Dresdner Research Articles

Between Strategy and Ideology

Since 1901 the Dresdner Bank ran a department to finance cooperatives. After the financial crisis in summer 1931 when the Dresdner Bank was faced with bankruptcy the success story of this department seemed to come to an end. But when the Nazis formed their first government in 1933 it was in the center of ideological debates, which, moreover, guaranteed the business of the branch. In 1939, however, when the Dresdner Bank followed a new strategy due to the territorial expansion of the Nazi regime in Europe, it lost its significance for the business strategy. So, it was decided to sell the department to the Deutsche Zentralgenossenschaftskasse, for a long time the great rival in financing German cooperatives.

독일제국의 종합금융기업 드레스트너뱅크(Dresdner Bank): 지역에서 제국으로

This paper studies and analyzes the background, crisis response, business policy and performance of the German Dresdner Bank in 1850-1904. Dresdner Bank was founded locally, but was a financial institution that succeeded in expanding its field of activity in the center of Germany and across the country. In June 1867, the customs union and the so-called “freedom of business” served as an important foundation for the development of Saxony’s business activities. As a result, Saxony was one of the most industrialized regions in Germany economically, which was a major basis for business and finance to grow. There are three points to note in the development of Dresdner Bank. First, this bank was under the universal banking system at the time. This is a financial system that has various areas of business in addition to the bank’s own corporate loan business. Secondly, Dresdner Bank was a regional bank that started its activities with roots in the Saxony region, but successfully advanced into the center of the German Empire, namely Berlin and other regions of Germany and the world. Third, it is an active and aggressive response, strategy and business execution to the rapidly changing economy and the crisis of the bank''s key personnel. However, it was not without problems. Financial activities through political relations were frustrated, as in the case of Hiberna, and also left a mark on reputation. Participation in corporate management was also a business area that had to be given up for Dresdner Bank at the time. For the sake of the bank’s profit, the systematic absorption of available local funds and lending to large corporations outside the region did not correspond to the local sentiment at the time. In particular, it was true that expansion through aggressive mergers and acquisitions left a negative impact on the sound corporate image. (Youngsan University / yensupark@yahoo.com)

Die Expansion der deutschen Großbanken nach Österreich und in die Tschechoslowakei 1938/39

Abstract In order to integrate the (in part) highly industrialized Austrian and Bohemian economies into the German autarky and war economy it was very important for the German government to take control of all relevant Austrian and Bohemian industrial concerns, that is, big industry in these countries had tobe “Aryanized” and/or “Germanized”. At the time of invasion, many of the major Austrian and Bohemian companies were under the control of Austrian and Czechoslovakian banks respectively. Therefore, the realignment of the finance industry of the occupied territories became a precondition for the intended takeover of these industrial concerns. Simultaneously, it offered the German great banks excellent prospects for expansion. On the other hand, the deep economic crisis of the early 1930s had not yet been overcome in both countries and the German great banks faced substantial risks when they took over the more important native banks. Therefore, the strategies by which the great banks penetrated the Austrian and Bohemian markets differed substantially. This article explains the logic behind the respective strategies of Deutsche Bank, Dresdner Bank and Commerzbank as well as the intensions of the German authorities and assesses the relative success of the respective strategies.

Allianz and its fateful acquisition of Dresdner Bank

Purpose The Allianz acquisition of Dresdner Bank was announced as one of the most important deals of the year, in 2001. It was certainly one of the largest. In April 2001, the Munich-based insurance firm, Allianz, bought Dresdner Bank for more than €20 bn. Unfortunately, such optimism was unfounded. The projected synergies never materialized and in August 2008, Allianz sold Dresdner Bank to Commerzbank for €9.8 bn. The company had lost more than half its value in just seven years. The purpose of this article is to analyze how this happened. Design/methodology/approach The article is a case study of the acquisition Dresdner, looking specifically at problems of post-merger integration. Findings The article shows that problems of corporate culture were a serious handicap to the success of the merger. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Vliv integrace na profil a ekonomické výsledky finanční skupiny Allianz Group AG

In the last decade a new financial product – bankinsurance – became very popular on international financial markets. The cooperation between banks and insurance companies is based on the goal to achieve financial synergic effects and to make complex supply of financial services „under one roof“. The aim of this article is to clarify possible positive and negative impacts of this form of cooperation. These impacts are shown on the fusion of Allianz and Dresdner Bank. Through this fusion arised the biggest company in the field of bankinsurance. Nowadays there are connected many problems with this fusion.

