The CFS Index, which quarterly tracks the state of the German financial sector, fell by 1.9 points to 106.0 in the second quarter. Revenue and earnings growth stabilized at last year’s levels, while financial services providers reported significant declines. Positive signals were observed in workforce growth. Overall expectations for the current quarter remain mixed across the sector.
“Clearly, the financial industry is taking a wait-and-see approach to the ‘autumn of reforms’; however, it is already strengthening its workforce to respond flexibly to upcoming challenges,” commented Prof. Dr. Rainer Klump, Director of the Center for Financial Studies, on the results.
The assessment of Germany’s future international significance as a financial center declined in Q2 2025. With a decrease of 6.0 points, the current index stands at 98.7. While the sector’s outlook remains better than a year ago, it is notably below last quarter’s level. Both financial institutions and their service providers view the situation as deteriorating, with sentiment among banks dropping more sharply (-8.4 points) than among service providers (-4.0 points).
“The assessment of market participants aligns with the development of the Global Financial Centers Index (GFCI). Frankfurt was confirmed as the leading financial center in the EU but slipped one position, now ranking behind Dubai. The challenging geopolitical environment and uncertainty about the scope and nature of national reforms weigh on sentiment. Yet, positive developments are on the horizon. The scale of investments and reforms alone will give the financial center a boost. Furthermore, policymakers, regulators, and the financial industry are working together to strengthen competitiveness. The Financial Center Cabinet established by the Hessian state government has paved the way in this regard,” explained Oliver Behrens, President of Frankfurt Main Finance.
Sales growth at previous year's level, earnings growth among service providers significantly down
Revenue growth among financial services providers plummeted by 11.5 points to 101.0 in Q2 2025, whereas financial institutions experienced only moderate declines of 2.8 points, reaching 117.5. Compared with last year, growth remains broadly stable at almost the same level. Expectations for revenue growth in Q4 2025 show no significant deviations.
Regarding earnings growth, surveyed financial institutions recorded 114.6 points, nearly unchanged from the same quarter last year. For service providers, who reported 114.7 points last year, growth in Q2 2025 dropped to the neutral level of 100.0 points, marking a significant decline. Both groups, however, anticipate rising earnings for the current quarter.
Workforce and investment growth show little movement
Slightly positive signals were observed in workforce growth: among financial institutions, it increased by 4.7 points to 103.9, while service providers remained at the neutral benchmark of 100.0. In the same quarter last year, financial service providers were still reducing staff. Expectations for the current quarter remain mixed.
Investment growth in product and process innovations within the financial sector declined on average by 1.0 point to 105.7, remaining slightly above last year’s level.
CFS survey
Source: CFS Press Release, 8 October 2025
