The History of DVB Bank 1923 – 2013 Events – Decisions – Experience 1923 – The HistoryofDVBBank Events –DecisionsExperience Borislav Bjelicic 2013

1923 – 2013

The History of DVB Bank Introduction

18 June 2013 marks the 90th year of DVB‘s The story begins with the institution set up as the financial founding. It has been through quite a bit services provider to the (the German National Railway). In fact, the Bank remained a wholly-owned since 1923, and has little in common today subsidiary of Deutsche Bundesbahn (the German Federal with the Bank that was created back then. Railways) until 1988, when partial privatisation begins and the sole shareholder starts to gradually sells its stake. In 1995 the majority shareholding is acquired by DZ BANK (which was still trading as DG BANK back then). These changes cause the Bank’s long-standing ties to the railway sector to fade, and prompts questions as to how the Bank should position itself. Ultimately a decision is made to expand the Bank’s business activities from land transport to include aviation and maritime shipping, growing across national borders and throughout the world. As a specialist bank, DVB concentrates on a niche market, which is in fact massive when its global scale is con- sidered. Passenger and freight transport have been growth sectors for quite some time. Freight traffic has benefited from the globalisation of the world’s economy and the increasing decentralisation of procurement, production and sales relation- ships across long distances. Passenger transportation has been driven by rising prosperity, and the demand for tourism-related services that goes hand in hand with it. Over the past several years, DVB has succeeded at carving out a position for itself as the premier global financing provider for aircraft, seagoing vessels, rolling stock and other transport assets, including container boxes and aircraft engines. The Bank has transformed itself from an unknown into a brand name. The DVB brand now symbolises dependability and expertise the world over.

1923 –1932 1933 –1945 1946 –1949 1950 –1973

The Bank‘s foundation The Bank during the A new start The Bank during the and development during Nazi regime in West “Wirtschaftswunder“ – the Republic – Page 24 – 33 Page 34 – 39 a reliable partner to becoming the principal Deutsche Bundesbahn, banking partner to the German Federal Deutsche Reichsbahn, the Railways German National Railway Page 40 – 51 Page 04 – 21 Ten questions for: Ten questions for: Kurt Müller Karl-Heinz Boldt Page 52 – 53 Page 22 – 23 90 years DVB Bank 02 | 03

v Prof Dr Borislav Bjelicic, Head of Corporate Communications and author of “The History of DVB Bank“

At the same time, this process has also been reflected in strong (1974 – 1988) sees the beginning of globalisation and concludes financial results. And looking ahead, the future has much in with the momentous occasion of the Bank’s initial public offering. store for the Bank. The pace of change will continue to be rapid. also represents an important milestone This publication is dedicated to the Bank’s history. To date, only for the Bank, sparking years of business expansion into the two such commemorative editions have been published, namely new Federal states in (1989 – 1996). This period on the 40th (Merten/Schmidt 1963) and 50th anniversary of of time draws to a close with a reassessment of the Bank’s the Bank (Brestel 1973). The many things that the Bank has business strategy for the years ahead. The outcome is a decision seen and done in the forty years that have passed since that to develop into a specialist bank in international transport finance, time certainly merit retelling here. New information linked to a process which is completed by the end of 2003 and has been historians’ research findings has also been discovered about steadfastly adhered to ever since (1997 – 2013). the Bank’s early years. This publication will look at these findings. While this publication makes no claim to be a comprehensive In addition to the selection of publications listed in the biblio­ and definitive history of DVB Bank, it will attempt to recount graphy, the Annual Reports published since 1923 and the the major milestones in the Bank’s story, with all its highs and employee gazette published and distributed since 1959 are also lows. And because the events of the Bank’s past need to be important sources of information about the Bank’s history. considered against the backdrop of general political and social transformation in order to be understood, it is also important History is about people, and a company’s history is always to trace major developments in the history of Germany and the shaped by its people. That is as true today as it was 90 years world. ago. As such, Bank employees from the past and present have been asked about what they have seen and experienced This work covers different eras of the Bank. The first section throughout the different phases of the Bank’s life. (1923 – 1932) describes the development of the Bank during the . The next section is dedicated to the National Socialist era (1933 – 1945). After the end of WW II, recon- struction of the Bank in the western region of Germany begins (1946 – 1949). Following its formation, the Federal Republic of Germany experiences an era of continuous economic growth (1950 – 1973): prosperity booms. The following period

1974 –1988 1989 –1996 1997 – 2013 Appendix

The “Wirtschaftswunder“ German reunification – The Bank develops into Members of the ends – partial privatisation DZ BANK acquires a a global specialist for Bank‘s Board of Managing and IPO majority shareholding – international transport Directors and Supervisory Page 54 – 59 the Bank evolves from finance Board a railway bank into a Page 72 – 83 Page 100 – 101 Ten questions for: transport finance house Arno Grunhold Page 64 – 71 Ten questions for: Branches and Page 60 – 63 Wolfgang F. Driese bureaux de change Page 84 – 87 Page 102 – 103 David Goring-Thomas Page 88 – 91 List of pictures and images Richard Groeneveld Page 104 – 105 Page 92 – 95 Marilyn Gan References Page 96 – 98 Page 106 – 107

Concluding remarks Imprint Page 99 Page 108 h Two telegrams dated 12 May 1923, to communicate the agreement concerning the name of the bank to be established. They were addressed to the solicitor entrusted with transferring the corporate shell of Pforzheimer Hypothekensicherungs-AG to the new bank; the senders were Jacques Bronner, one of the founder shareholders (and later, the Bank‘s first Deputy Chairman of the Supervisory Board) and Dr Walter Prerauer, one of the Bank‘s first two Managing Directors. 90 years DVB Bank 04 | 05

