Types and features of banks in Germany

What financial institutions are in Germany, their specialization. Division of German banks by type.

Germany is a country of banks. According to statistics, in 2019 there were 1,717 different financial institutions with 28,384 branches.

The German commercial banking system stands on three pillars – the “Drei-Säulen-System”:

  • cooperative Genossenschaftsbanken
  • public law Öffentlich-rechtliche Banken
  • and private banks Privatbanken.

The German Bundesbank – Deutsche Bundesbank acts as a control and regulatory body with the corresponding tasks.

Universal banks

Most of the financial institutions are “universal”. These institutions offer a wide range of banking services:

  • Capital management and accepting deposits.
  • Providing loans to individuals and legal entities.
  • Consulting clients on financial issues.
  • Buying and selling assets such as real estate.
  • Storage of valuables such as gold bars or art.
  • Provision of guarantees.
  • The ability to carry out non-cash payments.

According to the type of organization and tasks performed, the universal banks in Germany are divided into credit Kreditbanken, savings Sparkassen and cooperative Genossenschaftsbanken. Each type of financial enterprise has its own characteristics.

Credit banks

According to the Deutsche Bundesbank classification, credit banks are universal banks that issue short-term loans. Kreditbanken includes both large credit and financial institutions, such as Deutsche Bank, and regional ones.

The task of credit banks is to ensure that individuals and entrepreneurs are supplied with sufficient capital if necessary.

Cooperative banks

Genossenschaftsbanken emerged in the middle of the 19th century as mutual aid communities for artisans and traders. Today they exist in the form of a registered eingetragene Genossenschaft eG or a joint stock company Aktiengesellschaft AG . The peculiarity of institutions is that clients are also members of cooperatives with voting rights.

Such organizations are financed through contributions from members as well as through capital transactions on the open market. The main role is not played by the maximum benefit, but by the reliable and stable provision of banking services.

In Germany, at the regional and interregional levels, there are more than 1000 cooperative banks, for example, in the form of regional “people’s” Volks- or Raiffeisenbanken. The largest cooperative bank is Sparda-Bank.

Kreditgenossenschaften are controlled by the central cooperative organizations genossenschaftliche Zentralbanken, for example, DZ Bank. They also protect deposits from bankruptcy.

Savings banks

In Germany, there are about four hundred Sparkass. They provide services through 14,400 branches. Most Sparkasse work in the field of government orders. The main clients are usually city or regional administrations. Some Sparkassen work with private clients.

Savings banks in Germany operate on a regional basis, which is enshrined in the legislation of the respective land. Sparkassi carry out financial activities only in a specific region.

The financial group Sparkassen is one of the largest banking systems in Germany. The amount of assets for 2015 was 1.145 billion euros.

Special banks

Spezialbanken focus on providing only specific banking services. Usually this is the issuance of targeted loans or operations with deposits. In this, special banks differ from universal banks, which cover a wide range of financial transactions.

Construction savings banks

Bausparkassen’s work is based on the principle of consumer solidarity. The basic idea is simple: people accumulate savings for a long time. Due to the large amount of capital Bausparkassen, it is easier to make a profit and it is easier to offer investors cheap loans for real estate construction.

Bausparkassen’s activities are regulated by a separate law – Bausparkassengesetz (BauSparkG), according to which these companies have the right to place customer deposits only in residential assets in the form of a mortgage loan .

The most famous Bausparkassen are the Schwäbisch Hall or LBS.


The term translates as “installment banks”. Specialization – issuing consumer loans for a specific purchase. These are mainly loans for personal needs or car loans . If you make an expensive purchase in a store, most likely the proposed loan will be taken from one of these institutions.

These financial institutions do not work with government orders. And for short-term consumer loans, better partners are not found.

Unlike public law and other universal banks, it is easier to get a loan from Teilzahlungsbanken. Many German financial institutions have institutions of this kind as subsidiaries.


These are specialized banks that mainly issue loans to finance large real estate objects. Usually we are talking about the “mortgage” organizations Hypothekenbanken, whose activities are regulated by a special law – Pfandbriefgesetz.

These banks issue debt securities that are secured by mortgaged real estate or the government. Realkreditinstitute services are in demand when financing the construction of large passenger transport such as ships or aircraft.

Direct banks and classic branches

An important factor distinguishing German banks from each other is the absence or presence of branches – Direktbank and Filialbank. This does not depend on the classification of the financial institution. Direktbank without branches may well be universal.

Filialbank clients have the opportunity to conduct financial transactions at the branch. In Direktbank, there is only a remote way to carry out monetary transactions – via the website, telephone or fax.

Due to the savings on the maintenance of branches, Direktbank incurs low operating costs. This advantage is used by the financial institution to offer clients the best interest rates on deposits or cheap loans. Many Direktbanken do not have a payment for current account management.

Direktbanken are often not completely independent enterprises, but are owned by other institutions that close the direct banking niche.

The opening of a current account with Direktbank takes place online. This applies to various deposits, for example, Tages- or Festgeld , and deposits.

For the issuance of cash, direct banks are part of various associations. Therefore, customers receive a regular Girokarte or EC-Karte card, with which they can withdraw cash from ATMs in Germany. The use of ATMs within the network is free.

Major German banks with branches

Deutsche Bank is one of the largest and most influential banking houses in the world.

Deutsche Bank

The largest German universal bank offers a wide range of services for private clients in Germany: from checking accounts and investment banking to real estate lending.

