Market Guide: Retail Investment Market in Germany 2006

EXECUTIVE SUMMARY - MARKET HIGHLIGHTS

Market overview

Market forecasts

Market regulation

Competitive market structure

Market leaders

INTRODUCTION

What is this report about?

Who is the target reader?

How to use this report

CHAPTER 1 MARKET OVERVIEW

Introduction

The retail market accounts for close to 60% of assets in deposits but less than 50% in all other asset classes

Close to 60% of all retail investments is held in deposits

Between 2003 and 2004, the composition of retail savings and investment portfolios was stable; however in 2005, deposits were substituted by mutual funds and equities

CHAPTER 2 MARKET FORECASTS

Introduction

Key findings

While deposits will continue to account for the majority of household wealth, the proportions held in mutual funds and equities will increase slightly

CHAPTER 3 MARKET REGULATION

Introduction

Key findings

The Central Bank and the Federal Financial Supervisory Authority regulate the German financial services industry

Banks must adapt their accounting systems to meet new standards re: consolidated financial statements

For banks and investment companies, Basel II capital adequacy requirements imply additional investment in risk management expertise and in IT systems to calculate risk

Banks enjoy flexibility in the implementation of new requirements for risk management

Investment companies and asset management companies face additional prospectus requirements

Asset management companies may establish unit classes within funds

Implementation of the EU Prospective Directive promotes competition across borders among asset management companies

Upcoming EU legislation (UCITS directive and MiFID) facilitates market development and enhances consumer protection

Proposed anti-money laundering legislation implies an additional administrative burden for banks

CHAPTER 4 COMPETITIVE MARKET STRUCTURE

Introduction

Key findings

The majority of banks in Germany are credit co-operatives

Banks distribute primarily through their branch networks, but telephone and Internet banking are available

The top five banks control 40% of the banking market, measured by total assets

The mutual funds industry is heavily concentrated - the top 5 companies control 79% of Assets under Management (AuM)

Over 78% of available mutual funds comprises securities funds

Competitors in securities trading include investment companies and other authorized institutions; outsourcing is a growing trend

CHAPTER 5 MARKET LEADERS

Introduction

Key findings

Deutsche Bank leads the banking and mutual funds sectors

The HVB Group trails the market leader in the banking sector; it has the fifth largest asset management company

Dresdner Bank ranks third among banks; the Allianz Dresdner Global Investors Group is fourth among asset managers

Commerzbank AG is the fourth highest ranked bank by total assets

Landesbank Baden-Wurttemberg rounds out the top 5 banks

Union Group has the second largest share of mutual funds, by AuM

Deka Group ranks third among asset managers

APPENDIX

Definitions

Asset manager / Asset management company

Bank

Collective Investment Scheme

Friendly society

Fund of funds

Hedge fund

Investment company

Non-retail market

Retail market

UCITS

Further reading

Savings and Investments SPP

Interactive Databases

Reports

Related Global Wealth Service SPP Reports

Interactive Databases

Market Reports

Strategic Insight Reports

Wealth Management Competitor Tracker

SPP writing team

List of Tables

Table 1: Total Savings & Investments segmented by retail v institutional, EURm, as at Dec 2005

Table 2: Total Savings & Investments segmented by retail v institutional, in percentages, as at Dec 2005

Table 3: Retail Savings & Investments, segmented by asset class, EURm, as at Dec 2005

Table 4: Retail Savings & Investments, segmented by asset class, EURm, 2001 - 2005

Table 5: Retail Savings & Investments, segmented by asset class, in percentages, 2001 - 2005

Table 6: Retail Savings & Investments, segmented by asset class, EURm, 2006 - 2010

Table 7: Retail Savings & Investments, segmented by asset class, in percentages, 2006 - 2010

Table 8: Number of banks segmented by type, as at Dec 2005

Table 9: Top 5 banks by total assets, as at Dec 2005

Table 10: Top 5 Asset management companies by assets under management (AuM), as at Dec 2005

Table 11: Number of mutual funds, segmented by type, as at Dec 2005

List of Figures

Figure 1: Deposits account for close to half of total savings and investments in Germany in 2005

Figure 2: Deposits represent 58% of household savings, while mutual funds account for just under one-quarter

Figure 3: Deposits consistently account for the single highest proportion of household assets, followed by mutual funds

Figure 4: Over the next 5 years, the proportion of household wealth held in mutual funds and equities will increase slightly, at the expense of deposits

Figure 5: The co-operative sector dominates the German banking industry, by number

Figure 6: The banking sector is dominated by the leading banks and savings bank

Figure 7: The DWS Group managed one-quarter of all mutual funds as at December 2005

Figure 8: As at December 2005, equity funds represented 36% of mutual funds, by number of funds