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March 18, 2010 2:00 am
The senior representative of Germany's 430 local savings banks has hit out at Commerzbank, the country's second-largest lender, accusing it of being able to use its financial backing from the German government to compete unfairly for deposits.
The comments from Heinrich Haasis - rejected by Commerzbank - highlights the intense competition for retail deposits as a source of stable income for banks after the financial crisis.
Germany's private sector banks lag far behind the savings banks, and about 1,200 local mutually-owned lenders, in terms of the share of retail deposits they hold. Savings banks hold about 40 per cent of the retail market and were able to increase customer deposits by 1.3 per cent last year, Mr Haasis said. But he said it was "not in accordance with fair competition" that Commerzbank - which needed €18bn ($24bn) of state support during the financial crisis - was now offering cash to new customers to open accounts.
The accusation is sensitive since under the terms of its receipt of state aid Commerzbank has agreed with the European Commission to refrain from making market-leading offers in products where it has more than a 5 per cent market share. Mr Haasis also said lossmaking Commerzbank had not yet begun to pay interest on the state aid granted to it.
James Wilson, Frankfurt
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