The German banking landscape is undergoing a profound consolidation, with the number of regional banks – comprising cooperative banks (Genossenschaftsbanken) and savings banks (Sparkassen) – falling below 1,000 for the first time in 2025. A recent study by consultancy Zeb, published in the Handelsblatt, reveals a decline of 34 institutions, leaving just 987 independent entities. While rescue operations have been sporadically implemented, the rate of mergers has not accelerated significantly.
Data indicates that by November 2025, 23 cooperative banks have already merged, including complex transactions involving the consolidation of three and four financial institutions respectively. This represents a reduction of 27 banks, a figure slightly exceeding the 25 decline observed in 2024. Prior years witnessed even more substantial losses, with 40 and 35 institutions disappearing in 2023 and 2022, respectively.
The savings banks sector has also seen a contraction, albeit at a slower pace. Six mergers, including one encompassing three savings banks, reduced their number by seven in 2025, bringing the national total to 342, including the Berlin Sparkasse.
This ongoing consolidation raises critical questions about the future of regional banking in Germany. While proponents argue that mergers are essential for achieving economies of scale and maintaining competitiveness in a challenging economic environment, critics express concerns about the erosion of local decision-making and the potential loss of personalized service for communities historically served by these institutions. The dwindling number of regional banks also signals a continued shift towards a more centralized financial system, potentially increasing the concentration of power within the national banking sector and diminishing the role of community-based lending. Further scrutiny is needed regarding the long-term impact of these mergers on regional economies and the overall stability of the German financial system. The government’s role in fostering a supportive environment for smaller, regional banks, rather than simply facilitating mergers, warrants careful consideration in future policy discussions.