After the Crisis: Nationalisation and re-privatization of the German great banks 1931–1937

Abstract After the 1931 banking crisis the survival of the four German great banks was safeguarded only by a huge injection of taxpayers’ money. In return, the great banks were partly nationalized and the two worst affected, the Dresdner Bank and the Danat Bank, were merged. Re-privatization was, however, started only a few years later and finalized under Nazi rule in 1937. This article assesses the costs of the bailing out and explains why the Nazi government was prepared to sacrifice more than 500m RM for the sake of re-establishing a banking system which had been a major target of Nazi propaganda before they came to power.

After the Crisis: Nationalisation and re-privatization of the German great banks 1931–1937

After the 1931 banking crisis the survival of the four German great banks was safeguarded only by a huge injection of taxpayers’ money. In return, the great banks were partly nationalized and the two worst affected, the Dresdner Bank and the Danat Bank, were merged. Re-privatization was, however, started only a few years later and finalized under Nazi rule in 1937. This article assesses the costs of the bailing out and explains why the Nazi government was prepared to sacrifice more than 500m RM for the sake of re-establishing a banking system which had been a major target of Nazi propaganda before they came to power.

Bankenkrise und Bankenrettung – Die Reichs-Kredit-Gesellschaft in der Banken- und Finanzkrise des Jahres 1931

Abstract After the German banking system’s collapse on July 13th 1931 the German government was faced with the problem of reorganizing and reconstructing the financial system. The first measures taken concentrated on the Reichs-Kredit-Gesellschaft, a state owned great bank, which played a prominent role in stabilizing the Dresdner Bank and some smaller regional banks. This article examines the different steps involved in restoring the Dresdner Bank’s liquidity, in granting it credit and in completely reconstructing it under German government control. Further, it analyses these steps for some smaller regional banks as well.

Der „Napoleon des deutschen Aktienmarktes“ Hermann D. Krages und die Netzwerke des „rheinischen Kapitalismus“: Die Geschichte einer scheiternden Karriere

Abstract Taking as an example the career of the medium-sized entrepreneur Hermann D. Krages, who was attracting wide public attention by spectacular stock market transactions in the West German coal and steel industry during the 1950s and soon became a predominantly yield oriented financial investor, this paper discusses, why an economically successful outsider like Krages was not able to establish himself as a respected member of the business elites’ networks within Rhenish Capitalism. For this purpose, the analysis focuses on a heavy conflict between Hermann Krages and Dresdner Bank AG between 1962 and 1966. As the article shows, Krages can be interpreted as an early, extremely stubborn and at the same time completely inopportune pioneer of shareholder value thinking. His initially so promising career finally failed, because his mentality and his business strategies, based on credit financed stockmarket speculations, did not at all correspond to the notion of steady and responsible business of the overwhelming majority of his contemporaries.

Portuguese public debt and financial business before WWI

Government, public finance, and public debt framed the historical background for exceptional financial business opportunities for Henry Burnay as a private banker and a network with Baring Brothers, Comptoir National d’Escompte, Banque de Paris et des Pays Bas, Neuflize et Cie., Credit Lyonnais, Societe Generale, Deutsche Bank, Bank fur Handel & Industrie, Dresdner Bank, M. Jacob H. S. Stern and the Deutsche Effecten & Wechsel Bank from Frankfurt. Nineteenth-century financial markets and public debt emerge as the main players in the game. Credibility and honesty were important values for earning confidence and trust in international financial business, while bilateral-monopoly market situations required a lot of bargaining for joint profit maximization.

Der „Napoleon des deutschen Aktienmarktes“ Hermann D. Krages und die Netzwerke des „rheinischen Kapitalismus“: Die Geschichte einer scheiternden Karriere

Taking as an example the career of the medium-sized entrepreneur Hermann D. Krages, who was attracting wide public attention by spectacular stock market transactions in the West German coal and steel industry during the 1950s and soon became a predominantly yield oriented financial investor, this paper discusses, why an economically successful outsider like Krages was not able to establish himself as a respected member of the business elites’ networks within Rhenish Capitalism. For this purpose, the analysis focuses on a heavy conflict between Hermann Krages and Dresdner Bank AG between 1962 and 1966. As the article shows, Krages can be interpreted as an early, extremely stubborn and at the same time completely inopportune pioneer of shareholder value thinking. His initially so promising career finally failed, because his mentality and his business strategies, based on credit financed stockmarket speculations, did not at all correspond to the notion of steady and responsible business of the overwhelming majority of his contemporaries.

