Yesterday the Bundeskartellamt prohibited Haspa Finanzholding from acquiring a stake in the savings bank Kreissparkasse Herzogtum Lauenburg. In the Herzogtum Lauenburg district the planned acquisition would lead to the creation or strengthening of a dominant position in the regional markets for loans to small and medium-sized companies and private current accounts.

The President of the Bundeskartellamt, Andreas Mundt, stated: "Due to the special circumstances in the greater Hamburg area the concentration would lead to the elimination of an important provider of loans to the region's small and medium-sized businesses. Our investigations have shown that the majority of private customers are reluctant to dispense with their local banks, and that the provision of loans to smaller businesses also requires the local presence of a bank."

Haspa Finanzholding owns Hamburger Sparkasse and holds stakes in four other independent savings banks in Northern Germany. Haspa intends to acquire 25.1% of the savings bank's nominal capital stock. Under the German Act against Restraints of Competition (GWB) even such a minority stake clearly constitutes a concentration which must be examined under competition criteria.

In their respective core business areas the savings banks often have strong positions in the market for loans to small and medium-sized companies. The investigations of the Bundeskartellamt have confirmed that in most cases the provision of loans to small and medium-sized companies, which usually requires intensive advice and negotiations, is carried out by banks which have local branches in the respective areas. In the Herzogtum Lauenburg district, which is in the immediate vicinity of Hamburg, Hamburger Sparkasse is the second largest competitor after Kreissparkasse Lauenburg. All other competitors, including the Volksbanken Raiffeisenbanken group, which is highly fragmented in this region, have only achieved very small market shares. The participation of Haspa would eliminate the incentive for the two banks to compete for loan customers, and the market position of Kreissparkasse Lauenburg would be strengthened.

The project also affects the market for private customers' current accounts in the Herzogtum Lauenburg district. Kreissparkasse Lauenburg already has a strong position in this market due to the fact that it has an extensive network of branches and maintains the largest number of cash machines. Hamburger Sparkasse is the third largest provider in this market. As a result of the concentration Kreissparkasse Lauenburg would gain access to the products of Hamburger Sparkasse, for instance its "Joker" value added account model, which could help the bank to expand its customer base. Competition between two major providers would thus be substantially reduced in this area as well.

The decision is not yet final. The companies have a month to appeal the decision to the Düsseldorf Higher Regional Court.