Commerzbank
The Commerzbank Aktiengesellschaft is a European banking institution headquartered in Frankfurt am Main, Hesse, Germany. It offers services to private and entrepreneurial customers as well as corporate clients. The Commerzbank Group also includes the Polish subsidiary mBank.
As one of the oldest banks in Germany, Commerzbank plays a significant role in the country's economy. It is the largest financier of German foreign trade, with strong ties to the German 'Mittelstand.' In addition, it maintains a presence in all major economic and financial centers worldwide. Since its establishment in 1870, Commerzbank has undergone several changes. It was the first German banking institution to open an operational branch in New York City in 1971.
Another milestone was the acquisition of Dresdner Bank in 2009. During the 2008 financial crisis, the Federal Republic of Germany became a major shareholder in the company. To this day, the government remains a significant bank shareholder, which is listed on the DAX. In recent years, the bank has undergone considerable transformation, returning to profitability, partly through substantial cost reductions and the evolution of its business model.
History
1870–1918
On February 26, 1870,, a merchant successful in South American trade, together with other trading houses and private bankers in Hamburg, founded the Commerz- und Diskonto-Bank. The goal was to provide financial resources to Hamburg's trade and facilitate international commerce. The banking houses of Mendelssohn & Co., M. M. Warburg & Co., Hesse Newman, and B.H. Goldschmidt were among the founding investors. In 1873 the bank sponsored the creation of an affiliate in London, the London and Hanseatic Bank, of which it subscribed about half of the shares.In 1881 the Commerz- und Disconto-Bank was among the founders of Nationalbank für Deutschland in Berlin, together with Anglo-Austrian Bank, Vienna's newly established Länderbank, the latter's affiliate Ungarische Landesbank, and Breslauer Disconto-Bank Friedenthal & Co. By 1891, it had become the largest bank in Hamburg by total lending. It participated in the rapid industrial and commercial development of the German Empire by providing trade finance, credit to small businesses, and investments in various industries that included shipping, electricity generation, mining, chemistry, and manufacturing. In 1897 it acquired Jacques Dreyfus & Co., a banking house established 1868 as Dreyfus-Jeidels in Frankfurt, which also had a branch in Berlin. Following that acquisition, the bank shortened its name to Commerz- und Disconto-Bank in 1898.
In 1901 the bank joined the Reichsanleihe-Konsortium, a group of several dozen banks that placed loans for the German imperial government. In 1905 it acquired Berliner Bank and from then until 1931 maintained two head offices in Hamburg and Berlin, the latter at Behrensstrasse 46 / Charlottenstrasse 47. It acquired a number of regional and private banks, including B. Magnus in 1897 and Altonaer Bank in 1910.
During World War I the London and Hanseatic Bank, the subsidiary established in 1873, was seized by the British authorities, together with other German-owned banks. In 1917, Commerz started an acquisition spree in Germany, by which it had acquired 40 local banks by 1923.
1918-1933
In 1920 the bank acquired Mitteldeutsche Privat-Bank, a significant institution established 1856 in Magdeburg with a dense branch network in Saxony and Thuringia, and renamed itself Commerz- und Privat-Bank AG. In 1923, it took 25 percent ownership of Rigaer Internationale Bank in Riga, which would be liquidated in 1933. That same year, to cope with hyperinflation, it employed a total of 26,000 staff in 319 locations, the densest branch network among German banks; by end-1923, after hyperinflation ended, the headcount fell to 10,200. In 1927, Commerzbank increased business in the US by establishing an office in New York City In 1928, together with Chase Securities Corp. and Halsey, Stuart & Co., it co-founded General Mortgage and Credit Corporation, a long-term lender to small businesses. In 1929 it merged with the Mitteldeutsche Creditbank in another transformative acquisition.By 1930 Commerz- und Privatbank was Germany's fourth-largest joint-stock bank by total deposits with 1.5 billion Reichsmarks, behind Deutsche Bank & Disconto-Gesellschaft, Danat-Bank, and Dresdner Bank and ahead of Reichs-Kredit-Gesellschaft and Berliner Handels-Gesellschaft.
Following the European banking crisis of 1931 the bank consolidated all head office functions in Berlin, then in February 1932 was prompted by the Reichsbank to absorb the distressed . As a consequence, the government held 71 percent of the merged entity's capital, mainly through the Reichsbank subsidiary Deutsche Golddiskontbank. In November 1932 the Commerz- und Privatbank chief executive Friedrich Reinhart and chairman were among the signatories of the Industrielleneingabe petition of business leaders that advised President Paul von Hindenburg to appoint Adolf Hitler as chancellor.
