zeit.de
German Banks Face Record Surge in Non-Performing Loans
German banks experienced a 24.9% surge in non-performing loans in 2024, exceeding the European average of 1.1%, primarily due to increased business insolvencies (21,812 in 2023) and losses in commercial real estate, driven by factors such as post-pandemic economic adjustments, high energy costs, and reduced office demand.
- What are the potential long-term economic consequences of the high NPLs in Germany, and what measures could mitigate this risk?
- The high NPLs in Germany might curb future lending, impacting economic growth. While the European banking sector shows resilience with a rising average capital ratio (23.5% in 2024), the German situation warrants close monitoring. Further insolvencies are expected in 2025, potentially exacerbating the NPL problem.
- What is the extent of the increase in non-performing loans for German banks compared to the European average, and what are the primary causes?
- German banks faced the steepest rise in non-performing loans (NPLs) in Europe in 2024, with a 24.9% increase compared to the European average of 1.1%. This surge is mainly due to increased business insolvencies and significant losses in the commercial real estate sector.
- How did the end of pandemic support and other economic factors contribute to the rise in German business insolvencies and their impact on NPLs?
- The sharp increase in German NPLs is linked to a record 21,812 business insolvencies in 2023, exceeding levels since 2015. Factors contributing to this include the end of pandemic support, high energy prices, bureaucracy, and political uncertainty. The commercial real estate market is also under pressure due to the home-office trend and online shopping.
Cognitive Concepts
Framing Bias
The headline and opening sentence immediately highlight the negative situation in German banks by emphasizing their struggle with the highest increase in non-performing loans compared to other European banks. This sets a negative tone and frames the story around the problems rather than a balanced presentation of the overall situation. The use of terms like "sprunghafter Anstieg" (sharp increase) and "massiven Wertverluste" (massive losses) further amplifies the negative aspects.
Language Bias
The article uses language that leans toward negativity, such as "sprunghafter Anstieg" (sharp increase), "massiven Wertverluste" (massive losses), and "Firmenpleiten" (company bankruptcies). These choices could evoke stronger emotional reactions in readers compared to more neutral terms like "significant increase," "substantial losses," and "business failures." The description of empty offices and empty cash registers also contributes to the negative framing.
Bias by Omission
The article focuses heavily on the negative aspect of increased non-performing loans in German banks, but omits discussion of potential positive factors or mitigating circumstances. While acknowledging the resilience of the European banking sector overall, it doesn't elaborate on specific strategies employed by German banks to address the issue or any government interventions to support the sector. The article also doesn't include data on the performance of other major European economies' banking sectors for comparison.
False Dichotomy
The article presents a somewhat simplistic view by focusing on the negative impacts of increased non-performing loans without sufficiently exploring the complexities of the situation. For instance, while the article mentions factors like high energy prices and the home office trend, it does not delve deeper into the interplay of these factors or consider alternative explanations for the rise in NPLs.
Sustainable Development Goals
The article highlights a significant increase in non-performing loans (NPLs) in German banks, driven by rising corporate insolvencies and losses in the commercial real estate sector. This negatively impacts economic growth and employment, hindering progress towards SDG 8 (Decent Work and Economic Growth). The increase in bankruptcies and the decline in the commercial real estate market directly affect job security and economic stability.