Corporate History and Development of Dvb's Business Model
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THE HISTORY OF DVB – AN OVERVIEW 20191111_Cover.indd 1 11.11.19 16:07 DVB BANK SE THE HISTORY OF DVB – AN OVERVIEW CORPORATE HISTORY AND DEVELOPMENT OF DVB’S BUSINESS MODEL 1923 The Bank was established by virtue of a Memorandum and Articles of Association dated 18 June 1923, executed by several banks and industrial companies. To keep start-up time to a minimum, the shell of a bank that had been established on 1 July 1918 but was inactive – Pforzheimer Hypothekensicherungs-AG, Pforzheim – was used, and renamed Deutsche Verkehrs-Kredit-Bank (DVKB). The purpose of the Bank then was to introduce a “bankable” deferred freight payment business for Deutsche Reichsbahn (the German National Railways at the time). 1924/1925 In 1924, Deutsche Reichsbahn acquired a majority stake of 51%, and DVKB functioned as the Reichsbahn's principal bank, managing all of its financial transactions. In 1925, Deutsche Reichsbahn raised its stake in DVKB's share capital to 75%. Within the same year, the Bank opened bureaux de change (currency exchange offices) in all of Germany’s major railway stations. 1930s to 1945 Throughout this period, DVKB continued to act as Deutsche Reichsbahn's principal bank. In 1930, 39 DVKB bureaux de change existed in railway stations and border crossings, and in 1935, DVKB moved into a new office building with a noble address: “Unter den Linden 10” in Berlin. In August 1944, DVKB published its last annual report. Before the end of World War II, the Bank had 23 regional offices, four agencies and 45 bureaus de change. Since 1949 After World War II, DVKB regained its status as a railway-related bank and, in 1949, it received a special permit (as the only banking institution) to operate freight payments and fee settlements, freight credits, money transactions and the currency exchange office business in the three Western zones of occupation. DVKB's headquarters were relocated to Frankfurt/Main. At this point in time, Deutsche Bundesbahn (the German Federal Railways) held 100% of DVKB's shares. In 1952, one branch office was established in West Berlin, and a further 14 regional offices were founded in West Germany. 1958 Having finally resolved the post-war ownership structure, Deutsche Bundesbahn continued to hold 100% of DVKB’s share capital. The Bank's tasks remained principally the same as they had been since 1949. The company had two headquarters, one in West Berlin and one in Frankfurt/Main. The first post-war balance sheet was presented on20 December 1958 and the first post-war Annual General Meeting took place in West Berlin. 1988 and the 1990s In March 1988, the Bank went public, with Deutsche Bundesbahn retaining a 75.1% stake in the share capital, and 24.9% in free float. In1991 , the Bank’s corporate name was changed to Deutsche Verkehrs-Bank AG. In 1995, DZ BANK AG became the new major shareholder, owning 50.1% of the share capital. As a consequence of Deutsche Bundesbahn's conversion into a public limited company and its withdrawal from DVKB's shareholder base, the Bank lost a significant part of its railway-related business functions. The Bank responded to this processsince the early 1990s, by opening its corporate lending business for client groups in non-transport market-related sectors. At that time, DVKB's business activities comprised a wide, unspecific product mix, ranging from retail banking (payment transactions, securities trading, trading in foreign notes and precious metals, as well as the currency exchange office business at railway stations, airports and border crossings), via the central bank function for Sparda banks, the corporate lending business without an industry-specific focus, whilst continuing to handle freight payments and fee settlements for clients of the German Federal Railway. In the 1990s, the expansion of its corporate client lending business led to credit defaults. The significance of rail- way-related services decreased noticeably. 02 DVB BANK SE THE HISTORY OF DVB – AN OVERVIEW 1997, the 2000s and up to the present From 1997 onwards, the Bank – changing its corporate name to Deutsche VerkehrsBank AG in the same year – undertook a general realignment by focusing only on the international transport market – whilst withdrawing from its previous, non-transport market-related business. The Bank purposefully implemented its re-orientation within just a few years, via the following steps: / In 1998, the Bank took over the “International Aircraft and Ship Financing” division at the Long Term Credit Bank of Japan Ltd, making the Bank one of the leading aircraft financiers in Europe. / In 1999, the Bank began financing railway rolling stock in international markets. / In May 2000, the Bank completed the takeover of Nedship Bank N.V.