Consell Municipal de Benestar Social

The Commission also looked into regional concentration patterns of retail banking. In this respect, the banks included in the sample were asked for information regarding, amongst others, the regional distribution of the number of current accounts (consumers and SMEs) in the given country. The regions were set according to the NUTS of Eurostat, namely the medium level NUTS2 76).

To calculate shares at the regional level, the data given by the individual banks per region were put in relation to the estimated total. Lacking any regional ECB data on the number of current accounts, the Commission calculated the average number of current accounts per country (number of current accounts per country according to ECB divided by population) and multiplied this by the population number of each NUTS2 region.

This method also has its limitations because the number of current accounts per capita differs, of course, between regions and does not necessarily correspond to the country average. In urban areas, for instance, people tend to have a higher per capita average than in rural areas. However, this method was the best way to arrive at an acceptable estimate for a regional total.

Germany is a special case. The coverage rate of the sample is low for this Member State due to its fragmented retail banking sector with about 500 Sparkassen and about 1600 co- operative banks (so that with roughly the 40 leading banks only about 60-70% of the national ‘market’ measured by means of the deposit total can be covered). However, the Commission tried to cover a larger part, at least for the regional data, by addressing the national associations of these two types of banks in addition. The coverage rate for Germany with respect to regional data on the number current accounts77 finally turned out to be very high compared to the other German indicators but also compared to the other countries with respect to regional data.

Figures 11 and 12 present C3 and CR5 measures at country levels which are based on the sums of number of current accounts in all regions of a country and put in relation to the number of current accounts per country according to the ECB Blue Book:

Figure 11: The leading 3 banks per country (measured on the basis of number of current accounts as a sum of all regions per country)78

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In Lithuania and Slovenia the number of current accounts given by our sample banks was higher than the ECB figures of the countries, and the CRs > 100%; for the purpose of this illustration, they were therefore set at 100%. Luxemburg, Cyprus, Malta and Estonia have been excluded.

Figure 12: The leading 5 banks per country (measured on the basis of number of current accounts as a sum of all regions per country)79

Figures 13 and 14 present C3 and CR5 at regional (NUTS2) level. They are based on the same data source, i.e. the number of current accounts per region, and put in relation to the number of current accounts per country according to the ECB Blue Book80:

Figure 13: The leading 3 banks per country region (NUTS2 level) on the basis of number of current accounts81

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As explained further above, to achieve a total volume per region, the average number of current accounts per capita of a given country was multiplied by the population number of each NUTS2 region of that country.

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In Lithuania and Slovenia the number of current accounts given by our sample banks was higher than the ECB figures of the countries, and the CRs > 100%; for the purpose of this illustration, they were therefore set at 100%. Luxemburg, Cyprus, Malta and Estonia have been excluded.

Figure 14: The leading 5 banks per country region (NUTS2 level) on the basis of

number of current accounts:82

These figures show that the picture can change when looking at regional levels. The difference is particularly striking in Germany. Concentration is extremely low at the national level due to the existence of the more than 2000 legally independent Sparkassen and Volksbanken.

In the last two figures those regions with the same ‘concentration ratio’ are highlighted in the same colour (therefore, regions sometimes appear larger than the defined NUTS2 area) though they were analysed separately and consequently count separately. Moreover, in each German NUTS2 region there may be more than one Sparkasse or Volksbank. However, for

figures and, therefore, is ‘translated’ in the NUTS2 regions though they are generally larger than the reserved territories for these banks.

The illustrations clearly demonstrate one phenomenon: the analysis of national market structures may lead to wrong conclusions for certain countries. Whereas in countries such as Belgium or the Netherlands regional and national market structures do not seem to differ dramatically, this is clearly the case in Germany which shows a high degree of regional concentration despite a totally fragmented national ‘market’. This can be explained by the fact that retail banking in Germany to a large extent is the business of savings banks (Sparkassen) and co-operative banks which are legally independent but act as a kind of ‘co- operative group’ regarding certain aspects (label and brand name, clearing system) and have reserved territories according to the so-called regional principle which is – in the case of the savings banks - also fixed in the state laws concerning the Sparkassen.

Conclusions

Though we can only present rough pictures due to the described method limitations, the results of our different measurements all point all in the same directions. In conclusion, the average CR3 across all EU25 countries is around 50% with larger average concentration ratios in the New Member States than in the EU15. The countries with the highest national concentration ratio include the Netherlands, Belgium, Sweden, Lithuania and, to a somewhat lesser extent, Finland. The least concentrated countries seem to be Italy, Spain and, in particular, Germany.

In view of the still given importance of local branch networks, national markets may, however, be too large for analysing competition on main retail banking products. The Commission, therefore, also looked into regions and found, at least in some Member States and predominantly in Germany, much higher regional concentration ratios than the national figures suggest.