Since November 2024, it has been decided that Jörg Münning will hand over the leadership of LBS Nordwest to management board member Frank Demmer at the end of September 2025. Münning will retire after 45 years in the Sparkassen organisation. The nearly 65-year-old East Frisian – who began his career in 1980 with a banking apprenticeship at Sparkasse Bremen – will be succeeded as chairman of the Bausparkassenkonferenz by Stefan Siebert, CEO of LBS Süd. Münning served on the management board of Kreissparkasse Steinfurt before moving in 2012 to the former LBS West, joining the camp of the public-sector Bausparkassen. Two years later, the business graduate became CEO of the institution, which in 2023 merged with LBS Nord to form LBS Nordwest. Münning became the federal spokesman for the LBS group in early 2018 and was re-elected twice. He has already received a formal send-off within the Sparkassen family. Even shortly before handing over his duties, however, the Werder Bremen fan continues to advocate for the interests of the Bausparkassen in talks with the financial supervisor.

There had already been consolidation within the group of Landesbausparkassen. I recall the takeover of LBS Bremen by LBS West in 2014, and the 2016 merger of LBS Baden-Württemberg with LBS Rhineland-Palatinate to form LBS Südwest. Decisions on the mergers agreed in 2023 – between LBS Bayern and LBS Südwest, LBS West and LBS Nord, and LBS Ost and LBS Schleswig-Holstein-Hamburg – are made by the respective owners. But advancing consolidation and creating the necessary conditions was certainly part of my agenda as chairman of the LBS Bausparkassen Conference.

Yes. Even while serving as a Sparkasse board member before 2012, it seemed obvious to me that consolidation was needed. At that time, nearly a dozen Landesbausparkassen were operating with three different IT systems. So a major multi-year project was launched that led, by 2019, to all Landesbausparkassen in Germany using a single IT platform provided by our service partner Finanz Informatik. I strongly supported this standardisation because it enabled cost savings across the savings bank sector.

Around 100 million euros. We made that investment despite earnings pressure during the low-interest phase. It wasn’t pleasant, but it was the right decision.

Yes, that’s fair to say. As the merged former LBS West and LBS Nord, we paid almost 130 million euros into the protection fund over more than a decade. It was never drawn upon. At the instruction of the banking supervisor, however, a successor fund has now been established that we, as specialised institutions with a low-risk business model, must also start funding from 2025.

Those circumstances certainly made it easier for the LBS owners to reach agreement.

I won’t rule it out, but, as I said, the decision rests with the respective owners. At present I am not aware of any merger talks. In fact, we would be more likely to be penalised if we merged further and our balance sheet grew larger.

My impression is that there is currently little interest in taking on the additional burden of new mergers. That doesn’t mean mergers of Landesbausparkassen won’t make sense in the future. But the number of LBS in Germany has already halved to five over the past ten years. Mergers also need time to be digested, and there are other forms of cooperation.

Further mergers among the Landesbausparkassen will certainly not be high on the agenda. What matters most for our group is cooperation with the Sparkassen and participation in joint projects. Our strengthened position within the Sparkassen organisation – as a full member of the executive board of the German Savings Banks Association (DSGV) – is helpful in this regard.

Regulatory requirements have increased significantly even for a Landesbausparkasse like LBS Nordwest, which has a balance sheet of less than 30 billion euros. Nationally, we are classified as a potentially system-relevant institution solely because of our size, and at the European level as a so-called High-Impact Less Significant Institution. As a result, the national supervisor must report to the ECB several times a year, even though we are not under the ECB’s direct supervision.

We hold supervisory meetings twice a year and must calculate a wide range of scenarios. Some of the parameters, however, do not fit the Bauspar business model, which has been governed for more than 50 years by Germany’s Bausparkassen Act. Together with the private Bausparkassen, we are working with the ECB and national supervisors to develop parameters that reflect the specific characteristics of Germany’s Bausparkassen as specialised credit institutions. This remains an important task for the chair of the LBS Bausparkassen Conference. The next stress test is scheduled for spring 2026. We want to resolve the conflict over whether European or national law should apply.

We explain the distinctive features of the Bausparkassen business model and emphasise that applicable national law must be taken into account. We would like to resolve the question of whether European or national law takes precedence.

We talk to the ECB about the specific requirements of Bausparkassen. From our perspective, rules designed for the entire European banking sector cannot simply be applied to the small number of Bausparkassen operating solely at the national level as specialised credit institutions. The Bundesbank has established a dedicated competence center for supervising Bausparkassen in Germany, which I very much welcome. The ECB is now developing special expertise for two institutions in Germany, although it would be more sensible to leave oversight of the Bausparkassen sector to institutions that have long been familiar with its characteristics. Nevertheless, the ECB exerts influence on other institutions through requirements that are not appropriate.