Deutsche Bank, with nearly a hundred thousand employees and an annual turnover of one and a half trillion euros, is the largest financial institution in Germany. The listed universal bank is an international employer with offices in New York, London and Singapore.

Deutsche Bank was founded in 1870 in Berlin to enable foreign trade businesses to do so independently of England. The company was actively developing, branches were soon opened in the trading cities of Bremen and Hamburg, and after a short time also in London and Singapore. Today the financial concern is considered one of the most influential on the planet. In addition to dealing with private clients, the bank has large capital in well-known German companies.

In the 1950s, a well-known banking house began developing a network of branches. Private clients were able to borrow small amounts thanks to a special loan from Deutsche Bank.

This financial institution offers customers an extensive field network of 1,300 branches in Germany. It is also possible to conduct banking operations online or by phone. Germany’s 14 million residents use six key areas of the universal bank, which, in addition to investment banking and savings, also include real estate financing, loans of various types, checking accounts and credit cards, and savings deposits.

As a serious universal bank, this financial institution is often in demand when it comes to a large loan for your own home or other real estate. Deutsche Bank offers many different models to help you plan and implement your lending in the best possible way.

Commerzbank is Germany’s second largest financial institution.


Commerzbank is the second largest credit institution in Germany with headquarters in Frankfurt am Main. The concern offers private clients a wide range of classic and innovative financial products in all areas, for example, financial deposits or lending.

The foundation of one of the largest universal banks in Germany was laid in 1870, when Hamburg bankers and merchants founded the Commerz- und Disconto-Bank in Hamburg. Three decades later, the young banking house had branches in Berlin, Frankfurt am Main and in the place of foundation – Hamburg. At the turn of the century, the financial institution concentrated on doing business in Berlin.

In the course of further mergers and several acquisitions in the 1920s, the company changed its name to Commerz- und Privat-Bank AG. Due to the expansion, the network of the company’s branches has also grown significantly.

After the occupation of the allied forces, the enterprise was divided into many parts in different occupation zones. Only in 1958 were the separated financial institutions reunited into Commerzbank AG with headquarters in Düsseldorf, which was moved to Frankfurt am Main in 1990. In the 50-60s, the expansion of the banking network in Germany was successfully carried out. Simultaneously, the financial institution set about creating international branches. Commerzbank was the first German bank to have, among others, a branch in New York.

Following the acquisition of Dresdner Bank in 2009, Commerzbank became the second largest bank in Germany. The number of employees is 50,000.

As a universal German bank, Commerzbank provides a full range of modern financial services. Along with classic deposit accounts, the financial institution also offers special savings deposits, for example, “AusbildungsSparen” – savings for education.

In the field of securities, private clients have the opportunity to open deposits and use various management strategies. Everything related to the concept of “payment” is fully provided with a wide range of choice of checking accounts and credit cards. And thanks to the large number of branches, clients seek advice directly at their place of residence.

Examples of direct banks

Comdirect was founded in 1994 as a subsidiary of Commerzbank.


Comdirect is an exchange-oriented bank headquartered in Quickbourne. More than 80% of the shares are owned by Commerzbank. Founded in 1994.

The main activity in Germany is online securities trading for private clients. With the help of the Informer service, the bank offers an important Internet platform to clients who are interested in an exchange and need information about stock quotes or exchange rates. The website receives 6 million hits per day. Comdirect ranks among the leading financial institutions in Germany in the field of online brokerage.

Since 2009 Comdirect has been providing services to legal entities. The clients include insurance companies.

1200 bank employees in Germany are always at the service of 1.8 million customers. A large number of employees are required to offer customers a comprehensive service even without a branch network. For example, customer service is available around the clock by phone, as well as via chat or video chat.

As a full-fledged bank, Comdirect covers the entire range of modern banking services. These include checking and savings accounts, as well as Festgeldkonto fixed deposits and securities trading. Other financial services such as “classic” interest-bearing loans or pension savings are provided by the partners of the financial institution.

Bank 1822direct is a subsidiary of Frankfurt Sparkasse.

Bank 1822direct

Bank 1822direkt is a subsidiary of Frankfurter Sparkasse. The main activities are online customer settlement, as well as term deposits and consumer lending to the population.

For the banking community, 1822direkt is very young. The company was founded in 1996 as a subsidiary of the Frankfurter Sparkasse bank, which is the fourth largest bank in Germany. Therefore, in the literal sense, the society is not an independent credit institution, but rather a distributor of banking products of the parent organization. The company accounts have the same BIC number as the Frankfurter Sparkasse accounts.

The name of the organization refers to the founding year of Frankfurter Sparkasse and indicates the tradition and consistency of the “parent”. Since its inception, 1822direkt has positioned itself as a direct bank, where clients conduct transactions remotely by phone or online.

Affiliated with the Frankfurter Sparkasse company, 1822direkt is also owned by a financial group. Due to the special distribution of responsibilities, deposits are reliably protected. Since its foundation, no organization associated with 1822direkt has gone bankrupt.

The main business portfolio of the organization consists of 3 parts: checking accounts, Tagesgeld and deposits. The organization offers other financial products: financing of construction projects or partner organizations like Interhyp or SWK Bank.

In 2015, 1822direct won the bank benchmarking by the German Institute for Quality Assessment DISQ. 1822direct was named the best in the Direct Banking and Data Protection categories. The bank also received an excellent rating in the service sector.

The bank’s head office in Frankfurt am Main employs 150 people.

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Igor Smith/ author of the article
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