1933–1945
The Commerz- und Privat-Bank paid its first dividend in five years in 1935, and returned to private ownership in 1936-1937. In line with the Nazi policy of aryanization, the bank discarded its Jewish staff, which by 1933 represented around 14 percent of its senior executives and 1.6 percent of overall employees. Supervisory board members and Albert Katzenellenbogen left in 1933 and 1937 respectively, as did management board member Ludwig Berliner in 1933. All three would be murdered in the early 1940s under the Final Solution policy. By 1938 Commerzbank no longer had any Jewish employees. By September 1939 it had 6,900 employees, of which 16 percent were mobilized into the Wehrmacht.In 1940 the bank formally adopted the name Commerzbank AG, by which it had already been referred to for a long time.
Through the 1938 Anschluss, the annexation of the Sudetenland, and during World War II, the bank opened branches and subsidiaries in the expanded German territory and also benefited from the expropriation or sale under duress of Jewish-owned banks. In 1940 it opened a branch in Strasbourg. In 1941 it took over the former in Amsterdam and in 1942 renamed it the. In November 1941 it established Hansabank AG in Riga, with operations in Reval and Dorpat, and in 1942, Hansabank NV / Banque Hanséatique SA in Brussels. In the former Yugoslavia, it took minority stakes of 6 and 10 percent respectively in Bankverein AG Belgrad and Bankverein für Kroatien AG in 1941, both carved out from the former Allgemeiner Jugoslawischer Bankverein which itself had been a product of dismantling Wiener Bankverein in the 1920s. In 1942 it also took a 10 percent stake in Böhmische Industriebank in Prague, and 10 percent in the newly established Deutsche Bank für Ostasien intended to develop trade with Imperial Japan. By late 1944, the bank's balance sheet size had tripled from its 1938 level, with two-thirds of the assets being German government debt. In comparative terms, however, it had been less expansionist and ideologically aligned than other large German banks, particularly Deutsche Bank and Dresdner Bank, and in 1942 fell from third to fourth place among German joint-stock banks. In early 1945, it relocated its head office from Berlin to Hamburg as a precautionary measure.
1945–1967
By the end of the war the former head office and close to half of the bank's branches were in the Soviet occupation zone, where they were promptly nationalized and liquidated. Of the 119 locations in West Germany, 42 were fully destroyed, 35 severely damaged, and 42 in working condition. In 1947-1948, these were first reorganized into nine groups of branches, intended to be operationally independent: Bankverein Westdeutschland, Hansa-Bank, Merkur-Bank, and Holsten-Bank in the British occupation zone; Mittelrheinische Bank in the French zone; and Mitteldeutsche Creditbank, Bankverein für Württemberg-Baden, Bayerische Disconto-Bank, and Bremer Handels-Bank in the American zone. In August 1949, the bank resterted operations in West Berlin, first as Bankhaus Holbeck, renamed Bankgesellschaft Berlin AG in October, and later Berliner Commerzbank AG. In order to expand credit provision to the German economy, the nine West German entities were consolidated by law in September 1952 into three: Bankverein Westdeutschland AG, renamed Commerzbank-Bankverein AG in 1956, in Düsseldorf; Commerz- und Disconto-Bank AG in Hamburg; and Commerz- und Credit-Bank AG in Frankfurt. On 1 July 1958, the Düsseldorf entity acquired the other two and changed its name back to Commerzbank AG. Berliner Commerzbank AG only merged into the parent Commerzbank on 1 October 1992.In 1951 several of the groups of Commerzbank branches had taken stakes in, Germany's first investment fund management company founded in 1949 in Munich, thus establishing the basis for the group's asset management arm. By 1962, Commerzbank had surpassed its pre-war level with 372 branches.
Meanwhile, in 1952 the Commerzbank group restarted an international activity by opening a representative office in Rio de Janeiro, followed by Amsterdam and Madrid in 1953, Beirut in 1957, and Tokyo in 1961, the first German bank to open in postwar Japan. in 1967, Commerzbank established a representative office in New York City. That same year, it joined with Irving Trust, First National Bank of Chicago, Westminster Bank, and HSBC to form the International Commercial Bank in London. In 1969 Commerzbank opened a subsidiary in Luxembourg, Commerzbank International SA, which for many years was its largest foreign subsidiary. In 1971 the New York office was converted into a branch, the first by a German bank in the postwar United States. Commerzbank opened further branches in London in 1973, in Paris in 1976, and in Hong Kong in 1979. It opened a representation in Beijing on 16 April 1982.