For the denominator the yearly average of total assets is used. Interest margins in the German banking sector have been narrowing steadily over the past decades. Recently, margins have come under pressure as it is diﬃcult for banks to pass negative monetary policy rates on to customer deposits.
Figure 2: Number of Banks in Germany 1950-2018  Source: Deutsche Bundesbank, Monthly Balance Sheet Statistics  The process of consolidation, which had been evident for some time, gained traction in the 1990s. This holds especially true for the cooperative bank sector with its very large branch network, as credit institutions set out to streamline costs.