5 questions for Michael Schulte

Herr Schulte, tell us about your career to date and how you came to be head of the Transport Competence Centre at GEFA BANK?

Since the beginning of my career I have been in the banking business. I began in the traditional fashion by training as a banker at Sparkasse Meinerzhagen, where after successfully completing my course I gained a further ten years of experience on the job .

I moved to GEFA BANK over 26 years ago, initially as a sales representative for a region in the Sauerland. This period was particularly formative and instructive. Being in direct contact with customers, I was able to develop a deep understanding of their financial and transport needs.

In 2007 I gained my first managerial position at GEFA BANK with the Transport team in Wuppertal. Later on, I was branch manager for three years for Region Süd in Munich.

In 2018, I took over as head of the Transport Competence Centre at GEFA BANK where, together with seven regional managers, I have responsibility for a team of 56 sales representatives and 15 sales employees. The sales representatives work in all parts of Germany and annually achieve new sales of more than 1.1 bi. euros, with loan, lease and lease-purchase financing of HGVs and buses.

How do you see the investment requirements and trends in the bus industry right now, and what options are there for state funding of investment for buses?

I see considerable need for investment in the bus industry. Particularly in the wake of the coronavirus pandemic, there is a huge investment backlog there. This is gradually being dealt with and many tour companies whose fleets shrank during the pandemic are rebuilding them now. This trend seems to be continuing in 2024. The travel industry is very optimistic and looks in good shape economically after the pandemic. I see there being a constant need for investment where public transport buses are concerned.

Euro-6 diesel buses continue to make up the biggest share of new purchases in the bus industry. There was a noticeable trend towards electromobility last year. The number of newly registered electric buses in Germany rose to 753, 37.2 per cent more than in 2022. It will be fascinating to see whether this trend continues in 2024, now that state funding for electromobility has all but ended.

What are the current challenges in the bus industry that you have identified in conversation with their representatives, and what kind of support can the financial sector offer for overcoming these challenges?

Our latest meetings with customers requiring financial support have repeatedly highlighted the industry’s dilemma. On the one hand, as mentioned, there is substantial need for investment, on the other hand people are uncertain whether to invest in conventional or alternative drives. Driven by their obligation to implement the European Clean Vehicles Directive (CVD) (EU) 2019/1161, many companies, towns and municipalities want to make their vehicle fleets more eco-friendly. There needs to be planning certainty here concerning how one can invest profitably in the higher cost of purchasing electric buses and the charging infrastructure..

The extremely long delivery times, sometimes over a year especially for coaches, are also a problem for the industry. This also affects the ability of companies to plan ahead.

Another challenge is cases where companies have received approval for funding but where it is unclear when it will be paid. In these instances we provide vital support with interim loans.

How can banks in general help fund greater sustainability, particularly in the transport industry?

Equipment financiers in particular can play an important role in funding sustainability in the transport industry. We are ready to take on this responsibility and manage the transformation processes our customers are undertaking, particularly in the transport sector. In that context, several years ago we set up a division which looks at how with the help of innovative loan and leasing products we can facilitate investment in sustainable technology.

In order to fund sustainability, banks must also acquire better knowledge of new technologies, so that they can expand their financial portfolio, not just for EVs for example, but for the corresponding charging infrastructure as well.

In principle, it is also important to offer customers information on state programmes funding sustainability, even if the current options are limited.

How is ongoing digitalisation impacting the ability of financial institutions to provide services for the transport industry, and what steps are required in order to successfully master the digital transformation?

The possibilities digitalisation has opened up have significantly changed how we provide services. For some years now we have been able to offer our customers and interested parties the option of calculating loan and leasing instalments online. That provides a quick and easy overview of the various financing options. Optionally, we follow that up with processing a loan, in the main paper-free, which significantly speeds up and simplifies the matter for our customers.

However, it is imperative that we keep up with the rapid pace of development in digital technologies. It means we must continually adapt and improve our digital services. At the same time, we see it as important to let our customers choose the degree to which digital services are involved. Some of them value the convenience and efficiency that our online support offers, while others favour a personal dialogue.