Germany
Banking sector profile — Europe
Data as of October 2026 • TGB Intelligence Unit
Policy rate as of 7 October 2026: 2.50% (ECB deposit facility rate; source: European Central Bank)
Banking sector at a glance
Structure and performance
Germany's banking market is fragmented and organised in three pillars. At end-2025 the Bundesbank counted 1,329 credit institutions: 232 private commercial banks (three big banks, 129 regional and other commercial banks and 100 branches of foreign banks), 344 savings banks and six Landesbanken in the public-sector group, and 647 cooperative institutions. The five largest credit institutions held only 35.4% of sector assets in 2025, according to ECB structural indicators, against 51.2% in Italy, 67.4% in Spain and 81.3% in the Netherlands. Public development banks, led by KfW with €540.7bn of assets, add a significant state-owned lending layer.
Savings and cooperative banks run a deposit-funded, relationship-based model centred on households and the Mittelstand. The savings banks reported an operating result before valuation of more than €18bn for 2025, allocated €7.6bn to precautionary reserves before a €2.8bn profit and held a CRR core capital ratio of 16.8%. At the listed banks, Deutsche Bank earned a record €9.7bn before tax in 2025, with a 10.3% post-tax RoTE and 14.2% CET1 ratio; Commerzbank reported €2.6bn net profit, 8.7% RoTE, a 14.7% CET1 ratio and a 1.1% non-performing exposure ratio.
Asset quality is deteriorating gradually from a strong base. The Bundesbank's November 2025 Financial Stability Review found that the non-performing loan ratio had risen steadily since end-2022, led by commercial real estate and spreading more slowly to other sectors, while noting that high regulatory capital ratios rest partly on low risk weights at large banks. BaFin's Risks in Focus 2026 ranks rising non-performing loans, driven by weak growth and corporate insolvencies, alongside links to private debt funds among the main risks for the sector.
Foreign groups hold significant domestic franchises: UniCredit Bank GmbH (HypoVereinsbank) reported €286.3bn of consolidated assets at end-2025 and ING Deutschland €207.7bn with about 10 million customers. Ownership of Commerzbank is the sector's principal strategic question: after its 2026 exchange offer, UniCredit is set to control close to half of the voting rights subject to regulatory approval, while the federal government remains the second-largest shareholder and Commerzbank's boards rejected the offer as inadequate.
Structural trends
The shifts shaping banking in Germany.
Consolidation continues: the number of credit institutions fell by a net 39 to 1,329 in 2025, driven mainly by 34 mergers, 27 of them in the cooperative sector.
Branch networks are shrinking: domestic branches fell 6% to 16,799 in 2025, with the big banks cutting 755, almost all at Deutsche Bank (709).
Cross-border consolidation is advancing: UniCredit's 2026 exchange offer for Commerzbank closed in July with 17.6% of shares tendered, leaving UniCredit close to 50% of voting rights pending approval.
The rate cycle has turned: the ECB raised its deposit facility rate to 2.25% in June and 2.50% in September 2026 after cutting it to 2.00% in June 2025.
Leading institutions
Largest banks in Germany by total assets.
| # | Bank | Total assets (US$) | Type |
|---|---|---|---|
| 1 | Deutsche Bank | US$1.69tn | Universal |
| 2 | DZ BANK Group | US$777.2bn | Cooperative |
| 3 | Commerzbank | US$693.4bn | Universal |
| 4 | J.P. Morgan SESubsidiary of JPMorgan Chase | US$509.4bn | Investment |
| 5 | LBBW | US$408.1bn | State-owned |
| 6 | UniCredit Bank GmbH (HVB)Subsidiary of UniCredit | US$336.4bn | Universal |
| 7 | BayernLB | US$325.2bn | State-owned |
| 8 | ING DeutschlandSubsidiary of ING | US$244.0bn | Digital |
Largest banks in Germany by total assets, FY2025 audited accounts. Domestic groups as in the TGB Bank Rankings; subsidiaries of foreign groups shown with their own accounts and marked. Not a ranking table. Converted at official central-bank rates for each fiscal year-end.
Supervision and capital rules
Significant institutions, including Deutsche Bank, Commerzbank, DZ BANK and the Landesbanken, are supervised directly by the ECB under the Single Supervisory Mechanism; BaFin and the Bundesbank supervise the less significant institutions. The EU's CRR3 package applied from 1 January 2025, with the output floor phased in to 2030; the Fundamental Review of the Trading Book applies from 1 January 2027, with temporary adjustments to 2030 adopted by the Commission in June 2026. BaFin cut the sectoral systemic risk buffer on residential mortgage exposures from 2% to 1% from 1 May 2025 and kept the countercyclical buffer at 0.75% in July 2026. Deposits are protected by law up to €100,000 per depositor, with the savings bank and cooperative groups operating institutional protection schemes.
What changed in 2026
- January 2026: Deutsche Bank reported record 2025 profit before tax of €9.7bn and net profit of €7.1bn, meeting its 10% RoTE target with a 10.3% return.
- March 2026: UniCredit announced an exchange offer of 0.485 of its shares per Commerzbank share to cross the 30% threshold; Commerzbank's boards recommended shareholders reject it.
- July 2026: The UniCredit offer closed with 17.6% of Commerzbank shares tendered, mostly by UniCredit-linked parties; transfer of the shares remains subject to regulatory approval.
- September 2026: BaFin declared a compensation event for the Frankfurt branch of Bank Sepah-Iran on 10 September, opening compensation of depositors by the statutory deposit guarantee scheme EdB.
Sources (33)
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