1923 – 1932

The Bank’s foundation and development during establish state-owned railways. In the absence of a coordination the Weimar Republic – becoming the principal of the different rail networks, the full economic potential of the railroad cannot be realised. And the birth of the German banking partner to Deutsche Reichsbahn, the Kaiserreich in 1871 does not in itself bring about an end to the German National Railway fragmentation of the railroad system. Baden, , Hesse, Mecklenburg, Oldenburg, Prussia, Saxony and Wuerttemberg continue to operate their own state-owned railways. However, The history of DVB Bank starts with the creation of Deutsche the economic crisis of 1873 leads to a consolidation, as state- Verkehrs-Kredit-Bank Aktiengesellschaft on 18 June 1923 in owned railways acquire privately-owned railways in financial . The First World War had ended just five years prior, and trouble. Between 1860 and 1890, state-owned railways increase the German is suffering as one of the defeated nations from 58% of Germany’s total rail network to 92% (Ambrosius left in its wake. WWI’s fallout includes ceded territory and 1984, p. 29). During this era, technological developments in the redrawn borders, as well as reparation demanded by the victors rail sector increasingly drive the industrialisation of Germany. from the German Reich. Political uncertainty looms large. While Railways thus become important sources of income for the the collapse of the monarchy signifies the end of an era for many states. Naturally the railway system also becomes important people, causing some of them to reject the new democratic to the military, as a means of conveying troops and military system, others view the political transformation as an oppor- goods – as was made apparent in WWI. tunity to spread new ideas and make them a reality. Strong forces emerge from both the right and the left, willing to do After the end of WWI, the economic situation deteriorates for anything – even if it means the use of force – to achieve their the railways. Due to the decline in economic activity, income political goals. One of these new forces is the Nationalsozialis- is shrinking. The railways also have to help to integrate those tische Deutsche Arbeiterpartei (NSDAP or Nazi party), which returning from war. The poor financial situation for individual holds its first party convention in in 1923; at the time, state-owned railways in the wake of WWI contributes substan- the party has 55,000 members. The economic situation tially to the decision to merge the different networks to create remains tense. Inflation escalates throughout 1923, ultimately a nationwide Railway Administration. These factors eventually raging to hyperinflation before being curtailed at the end of culminate in the State Treaty on the Transfer of the State-Owned 1923 with the introduction of the Rentenmark. Railways to the Reich, which provides for the formation of Deutsche Reichsbahn on 01 April 1920 in the Weimar Republic Deutsche Reichsbahn (the German National Railway), with which (Gottwaldt 2011, p. 21 et. seq.). Only a few months prior, on the foundation and development of Deutsche Verkehrs-Kredit- 01 October 1919, the Reich Transport Ministry (Reichsverkehrs­ Bank is inextricably entwined, has a decisive role in the state’s ministerium) had been formed. economy in that year, and is the country’s largest employer. The American economic historian Alfred C. Mierzejewski even However, some of the territories lost as a result of the war – dubbed Deutsche Reichsbahn the “Most Valuable Asset of the and the railway lines that went with them – prove problematic Reich”. for the economic development of the Reichsbahn, due to the loss of freight volumes. The had planned The railway’s history in Germany began with the inauguration for some territories to be ceded immediately. The largest such of the first stretch of track between and Fürth in action related to Alsace-Lorraine (to France), as well as the 1835. Railroading then developed predominantly through the majority of Western Prussia and the Poznan Province (both to initiative of the private sector. But individual German states – Poland). In other regions, referendums were scheduled to decide for Germany is still a confederation of states at this point before on whether to remain within or secede from the German Reich. they are unified under the Deutsche Reich in 1871 – begin to The most important popular vote involved Upper Silesia. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Otto Fischbeck, co-initiator of the Bank‘s foundation and the first Chairman of the Supervisory Board of Deutsche Verkehrs- Kredit-Bank

Conflicts following the referendum in this region between Rail transport statistics indicate not only that massive loads of Germany and Poland, which had been decided in favour of goods are transported, but also that corresponding payment Germany, eventually led to Upper Silesia being divided – with flows are generated, which require processing. To handle them, a portion, including the coal mining region, going to Poland. The Deutsche Reichsbahn uses an official deferred freight payment Saar region was occupied under a League of Nations mandate, procedure whereby all of the shippers’ fees are deferred for the with the coalfields awarded to France as reparations. A referen- freight carried within a specified period. This deferred freight dum was slated for 1935 to decide on the future of the Saar payment procedure was also used by predecessor companies region. The Rheinland, including the Ruhr region, was to remain of Deutsche Reichsbahn. In the Encyclopaedia of Railways, under Allied administration. These developments were impor- Viktor von Röll describes the principle as follows: “Deferred tant, because coal was not only a valuable resource for the steel freight payment is credit for freight amounts due. The railway industry at the time; it was far and away the most important foregoes immediate payment for goods conveyed, in order to fuel source for the nation, and its railways. streamline business processes and avoid unnecessary cash circulation by settling the forwarded freight against the bor- Despite all of these obstacles, Deutsche Reichsbahn is a rower’s credit, and only taking payment after a certain period transportation force to be reckoned with in 1923. By the end of time. […] Credit is generally only extended once collateral of the 1922 reporting year, it controls a rail network spanning has been pledged” (Röll 1914, p.122). The various railways’ 51,691 km (with another 3,658 km operated by privately- deferred freight payment structures predominantly differed only owned railways). More than 31,000 locomotives and nearly with regard to the amount of the freight credit permitted, 700,000 freight cars are at work on the lines. 470 million tonnes the billing cycle, and the way collateral was measured. of goods are conveyed and nearly 3 billion passengers trans- ported in 1922, underscoring the importance of the railway, In 1922, Deutsche Reichsbahn has in place both a one-day and for the economy and for society. With just over one million monthly deferred freight payment procedure for its customers, employees and civil servants, the railway represents the single despite the fact that the procedure requires quite intensive most important employer of the German Reich (Statistisches administration (Malotki 1935, p. 14 –16). Looking for ways to Reichsamt 1925). improve deferred freight payment, the Reich Transportation Ministry assembles a committee chaired by Otto Fischbeck, By way of contrast, road traffic and aviation have yet to assume the former Prussian State Minister of Trade, that pays a visit any significant role in passenger and freight transport. The to the Austrian Railway Administration in in April 1923. Statistical Yearbook for the German Reich (Statistisches Jahr- There the committee discovers that a bank has been using buch für das Deutsche Reich, 1925) reports that there are a new procedure to handle deferred freight payment since 100,340 motor vehicles registered in the country for passenger October 1922. transport, and 51,736 motor vehicles used for freight transport. But it is not long before the motor vehicle establishes itself as one of rail’s major competitors, both for passenger and cargo traffic. Throughout the whole of 1923, only 8,507 passengers travel by air on 1,378 flights in Germany. The heyday of aviation only begins after the end of WWII. 90 years DVB Bank 06 | 07

h Company logo from 1923

The process is as follows: “Once collateral is pledged, the borrower receives so-called order booklets from the lender. A credit limit is written on the booklet’s cover. The freight customers then use these booklets to pay for their forwarded freight at the dispatch offices by presenting them to the rail officer who then fills out an order for the corresponding amount and deducts it from the booklet. For accounting purposes, these orders are treated as cash by the rail department offices. After the half-monthly deferral period expires, the railway submits the accumulated orders to the bank with the instructions that it is to be paid in full before a short grace period expires” (Kaatz 1927, p. 5).

