First BaFin audit certificate for a bank merger
Bank mergers have been common practice in Germany for years. Now, for the first time, BaFin, the Federal Financial Supervisory Authority, has taken a closer look at a merger process – and has not objected to it. A zeb team supported the merger of two cooperative banks.
There are fewer and fewer of them around: In 2015, there were 1,960 banks and Sparkassen (savings banks) in Germany. Five years later, 1,717 were left. The main drivers of this development are the savings banks (minus 33) and, above all, the cooperative banks (minus 184). These figures are the result of a process that mainly takes place via mergers.
“A bank merger – even among cooperative banks – is a great challenge”, says zeb Manager Gerald Laasch about such a process. Some of them end prematurely at the first exploratory meeting, a few after the intention to merge has already been communicated. “For a merger to be successful, it is essential to have a clear plan from the very beginning, to name and clarify contentious issues as early as possible and to have transparency about the objectives. The commitment of the board and committees is very important.”
“We stand for process security.”
Merger advisors often play a mediating role. “We are also moderators, through whom one can bring the special topics into play”, Laasch states. However, another role is more important: “We stand for secure processes. Our process support gives the board members security.”
With the experience gained from a large number of mergers, the zeb consultants are well aware of the issues at that level: transparent project organization, task catalogs with clear responsibilities and deadlines, a central project database – and all this supported by extensive documentation. “There are sometimes 2,000 tasks with 250 decisions that have to be taken, where attention has to be paid to timing, correlations and particularities of the institutions”, says Laasch.
Other important areas of the zeb process model are the alignment of structures and of a large number of business processes, not to forget the “store” for those topics and ideas that are to be addressed after the merger. “One thing that’s very important is active communication – with all stakeholders and especially with the employees, because transparency and acceptance are success factors of any merger.” Ultimately, zeb is “only” an advisor to the bank – the main burden of the work will and must be shouldered by the employees.
BaFin attests to a successful process
The Federal Financial Supervisory Authority (BaFin) has now for the first time looked at such a merger within the framework of a special audit. The key question was whether the merger had succeeded in creating one bank. Negative findings: none.
And the conclusion drawn by the merged bank was that the process tailored by zeb according to the process model had contributed significantly to the BaFin result. “We are glad that we were able to support both banks during the merger and that their work has now received this recognition by BaFin”, Laasch summarizes.