OLB sharpens profile

Oldenburg | 22. October 2021

• Higher pace in the transformation process
• Job cuts agreed with boards
• Significant strengthening of future viability

Oldenburgische Landesbank AG (OLB) is working intensively on its future strategic orientation. Following the mergers with Bremer Kreditbank AG, Bankhaus Neelmeyer AG and Wüstenrot Bank AG Pfandbriefbank, OLB has repositioned itself in recent years as a bank active on the market throughout Germany. OLB offers its approximately 700,000 private and corporate clients competent personal advice through all channels and modern digital services. The Bank has been successful in its customer business with this diversified multi-channel approach, most recently reporting a 14 per cent year-on-year increase in its operating result of Euro 81.1 million and a 23 per cent year-on-year improvement in profit before taxes of Euro 69.1 million for the first six months of 2021. "Our transformation is progressing well. However, we are not yet exploiting the full potential of our bank. We are therefore building on our strong foundation, streamlining structures and sharpening our business model", says Stefan Barth, Chief Executive Officer of OLB. In its further development, OLB is now picking up speed significantly and will also make necessary job cuts in this context.

Advice as the core of the customer business - services more via digital channels

Private clients, with their large number, continue to form the foundation of OLB. For advising, the Bank has bundled its expertise primarily in regional competence centers. In addition to the personal advisors, most of whom have been known to the clients for a long time, specialists are also available for complex topics such as investments, securities business, private construction financing and real estate as well as old-age provision and insurance. Clients can make use of the advisory services by appointment 45 hours a week on site in a competence center or in a larger branch and also by telephone or video chat. In the course of the bundled expertise in the area and numerous alternatives in cash supply, especially through the flexible use of the ec-card (Debit Mastercard), OLB is streamlining its network of locations and will close around two dozen locations (branches and, in particular, self-service points) by the end of 2021, as announced.

In the area of Corporates and SME, OLB will provide a much more differentiated service based on specific needs. Individual, personal support will continue to be provided for all companies where complex advisory topics are involved and the offer is profitable for the Bank. For these advisory services, OLB is also increasing the exchange via telephone and video chat. In addition, services for corporate and business clients will in future be implemented more strongly via digital channels, as is already the case in the private client business. Furthermore, OLB plans to modernize its product range in the Corporates and SME segment. Simplified and fast processes will also ensure a higher speed of response to customers and an overall improved customer experience.

Reduction of around 250 employee capacities by the end of the year

The digitalization of processes and offers in the customer business as well as in central divisions with the resulting adjustments in the Bank's organizational structure lead to the necessity of a timely reduction in the number of employees. As the Board of Managing Directors and the Central Works Council have now agreed, the number of jobs at OLB will be reduced by about 250 employee capacities (= full-time equivalents) by the end of the current year. Measured in terms of the number of current full-time positions, this reduction corresponds to an order of magnitude of around 15 percent, which is going to be realized in a socially acceptable manner primarily through a so-called volunteer program.

Improving efficiency and profitability strengthens future viability

The financial industry is facing major challenges. In view of this, analysts agree: a private bank can only maintain its independence in the long run if it achieves high profitability and economic efficiency. In these factors, German banks are clearly behind the competition, as international studies show. OLB's goal is to play an active role in the wave of consolidation and to maintain its independence. This requires in particular an increase in the return on equity from the most recent 7.6 per cent as at 30 June 2021 to a target corridor larger than 12 per cent, and a reduction in the cost-income ratio from 65 per cent to a range below 50 per cent. Stefan Barth points out: "We are adjusting our range of products and services where necessary and focusing even more strongly on the customer business. At the same time, we are improving our cost structure. After all, a high level of profitability at OLB is not only important for the shareholders in the long term, but first and foremost important for our customers, our employees and the company itself, since it will noticeably strengthen our future viability.”