Transferring Rhineland capitalism to the Polish‐German border

PurposeThe purpose of this paper is to look at the past development and potential of the Rhenish capitalist governance “model”. The origins and nature of the model are to be discussed. The aim is to focus on its specific role within the transformation processes of Central‐Eastern European economies. East‐Central Europe is where, it is contended, Rhineland capitalism's future will be decided.Design/methodology/approachUsing a survey questionnaire, customers' perceptions of bank governance and practice in the Polish‐German city of Zgorzelec‐Görlitz are explored. The experience of Dresdner Bank is stressed and the fact that the local people not long before lived under a Socialist regime. A control group in London is used to ascertain the presence of German management traditions as opposed to Anglo‐American approaches to management in the context of retail bank markets. In total there were 210 participants in the survey (all equally divided between the three cities).FindingsGerman and Polish respondents mostly rejected co‐determination and favored top‐down management. Germans seem to make trust and loyalty a major factor in their retail banking decisions while Polish seemed more open to American style marketing. The findings support the hypothesis about the long‐term viability of Rhinish capitalism.Originality/valueThe paper ascertains that the presence of German management traditions as opposed to Anglo‐American approaches to management in the context of retail bank markets in a border region is dominant.

The future of Rhineland capitalism across the Polish‐German border

PurposeThis paper aims to look at the past development and potential of the Rhenish capitalist governance “model”. The paper aims to discuss the origins and nature of the model. The main focus is on the model's in crisis and its specific role within the transformation processes of Central‐Eastern European economies. East‐Central Europe is where, it is contended, Rhineland capitalism's future will be decided.Design/methodology/approachDrawing on archival research (including current writings) the paper draws out two salient features of the Rhenish capitalist model which would be relevant to explore bank customers perceptions of bank governance and practice in the Polish‐German city of Zgorzelec‐Görlitz. The experience of Dresdner Bank is stressed and the fact that the local people not long before lived under a Socialist regime.FindingsThe paper contends that the abandonment of the social harmony structured into the Rhineland model would be a great pity, since the 100 years of effort it took to create it would go down the drain.Originality/valueThe paper ascertains the presence of German management traditions as opposed to Anglo‐American approaches to management in the context of retail bank markets in a border region.

Scenarios and simulations for planning Dresdner Bank's E‐day

AbstractConfronted with the approaching introduction of euro coins and notes, Dresdner Bank's branch managers had to consider that cash‐related transactions between 17 December 2001 and 28 February 2002 would rise much above the normal level. On top of the regular business, the branches had to cope with an unknown amount of exchange transactions of DM into euro. To avoid chaotic situations in the branches and high extra costs, the branches had to prepare themselves. It was, however, unclear what would happen and which measure would be appropriate for which scenario. The branch manager's uncertainty was high. This article shows that the system dynamics method can be successfully applied even to such non‐typical, short‐term, event‐driven problems. Using a feedback perspective, defining the problem dynamically, creating scenarios, developing models and using simulation experiments does not only help to find better strategies but also improves decision making in unique situations with a short‐term focus such as the introduction of the euro coins and notes. Copyright © 2005 John Wiley & Sons, Ltd.

Les accords de coopération : passé ou futur ?

Co-operation agreements : more or less en vogue ? The writer shows that the rebirth of the European banks until the end of the 80’s has seen the emergence of co-operation agreements among those banks. The banks formed clubs, quite informal, their main task being to encourage better personal knowledge between executives of the member banks. Some of the agreements, first of all the one signed between BNP and Dresdner Bank, were exclusive, universal and all-embracing, covering all business areas and paved the way for a forthcoming merger among equals. Today’s trend seems quite different and shows that co-operation agreements are less en vogue. This is due to the willingness of the banks to be stronger on a stand alone basis, on their domestic market, generating thereby a wave of acquisitions, sometimes unfriendly, within the national borders. This is also due to the opening of the world markets favoured by the huge progress of the information technologies as well as the need to get access to all the international customers without the intermediary of local players. JEL classification : F36, G21, G34

Synopsis of the 12th International Symposium on Polarization and Correlation in Electronic and Atomic Collisions

The 12th International Symposium on Polarization and Correlation in Electronic and Atomic Collisions was held at the Communications- and Information Center of the Dresdner Bank Corporation in Königstein, near Frankfurt, Germany, from 30th July – 2nd August 2003. The papers presented at this meeting are briefly summarized and commented upon.

