The CFS Index, which tracks the state of the German financial sector on a quarterly basis, rose +4.4 points to 108.7 points in the fourth quarter of 2024, returning to the level it had stabilised at since the beginning of 2023 before a brief dip in the third quarter of 2024. The index was bolstered by significant increases in turnover and earnings growth at both financial institutions and financial service providers. The positive key figures are reflected in the assessment of the future importance of Germany as a financial centre with an increase of 6.6 points, although the corresponding index value remains below the neutral 100-point threshold at 98.0 points.
‘As the modest rise in the expectations index shows, there is still no sign of a clear trend reversal,’ comments Prof Dr Rainer Klump, Director of the Center for Financial Studies, on the results.
The assessment of the future international importance of Germany as a financial centre rose to 98.0 points in the fourth quarter of 2024 and is still only slowly approaching the neutral level of 100 points. The industry assessment is still relatively far away from the positive values that were even achieved in the years during the pandemic.
‘The direction is right again. It is now up to politicians to create the framework conditions that will allow the trend to accelerate. We have shown the way with our proposals to improve the competitiveness of the financial centre. The financial centre cabinet convened by Hessian Minister President Boris Rhein will now incorporate these proposals into the ongoing coalition negotiations,’ explains Oliver Behrens, President of Frankfurt Main Finance.
Sales and earnings growth with clearly positive impetus
Growth in the turnover of financial institutions recorded a strong increase of 12.4 points to 122.7 points in the fourth quarter of 2024. This value marks a peak that has only been narrowly surpassed twice since 2007 – in the third quarter of 2021 and the first quarter of 2018. Together with the financial service providers, where the increase was lower at 7.6 points, turnover growth rose to an average of 117.3 points and was well above the expectations of the industry as a whole at the end of 2024.
The financial institutions and service providers surveyed also reported positive data for the last quarter of 2024 in terms of earnings growth. The corresponding sub-index for financial institutions rose by 11.0 points to 120.3 points, but only made up as much ground as it had lost over the course of last year. For service providers, on the other hand, earnings growth has increased significantly since the first quarter of 2024, rising by 15.1 points. Nevertheless, financial service providers are not very euphoric and expect earnings growth to be adjusted downwards, while financial institutions continue to anticipate moderate increases.
Investment growth remains stable compared to the previous year
The growth in the volume of investment in product and process innovations by financial institutions increased slightly by 2.4 points to 109.3 points, roughly the same level as the previous year. Service providers are investing 5.2 points more compared to the previous quarter, marking a value of 102.4 points. There was little movement here over the course of 2024 as a whole. In contrast, financial service providers expect investment growth of +16.0 points for the current quarter.
The picture is mixed when it comes to employee growth. There is an increase of 5.8 points to a value of 105.0 points in the sector as a whole. For service providers, this sub-index even shows growth of 8.8 points to 102.4 points. The financial institutions remain comparatively stable at 107.9 points. At the same time, expectations for the current quarter are falling below the 100-point mark in both sectors. The mood here is regularly more pessimistic than the results.
CFS-Survey
Source: CFS press release from 06/03/2025