On Wednesday, Spain’s Santander (SAN.MC) announced its decision to exit the mortgage business in Germany, resulting in the termination of approximately 500 jobs by the end of 2026.
This strategic move is part of Santander’s initiative to focus on more profitable ventures, as conveyed by a spokesperson for the lender to Reuters. Germany has been grappling with its most severe real estate downturn in decades.
Following a period of robust growth, mortgage lending in Germany decelerated significantly due to a rapid increase in interest rates aimed at curbing inflation, causing prospective homebuyers to adopt a cautious approach. Recent data indicate a stabilization of the real estate market.
The reduction in staff, bringing the total to 3,600, will be distributed across all Santander Germany subsidiaries, including its consumer bank. However, this restructuring will not result in the closure of any of its 189 branches.
The spokesperson emphasized that Santander aims to achieve the necessary workforce reduction through natural attrition, voluntary departures, and early retirements, with all employees in Germany duly informed of the changes.
In parallel, Santander’s main competitor in Germany, Deutsche Bank (DBKGn.DE), has been rationalizing its mortgage operations, leading to a similar downsizing affecting hundreds of positions.
In Germany, Santander manages a mortgage loan book valued at approximately 2.5 billion euros ($2.66 billion).
Santander Consumer in Germany reported a 41% decline in net profit for the previous year, amounting to 264 million euros. Currently, its return on equity (ROE) stands at 7.8%, falling below the group’s ROE of 11.91%.