Applying the 30 billion euros balance-sheet threshold to Bausparkassen with their low-risk business model is questionable. LBS Nordwest was formed from the merger of LBS West and LBS Nord and has a balance sheet of about 22 billion euros. We are certainly no longer small, but we still operate only in four federal states. The predecessor institutions’ business models were low risk, and the merger did not increase those risks.

Exactly. The requirements must appropriately reflect low-risk business models. Supervisory rules must be based on risk, not merely on size.

In my view, yes. Let me give another reason: in many industries, including banking, we talk about cutting red tape, yet in supervision we are seeing the exact opposite. The workload keeps growing. Do regulators gain more insight when we now hold several supervisory meetings a year and run over 200 stress scenarios? In July we submitted the annually updated recovery plan, subjecting ourselves to a simulated stress test using 20 parameters. We are allowed to use all the instruments available to us under national law. That report, nearly 500 pages long, underscores our solid business model.

That’s correct. For example, we cannot count on raising liquidity simply by selling securities.

You can assume that our positions as Landesbausparkassen are coordinated with the DSGV and that both BaFin and the Bundesbank are informed.

It would already be progress if European requirements for Bausparkassen did not conflict with national law. Working toward that remains an important task – not only for the chair of the LBS Bausparkassen Conference.

I understand that concern. But can Bausparkassen, with their business model, cause systemic instability? I am firmly convinced they cannot. On the contrary, we have proven to be stable in crises – whether during the long period of low and negative interest rates or through the recent surge in rates.

I stress again: size is not the decisive yardstick given the special nature of Bausparkassen. The business risks do not increase because of a merger. The Bausparkassen model has proved itself for over 100 years. Savings are accumulated, loans are granted collectively, and management continues to steer using established valuation ratios. Interest-rate management remains the responsibility of management. There have been no crises among Bausparkassen.

That’s correct. The rating stemmed partly from our merger and the related costs, and partly from interest-rate developments and securities valuations. Bausparkassen follow a buy-and-hold strategy for investments. We do not trade securities – nor are we allowed to. We buy securities and hold them for a longer period. Interim price fluctuations are essentially irrelevant. But an ECB metric tied to reserves requires us to value holdings with all markdowns. Had we sold, we would have had to book losses, which we avoided. Since 2025 we have been back in green status.

Yes, and we have other means of obtaining liquidity. Customers can terminate contracts, but funds are paid out only after six months – that’s the rule. Regarding business development, we are satisfied with last year’s performance despite the merger backdrop. We expect a significantly lower risk result this year, helped by the closure of a special fund, realization of low single-digit millions in hidden losses, and other liquidity measures. Pretax profit will likely slightly exceed last year’s 47 million euros – though that included a 24 million euros one-off that doubled operating profit. We also expect a slight increase in our core capital ratio.

During the merger we took the first technical opportunity to harmonise the tariff models of the two predecessor institutions. That was important for integration. In hindsight, given interest-rate developments, it would have been better to introduce the new Bauspar tariffs a few months later. But we had to register the tariff nearly a year in advance – late summer 2023 for June 2024 – so we couldn’t foresee rate movements. Deposit rates, which have again become more important than lending rates, must and will become more attractive. In collective lending – that is, pure financing – we are ahead of plan and expect around 900 million euros in 2025, roughly 150 million euros above target. Encouragingly, non-collective business is performing well above plan, confirming we are on the right track.

Less from new business and more from the interest income generated when customers later draw their loans.

There is still room for improvement. The merger is therefore not yet fully complete, even though we have made great progress integrating. Our motto was „function before optimize“. Looking ahead, we can work even more closely with the roughly 110 Sparkassen in our region. First we harmonized sales systems, now we must optimize them.

Yes. We continue to aim for at least 10 billion euros in realized new Bauspar business, 750 million euros in non-collective lending, pretax profit of 160–170 million euros, and a net profit of 100 million euros. Last year’s net profit was 29 million euros, which was boosted by special effects.

No change expected. Otherwise I’d have had to play the „bad guy“ myself before leaving (laughs).

Planning isn’t finished, but some adjustments will certainly come. Much is already set. We want to work even more closely with the Sparkassen, particularly in sales, and we see scope to engage more with specific target groups such as housing companies or in municipal lending.

That’s true. The financial situation of many municipalities is precarious. Relief – whether through federal special funds or regulatory easing – is crucial to boost housing construction, enable affordable living, and make homeownership easier. Owner-occupied housing remains the most popular form of retirement provision.

The situation is serious. Affordable housing, especially in metropolitan areas, is essential for social cohesion. Owner-occupied housing is important because studies show that when people move into their own homes, rental units often become available. At the moment it is not clear to me whether the government is acting decisively enough. Political new-build targets have been repeatedly missed for decades. Germany’s homeownership rate remains the lowest in the EU – only Switzerland is lower. The reasons have not changed: ancillary construction costs and regulatory requirements demand too much capital. In my view, homeownership as a form of retirement savings needs stronger support. This appeal is not new – but it must finally be implemented.