Upon the commission’s return, it recommends that the bank- based deferred freight payment procedure be instituted. But to do so, they first need to create a bank. Fischbeck manages to garner interest in the project from a variety of banks and investors. On 17 May 1923, an agreement is reached between Deutsche Reichsbahn and the soon-to-be bank, whose interests are represented by Otto Fischbeck. On 18 May the Reichsbahn h Head office of Deutsche Verkehrs-Kredit-Bank, at Markgrafenstrasse in Berlin ratifies the ten-year contract. On 25 May 1923, the agreement (from 1925 to 1936) is approved by the Reich Transportation Ministry, under the condition that a bank be established (Kaatz 1926, p. 2–3). The first Board of Managing Directors of Deutsche Verkehrs- The interested partners (founding shareholders include Kredit-Bank comprises Mr Ernst Schlesinger and Dr Walter Dresdner Bank, Bankhaus S. Bleichröder, Kur- und Neumärkische Prerauer. In 1924 Richard von Schaewen becomes the Board’s Ritterschaftsbank, Deutsches Kalisyndikat and Kommerzienrat third member. Otto Fischbeck becomes Chairman of the Super- Jakob Bronner) execute the Memorandum and Articles of visory Board. The new company’s registered office is in Berlin. Association on 18 June 1923 to create Deutsche Verkehrs- The first premises are initially located on Bellevuestrasse, before Kredit-Bank Aktiengesellschaft, which commences operations the Bank moves to Schadowstrasse 6/7, where it remains until on 01 July 1923. To keep start-up time to a minimum, the shell February 1925 (DVKB Gazette No. 3/1960). The headquarters of of a bank that had been established on 1 July 1918 but was Deutsche Verkehrs-Kredit-Bank subsequently relocate to new inactive – Pforzheimer Hypothekensicherungs-AG – is used, and premises in an office building on Markgrafenstrasse 46 at the renamed Deutsche Verkehrs-Kredit-Bank (Kaatz 1926, p. 2–4). intersection of Französische Strasse. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h Dr Walter Prerauer h Richard von Schaewen h Ernst Schlesinger

The first board of Managing Directors of Deutsche Verkehrs-Kredit-Bank

The agreement requires Deutsche Verkehrs-Kredit-Bank to When Deutsche Verkehrs-Kredit-Bank is founded in 1923, create a clearing house for deferred freight payments in each Germany is experiencing currency devaluation which ultimately of the Reichsbahn’s divisions (which are responsible for railway leads to hyperinflation. The most obvious cause is the increased operations in a specified geographical area), to handle freight supply of money by the Reichsbank, which eventually goes billing within that region. Because the newly founded Bank out of control. The underlying reason, however, relates to how needs time to set up its own clearing houses, it initially out- German military expenses were financed during WWI, including sources the work to third-party banks for a fee. In the second the aftermath of the end of the war (James 1998, p. 46). During half of 1923, nine renowned banks – among them the two the war, the Kaiserreich relied minimally on taxes to fund the founding shareholders Dresdner Bank and S. Bleichröder – help war and instead went into heavy debt by selling war bonds to to set up 28 clearing offices(Kaatz 1926, p. 35). its citizens. The remainder was financed through more state debt in the form of treasury bills and similar instruments. All of Most clearing offices are later transformed into independent these decisions were based on the assumption that Germany banks, with Deutsche Verkehrs-Kredit-Bank becoming a share- would win the war and that the defeated nations would pay holder. Under the typical investment arrangement, Deutsche reparations for its cost, which Germany would then use to cancel Verkehrs-Kredit-Bank holds a 50% stake, with the remainder out its debt (cf. Blaich 1994, esp. p. 38 et seq., and Ambrosius going to the partner bank(s). In Munich, Bayerische Verkehrs- 2005, p. 302–303). Kredit-Bank AG is established according to this arrangement. Bayerische Hypotheken- und Wechsel-Bank and Bayerische This miscalculation left Germany in a precarious position at the Vereinsbank hold half of the shares as partners. In the Königs- end of the war, which left it as the nation owing reparation berg/East Prussia region, a partnership with Dresdner Bank payments. Other consequences of the war, such as caring for yields the Ostpreußische Verkehrs-Kredit-Bank AG (Kaatz 1926, the war invalids and tending to surviving dependants of war p. 36–37). victims, led to increased government spending. To prevent mass unemployment after soldiers returned from the front, the state In addition, other banks are granted the right to take part in the implemented support measures. All of these developments deferred freight payment process as so-called delivery points. were pitted against the backdrop of a sharp decline in state These banks can coordinate deferred freight payment for their revenue as industrial output was initially far below its pre-war own customers without them having to switch to one of the levels, causing the state deficit to grow. These factors, along clearing house banks. The rationale for the arrangement is with the continued payment of war bonds after the Kaiserreich that the Reich Transport Ministry wanted to prevent Deutsche collapsed, spurred the rise in state debt. In 1919 a series of Verkehrs-Kredit-Bank from monopolising the new bank-based tax increases were introduced with the aim of improving the deferred freight payment procedure (Malotki 1935, p.14–19). state’s income situation, but politicians quickly shifted focus to promoting employment, which again led to increased spending. After Deutsche Verkehrs-Kredit-Bank commenced operations, Ultimately, statutory measures were introduced that granted the new procedure is rolled out while Deutsche Reichsbahn’s the Reich Finance Minister unlimited access to Reichsbank loans deferred freight payment procedure is still in use. This remains to finance the soaring deficit, which sparked inflation in 1921. the case until 23 January 1925, when a resolution is adopted by the Board of Directors of the Deutsche Reichsbahn-Gesellschaft (the German National Railway Company, which was founded in October 1924), to make Deutsche Verkehrs-Kredit-Bank responsible for all of the Reichsbahn’s deferred freight payment. 90 years DVB Bank 08 | 09

h Railways in the Weimar Republic: Series 39 steam engine no. 39 151 of the German National Railway Company (1931)

In the 1920s, Berlin is the financial Bau-Anstalt von Siemens & Halske in and J. Mendelsohn & Co. number centre of the German Reich Berlin. The railway boom makes the amongst Germany’s largest private (cf. Berghoff 2002; James 2002). Berlin Aktiengesellschaft – the public limited- banks. Disconto-Gesellschaft, which owes its position to the development liability company – popular for other was founded in 1851 and merges of the railways, and the industrialisation companies that emerge over the with Deutsche Bank in 1929, along that has gone hand in hand with it from course of industrialisation. Ultimately, with Dresdner Bank, Darmstädter und 1840 onwards. Establishing a railway incorporated banks, or Aktienbanken, Nationalbank, Bayerische Vereinsbank company requires considerable capital, also emerge that far surpass the private and Commerz- und Privatbank are and entrepreneurs increasingly look to banks and state institutions, which had amongst the nation’s leading banking the stock markets for financing. While been dominant until the mid-nineteenth institutions. assumes a sceptical stance century with regard to their ability to towards this development, preferring mobilise capital (Berghoff 2002, p. 89). to concentrate on traditional business Berlin becomes a hub for Germany’s with state bonds, as many as 87 railway equity business, and the corresponding companies are listed on the Berlin stock growth of the Berlin stock exchange – exchange by 1860. Berlin is also an coupled with its geographic proximity industrial frontrunner as a centre for to the German central bank – represent locomotive engineering, in addition two key factors behind Berlin’s impor- to its position as an important location tance as a financial centre at the point for mechanical engineering and the in time when Deutsche Verkehrs-Kredit- electronics industry. For instance, in Bank is founded. The shareholders of the 1847 Werner Siemens and Johann Bank represent the premier names on Georg Halske establish the Telegraphen the Berlin financial market. S. Bleichröder 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

