How Hannover became the “Centre of Finance“
Seit bald 240 Jahren verleiht die hannoversche Börse der örtlichen Wirtschaft Flügel. Sparkasse und Volksbank stärkten bald den Finanzplatz. Wie sich alle Akteure bei rasanter und radikaler Globalisierung sowie Digitalisierung heute behaupten, ist spannend zu beobachten. Hohe Professionalität und Vernetzung sichern die Zukunft.
Hannover as a centre of finance goes back even further to 1785 when, just before the French revolution, merchants in Hannover had the idea of founding a stock exchange association with the aim of making entrepreneurial activity easier. Roughly speaking, it is about investing and lending money. The aim is to procure enough loans for companies on easy terms so that they can invest (and earn well). King George III was also a fan. He understood that a flourishing economy needs the fluidity of a regulated cash flow. In 1787, the King granted the association the status of an official institute, so that this is seen as the year of birth of Hannover Stock Exchange. In other words, it has now been in existence for 235 years. However, the first stock list was not issued until 1858.
Sparkasse has been around since 1823.
The second half of the 19th century is the era that has shaped Hannover as a financial centre right through to the present day. Stadtsparkasse Hannover was founded in 1823 as the “Savings and Lending Bank in the Royal City of Hannover”. It is thus one of the oldest institutes in the history of Germany’s savings banks. And it is still doing well today: it has about 1,700 employees, and in early 2003 it merged with the Kreissparkasse (district savings bank) to become Sparkasse Hannover. This made it the largest financial services provider in the region and one of the largest Sparkassen in Germany (in 6th place according to the balance sheet total in 2020).
The region’s other traditional bank is the Hannoversche Volksbank. It has around 1,000 employees, 77 branches, about 250,000 customers and 124,000 members.
The numbers show that this is a cooperative bank with many shareholders. Today it is still the oldest private sector bank in Hannover. To support agriculture, commerce and manufacturing in the former kingdom of Hannover, on 1 March 1860 the chairs of Hannover’s guilds founded the “Vorschuß-Vereins-Bank zu Hannover” (loan association bank) based in Scholvinstraße 17. It only recently merged with the Volksbanken in Barsinghausen and Neustadt, the Lindener Volksbank, the Volksbank Burgdorf-Celle, the Volksbank Garbsen and the Volksbank Hildesheimer Börde.
Highly professional risk mitigation
The stock exchange, the Sparkasse and the Volksbank are therefore the mainstays of the Region Hannover as a financial centre. In view of the rapid, radical transformation of the financial world particularly in the last two decades, the fact that these three institutions still exist is already indicative of their highly professional approach to business. The globalisation of trade and of the financial flows involved makes it simply indispensable for banks and stock exchanges to have robust, foresighted planning.
All aspects of life, work and business are being changed drastically, and not just by digitisation. Many customers do their banking online: they download their account data directly from the bank to their computers at home and no longer go into their local branch to get their statements out of the statement printer. But this example is just one tiny aspect of digitalisation. There is constant demand for products and services to be available everywhere, at all times and at the lowest possible price. “Fintechs” is an emotive word for long-established banks. Amalgamating financial services and technology, it describes young companies that use technology-based systems to offer specialised and particularly customer-oriented financial services. Young people who are confident with their smartphones take no more than five minutes to open an account, invest money, take out a loan and click quickly and easily through their transactions.
Fewer branches, but more intensive advice for customers
One consequence is that banks and other credit institutes in the Region Hannover are increasingly turning into technology companies because customers make ever increasing use of digital channels for their banking transactions. This in turn has another consequence: financial advice is no longer tied to the local branch of the bank but is offered on various channels. The branch network is shrinking. At least cash machines will remain a feature for as long as cash is important. This service is also expensive, but necessary particularly for older people and those who do not like to do online banking on the internet. Nevertheless, as the world of money grows more impenetrable, providing customers with advice gets more intensive and complex. To offer this service, the banks need employees with specialist knowledge and communication skills. There will be far less need in future for bank clerks and account managers. While advocating digitalisation, banks and savings banks now also offer special events in the interests of intensive customer loyalty. Furthermore, it is hard to find the funds for this balancing act in the light of shrinking revenues from money lending due to the low interest rates. Even so, both Sparkasse Hannover and Hannoversche Volksbank sponsor a whole number of non-profit projects and associations in the region, making donations to promote art and culture in the Region Hannover. In this way, the banks emphatically confirm their firm bond with the region and the people living here.
Hannover Centre of Finance founded already in 2008
The banking sector in the Region Hannover reacted some time ago to make sure it remains fit for the future. Here it is worth mentioning the Hannover Centre of Finance e. V. (HCF e. V.) as an example of the far-sighted approach taken by all financial experts in the region. Long before “Fintechs” started to mix up the world of money, the Hannover Centre of Finance was founded by the directors of five institutes belonging to the Faculty of Economics and Management at Leibniz University Hannover, together with committed companies from the financial sector and Lower Saxony’s finance industry. This was back in October 2008. Today, Sparkasse Hannover and Hannoversche Volksbank are also joined by Swiss Life GmbH, Pricewaterhouse-Coopers AG, Ernst & Young, Horbach Wirtschaftsberatung and Deloitte Consulting, together with MLP Finanzberatung, Deutsche Hypothekenbank, Deutsche Bundesbank and Nord/LB.
The aim is for a regional knowledge pool to enhance Hannover in its role as a financial centre, with networking opportunities for players from science, the authorities, the political sector and practitioners. The key buzzwords include lending, risk controlling, regulation, stock exchanges, the monetary system, international financial markets, banking information technology and statistics. It might sound abstract but it offers specific services. Regular events include the Hannover Finance Symposium (every November) and the Hannover Banking & Finance Colloquium (every six months). The financial world in the region is constantly involved in sharing, consulting and coordinating, not just for knowledge transfer: other established events also include job exchanges and career fairs. Clicking here can take you to the “women’s coffee chat”, for example. Like-minded people get together on line to talk to experts about how to start their careers. That’s a modern approach, and is highly effective.
From NORD/LB to NBank
While business for the auditing and accounting firms seemed to soar to new heights, the situation for the state bank NORD/LB based in Hannover Centre of Finance was somewhat different. As the state bank for Lower Saxony and Saxony-Anhalt, it supports the public sector with financial services and economic issues.
The core business units include corporate accounts, special funding for the energy and infrastructure sector and for aircraft, as well as funding commercial real estate. The failure of ship loans in particular caused problems for NORD/LB. Since 2022, the bank has been housed in modern headquarters on Aegidientorplatz in Hannover, designed in the shape of offset glass cuboids. The state of Lower Saxony has another instrument at its disposal: NBank is the investment and funding bank in Lower Saxony. All the state’s programmes for funding the economy and labour market are concentrated here.
It transpires that success on the markets of tomorrow will only come to those who developed the traditions and are already thinking of the future today. All the players involved in the financial centre Hannover took this on board long ago. But offering the local economy a sound financial basis means constantly solving the tasks in hand, pressing the right buttons and pulling the right strings.
Header picture: Saklakova/stockAdobe.com
