Deutsche Bank
Deutsche Bank AG is a German multinational investment bank and financial services company headquartered in Frankfurt. It is dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange.
Deutsche Bank was founded in 1870 in Berlin. From 1929 to 1937, following its merger with Disconto-Gesellschaft, it was known as Deutsche Bank und Disconto-Gesellschaft or DeDi-Bank. Other transformative acquisitions have included those of Mendelssohn & Co. in 1938, Morgan Grenfell in 1990, Bankers Trust in 1998, and Deutsche Postbank in 2010.
As of 2018, the bank's network spanned 58 countries with a large presence in Europe, the Americas, and Asia. It is a component of the DAX stock market index and is often referred to as the largest German banking institution, with Deutsche Bank holding the majority stake in DWS Group for combined assets of 2.2 trillion euros, rivaling even Sparkassen-Finanzgruppe in terms of combined assets, forming Europe's 4th biggest asset management firm.
Deutsche Bank has been designated a global systemically important bank by the Financial Stability Board since 2011. It has been designated as a Significant Institution since the entry into force of European Banking Supervision in late 2014, and as a consequence is directly supervised by the European Central Bank.
History
1870–1933
Deutsche Bank was founded in 1870 in Berlin as a specialist bank for financing foreign trade and promoting German exports. It subsequently played a large part in developing Germany's financial services industry, as its business model focused on providing finance to industrial customers. The bank's statute was adopted on 22 January 1870, and on 10 March 1870 the Prussian government granted it a banking license. The statute laid great stress on foreign business: Prior to the founding of Deutsche Bank, German importers and exporters were dependent upon British and French banking institutions in the world markets—a serious handicap in that German bills were almost unknown in international commerce, generally disliked and subject to a higher rate of a discount than English or French bills.The founding members were: Hermann Zwicker ; Anton Adelssen ; Adelbert Delbrück ; Heinrich von Hardt ; Ludwig Bamberger ; Victor Freiherr von Magnus ; ; Gustav Kutter ; and Gustav Müller. The First directors were Wilhelm Platenius, Georg Siemens, and Hermann Wallich. Georg Siemens was a son of a cousin of Werner von Siemens. The bank initially operated from the first floor of a building at 21 Französische Strasse, then in 1871 moved to premises near the Berlin Stock Exchange, and in 1876 started building its massive head office complex on Mauerstrasse.
The bank's first domestic branches, inaugurated in 1871 and 1872, were opened in Bremen and Hamburg. Its first overseas offices opened in Shanghai and Yokohama in 1872, and London in 1873, followed by South American offices between 1874 and 1886. The branch opening in London, after one failure and another partially successful attempt, was a prime necessity for the establishment of credit for the German trade in what was then the world's money center. Deutsche Bank also took advantage of the Panic of 1873 by taking over a number of banks in liquidation, including the Berlin-based Deutsche Union which had itself consolidated a number of failed banks in the early 1870s.
Major projects in the early years of the bank included the Northern Pacific Railroad in the US and the Baghdad Railway. In Germany, the bank was instrumental in the financing of bond offerings of steel company Krupp and introduced the chemical company Bayer to the Berlin stock market.
The second half of the 1890s saw the beginning of a new period of expansion at Deutsche Bank. The bank formed alliances with large regional banks, giving itself an entry into Germany's main industrial regions. It thus formed community-of-interests partnerships with in Elberfeld and in Breslau, linked to the fast-growing industrial economies of the Rhineland and Silesia respectively; it eventually acquired the two banks in 1914 and 1917 respectively. Joint ventures were symptomatic of the concentration then under way in the German banking industry. For Deutsche Bank, domestic branches of its own were still something of a rarity at the time; the Frankfurt branch dated from 1886 and the Munich branch from 1892, while further branches were established in Dresden and Leipzig in 1901.
In 1889, Deutsche Bank participated in the creation of the Deutsch-Asiatische Bank in Shanghai, in 1894, of the Banca Commerciale Italiana in Milan, and in 1898, of the Banque Internationale de Bruxelles.
In addition, the bank rapidly perceived the value of specialist institutions for the promotion of foreign business. Gentle pressure from the Foreign Ministry played a part in the establishment of Deutsche Überseeische Bank in 1886 and the stake taken in the newly established Deutsch-Asiatische Bank three years later, but the success of those companies showed that their existence made sound commercial sense. By end-1908, Deutsche was by far the largest German joint-stock bank by total deposits, with a total of 489 million Marks ahead of Dresdner Bank, Disconto-Gesellschaft, Darmstädter Bank and A. Schaaffhausen'scher Bankverein. At that time, Deutsche Bank was referred to as one of the four "D-Banks" that dominated German commercial banking, together with Darmstädter Bank, Disconto-Gesellschaft, and Dresdner Bank. On it also opened a branch in Brussels, the first establishment of a German bank in Belgium. In March 1911, it took over the Banque Oury in Liège and renamed it Banque Centrale de Liège, with assistance from the Société Générale de Belgique. The Belgian branch became a conduit for Deutsche Bank's investments in Central Africa.