War Crimes of the Deutsche Bank and the Dresdner Bank: Office of Military Government (U.S.) Reports

In November 1946, US Government financial experts inside former Nazi Germany concluded that Germany's most powerful banks must be liquidated if lasting peace was to be achieved. The giant Deutsche and Dredener Banks had completely intertwined themselves with the Nazi regime and were directly responsible for the systematic theft of Jewish property, slave labour, and financing the construction of SS concentration camps. As the Americans in the Finance Division of the Office of Military Government (US) -- OMGUS -- saw things at the time, the bank leaders should be tried as war criminals and barred from ever holding any positions of importance in German political or economic life. However, these recommendations were never implemented. In fact, many of the officials of the Deutsche Bank went on to be some of the most important figures in German economic development in the postwar period. The Deutsche Bank secretly retained almost a ton of gold taken from the dead at concentration camps; the Dresdener Bank re-emerged as a multinational financial giant. Meanwhile, the US Government buried the 500+ page report of its financial experts in classified files, where they gathered dust for decades. Today, the Deutsche Bank is the largest financial institution in the world and the Dresdener Bank is not far behind.

War crimes of the Deutsche Bank and the Dresdner Bank: Office of Military Government (U.S) Reports

In November 1946, US Government financial experts inside former Nazi Germany concluded that Germany's most powerful banks must be liquidated if lasting peace was to be achieved. The giant Deutsche and Dredener Banks had completely intertwined themselves with the Nazi regime and were directly responsible for the systematic theft of Jewish property, slave labour, and financing the construction of SS concentration camps. As the Americans in the Finance Division of the Office of Military Government (US) -- OMGUS -- saw things at the time, the bank leaders should be tried as war criminals and barred from ever holding any positions of importance in German political or economic life. However, these recommendations were never implemented. In fact, many of the officials of the Deutsche Bank went on to be some of the most important figures in German economic development in the postwar period. The Deutsche Bank secretly retained almost a ton of gold taken from the dead at concentration camps; the Dresdener Bank re-emerged as a multinational financial giant. Meanwhile, the US Government buried the 500+ page report of its financial experts in classified files, where they gathered dust for decades. Today, the Deutsche Bank is the largest financial institution in the world and the Dresdener Bank is not far behind.

Wer Spinnt?

Christopher Simpson, ed., War Crimes of the Deutsche Bank and the Dresdner Bank. Office of Military Government (U.S.) Reports (New York and London: Holmes & Meier, 2001)

Integrated Financial Services – A Framework for Success: Synergies in Insurance, Banking, and Asset Management

Financial conglomerates, formed by combining banks, insurers, and asset managers, were virtually unknown when ING was formed ten years ago. They have gained some attention in the intervening ten years with the combination of Travelers and Citicorp in 1998, consolidation within the financial services sector in the U.K. and Australia, and the recently announced deal between Allianz and Dresdner Bank. The premise for creating such conglomerates is to create value for all stakeholders, i.e. shareholders, employees, and, most important, their clients. Creating long-term relationships with customers and serving them with products that meet their needs through the channels of their choice that create shareholder value is ING's mission and indeed the likely mission of other financial conglomerates. This strategy, which we call "global wealth management and financial protecion", has served ING well for ten years, yet there remains much we can still do. Opportunities remain to realize the full potential from our ever-expanding customer base, employee base, and distribution platforms. Synergies continue to be identified and implemented with respect to back-office and frontoffice operations. And, we expect that the further pursuit of our strategy to operate as an integrated financial services company will continue to create shareholder value. There are currently only a limited number of companies within the financial services sector built upon the business model of integrating banking, insurance, and asset management operations. Consequently, financial conglomerates are all too often perceived as complex and thus more risky. Indeed many parties raise the essential question: "Are they worth more together than they would be as separate companies?" From a financial perspective, the answer is yes if the combination produces relatively higher earnings and/or a reduction in risk. From a strategic perspective, the answer is yes if the combination produces greater efficiency and better means of serving customers. This paper discusses the synergies that can be achieved by integrating the businesses of insurance, banking, and asset management into one integrated financial services company. These synergies relate to programs directed toward clients, employees, and distribution channels. They take advantage of the power of global brand awareness and worldwide purchasing programs. The latter is particularly true in the area of technology where synergies relate to hardware and software systems for the businesses and indeed to the management of the businesses. And, the outcome is that these synergies translate into significant advantages with respect to earnings and risk for the shareholders.