Bank Branch Closures in Germany: What It Means for Expats

Introduction

Germany has long had one of the densest banking networks in Europe, built around local savings banks (Sparkassen) and cooperative banks (Volksbanken). But that network is shrinking. Branch closures have accelerated in recent years, and the trend is continuing into 2025. For expats, this is not just background economic news — it touches practical daily life: where you open your first account after Anmeldung, how you receive your salary, whether you can get a loan, and how you resolve banking issues that still require face-to-face contact in Germany.

Why Banks Are Closing Branches

The main drivers are well-documented: rising operating costs, falling foot traffic as more customers move online, and pressure on profit margins after years of low interest rates. Smaller regional banks in particular have struggled to justify maintaining physical locations in every town. Mergers between local Sparkassen and Volksbanken have also led to consolidation, with duplicate branches being closed.

For customers in rural areas, this can mean the nearest branch is now a 30- or 40-minute drive away. ATMs are also disappearing alongside branches, making cash access more difficult in some regions.

Impact on Expats and Newcomers

For expats — especially recent arrivals — a physical bank branch still matters more than it might in other countries. Germany's banking culture has traditionally been more in-person and document-heavy than many other European nations. Opening an account, resolving an identity verification issue, or applying for a loan often still requires visiting a branch or at least posting certified documents.

If your local branch closes, you may need to:

• Travel further for in-person services
• Shift entirely to online banking, which can have different identity verification requirements
• Deal with a different customer service team that is less familiar with your account history

For newcomers who have not yet built a credit history in Germany (Schufa score), local banks were sometimes more flexible in offering accounts or small loans based on a personal relationship. That advantage disappears when the branch closes.

Impact on Small Business Owners and the Mittelstand

For expats who run their own business or are self-employed (Selbstständige), the closures carry additional weight. Germany's Mittelstand — its backbone of small and medium-sized companies — has historically relied on regional banks for business accounts, credit lines, and investment financing. Local bank managers who understood the local economy and knew their business customers personally were a real asset.

As those relationships disappear, business owners may find themselves dealing with centralised credit departments at larger banks that apply more standardised — and often stricter — lending criteria. This can slow down investment decisions and make financing harder to access, particularly for newer businesses without a long track record.

What Larger Banks Offer Instead

The flip side is that larger banks and online banks (N26, DKB, ING, Comdirect) often offer more competitive products, lower fees, and better digital tools. For expats comfortable with digital banking, these can be excellent alternatives — and some, like N26, were specifically designed with international customers in mind, offering English-language interfaces and simplified account opening.

However, larger banks may offer less flexibility for edge cases: unusual income situations, international payslips, or accounts for newly arrived foreigners without a long German address history.

Frequently Asked Questions

My local bank branch is closing — what should I do?

First, check whether your bank is merging with another local branch or transferring your account to a different location. Your bank is legally required to notify you of any changes to your account terms or service access. If the new setup does not work for you, compare online banks — many now offer fully digital account opening with video identification (VideoIdent), which does not require a branch visit at all.

Can I still open a bank account in Germany without visiting a branch?

Yes. Several banks in Germany allow you to open an account entirely online using VideoIdent or PostIdent (identity verification via a post office). N26, DKB, and ING are popular options among expats. Some still prefer a traditional Sparkasse or Volksbank because they accept a broader range of documents for newcomers, but branch dependency for the opening process is no longer necessary at most major banks.

Does a bank closure affect my credit score (Schufa)?

No. Your Schufa data is held by Schufa Holding AG, not by your individual bank. Closing an account or switching banks does not directly damage your Schufa score, though opening many new accounts in a short period can have a minor negative effect. Check your free annual Schufa report at schufa.de to monitor your record.

Conclusion and Next Steps

Germany's banking landscape is changing, and expats need to adapt. If your local branch is closing, use it as an opportunity to review whether your current bank still meets your needs. Compare digital alternatives, check whether your employer's salary payment requirements are compatible with an online bank, and make sure you have a working debit card and online banking access before any transition happens.

If you are self-employed or run a business, speak to your bank's business team proactively about how the changes will affect your credit relationship — do not wait until you need financing urgently.

Source: Tagesschau (Johannes Lenz)