While the wealth of affluent Germans is surging, traditional private banks are falling behind. Their dependence on interest income is increasingly clashing with a savings culture that discourages investing.
Assets under management at traditional German private banks grew by around 3 percent per year over the past five years, according to calculations by Zeb in its Private Banking Study Germany 2025, published in December and based on a sample of 13 German institutions. In recent years, bank revenues were driven mainly by interest income from deposits. The strategy and management consultancy warns that this engine is losing power as interest rates normalize.
Meanwhile, the richest Germans are getting richer at an accelerating pace. Households classified by wealth into the private banking and wealth management segments held a combined €6.5 trillion in assets at the end of 2024. This represents year-on-year growth of 8.6 percent.
Although these two client segments together account for less than 2 percent of all private households in Germany, Zeb describes this “seemingly small slice of the pie” as “highly promising” for banks. The number of private banking and wealth management households increased by 11 percent in 2024 compared with the previous year, while the affluent banking and retail banking segments stagnated.
That growth is attracting competition. Zeb points to a “highly competitive market” focused on top-level wealth management and high net worth individuals (HNWIs). Foreign banks, and increasingly large banks, are targeting these segments. Regional banks are also setting up private banking as a separate business line and rolling it out across their regions. They mainly serve the lower and mid-range private banking segment and benefit from long-standing client relationships in their corporate and retail banking franchises.
Savings
Zeb’s report does not state where the wealth that affluent Germans do have—but that is not managed by private banks—is actually held. What is known is that German households keep a large share of their wealth in savings and bank deposits, which explains why the business model of German banks has remained so heavily dependent on interest income.
According to Reuters, German households hold an average of more than 40 percent of their wealth in cash or bank deposits. Only 14 percent of assets are invested, the news agency reported in December. The average European household invests nearly 37 percent of its wealth in equities and investment funds, according to Eurostat figures published in October.
In a background interview with Investment Officer in the fall of 2025, Amundi Germany CEO Christian Pellis described how deeply rooted the savings culture is in Germany, and why the step from saving to investing is anything but self-evident. One reason, he said, is that Germany is one of the few European countries that still offers no fiscal incentive to invest for retirement.
People are certainly thinking about their retirement, Pellis emphasized, but they save for it rather than invest, despite the fact that investing would be better for their pensions in the long term. It would also be better for the German economy, Pellis said, pointing to the €500 billion investment program presented by the government in 2025, which is to be financed partly through borrowing. “That requires private capital, so people need to put their money to work instead of leaving it in savings accounts. At the same time, the first pillar—the state pension system—has to be subsidized by much more than €100 billion from the federal budget every year.”
The German government will have to address the pension problem, Pellis concluded, and decide what it wants to do with the second and third pillars. “My conviction is that it has to remain simple. People need to be able to understand it. And there has to be a tax incentive, because that works. You see it in France, where it is fiscally attractive. The same applies to the United Kingdom and the Netherlands. If Germany does the same, it will encourage more people not only to save, but also to invest.”
A shift toward investing would ultimately also benefit the asset management sector, Pellis added, as well as banks, which would be sought for advice. “Some will go to digital banks and do everything themselves, others will be influenced by influencers or look for information online. Still others want personal advice from a bank advisor. That is the growth scenario for both asset managers and banks in the coming years. Pensions are, in my view, the biggest societal issue for the next two generations.”