German Private Bank Employees Secure 10.5% Pay Increase

German private bank employees have successfully negotiated a 10.5% pay increase to help offset rising living costs. This agreement, which impacts approximately 140,000 workers, was reached late on Wednesday after a third round of talks, following a series of strikes.

Union and Employer Perspectives

The Verdi and DBV unions had initially sought increases of 12.5% and 16%, respectively, but faced resistance from banks aiming to control expenses. Jan Duscheck, the chief negotiator for the Verdi labor union, stated that the agreed increase will provide "noticeable relief" to workers. The AGV, representing employers, described the deal as "fair."

The new wage agreement, which is valid for 28 months, affects listed banks including Deutsche Bank and Commerzbank. Deutsche Bank, Germany's largest lender, has been working to reduce costs in order to meet ambitious targets for the coming year. According to a source familiar with the matter, the bank had already accounted for the wage increase in its financial planning.

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Separate wage negotiations are still underway for the 60,000 employees at state-affiliated banks. These discussions are expected to continue later this year, as unions and employers work towards a satisfactory resolution.

In May, Deutsche Bank reached a separate agreement with unions for thousands of its Postbank employees, ending months of disputes and strikes. This deal included an 11.5% pay increase, implemented in two stages.

Economic Context

Inflation in Germany has significantly dropped from nearly 7% in 2022—the highest rate in decades—to 2.2% in June. Despite this decrease, the current inflation rate is still higher than what many Germans are accustomed to.

The 10.5% pay increase for German private bank employees represents a significant achievement for workers facing rising living costs. As inflation remains higher than usual, this agreement provides essential financial relief and underscores the importance of ongoing negotiations to address wage disparities and economic challenges.