I agree with you that it should be allowed to say Sparkasse. Especially when "Bank" is allowed, and that's not a clear translation of the concept.
Like wataya mention, it's not a specific chain, and it's structure is somewhat unique being non-commercial and a disorganized group of things, but in Germany "Sparkassen" are talked about as a single proper thing.
This sounds like a "credit union" in the US. Quoting from http://en.wikipedia.org/wiki/Credit_union: "Credit unions see themselves as different from mainstream banks, with a mission to be 'community-oriented' and 'serve people, not profit.'" I wonder if DUO would accept "credit union" for "Sparkasse."
'savings bank' is the technical term used in finance: http://is.gd/zNAgqh 'Sparkasse' refers to a special organization form of a bank that is backed by - say - a municipality or other public institution. It's not the name of a bank chain. There are thousands of independent banks that call themselves 'Sparkasse'.