File:Kredietbank Brussels.jpg|thumb|Office building erected 1912 by Deutsche Bank for its branch in Brussels, expropriated following World War I, later head office of Kredietbank
During World War I and in its immediate aftermath, the operations of Deutsche Bank in Brussels, London, Tokyo and Yokohama were expropriated; conversely, its activity in the Ottoman Empire expanded considerably, and it greatly expanded its footprint in Germany. In 1919, the bank purchased the state's share of Universum Film Aktiengesellschaft. In 1926, the bank assisted in the merger of Daimler and Benz.
The bank merged with Disconto-Gesellschaft in 1929 and rebranded itself Deutsche Bank und Disconto-Gesellschaft, sometimes referred to as DeDi-Bank. By 1930, Deutsche Bank & Disconto-Gesellschaft maintained a similar dominant position as before World War I, with 4.8 billion Reichsmarks in total deposits ahead of Danat-Bank, Dresdner Bank, Commerz- und Privatbank, Reichs-Kredit-Gesellschaft, and Berliner Handels-Gesellschaft.
In the crisis summer of 1931 the Deutsche Golddiskontbank, a subsidiary of the Reichsbank, acquired 35 percent of DeDi-Bank's equity as part of a sector-wide rescue, bringing total government ownership of the bank to 38.5 percent. This did not, however, result in significant government interference in the management of the company, unlike at Dresdner Bank whose capital was near-completely nationalized.
1933–1945
When Adolf Hitler became leader of Germany, Deutsche Bank increasingly became integrated into the Nazi power structures, and fully implemented the Nazi policy of aryanization. In 1934 it dismissed its three Jewish management board members, Oscar Wassermann, Theodor Frank, and Georg Solmssen; in 1938 it dismissed its last Jewish supervisory board member. By the end of 1938, it had been involved as an intermediary and lender in at least 363 cases of expropriation of Jewish-owned businesses. In 1938, it acquired Jewish-controlled German bank Mendelssohn & Co. under duress. Meanwhile, the Nazi government fully re-privatized Deutsche Bank in 1935–1937, largely out of budgetary considerations. Its name changed back to Deutsche Bank in 1937.While the Nazi policies of financial repression were largely unhelpful to the domestic business of Deutsche and other German commercial banks, its expansionary behavior created opportunities that Deutsche Bank pursued. In 1938 following Hitler's Anschluss of Austria, Deutsche Bank gradually took control of Creditanstalt-Bankverein, the former country's leading bank. On the latter was coerced to enter a "friendship agreement" with Deutsche Bank, by which the latter secured a presence in its board of directors. Creditanstalt executive Louis de Rothschild was immediately arrested and imprisoned, deprived of his position and property, then released upon payment of $21,000,000, believed to have been the largest bail bond in history for any individual, and migrated to the U.S. in 1939 after more than one year in custody. Later in 1938, Creditanstalt was jointly taken over, without compensation, by German government holding, Deutsche Bank, and the Reichsbank, which held respectively 51 percent, 25 percent, and 12 percent of its capital. In April 1942, Deutsche Bank raised its ownership to 51 percent by acquiring a block of shares from VIAG. During wartime, the Creditanstalt expanded its operations into Nazi-occupied Czechoslovakia, Poland, Yugoslavia, and in Nazi-allied Bulgaria.
In September 1938, following the Munich Agreement, Deutsche Bank took over the branches of Prague-based Böhmische Union Bank in the Sudetenland. In March 1939, it forcibly took over control of the BUB itself, in which it built a majority stake complemented with prior shareholding of Creditanstalt. It also took over management control of the National Bank of Greece during the Axis occupation of Greece, without however acquiring ownership out of consideration for Italian sensitivities. Through the Creditanstalt-Bankverein, Deutsche Bank also became a major shareholder of the Allgemeiner Jugoslawischer Bankverein, which had been formed in 1928 from the two former branches of the Wiener Bankverein in Belgrade and Zagreb, and of the Landesbank für Bosnien und Herzegowina in Sarajevo, together with the Société Générale de Belgique and its affiliate Banque Belge pour l'Étranger. In 1940, following the German invasion of Belgium, Deutsche Bank bought out the Belgian stake under duress and became the AJB's dominant shareholder, with 88 percent held either directly or through Creditanstalt. Deutsche Bank simultaneously took control of the Landesbank in Sarajevo. Following the German invasion of Yugoslavia, the AJB was divided into two separate institutions, respectively the Bankverein AG Belgrad in occupied Serbia, and the Bankverein für Kroatien AG in the Independent State of Croatia. Both these banks' assets were eventually confiscated by the newly established Communist authorities in October 1944, and they were subsequently liquidated.
During the war, Deutsche Bank provided banking facilities for the Gestapo and, through its branch in Katowice, loaned the funds used to build the Auschwitz camp and the nearby IG Farben facilities. Deutsche Bank publicly acknowledged its involvement at Auschwitz in 1999. It also was a principal participant in the Nazi regime's gold transactions. Between 1942 and 1944, Deutsche Bank purchased 4,446 kg of gold from the Reichsbank, of which 744 kg came from Holocaust victims.
In an effort to come to terms with its past during the Nazi era, Deutsche Bank in 1995 published a history volume that detailed its entanglement with the dictatorship. In December 1999, along with other major German companies, Deutsche Bank contributed to a US$5.2 billion compensation fund following lawsuits brought by Holocaust survivors; U.S. officials had reportedly threatened to block Deutsche Bank's $10 billion purchase of Bankers Trust if it did not contribute to the fund.