As the population lost confidence in the currency, a run on tangible assets began and the velocity of money increased, paving the way for hyperinflation. Everything came to a grinding halt with the introduction of the Rentenmark in October 1923 which was followed with the currency reform of August 1924 that introduced the Reichsmark. Those with monetary assets were the big losers. The winners included private borrowers and the state, whose debts practically evaporated into thin air. The only positive effect is an inflation economy that begins by shoring up the labour market and eventually expanding economic production facilities.

Currency devaluation presents tremendous difficulties for the newly founded Deutsche Verkehrs-Kredit-Bank when it came to executing the deferred freight payment procedure. One employee recalled the situation as follows: “Ever-increasing inflation was a major problem for collateral, which was still recorded in Papiermark (paper mark). By the end of the credit period, the collateral was almost never sufficient any longer. By the time inflation ended, our customer base had shrunk to the few firms that were still solvent” (Franz Schneider in DVKB Gazette No. 14/1962).

Author Stefan Zweig, who flees in 1934, saw inflation as an underlying reason for Hitler’s subsequent rise to power, the vitriol directed at the Weimar Republic and its democratic politicians, because “virtually everyone had lost. But the people who were held responsible were not the people who were to blame for the war, but the self-sacrificing – albeit unrecognised – who bore the brunt of re-shaping society. Nothing made the German people – and this must not be forgotten – so bitter, so vitriolic and so primed for Hitler as inflation. […] an entire generation held these years against the German republican system […]” (Zweig 1958, p. 288–289).

h Bank notes printed during the 1923 period of hyperinflation 90 years DVB Bank 10 | 11

k First annual report of Deutsche Verkehrs-Kredit-Bank (1924)

In 1923 extensive reparation demands weigh heavily on Germany. Because Deutsche Reichsbahn has returned to being a highly While extensive payments in kind were made directly after the profitable enterprise, its revenue is channelled into paying war ended – the railways, for example, saw roughly 5,000 loco- reparations. A key feature of the Dawes Plan is to have the motives and 150,000 freight cars go to the victors as reparations Reichsbahn issue reparation bonds itself, subsequently made (Ambrosius 1984, p. 77) – cash payments were now being over to a trustee of the creditor nations. These debt securities demanded. The associated reparation negotiations are driven are to accrue interest and be paid out according to a predefined by a variety of different interests. France’s interests rest first schedule (cf. Ruser 1981 for more detail). In order to maintain a and foremost with high reparation payments, while Weimar clear picture of the company’s financial position and profit and Republic governments seek to minimise reparations in light of loss account at all times, the Reichsbahn has to be separated the country’s economic problems. In 1921 the Ulti­ from the state budget and transitioned into a commercial enter- matum sees reparations set at Goldmark 132 billion, and a prise to ensure that it is run as a competitive business. The payment plan is drawn up (James 1998, p. 48). France seeks first step is the creation of Deutsche Reichsbahn, which is a guarantees for the payments. At the beginning of 1923, faced public-sector enterprise at this stage, on 12 February 1924. with the spectre of default, French and Belgian troops occupy On 11 October 1924, it is transformed into Deutsche Reichs- the Ruhr region. The Weimar government responds with so- bahn-Gesellschaft (German National Railway Company), which called passive resistance. This leads railway workers from France is to function entirely as a private-sector business. The manage- and to take control of operations from their ousted ment structures reflect this. The company is run by a Manage- German counterparts. ment Board (Vorstand) comprising a General Director and other Directors, one of which serves as Deputy General Director. A Both inflation and the occupied Ruhr territory shape social dis- Board of Directors (Verwaltungsrat) serves as the supervisory course in Germany in 1923, and encourage radical opposition body of Deutsche Reichsbahn-Gesellschaft. The first General from both the right and the left to launch coups against the Director is former Reich Transport Minister Rudolf Oeser, while Weimar Republic. In October 1923, the German Communist the industrialist Carl Friedrich von Siemens becomes Chairman Party attempts to overthrow the government; in November the of the Board of Directors. Pursuant to the requirements of the Hitler coup follows. These attempts are ultimately quashed. Dawes Plan, there are also four non-German members of the Board of Directors (one representative from Belgium, France, Hyperinflation is brought to a grinding halt with the introduction Great Britain and Italy, respectively). A Railway Commissioner of the Rentenmark on 15 November 1923. At the beginning with far-reaching supervisory rights is positioned alongside the of 1924, progress is made in reparation negotiations with the Board of Directors. In 1926 Julius Dorpmüller assumes the role formation of a committee of experts under the direction of of General Director following the death of Rudolf Oeser, with Charles Dawes who is charged with creating a new reparation Carl Friedrich von Siemens initiating this appointment at a meet- payment plan that takes Germany’s economic situation into ing of the Board of Directors which coincidentally takes place account. The result is the Dawes Plan, which is presented to on the same day as Oeser’s passing. In making the move, the Reichstag (the German parliament) in April 1924 and Siemens hopes to pre-empt the possible appointment of a accepted in August. The Dawes Plan envisages a retreat of politician (Siemens 1962, p. 206 et seq., and p. 219). foreign troops from the Ruhr region, which becomes reality in July 1925. The Reichsbahn is at the very centre of the plan By extricating the Reichsbahn from the Reich Finance Ministry’s as a source of reparation payments. budget, the company must now organise its substantial cash and financial flows itself. At a very early stage, this situation gives rise to the idea of creating an independent banking divi- sion within the Reichsbahn. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

k Share certificates of Deutsche Verkehrs-Kredit-Bank (1924–1925)

