Deutsche Bank from 1870 Until Today Rooted in Germany – Global from the Beginning Deutsche Bank History
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Deutsche Bank History Deutsche Bank from 1870 until today Rooted in Germany – global from the beginning Deutsche Bank History Under the Empire 1870 –1918 When the idea of founding Deutsche Bank became reality in 1870, banking was in the throes of radical change: industrialisation meant that industry's financing needs were growing and the highly traditional banking sector was going to have to move with the times. the Prussian government granted it a in Bremen, Shanghai, Yokohama, banking license. This was the last Hamburg and London. license issued to a joint-stock bank in Prussia. The license requirement was The founders, all of them bankers, abolished that same year. showed vision in choosing the name Deutsche Bank even before Germany The statute placed great emphasis had been established as a nation- on foreign business: "The object of state. However, little did they suspect the company is to transact banking that they were creating tough business of all kinds, in particular to competition for themselves. In the promote and facilitate trade long run, financing foreign trade was Adelbert Delbrück relations between Germany, other not viable on its own, so the newly- European countries and overseas founded bank was soon on the First share certificate of Deutsche Bank In Berlin, a number of private bankers markets." The direct aim was to lookout for other areas of business. were open to new ideas. Their leading challenge the hegemony of British In the very year of its foundation, lights were Adelbert Delbrück and banks, which continued to dominate Deutsche Bank began to accept Ludwig Bamberger, both regarded as the financing of German foreign deposits in cash. Nowadays that sounds the "true founders" of Deutsche Bank. trade. From the outset, international self-evident, but for the German banking The bank's statute was adopted on business was built up steadily. world it was little short of revolutionary. January 22, 1870, and a little under Between 1871 and 1873 Deutsche The bank needed a solid base and two months later, on March 10, 1870, Bank opened five branches: 1870 1871 – 72 1873 1876 1883 1886 1887 1888 Deutsche Bank First domestic branches Opening of the London Acquisition of Participation in Foundation of Deutsche Participation in the The Turkish government is founded in Berlin in Bremen and Hamburg branch, Deutsche Bank's Berliner Bank-Verein Northern Pacific Ueberseeische Bank founding of AEG grants a Deutsche Bank- most important foreign and Deutsche Union- Railroad Company (electrical engineering led consortium the first Opening of the First foreign branches in branch until its closure Bank in the US industry) concession to build and run Frankfurt branch Shanghai and Yokohama on the beginning of the the Anatolian Railway, in 1872 First World War in 1914 linking Istanbul and Ankara 2 History Deutsche Bank found it in the deposit-taking business. The bank remained there for just over a Georg von Siemens, one of the two year and then moved, together with original members of the Management around fifty staff, to premises very near Board and a leading light in the history the Berlin Stock Exchange. In 1876, of Deutsche Bank, realised this from construction began on new head-office the start. By promoting this area of buildings at the junction of three streets – business he not only created a broad Behren Strasse, Mauer Strasse and capital base for the company; he also Französische Strasse. The view of the helped deposit-taking business to two connecting "bridges" was to become become firmly established in Germany. something of a trademark for the bank. When Deutsche Bank started Deutsche Bank's head office in Berlin, around 1910 business on April 9, 1870 its first office was at 21 Französische Strasse in Berlin, on the first floor of a rather ordinary-looking building. First premises at Französische Straße, Berlin 1889 1890 1892 1894 1897 1898 1901 1903 Participation in the Participation in the Opening of Participation in the Deutsche Bank sup- Participation in the Opening of branches Concession to build founding of Deutsch- founding of Mannes- Munich branch founding of Banca ports the conversion of Shantung Railway in Leipzig and the Baghdad Railway Asiatische Bank mannröhren-Werke Commerciale Italiana Siemens & Halske into Company and Shantung Dresden Acquisition of (steel pipe industry) a joint-stock company Mining Company in Romanian oil company Northern China Steaua Romana Deutsche Bank History 3 Deutsche Bank History Deutsche Bank's early decades were a at Deutsche Bank. The bank formed Its operations were focused on period of rapid expansion; the bank had alliances with large regional banks, Argentina, Brazil and Chile. Three an eye for good business prospects and giving itself an entrée into Germany's years later Deutsch-Asiatische Bank, a sound feel for risk. Issuing