Laurent Zahles, director of Raiffeisen, discussed global economic trends during an interview with our colleagues from RTL Radio on Thursday morning.
Zahles anticipates “relative stability” for private bank interest rates through 2025, with the European Central Bank (ECB) potentially implementing two to three minor rate reductions before year-end. He noted these projections depend on multiple economic factors beyond ECB decisions.
Addressing why banks apply ECB rate hikes faster to loans than savings accounts, Zahles explained that financial institutions must analyse various parameters before adjusting rates. Market conditions and competitor actions significantly influence timing decisions. The director clarified there is no direct correlation between ECB key rates and variable product rates, as these are more dependent on a bank’s general refinancing policy.
Zahles emphasised the importance of assessing capital market conditions to safeguard “long-term credits and placements”.
While mortgages remain Raiffeisen’s core business, Zahles noted a distinct market divide emerging since Q2 2024. Although client interest has rebounded for existing properties, new-build, and off-plan developments (VEFA) continue to underperform.
Zahles identified multiple factors needed for market recovery, beginning with interest rates that are already below 2023-2024 levels and unlikely to decrease significantly further. He acknowledged the positive effect of extended state tax incentives, which remain available through June, while emphasising that price adjustments constitute the most critical variable requiring case-by-case evaluation. “The fundamental issue is restoring buyer confidence in new constructions”, Zahles emphasised, suggesting developers reassess whether all possible pricing optimisations have been implemented.
Regarding recent US import tariff announcements, Zahles characterised the situation as “difficult to assess”, noting market uncertainty typically harms business activity. However, he observed clients maintaining composure despite the geopolitical developments.
The ultimate impact would heavily depend on retaliatory measures and negotiations, Zahles stated, adding that Raiffeisen’s investors have so far avoided panic reactions to the policy changes.
Zahles expressed ongoing concerns about increasing regulatory burdens facing banks. “We’ve observed growing complexity in recent years”, the Raiffeisen director stated, noting that clients frequently contact the bank confused by constantly changing documentation requirements.
Zahles called for regulatory relief, advocating for a “risk-based approach rather than perpetual additions” to banking rules. He specifically referenced the European Commission’s Omnibus initiative under Ursula von der Leyen’s leadership as a potential solution, though acknowledged that “no tangible changes have materialised yet.”