When the Reichsbahn eventually receives an unexpected offer in mid-June 1924 to acquire 40% of the share capital of Deutsche Verkehrs-Kredit-Bank from a floundering majority shareholder, the Reichsbahn is presented with the opportunity to have its monetary transactions handled by an established banking organisation. The Reichsbahn decides to go ahead with the investment, but demands that the agreement governing the deferred freight payment procedure be amended, that it acquire an absolute majority of the share capital and that other reputable Berlin-based banks be added to the shareholder structure. On 24 June 1924, 51% of the total share capital is transferred to Deutsche Reichsbahn-Gesellschaft. In the course of a capital increase on 30 September 1924, the Reichsbahn is able to increase its holding to 66%, by exercising subscription rights granted under its prior acquisition and by purchasing additional shares. Four new banks also join the ranks: Deutsche Bank, Darmstädter und Nationalbank, Commerz- und Privatbank and its first meeting, the Board of Directors considered whether it Reichs-Kredit-Gesellschaft (Document 2). would be better to have a special division within the company [the Deutsche Reichsbahn-Gesellschaft] dedicated to managing Before the capital increase, the Reichsbahn (as the majority the company’s funds or to use an established bank for this pur- shareholder), Deutsche Verkehrs-Kredit-Bank, and the banking pose. It was beyond question that the existing resources in the consortium comprising both new and old shareholders, together company, namely the ranks of civil servants, were neither suffi- reach an agreement that sets out guidelines for investing Reichs- cient nor suitable. […] The Board of Directors therefore came bahn funds. These guidelines describe the role of the bank to the decision to develop the bank in such a way that it would shareholders as follows: “Without prejudice to the discretion of handle the company’s funds but be prohibited from engaging in the Reichsbahn to determine where to allocate available funds, any independent banking business that it may have begun. […] but in the expectation that these funds will substantially flow to The Verkehrs-Kredit-Bank is therefore not to be treated as a the Bank [i.e. Deutsche Verkehrs-Kredit-Bank], there is general separate and independent banking institution, but rather one of consensus in the interests of the Bank’s liquidity that these the company’s departments” (Document 5). funds first and foremost flow to the institutions represented within the Consortium, insofar as these Banks are prepared On 23 January 1925, the Board of Directors of Deutsche to match rates offered by top-quality institutions. The Bank shall Reichsbahn-Gesellschaft decides to transfer responsibility for offer and distribute these funds to the Consortium pursuant all of its deferred freight payment activities, as well as for the to the stipulated consortial shares” (Document 1). organisation of its cash flow and the administration of a portion of its financial transactions, to Deutsche Verkehrs-Kredit-Bank. In a subsequent letter to Léon Delacroix, the Belgian reparation Literally, this means that “The Board of Directors of Deutsche trustee, Carl Friedrich von Siemens, President of the Board of Reichsbahn-Gesellschaft agrees that Deutsche Verkehrs-Kredit- Directors of Deutsche Reichsbahn-Gesellschaft, explains the Bank in Berlin shall assume responsibility for deferred freight reasons behind the Reichsbahn’s investment in Deutsche payment business under the condition that Deutsche Verkehrs- Verkehrs-Kredit-Bank in 1924: “At the very beginning during Kredit-Bank refrains from conducting general banking business, 90 years DVB Bank 12 | 13

and does not develop into a general commercial bank. The Board required for regular payments are transferred to the railway pay of Directors further agrees that the Reichsbahn-Gesellschaft offices. The Reichsbank is also more heavily involved in invest- shall at its discretion permit Deutsche Verkehrs-Kredit-Bank to ing the liquid funds available to us” (Annual Report 1927–28). manage liquid funds. These funds shall only be transferred to In a letter to the Main Administration of Deutsche Reichsbahn- recognised banks in good standing” (Document 3). Gesellschaft dated January 1928, the Reichsbank writes that: “To our present understanding, it seems as though the involve- However, any investments have to be short term in order to ment of the Reichsbank in the management of Reichsbahn ensure that the Reichsbahn always has sufficient available funds […] is assured to a satisfactory level” (Document 6). liquidity. As such, the Reichsbahn funds are generally invested overnight or, on an exceptional basis, for one month. No invest- As mentioned, the decision by the Board of Directors of Deutsche ments shall be made in foreign currency, or in securities, due to Reichsbahn-Gesellschaft of 23 January 1925 also involved con- the risk involved. With the help of Deutsche Verkehrs-Kredit- centrating the entire deferred freight payment business within Bank, internal payment flows between Reichsbahn cash-handling Deutsche Verkehrs-Kredit-Bank. By 1 March 1925, the monthly units can be rationalised and accelerated, which facilitates deferred freight payment procedure offered by the Reichsbahn interest savings or benefits(Kaatz 1927, p. 11–12; p. 32 et seq.). has been replaced, though the one-day deferred freight payment arrangement remains in place for existing customers for a short The transfer of the administration of the Reichsbahn’s funds is period. Also on 1 March 1925, the delivery points are removed however challenged by the President of Deutsche Reichsbank from the Bank’s deferred freight payment procedure. Now (Germany’s central bank), Hjalmar Schacht. Because he believes, Deutsche Verkehrs-Kredit-Bank clearing offices in the Reichs- as a matter of policy, that all public-sector funds should be con- bahn divisions are exclusively responsible for the settlement of trolled or centrally administered by the Reichsbank, he tries to deferred freight payments. These existing offices are gradually exert influence as to how Deutsche Reichsbahn-Gesellschaft’s transitioned into branch offices of Deutsche Verkehrs-Kredit- funds are managed. On 17 March 1925, a meeting takes place Bank. Where the clearing offices are independent banks based at the Reichsbank between President Schacht, Otto Fischbeck, on a joint venture between Deutsche Verkehrs-Kredit-Bank and Ernst Schlesinger and Alexander Jahn (representing the Reichs- one or more other banks, the partners are bought out. By the bahn). In this meeting, Schacht attacks “the decentralised end of 1925 the transition process has been completed. The management of funds, which he sees as contrary and damaging branches in Essen, Cologne and Elberfeld are the Bank’s first to the interests of a consistent picture of the money market” own new offices to open. In the deferred freight payment busi- (Document 4). First, the Reichsbahn rejects his offer to deposit ness, longer credit terms are now also offered, which means its cash exclusively with the Reichsbank. Later, however, a that major shippers in particular are granted longer deferred compromise is reached that requires Deutsche Verkehrs-Kredit- payment periods. After 1925, Deutsche Verkehrs-Kredit-Bank Bank to establish an account at Deutsche Golddiskontbank offers its deferred freight payment service to smaller railway (Gold Discount Bank), which it opens in May 1927, where it operators, industrial and works railways. The Bank also begins must deposit a substantial portion of the funds it manages extending loans to Reichsbahn suppliers. A number of improve- (Annual Report 1926–27; Mierzejewski 1999, p. 275–277). In ments are also made to the deferred freight payment procedure the 1927–28 Annual Report (1 July 1927 to 30 June 1928), the (Kaatz 1926, p. 12 et seq., p. 29, p. 37–38; Kaatz 1927, p. 37–41; Bank describes a working relationship with the Reichsbank that Malotki 1935, p. 17–19). has become even closer: “In the majority of the Reichsbahn divisions, income from the railway offices is transferred to us via a Reichsbank current account, which is also how the funds 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Memorandum dated 25 September 1924 on the handling of Reichsbahn funds, signed by Alexander Jahn (Deutsche Reichs- bahn), Ernst Schlesinger, Dr Walter Prerauer and Richard von Schaewen (Board of Managing Directors of Deutsche Ver- kehrs-Kredit-Bank), and Otto Fischbeck (Chairman of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank); presumably, it was Paul von Schwabach who signed “S. Bleichröder“, on be- half of the syndicate of banks that held a stake in Deutsche Ver- kehrs-Kredit-Bank and representing S. Bleichröder Bank on Deutsche Verkehrs-Kredit-Bank‘s Supervisory Board. 90 years DVB Bank 14 | 15

