... banks still dominate the German banking sector's imbalanced profit generation. With EUR30bn profit, 0.45% return on assets (ROA) and 8.1% return on equity (ROE; all pre-tax) in 2014, German banks' overall performance remains reasonable and small losses are limited to a few banks. However, most universal and wholesale banks are unable to earn their cost of capital as they emerge from years of forced downsizing. Major changes seem unlikely in 2015, but profits should further gradually shift from retail to universal banks in the longer term. Few Loss-Making Banks: Some 95% of the banking sector (based on total assets) was profitable in 2014. Years of downsizing by the weakest wholesale banks have increasingly diluted the impact of their low performance on the sector and only a couple of mid-sized public- sector lenders with challenged business models remain loss-making on a recurring basis. Retail Banks Dominate: Retail-focused banks have generated...
