Volksbank Euskirchen: mergers cause balance sheet total jump

This has never happened in the 121-year history of Volksbank Euskirchen: in 2020, the volume of credit and investment transactions managed by its customers at the bank and its affiliated partners exceeded the three billion mark. The exact figure is 3008 million euros – and that is 32 million euros more than in the previous year. Of this, customers invested just over two billion as of December 31, 2020, which was 23.5 million more than at the end of 2019.

The total of the loans increased by 8.4 million to 990 million euros. Meanwhile, due to the introduction of negative interest rates and custody fees for deposits, customers were more reluctant – they fell by 32 million to 1.25 billion compared to 2019 – or switched to investments by Volksbank’s network partners. The investment volume in custody accounts or with Volksbank’s network partners increased by 56 million euros in the same period – to 769 million euros. There is definitely a connection, as Lembicz explains: “Depending on the customer’s risk mentality, our advisors actively provide information about alternative forms of investment in order to avoid zero or negative interest rates.”

Board duo satisfied

Corona or low interest rates. The management board duo Hans-Jürgen Lembicz and Marc Güttes are satisfied with these difficult times: “Despite this turbulence, our bank did well in 2020”, they state in their balance sheet. The loan amount to customers rose from 828 to 843 million euros.

This is all the more remarkable because many customers use the low interest rates to repay their debts over-scheduled. In addition: By December 31, the Volksbank had promised building loans in the amount of 51 million euros, which had not yet been called up, i.e. not shown in the balance sheet.

The balance sheet total rose in 2020 by 20 million to 1.497 billion euros; the equity ratio by one percentage point to 25 percent and is well above the requirements of the banking supervisory authority of 13.16 percent.

The bottom line is a positive result

The bottom line is that Volksbank has a positive result of around 7.3 million euros for the 2020 financial year, which is used for the payments of taxes (around 2.3 million euros) and the creation of reserves (around 4.5 million euros in total) become.

The members receive a cash dividend of five percent (a total of 371,089.85 euros) from the profit generated, plus a bonus of one percent (74,217.97 euros).

“In view of the current interest rate landscape, this distribution is exceptional, but it is justifiable this year due to the satisfactory results,” said Lembicz. In their general assembly, which was held for the first time in digital form with a live vote due to the corona, the members also approved the mergers with Volksbank Düren and Raiffeisenbank Fischenich-Kendenich (see “Representative assembly will exercise the rights of the 19,000 members”).

Together, the three institutes now have total assets of 1.9 billion euros, have 74,494 customers, 19,214 members, 281 employees and 17 branches. The future challenges would have to do with the mergers, explained Lembicz. Customers would continue to be looked after on site and the names Volksbank Düren and Raiffeisenbank Fischenich-Kendenich would continue to be run as branches of Volksbank Euskirchen.

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