v Client note concerning a deferred freight payment to the Essen branch of Deutsche Verkehrs-Kredit-Bank (1927)

Following a capital increase from two to four million Reichsmark Due to the deferred freight payment business, which comprises agreed on 25 October 1925, the Reichsbahn increases its share- 17,129 borrowers by 30 June 1926 (Annual Report 1925–26), holding to 75% (Kaatz 1927, p. 8). As part of this capital increase, Deutsche Verkehrs-Kredit-Bank’s customer base continues to some shareholders depart while other join the mix. In 1927 nine grow. One of the large shippers in Germany is the German banks are part of the the shareholder structure: Dresdner Bank, branch of Schenker, a forwarding company. Founded in 1872 Bank­haus S. Bleichröder, Darmstädter- und Nationalbank (DANAT by Gottfried Schenker (1842–1901) with two partners (Moritz Bank), Commerz- und Privatbank, Reichs-Kredit-Gesellschaft, Hirsch and Moritz Karpeles) in Vienna, Schenker & Co. enjoys Diskonto-Gesellschaft, Mendelsohn & Co., Bayerische Hypo­ unbridled growth up until the end of WWI. After the military theken- und Wechselbank and Bayerische Vereinsbank. The defeat of the Central Powers of Germany and the Austro- last capital increase to take place before the end of WWII in Hungarian Empire, borders are redrawn and new transport 1945 occurs on 1 July 1931 (from four million to twenty million connections develop as a result. The dissolution of the Habsburg Reichsmark). Deutsche Reichsbahn emerges as the owner Empire diminishes Vienna’s significance as one of Europe’s of nearly all of the shares, with the exception of a few shares economic centres, while Berlin gains prominence despite amounting to no more than 3,000 Reichsmark of the total share Germany’s defeat. As a result in 1919 a German Schenker capital (Document 9). office is established in Berlin that is legally autonomous but financially dependent on the headquarters in Vienna. The Manag- In 1926 Deutsche Verkehrs-Kredit-Bank assumes responsibility ing Director, Marcell Holzer, who is also a partner, quickly begins for operating bureaux de change at train stations. The bureaux a course of expansion – even in the face of opposition from the de change network is actively expanded, and continues to be head office. Where the company once had 18 offices in Germany operated by the Bank for several decades until ReiseBank AG is in 1919, it is represented at 126 different locations by 1923. spun off in 1996 and sold to DZ BANK in 2003. In the 1920s, The expansion is made possible by bank loans. After inflation bureaux de change can be found in every major railway station ended in 1923, overcapacity in transportation became apparent, where international routes begin or end, as well as at various causing financial problems(for more information on Schenker, border train stations. Rail is still the undisputed leader in inter- see Matis/Stiefel 1995 and Matis/Stiefel 2002). national European travel. In 1925 Schenker is granted a large loan by Deutsche Verkehrs- Aviation has yet to assume any substantial role in international Kredit-Bank totalling 15 million marks, with a portion set aside transit, although the first consolidation in aviation occurs in 1926 for Schenker in Vienna. This loan is connected with an advertising with the foundation of the Deutsche Lufthansa. Unrelenting commitment in favour of Deutsche Reichsbahn. Schenker’s technological progress is spurred by the search for “higher, German business assets, namely property, investments and faster, further” in aviation. Charles Lindbergh’s non-stop solo the like, serve as collateral for the loan. In 1926 and 1927 the flight across the Atlantic from New York to Paris causes a sen- German office of Schenker receives two more loans in the sation. By April 1928, three pilots (Hünefeld, Köhl, Fitzmaurice) amount of 3 million and 3.5 million marks, respectively, bringing manage to make the first transatlantic flight in the other direction the Bank’s total exposure to 21.5 million marks (cf. Matis/Stiefel in a Junkers W 33 from Baldonnel (Ireland) to Greenly Island 1995, p. 278–283). (Newfoundland). Speed plays a major role in intercontinental maritime passenger transport as well. In June 1929 the steam- The years immediately following hyperinflation are character- ship “Bremen” wins the ”Blue Riband” for the fastest trans­ ised by a certain degree of stabilisation in the German economy, atlantic trip, on its maiden voyage. but the same does not apply to the state budget. A new era of sovereign debt begins that is financed to some extent by foreign 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

borrowing (cf. Ambrosius 2005, p. 317 et seq). In the United Prior to the beginning of the global economic crisis, German States, the years following WWI are a period of exceptional banks relied on foreign capital to extend loans for investments, economic growth. Share prices soar as a consequence. In the due to the limited capacity of the German capital market. The belief that the stock market will continue to climb, investors interest rates paid by German banks are quite high, because looking to get involved finance their share purchases with loans. foreign creditors demand a premium for the poor credit rating When the speculation bubble bursts on the New York Stock of the German Reich. The funding costs are priced into the Exchange on 25 October 1929, known as Black Friday, it has loans extended to German companies by German banks. As dramatic repercussions for banks and the US economy. The sales and company earnings shrink at the beginning of the global fallout is not confined to the United States. On the contrary, economic crisis, it becomes more difficult for companies to Black Friday signals the start of a global economic crisis which make their relatively expensive instalment payments on the peaks from 1930 to 1932, but has implications which last well loans, which means that credit risks mushroom on banks’ books. into 1933. Germany, like other countries, relies on money Darmstädter und Nationalbank (DANAT Bank) is no exception borrowed from the United States and is affected when that to the trend. There, the first rumours of troubled loans and pos- financial support is revoked, sparking the beginning of a crisis. sible insolvency cause foreign investors to pull out their deposits. The contraction in global trade, exacerbated by the introduction Although they are short-term in nature, the deposits form the of protectionist policies, leads to a decline in German exports – basis for long-term loans, which causes the situation to esca- and as a result, to a drop in industrial output. Unemployment in late; the long-term loans cannot be recouped because of the Germany, which had already been severe prior to Black Friday, borrowers’ difficult financial situations(Kopper 2005, p. 7 et reaches record highs in 1930. seq.).

