German cooperative banks expect 2025 profit drop as economy struggles

FRANKFURT (Reuters) -Germany's coopearative banks said on Wednesday they expect a decline in profit in 2025 after a 25% drop in 2024, as tariff uncertainty and a weak economy take their toll.

The drop would mark a second consecutive year of decline after record profit in 2023.

"The 2025 financial year will continue to be characterized by geopolitical tensions and a weak domestic economy," said Tanja Mueller-Ziegler, a board member of the National Association of German Cooperative Banks.

A sharp rise in risk provisions resulted in a decline in 2024 pre-tax profit to 10.8 billion euros ($12.55 billion), down from 14.4 billion euros in 2023.

Mueller-Ziegler said that earnings in 2025 would be "slightly lower" as she forecast Germany's economy would stagnate this year and grow only by 1% in 2026.

Cooperative banks are a pillar of the financial sector in Germany. The national association encompasses more than 650 lenders with 1.2 trillion euros in assets.

($1 = 0.8607 euros)

(Reporting by Tom Sims and Klaus Lauer, Editing by Rachel More)