Acquisition of OLB by Targobank - Implications for banking clients' service and experience - Banking institution Targobank acquires OLB: Implications for customer services at both banks.
by Marieke Einbrodt* ⏱ - 4 Min Read
In a surprising twist, the Oldenburgische Landesbank (OLB), a bank from Northern Germany, has agreed to be taken over by Targobank, a subsidiary of the French cooperative banking group Crédit Mutuel. This deal, worth around 2 billion euros, marks a significant change for OLB customers.
Originally, OLB was set to go public in April, with CEO Stefan Barth declaring in February, "We are ready and willing to go public as a bank." However, unfavorable market conditions doomed this plan, leading to the scrapped IPO in 2022 and 2023.
What Can Customers Expect in the Short-Term?
As of now, it's unclear whether OLB will be fully integrated into Targobank or will continue to operate independently under Targo Germany. Isabelle Chevelard, Targobank CEO, stated, "The OLB is a strong brand established throughout Germany." Crédit Mutuel General Director Eric Petitgand, on the other hand, spoke of "integrating the OLB into the Targobank group."
With both banks possessing a combined balance sheet total of 79 billion euros and 4.8 million customers, the merger places them among the ten largest banking groups in Germany.
Will the Number of Branches Shrink?
Both parties have promised no immediate changes for private customers or business partners. Philipp Rehberg, a financial expert at the Lower Saxony Consumer Center, notes, "As a rule, internal processes become more cumbersome as a company becomes larger, making a branch reduction more likely than an expansion of the offer."
Could customers see fewer branches in the future? Possibly, as rationalization measures regarding personnel and branches are common after such acquisitions. The Hypovereinsbank's takeover by Unicredit serves as an example for potential changes.
Are Services and Fees Likely to Change?
Experience has shown that mergers often lead to reduced service offerings and aligning fees between banks. However, Christian Urban, head of the Finance and Insurance group at the Consumer Center North Rhine-Westphalia, cautions against speculating too much. "There is also a lot to be said for keeping both brands independent, as both banks serve different customer segments."
Customers should monitor the transition process closely, as banks have no obligation to inform customers about branch closures, disappearing ATMs, or self-service areas.
Is There a Need to Worry About Deposit Security?
Worried about your money's safety? Don't be. The deposit protection will continue to apply, even if OLB becomes a part of a French financial institution. Per bank and customer, 100,000 euros are insured via the statutory deposit protection. Furthermore, additional security systems of the banks protect higher amounts.
敏銛심의자: A $2 billion deal between Targobank and the Oldenburgische Landesbank (OLB) could bring changes to OLB customers. While the banks promise no immediate changes for private customers or business partners, potential rationalization measures regarding personnel and branches could reduce the number of physical branches in the future. Mergers often lead to service reductions and changes in fees, but keeping both brands independent might help maintain the status quo. Customers should closely monitor the transition process and be aware that banks are not obligated to inform them about branch closures, ATM removals, or self-service area eliminations. Deposit protection will remain intact, ensuring deposits up to 100,000 euros are secure.
- The community policy of Targobank and OLB might undergo changes as a result of their merger, considering the integration of OLB into Targobank's group.
- In light of the 2022 merger between Targobank and OLB, employment policies at both banks could potentially be adjusted to address the combined workforce.
- The migration of OLB customers to Targobank's services could prompt a review of their employment policies to ensure a smooth transition, especially for the banking sector in Germany.
