GIt was definitely a small revolution in the banking industry, but maybe it was just the starting signal for a long-term development: when Raiffeisenbank Hochtaunus announced in autumn that it was going to close all its branches and, with one exception, also want to get rid of all ATMs, it caused nationwide Attention.
This is not new and was possibly even wanted, because the chairman of the board, Achim Brunner, and his team always arouse interest with unusual campaigns. The fact that a bank actually withdrew from direct cash transactions was and still is an unusual step.
Only 800 customers left in the branch
For Brunner, however, it is only the logical further development of a strategy that is increasingly turning the Bad Homburg-based company into an online bank. “We only had around 800 customers in our branches,” says Brunner: measurements had shown that an average of only two visitors per hour came to a branch. However, the operation of one branch per year devoured a six-figure sum for rent, technology, security and staff.
Conversely, the company has a large influx of customers who only want to do their business online: last year, the number of customers doubled from 15,000 to 30,000. “Banks have to keep developing if they don’t want to disappear,” says Brunner.
Blasting makes ATMs expensive to operate
Customers can withdraw money free of charge from any ATM in the world 52 times a year using a free Mastercard. The fees that Raiffeisenbank has to transfer to other institutions for this are apparently lower than the costs of maintaining its own ATMs, which are also becoming more and more expensive, as Brunner reports.
After all, the numerous blow-ups by criminal gangs necessitate increased security measures, so that the purchase and maintenance of the machines no longer made economic sense for the bank. “And we no longer see any need for it among our customers.”
However, the effect here is that the bank has long focused on its online customers and, at a time when almost all financial institutions charged fees on current accounts, still offered them a free model, while branch customers had to pay EUR 30 per month. So it’s no surprise that the total of these users has been declining, whereas currently between 80 and 100 people open a new account with the company every day.
Efficient business model
For Brunner, these figures are proof that it was right to restructure the business model and with it the entire bank since 2008, as he says. Last year, the balance sheet total rose accordingly by more than a third to 1.4 billion euros, the number of customers served rose by 28 percent to almost 2.3 billion euros and the lending business by a quarter to just over one billion euros.
Thus, the operating result after valuation increases by 26.1 percent to 15.3 million euros. The cost-income ratio, which shows how much a company has to invest to earn one euro, is particularly striking; the higher the ratio, the lower the efficiency of a house. According to statistics from the Bundesbank, this value is just under 70 nationwide on a long-term average, the Raiffeisenbank Hochtaunus recently came to 43.2.
Brunner believes that, as an online bank, nothing stands in the way of further growth for his company, but that growth needs to be moderated and operations staffed accordingly. most recently, the number of employees rose by eight to 99.
The bank’s growth engine has been its specialization in professional commercial real estate financing for many years. In addition, one continues to rely on publicity campaigns, for example on comparatively attractive overnight interest rates. New customers currently receive an interest rate of 2.1 percent on call money for four months up to a sum of 100,000 euros. After that, the money has a variable interest rate, currently 1.1 percent. This offer is one of the best for new customers nationwide – and flushes the company many contacts in the customer file.
The members should also benefit from this, the number of which also grew last year, by 17.8 percent to 8,874. The bank is currently planning to increase the dividend from 2.5 to 3.5 percent.