Oliver Fern: The regional primary bank – A strong, reliable partner for medium-sized companies in Saxony


Medium-sized companies specifically want a primary bank that offers not only financial solutions but also products and services related to strategic issues – from financing structure and international business to company succession.

Saxony’s economy has been growing steadily and sustainably for years now. The reasons for this are manifold. For one, the state possessed a strong economy even before reunification, with the business centres of Chemnitz, Dresden and Leipzig. This provided the basis for post-reunification development, and the boom was able to begin. The economic policy of Saxony’s government played a crucial role in paying the way for this success, especially in creating supportive conditions for medium-sized companies. Today, the automobile industry as well as systems and mech­anical engineering are shaping the state’s economy.

An important aspect of Saxony’s strong economy is its structure, which is strongly influenced by me­­dium-sized companies. It is characterised by many small and medium-sized companies, a large number of which offer cutting-edge technology at a world market level in their niches, particularly in the me­­ch­anical and systems engineering and electronics sectors, making them highly efficient and successful. Just in the last few years, where the economy has un­­dergone intense fluctuation, companies in Sax­­ony, new­­ly formed as well as long-established firms, have shown themselves to be flex­ible, fast and efficient in coping with economic developments.

To grow sustainably and be able to be proactive against competition, companies require capable, local financial institutions. Medium-sized companies want and need comprehensive support with financial and strategic issues. This is where local and regional banks – which have often built up a relationship with the companies for years in their function as a primary bank – are in demand and needed.

The first core function of the banks is to provide financial support to companies. The requirements and options for medium-sized companies in partic­­u­­lar, however, vary widely. In addition to classic corporate loans, companies are increasingly ex­­pecting alternative, individual financing solutions from their primary bank. The pure financing costs are not decisive, but rather the highest amount of flexibility possible, for example. Moreover, the events of the recent past have sensitised customers once more to the topic of financing security. Syndicated loans can be a fitting option for high credit volumes, while the inclusion of subsidies, such as for investments towards innovation development or energy conservation, can certainly be lucrative for some companies. Topics such as the management of interest, currency and raw materials play an increasingly import­ant role in financing security for companies in Saxony.


Companies increasingly expect support in optimising their financing structure in addition to the pure procurement of funds. Banks can deliver significant added value from a single source with a combination of credit and capital market financing. The classic tool of the borrowed capital market is still the bond. A bonded loan can be an attractive alternative for larger medium-sized companies with a good credit rating who want to procure money on the capital market.

Companies want a primary bank that not only supports them in raising resources but also accompanies them as a strategic partner with a long-term approach – with an excellent range of products and comprehensive consulting expertise. The subject areas here are extensive. A central aspect in the face of increasing globalisation is expansion abroad. Many medium-­sized companies in Saxony have potential here – and good opportunities for growth. Companies that wish to expand their international business not only require comprehensive support “at home”, but also want their partners at their side abroad. The primary bank needs to supply suitable products here, for example for export financing. Additionally, a solid network and lo­cal market expertise is in demand in order to support a company’s entry onto the market or for help with legal and bureaucratic requirements. That applies to neighbouring economic regions but especially for new growth regions in Latin America or Asia.

Last but not least, the topic of succession plans has in­­creasingly come into focus for many eastern German companies. More than 25 years since reunification, many companies are facing a generational change – or the fundamental question: what will happen to the company? Many businessmen will use succession plans to pave the way for the future, or even design an entirely new one. The issue here is often fiscal as well as strategic consulting.

No matter which of the topics mentioned above is relevant, ideally, the primary bank is reliable and supportive in all of these aspects – with specialist expertise, knowledge of the market and a suitable range of products. LBBW Sachsen Bank, the customer bank of Landes­bank acting in central Germany Baden-Württemberg (LBBW), has established itself as one of the leading financiers of the region and combines local presence and experience with the extensive range of products, know-how and international network of the LBBW Group.

In summary: as a business location, Saxony has developed solidly and, with its structure characterised by medium-sized companies, is well set for the future. High-performing banks need to play their part in supporting the regional economy in a comprehensive and collaborative way, with individual financing op­tions, products and consulting services – to further drive the engine of development that is Saxony and thus sustainably increase the economic strength of eastern Germany.

Oliver-FernOliver Fern
The author studied at the Bankakademie Cologne and at Ashridge Management College, London. From 1990 to 1998, he worked for Deutsche Bank in Bonn and Brussels. In the following years, he worked as a Corporate Customer Advisor and later as a Team Leader for Deutsche Bank AG in Frankfurt. Fern became a member of the management of Bayern Nord in 2011, before he was appointed to the Executive Board of Sachsen Bank in Leipzig in 2014.