The outbreak of the global economic crisis also marks the In light of the problems at DANAT Bank, which eventually come beginning of the end of the Weimar Republic. The parliamentary to the attention of the Reich government, an emergency order system had already contended with a number of crises in the is issued to guarantee all customer deposits at DANAT Bank. years before: forming stable parliamentary majorities was often The purpose is to authorise the bank to inform its customers impeded by the plethora of – often small – political parties, of the guarantee. The plan is to close the bank on 13 July 1931, evidenced by the fact that there are sixteen different government in order to undertake the necessary preparations. However, cabinets between 1919 to March 1930. From March 1930 to unease amongst bank customers mounts. In his memoirs, January 1933, Germany is governed by Presidential Cabinets Heinrich Brüning, the Chancellor at the time, writes that “my (under Chancellors Brüning, von Papen and von Schleicher) fears that one bank suspending payments could exacerbate the which rely increasingly on emergency orders. These are a form public run on other banks, requiring an all-out rescue package of legislation not backed by any parliamentary majority, but for all the banks was confirmed the following morning” [i.e. which came into use after being proposed by the government 13 July 1931] (Brüning 1970, p. 320). To prevent the situation to President Paul von Hindenburg, who took office in 1925, and from deteriorating further, all banks in Germany were closed on received full legal force through his signature. 14 and 15 July 1931. Uneasiness spread across the border. 90 years DVB Bank 16 | 17

Employee Regulations 1925

1. Upon assuming his duties, every employee shall submit his Employee Insurance or Disability Card, etc. to the Personnel department. 2. Office hours shall begin punctually at 9:00 AM. The Bank reserves the right to make changes to office hours. Tardiness shall be reported to the Head of Personnel or his Deputy, and the employee‘s Department Manager. The duration of the working hours shall be governed by stat- utory and collectively agreed regulations, which shall be posted by the Bank for viewing. 3. any changes to an employee‘s personal or family situation shall be reported to the Personnel Office immediately, particularly as regards births, deaths, and children under 18 commencing work, etc. 4. Illness, or any development that prevents an employee from working, shall be reported by phone, pneumatic post or telegram at the earliest possible opportunity on the morning of the first day of the employee‘s absence, and the estimated duration of the absence shall be indicated. Every employee must submit to an examination by a company-appointed physician upon request. Holiday requests shall be addressed to the Head of Personnel or his Deputy. 5. all employees must maintain absolute confidentiality with regard to all of the Bank‘s business matters. Any violation is punishable by immediate termination. 6. Personal telephone calls are prohibited: in exceptional cases permission may be obtained from the employee‘s Department Manager. Employees are not permitted to leave Bank property without permission during office hours. Gentlemen – not trainees – shall be permitted to smoke only after closing time. Should this cause any problems, the Bank reserves the right to prohibit smoking entirely. Books shall be fetched and taken away by male employees, female employees shall make requests for delivery men accordingly. 7. every employee must take care in using typewriters, calculators and accounting machines. This equipment must be cleaned and returned to its protective casing at the end of the day. Improper use of equipment may incur fines for damage. Employees shall use materials only with the utmost thrift and frugality. 8. each employee shall be liable and responsible for the materials, desk and cabinet key, hand towels, etc. which are assigned to him. The Bank accepts no liability for any loss or damage to personal belongings. 9. The above-mentioned conditions form part of the employee‘s contract of employment, and by signing, the employee agrees to abide by them. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Fritz Bergner, a long-standing branch manager of Deutsche Despite rising unemployment, the Chancellor in office at the Verkehrs-Kredit-Bank, remembers that DVKB was insulated time, Brüning, implements austerity measures. Taxes are from the banking crisis because the Management Board of the increased and spending is cut, escalating the crisis. While the Bank – he names Ernst Schlesinger – “had already decided to salary and wage cuts that ensue do manage to make German withdraw any placements by Deutsche Verkehrs-Kredit-Bank export products more competitive, other nations have long once their terms expired. These funds were then kept on the since erected import barriers to protect their own economies. Reichsbank account, at zero per cent interest. When all banks However, the high unemployment levels cannot be attributed closed their doors on 13 July, [...] Deutsche Verkehrs-Kredit- to the global economic crisis alone. Rationalisation measures Bank was the only institution that was not insolvent, because also take their toll by replacing labour through capital invest- the Reichsbank was not affected” (DVKB Gazette No. 1/1990). ments. The rising number of jobless, which surpasses the six million mark in Germany at the beginning of 1932, fuels radical Eventually the Reich government had to stabilise the banking political groups, namely the communist party on the left and system by offering financial assistance and acquiring shares in the Nazi Party on the right of the political spectrum. At this point the major banks affected by the crisis. A standardisation of in time, the communists are able to point to the success of the terms (interest rates and fees), initiated by the state, eradicated Soviet Union model under the leadership of Joseph Stalin, which banking competition. For the first time, a state banking super­ has managed to expand its economy while shielding it from the visory authority was introduced. Any remaining bank deposits distortions of the global economic crisis (Blaich 1994, p. 75). from foreign creditors were frozen. Foreign exchange control was also implemented, which would remain in place until 1958 (Kopper 2005, p. 7 et seq.). 90 years DVB Bank 18 | 19

v Hand-written application of Mr Walter Lohrenscheit, dated 9 November 1928, who was subsequently employed by the Bank. Born on 21 January 1908, Walter Lohrenscheit joins the head office of Deutsche Verkehrs-Kredit-Bank on 13 May 1929 from Dresdner Bank, where he had started an apprenticeship on 1 April 1923 and was hired as a bank officer in October 1925. He was drafted into the German armed forces during World War II, and was reported missing in January 1945.

