Annual Report 2018

Joint lending business Stronger together

Last year, DZ BANK improved the effectiveness and efficiency of its joint lending business with the Volksbanken Raiffeisenbanken. This business is a priority for the cooperative banks and their corporate customers, as syndicated loans are becoming increasingly important.

The local cooperative banks have a significant competitive advantage. Because they are located all over Germany, they are always close to their customers and are therefore ideally placed to offer a personal and bespoke corporate banking service. Loans continue to be the core product in corporate banking. When it comes to higher-volume loans and more complex structures, DZ BANK operates as the risk partner for the Volksbanken Raiffeisenbanken, drawing on its expertise and the strength of its balance sheet. DZ BANK and the local cooperative bank act as a consortium vis-à-vis the customer, which is why this business is referred to internally as joint lending. It enables companies to work hand in hand with their local bank to fund major capital expenditure projects or manage phases of growth.

Last year, DZ BANK prioritized its joint lending business and implemented some key improvements. One of the reasons for this is that corporate banking and thus the joint lending business are becoming more and more important to the cooperative banks. After all, income from other business lines has fallen sharply during the period of low interest rates. “There is still potential for growth for the Volksbanken Raiffeisenbanken and DZ BANK in the corporate banking business,” says Philipp Praeckel, Head of Department in DZ BANK’s SME corporate banking business for the Hessen region. Moreover, competition has intensified in the battle for corporate customers wanting to take out a loan. Banks can thrive in this competition if they position themselves even more professionally.

One outcome of the improvement process is that, in the joint lending business, the Volksbanken Raiffeisenbanken now receive reliable assessments of feasibility based on clear benchmarks and rapid decisions on credit exposures – and all in a completely transparent manner. “Our joint credit business with the Volksbanken Raiffeisenbanken has become faster, more transparent, and more dependable,” explains Praeckel. This saves time and gives greater planning certainty, both for the cooperative banks and for customers.

“Our joint credit business with the Volksbanken Raiffeisenbanken has become faster, more transparent, and more dependable.”

Philipp Praeckel, Head of Department in DZ BANK’s SME corporate banking business for the Hessen region

DZ BANK has also analyzed and amended the processes involved. For example, it has streamlined the procedural and documentation requirements for loans, thereby cutting the amount of administration for everyone involved. Another improvement is that the central institution’s regional decision-making powers have been strengthened, which accelerates the process and makes it more predictable.

Feedback from the Volksbanken Raiffeisenbanken on the changes made by DZ BANK is very positive. Nonetheless, Praeckel and his colleagues do not intend to sit back and relax. “We take the joint credit business and our role for the Volksbanken Raiffeisenbanken very seriously and are always working hard to make short-, medium-, and longterm improvements. As a cooperative banking group, we are ideally positioned to succeed in the fiercely competitive corporate banking business, and we are playing our part in ensuring this success.”

Overarching finance solutions for SMEs

DZ BANK’s products and solutions for corporate banking extend beyond the traditional lending business. They include not only capital-markets-related funding but also the arrangement of development loans, comprehensive support for international business, bespoke solutions for hedging interest-rate risk and currency risk, support for business sales and acquisitions, and much more. This expertise benefits the customers of the cooperative banks and the direct customers of DZ BANK in equal measure.