Overdrafts, returned direct debits and repossessions – Volksbank Stuttgart is recording these early warning signs among its corporate clients with increasing frequency. In the view of CEO Stefan Zeidler, many companies are operating at the limit. The resilience of local firms' balance sheets, he says in an interview with Börsen-Zeitung, has so far prevented a wave of insolvencies. Equity ratios of between 25% and 40% demonstrate the resilience of the region’s Mittelstand-driven economy.

At the same time, however, many companies are living off their capital base. For 2025, Zeidler therefore expects insolvencies to rise by 10% to 15% year on year. That is „not dramatic, but not good either", he says. Beyond the uncertainty caused by global trade disputes and a shaky national economy, the region faces structural challenges from its heavy reliance on automotive suppliers. „Sentiment is poor“, he observes. The weak investment appetite of his corporate clients is, in his view, a clear indicator of the strained situation for the Mittelstand in and around Stuttgart.

However Zeidler insists that "there will be no industrial decline in the Stuttgart region like in Detroit, the former US auto capital“. He points to aerospace engineering as one potential growth area, arguing that companies already have significant expertise in this field. He envisages an „aerospace cluster“ that could be developed together with the University of Stuttgart. Its Institute of Space Systems is one of Germany’s leading research centres in the discipline.

The attraction, he says, is that embattled auto suppliers are capable of producing high-precision parts. „This can be a serious complement to the automotive sector with high value-added potential“, stresses Zeidler.

The cooperative banker also sees „mega opportunities“ for the Stuttgart region in mobility and digitalisation. Yet he does not hold back with criticism: for five to ten years, he argues, there has been no effective structural policy, leaving the region’s transport, energy and digital infrastructure in a run-down state. This, among other things, has increased the risk of a „Dunkelflaute“ – periods of low generation from solar and wind power.

It is now up to the federal government to create a „sense of a fresh start.“ Greater political reliability is required. Zeidler warns against allowing the 500 billion euros federal infrastructure fund to fizzle out in bureaucracy – or worse, to be channelled into consumption. „The real upturn will only come when we use the federal special funds to create incentives for private co-financing“, he argues.

In principle, Zeidler believes the Swabian Mittelstand is capable of adapting successfully to the energy transition. The same applies to large groups such as Mercedes-Benz, Porsche, Bosch and Mahle. Stuttgart and its surrounding area, he states, remain „a great region“ with a high level of engineering expertise.

Still, despite the confidence he places in local industry, Zeidler predicts a longer lean spell. It will take time before the economy picks up again. „We will face difficulties throughout this decade – at least for the next two to three years“, he estimates.

The business of Volksbank Stuttgart – which ranked 23rd among German cooperative banks at year-end 2024 with total assets of 8.8 billion euros – is developing cautiously. Zeidler sees the main problem areas in commercial property and in manufacturing. But overall, balance-sheet risks remain contained.

According to Zeidler, Volksbank Stuttgart has been working for five years to transform its business model for the digital age. To streamline operations and eliminate bottlenecks, the bank is currently spending more than 1 million euros a year on automation – a figure set to rise. Larger investments in artificial intelligence applications are unlikely, in line with practice across the cooperative sector. Instead, the bank relies on services provided by group IT provider Atruvia and DZ Bank. „As a result, we will make significant progress in AI over the next five years“, predicts the banker.

Six years ago, Zeidler returned to his roots. The Stuttgart native began his career with Cannstatter Volksbank, one of the predecessor institutions of today’s Volksbank Stuttgart. After several career stops, he joined the management board of DZ Bank in 2013. Since taking over as chief executive officer of Volksbank Stuttgart in July 2019, Zeidler has positioned himself as a moderniser, driving forward the digital transformation of the institution.