Schwäbisch Hall Exhibits Resilience Amidst Market Downturn
Decline in Bausparen Business, Market Share Gains
Schwäbisch Hall, Germany’s largest Bausparkasse (building society), faced a decline in gross new business in 2024, continuing a downward trend from the previous year. The company’s Bausparen volume reached €28.1 billion, a 9.4% decrease compared to 2023.
Despite the overall market weakness, Schwäbisch Hall maintained a strong position, gaining 3.5 percentage points in market share to reach nearly 35%. This reinforces its status as the market leader, further solidifying its position from 2023.
The decline in Bausparen business follows a period of rapid growth spurred by rising interest rates. In the boom year of 2022, Schwäbisch Hall witnessed a surge in gross new business to €34.1 billion. Prior to the interest rate hike in 2021, the company recorded a volume of around €24 billion.
Progress in Baufinanzierung
As one of Germany’s largest mortgage lenders, Schwäbisch Hall faced challenges in its Baufinanzierung (mortgage financing) business. However, the decline appears to have plateaued, with new business reaching €13.6 billion, slightly above the previous year’s level. Despite this modest improvement, the volume remains significantly lower than peak levels. In 2023, the company experienced a nearly 30% drop in Baufinanzierung due to the construction crisis triggered by escalating interest rates, construction costs, and energy expenses.
Positive Outlook Despite Challenges
Schwäbisch Hall’s CEO, Mike Kammann, remains optimistic about the future, stating that "the trough in mortgage financing has been passed, and a market recovery is noticeable, even though the hurdles in real estate financing (…) are being overcome at a slower pace than hoped." For 2025, Schwäbisch Hall anticipates a stronger participation in the recovering mortgage market. The demand for Bausparverträge (building society savings contracts) is expected to stabilize after the recent boom.
Recovery in Profitability
After a sharp decline of nearly 86% in the previous year, Schwäbisch Hall’s financial results have shown signs of recovery. The company’s pre-tax profit reached €64 million for 2024, a significant improvement from €20 million in 2023. This improvement was driven by rising interest rates and reduced administrative expenses. However, it still falls short of the €143 million profit posted in 2022.
Conclusion
Despite facing challenges in both its Bausparen and Baufinanzierung businesses, Schwäbisch Hall has demonstrated resilience and maintained its market leadership position. The company’s positive outlook and the signs of recovery in its financial performance indicate its ability to navigate the current economic headwinds.
