The position of the bank branch in modern financial service sales , 1998, p. 39
  20. Hans-Dieter Deppe, Banking Operations Growth , 1969, pp. 203 ff.
  21. Leo Schuster / Alex W. Widmer, ways out of the banking and stock market crisis , 2004, p. 20