(later renamed to DVB Bank N.V.), already becoming one of the leading international shipping financiers at that time. In 2008, the Bank (which had been registered under the name DVB Bank AG since 2002) merged with its Dutch subsidiary DVB Bank N.V., simultaneously changing its legal form into a European public limited-liability company (Societas Europaea). Since then it has been trading under the name DVB Bank SE. / Since 2001, the Bank has set up its Corporate Finance business and commenced activities in Investment Management. It also started building up the Asset & Market Research departments for the Shipping Finance, Aviation Finance and Land Transport Finance divisions. / In 2006, DVB established its first asset management activities and founded New York-based DVB Capital Markets LLC (a US registered broker-dealer), a unit which functions as the US investment banking office, serving the Bank’s clients. This unique focus on the international transportation industry was also consistently pursued, by the Bank divesting all non-strategic business activities whilst simultaneously establishing and expanding its Transport Finance business. / In 1999/2000, all German branches were closed; the Bank withdrew entirely from retail banking services, and / eventually gave up providing central bank functions for Sparda banks in 2002. / In 2003, DVB sold ReiseBank AG to DZ BANK. The measures implemented by the Bank – or rather their interaction with each other – helped the Bank evolve: from a no longer profitable univer- sal bank for the German SME segment – without an independent profile and thus with no possibility of setting itself apart from competitors – to an international niche provider for transport asset-based financing and advisory services. Against the background of the ongoing shipping crisis, DVB established the Credit and Asset Solution Group in 2016 in order to apply bundled expertise to the management, restructuring and solving of problems related to challenging lending exposures. The following ownership developments occurred: from 2001 onwards, DZ BANK continuously increased its stake in the share capital of DVB by acquiring shares held by KRAVAG-Holding AG (a 10.0% stake), Deutsche Bahn AG (German Railways; 0.75%) and the Sparda banks (13.28%). Since 2008, DZ BANK has held more than 95% of DVB Bank SE's share capital. The remaining shares are held in free float. In a letter dated 14 November 2016 to DVB’s Board of Managing Directors, DZ BANK demanded that a resolution be passed, at DVB’s General Meeting, on the transfer of shares held by other shareholders (minority shareholders) to DZ BANK, the main shareholder, against payment of an appropriate cash compensation (so-called squeeze-out). On 25 April 2017, the cash compensation was determined to be €22.60 per share. On 22 June 2017, DVB’s General Meeting passed a resolution on agenda item no. 7 to transfer the shares held by minority shareholders of DVB Bank SE to DZ BANK against appropriate cash compensation. No action for avoidance had been filed against the AGM resolutions within the applicable guideline (24 July 2017). The squeeze-out resolution was thus entered into the Commercial Register at the Frankfurt/Main District Court on 17 August 2017. As a result, all shares previously held by DVB’s minority shareholders were transferred to DZ BANK. Within the scope of this squeeze-out, trading in DVB Bank SE shares at the Frankfurt Stock Exchange was suspended on 17 August 2017. On 22 August 2017, the cash compensation of €22.60 per share was paid to minority shareholders, via the custodian banks. 03 DVB BANK SE THE HISTORY OF DVB – AN OVERVIEW The Bank no longer offered any new financings of offshore vessels and platforms during 2017, and discontinued the ffshO ore Finance division with effect from 1 January 2018. Therefore, investment management activities in the shipping and offshore sectors were also discontinued in 2017. DVB sold its Land Transport Finance business to Landesbank Hessen-Thüringen (ad-hoc disclosure dated 21 December 2018), 100% of the shares in LogPay Financial Services to Volkswagen Financial Services (press release dated 27 February 2019) and its Aviation Finance business (incl. Aviation Investment Management and Aviation Asset Management) to MUFG Bank and BOT Lease, an affiliate of MUFG Bank (ad-hoc disclosure dated 1 March 2019). The sale of the Land Transport Finance business to Landesbank Hessen-Thüringen was closed on 3 May 2019. The sale of the Aviation Finance transaction element to MUFG was closed on 18 November 2019. 04 DVB BANK SE THE HISTORY OF DVB – AN OVERVIEW Imprint Contact worldwide DVB Bank SE Europe Platz der Republik 6 Amsterdam: +31 88 3997 900 60325 Frankfurt/Main, Germany Athens: +30 210 4557 400 [email protected], www.dvbbank.com Frankfurt/Main: +49 69 9750 40 London: +44 20 7256 4300 Lisa Boose-Kirwel Oslo: +47 2 3012 200 Corporate Communications Senior Vice President Manager Investor Relations Phone +49 69 9750 4435 North and South America Design and realisation: Curaçao: +49 69 9750 40 MPM Corporate Communication Solutions, Mainz, Germany New York: +1 212 588 8864, +1 212 858 2624 “The History of DVB – an Overview” The document is published in German and English.