business main industrial regions. Joint ventures headquartered in Shanghai, was began to grow in importance in the were symptomatic of the concentration established with the backing of a 1880s, and in the 1890s it really took off. then underway in the German banking consortium of the leading German And it meant that the capital market industry. For Deutsche Bank, domestic banks. In Africa, Deutsche Bank’s could be tapped for investments in new branches of its own were still something activities were via stakes in banks and industrial and infrastructure enterprises. of a rarity at the time; the Frankfurt railways. The bank played a major part in the branch dated from 1886 and the Munich development of Germany's electrical- branch from 1892, while further When in spring 1914 the "Frankfurter engineering industry, but it also gained a branches were established in Dresden Zeitung" told its readers that Deutsche strong foothold in chemicals and steel. A and Leipzig in 1901. Bank was "the biggest bank in the solid base in Germany permitted the In addition, the bank soon recognised world", the claim marked not only the Deutsche Bank branch offices and holdings in 1909 financing of business abroad, which in the value of specialist institutions for climax but the end of an era. The First some cases kept the bank occupied for the promotion of foreign business, World War brought the first phase of years, the best-known example being concentrating on Latin America and the globalisation of the world economy the Baghdad Railway. Asia. Deutsche Ueberseeische Bank to an end and forced Deutsche Bank to The second half of the 1890s saw the was established as the sole subsidiary concentrate on its activities in Germany beginning of a new period of expansion in 1886. for a long period. 1905-06 1909 –10 1914 1916 1917 Opening of branches Opening of branches Acquisition of Bergisch Participation Merger with Schlesischer in Nuremberg and in Istanbul and Märkische Bank in Elber- in the Deutsche Ozean- Bankverein and Augsburg Brussels feld and its branches in Reederei and the Norddeutsche Creditanstalt the Rhineland-Westpha- Mitropa lia industrial region 4 History Deutsche Bank In the Weimar Republic 1919 –1932 After the First World War the banks had to come to terms with a very different world. Before business was able to recover, Germany was hit by inflation. There was new business, some of Increasing costs and the trend For many years, it would not be possible which was to have an impact for a long towards consolidation throughout the to return to circumstances that might in time to come. The bank played a industry were the main reasons for some ways have been considered significant role in the establishment of the merger. It was the most reminiscent of the 'golden age' before the film production company, UFA, and significant merger in the German the First World War. in the merger of Daimler and Benz. financial world for decades, and it came at just the right time to help counteract the unfolding world economic and banking crisis. The consolidation of the German At the peak of inflation in 1923: banking industry peaked in 1929 banknote for 20 billion marks when Deutsche Bank merged with its In terms of its political impact, that crisis most powerful rival, Disconto- was the most disastrous economic The immediate post-war period was a Gesellschaft. For eight years what event of the century. The shortage of time of liquidations and acquisitions. was easily Germany's largest bank liquidity that paralyzed the banks was The bank had lost most of its foreign operated under a dual name – fuelled by a combination of short-term investments and branches. In Deutsche Bank und Disconto- foreign debt and borrowers no longer Merger of „Deutsche Bank und Germany, by contrast, the branch Gesellschaft – before reverting to its able to pay their debts, while the DiscontoGesellschaft“ 1929 network was expanded considerably, former, rather more memorable inflexibility of the state exacerbated the mainly via mergers with partner name in 1937. situation. regional banks. 1920 1923 1924 – 25 1926 1927 1928 1929 1931–32 Acquisition of Hyperinflation in Acquisition of Participation in the Acquisition of Acquisition of Merger of Deutsche Following the banking Hannoversche Bank, Germany Württembergische founding of Lufthansa Lübecker Privatbank Hildesheimer Bank Bank and Disconto-Ge- crisis, Deutsche Bank Braunschweiger Vereinsbank in and in the merger of sellschaft; the company und Disconto- Privatbank and Stuttgart and Essener Daimler Motoren-Gesell- is now called 'Deutsche Gesellschaft has to Privatbank zu Gotha Credit-Anstalt schaft, Stuttgart, with Bank und Disconto- deposit one-third of its Benz & Cie., Mannheim, Gesellschaft' share capital with the to form Daimler-Benz state-owned Golddiskontbank Deutsche Bank History 5 Deutsche Bank History In the Third Reich 1933 –1945 Hitler's seizure of power in 1933 marked the beginning of the darkest chapter in the history of Deutsche Bank.