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23 April 2024

The world’s smallest bank – run by just one man

Peter Breiter, CEO of Raiffeisen Gammesfeld eG bank, is seen through a window as he speaks to a customer at the bank in Gammesfeld, Baden-Wuerttemberg January 29, 2013. The Raiffeisen Gammesfeld eG cooperative bank is one of the country's smallest banks and is the only one to be run by just one member of staff. All banking duties are done by CEO Peter Breiter who records the daily business by hand, partly on paper. The bank is not connected to a database system, there are no automatic teller machines (ATMs) and its customer base consists only of residents of the town of Gammesfeld which has a population of around 510. (REUTERS)

By Reuters

Peter Breiter, 41, is an unusual banker. Not for him the big bonuses, complicated financial instruments and multi-million deals.

 He is happy instead writing transaction slips out by hand for the 500 inhabitants of the tiny southern German village of Gammesfeld.

 "Why would I use a cash machine?" said Friedrich Feldmann, a customer sitting in the bank's small waiting room on his once-weekly visit to withdraw cash. "They cost money anyway."

 The Raiffeisen Gammesfeld eG cooperative bank in southern Germany is one of the country's 10 smallest banks by deposits and is the only one to be run by just one member of staff.

 Small banks like this dominate the German banking landscape. Rooted in communities, they offer a limited range of accounts and loans to personal and local business customers.

 While numbers have shrunk from around 7,000 in the 1970s to around 1,100 now, cooperative banks like Raiffeisen Gammesfeld provide competition for Germany's two largest banks - Deutsche Bank and Commerzbank.

 A typical day's work for Breiter involves providing villagers with cash for their day-to-day needs and arranging small loans for local businesses. Not to mention cleaning the one-story building that houses the bank, which is 200 metres from his own front door.

 Moving from a bigger bank, where it was all "sell, sell, sell", Gammesfeld-born Breiter says taking up this job in 2008 was the best decision he ever made.

 The advertisement required someone to work by hand, without computers. The typewriter and the adding machine bear the signs of constant use, although Breiter, in his standard work outfit of jeans and jumper, does now have a computer.

 "It's so much fun," Breiter, a keen mathematician, says as he deals with a steady stream of lunchtime customers. He knows his customers by name and regularly offers advice on jobs, relationship and money woes.

 "People said I would get bored, but I'm not," he said.

 Breiter doesn't even mind that he gets barely any holiday each year, saying he is happy to settle for weekends skiing in the mountains nearby. "My hobby is my job. What could be finer?"

 The cooperatives' existence is entwined closely with that of the Mittelstand, Germany's medium-sized and often family-run firms responsible for much of its export success.

 "The Mittelstand is the lifeblood of Germany, and these are often our customers," Steffen Steudel, a spokesman for the BVR cooperative banking group association told Reuters.

 Mittelstand customers served by Gammesfeld include farmers, a maker of solar panels with around 100 employees, and a window firm, which supplied the windows for the bank.


 While many cooperative banks took a hit from the financial crisis, they fared better than some banks because they had mostly not tried to expand too quickly or take on too much risk-laden business.

 The shock of seeing big banks go bust has also sparked renewed interest in the cooperatives, seen as steady and reliable, according to the BVR.

 "Just as consumers want to know where their food is coming from, they also want to see what the bank is doing with their money," Steudel said.

 Raiffeisen Gammesfeld restricts its business to traditional retail banking - no credit cards, shares, funds or even online banking. Annual profits are stable at around 40,000 euros and the biggest loan it ever agreed was for 650,000 euros.

 Breiter said the financial crisis prompted interest in his bank from all over Germany: "One person rang up five times asking for a 4 million euro loan but I had to refuse because he wasn't from Gammesfeld!"

 Breiter also says people have called to ask how they too can recreate Gammesfeld in their own village, although he says that the model is impossible to start from scratch today because of the sums of money that would be needed.

 Breiter is also proud that Gammesfeld is there to serve the community and not just make profit. Each customer is offered the same interest rate, whether they earn 1,000 or 10,000 euros a month.

 Inge Dill, whose son went to school with Breiter, says the bank offers the best interest rates around. "Why would I go anywhere else?" 

 The bank, however, almost did not make it this far.

 Back in the 1980s, the bank's previous CEO, Fritz Vogt - whose grandfather founded the bank back in 1870 - had to go through the courts to ensure the bank kept its licence because it did not have a permanent second member of staff to act as a "second pair of eyes" to double-check transactions.

 Even now, 82-year old Vogt, whose house backs onto the bank, still pops in each week to help out and cast an eye over the books.

 Breiter says he too wants to stay working at the bank as long as possible. "Of course I have to be careful not to withdraw completely into my shell. There's a whole world outside Gammesfeld after all."