For the Reichsbahn, as for all other companies active in freight, and Behala (the company operating the inland ports of the City the global economic crisis translates into lower cargo volumes of Berlin). If any of the reparation creditors had found out at that and declining earnings. Deferred freight payment sees increas- stage that the Reichsbahn had such significant reserves – and ing payment problems and defaults that the Bank manages to for that length of time – it definitely would have been forced to cope with successfully, as the 1929–30 Annual Report (01 July continue paying the share of reparations demands that had been 1929 to 30 June 1930) attests: “Despite the almost unprece- tied to it” (Brüning 1970, p. 258). In order to ensure that the dented payment difficulties plaguing the German economy, transaction is kept confidential, a complex structure is adopted the freight balances owed to us have generally been collected with Deutsche Verkehrs-Kredit-Bank holding the Schenker without issue, and arrears never exceeded the levels of the shares on trust for the Deutsche Reichsbahn. Despite isolated last business year by any significant degree. Payment stoppages rumours that emerge and reported by the press, the contract of by shippers were more frequent than before, but our credit sale is kept a secret until 1938 (Matis/Stiefel 2002, p. 25). protection enabled us to realise our claims within a short period of time in nearly every case, so that no noteworthy defaults The Brüning government constantly strove to minimise repara- occurred”. As the economic crisis escalates, the Bank’s deferred tion obligations throughout its tenure, which it succeeds in doing freight payment business declines by roughly 20% in the 1930–31 under the Young Plan, the successor to the Dawes Plan. At the reporting year (01 July 1930 to 30 June 1931) and by another beginning of 1929, an expert commission begins work in Paris 26.9% in the year that followed (01 July 1931 to 30 June 1932). under the stewardship of Owen D. Young, who is officially But the Bank remains unscathed by large-scale defaults, appointed in May 1930 with retrospective effect to 1 September “although we have had to resort to collateral more than in the 1929. He defines a new total amount, changes the payment past” (Annual Report 1931–32). schedule again, and releases Deutsche Reichsbahn from its payment obligations (Ambrosius 2005, p. 322 et seq.). This also Schenker, which has been one of Deutsche Verkehrs-Kredit- marks the end of the Railway Commissioner and the four foreign Bank’s major borrowers, does not fare as well in the crisis. The representatives on the Board of Directors. However the Reich economic crisis leaves Schenker unable to pay back its loan. government starts attempting to exercise greater authority Confronted with this situation, Deutsche Reichsbahn decides over the Board of Directors (Siemens 1962, p. 272 et seq.). In to acquire Schenker Germany through its holding company August 1931 – shortly after the height of the banking crisis in Deutsche Verkehrs-Kredit-Bank in 1931. The outstanding loans Germany – US President Hoover’s proposed debt moratorium are converted into shares in Schenker, and the remainder is ac- enters into force, suspending Germany’s reparation payments quired directly (Mierzejewski 1999, p. 347–348). for a full year due to the country’s dire economic situation. Finally, at the Lausanne Conference in July 1932, all reparation Because reparation creditors had been told repeatedly of payments are cancelled, with the exception of a deferred one- Germany’s difficult economic and financial situation when time payment. discussing reparation payments, the takeover has to be kept secret. The Chancellor at the time, Heinrich Brüning, writes in While the fact that Schenker has been taken over by the Reichs- his memoirs that “the Reich government was practically pre- bahn is being kept secret, a separate rail forwarding contract is sented with a fait accompli with the Schenker contract. Only after signed between Schenker and the Reichsbahn in 1931 that the Reichsbahn had signed was the government told that the becomes the subject of intense public debate. Under this con- Reichsbahn had effectively held a controlling stake in Schenker tract, Schenker’s help is used to change tariff structures and for years” (Brüning 1970, p. 259). “Before the reparation issue the costs of truck feeder services into and out of train station was resolved, no one, under any circumstances whatsoever, freight offices. The ultimate goal is to make rail more attractive could talk to anyone, including individual members of parliament, than road haulage, which has expanded. This contract between about the fact that the Reichsbahn had secretly acquired Schenker Schenker and the Reichsbahn was seen as a positive develop- 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

x Letterhead of Deutsche Verkehrs-Kredit-Bank‘s head office (1931)

ment by Brüning: “The idea that this contract could help to reg- ulate lorries on surface roads was a good one, and it resonated with me” (Brüning, 1970, p. 259). In response to intense oppo- sition to the rail forwarding contract, amendments are made to make it more palatable, but the negotiations this entails between the Reichsbahn, industry representatives and the Reich government in October give rise to a Road Traffic Act, which has a decisive influence on competition between road and rail for many years to come. To protect the railway, which was seen as the state’s most important asset, road haulage is regulated. Truck companies become subject to licensing, and a tariff system for long-distance transit (the Reich motor vehicle tariff) is intro- duced (cf. Matis/Stiefel 1995, p. 321–329).

After being taken over by the Reichsbahn, Schenker continues to operate in the red for a certain amount of time, although the Reichsbahn is able to absorb the losses. But the Reichsbahn’s influence increases. A supervisory committee is formed and two of its seats are allocated to Deutsche Verkehrs-Kredit-Bank. Moreover, a Reichsbahn director is appointed to Schenker’s executive management. By the end of the 1930s, Schenker is once again in the black (Matis/Stiefel 1995, p. 337).

After Deutsche Verkehrs-Kredit-Bank became Deutsche Reichs- bahn’s banking partner, a collaboration also begins with the Railway Savings and Loan Banks (Eisenbahn-Spar- und Darlehns­ kassen). These banks were founded in the late 1800s to provide civil servants, workers and employees of the railways with retail banking services. In 1906, after a significant number of Railway Savings and Loan Banks have been established, the Audit Asso- ciation of the Railway Savings and Loan Banks (Revisionsverband der Eisenbahn-Spar- und Darlehnskassen e. V.) is formed. That same year, a central financial institution (the Federal Bank of the Association of Railway Savings and Loan Banks, or Verbands­ kasse der Spar- und Darlehnskassen des Allgemeinen Verbandes der Eisenbahnvereine) is created to pool the funds collected at the different bank branches and invest them. It also balances liquidity between the banks. By 1924, there is a Railway Savings and Loan Bank in every Reichsbahn division. The central insti- tution now operates under the name Reichsverkehrsbank [Reich Transport Bank] (cf. Olten 2006). 90 years DVB Bank 20 | 21

The Railway Savings and Loan Banks survive the banking crisis of 1931 because of their close relationship with the Reichsbahn, due largely to the fact that the Reichsbahn guarantees their customers’ deposits in July. This guarantee naturally strengthens the influence that the Deutsche Reichsbahn has on the Reichs­ verkehrsbank. Deutsche Reichsbahn uses this influence to require all of the Railway Savings and Loan Banks to deposit their excess liquidity exclusively with the Reichsverkehrsbank. In turn, the Reichsverkehrsbank makes some of these funds available to Deutsche Verkehrs-Kredit-Bank that it can then use to extend loans to the Reichsbahn (Olten 2006, esp. p. 60–62, p. 69–72, p. 78–79).

During his Presidential Cabinet’s tenure from March 1930 to May 1932, Chancellor Brüning attempts to combat rising unem- ployment sparked by the global economic crisis by pursuing a deflationary policy, but without success. He is unwilling to implement active economic policies akin to those advocated h The world economic crisis led to huge unemployment in Germany: by British economist John Maynard Keynes. Shortly before his the picture shows a large group of unemployed people outside an term in office comes to an end, a job creation programme of employment agency in Berlin; on 4 May 1932, payment delays triggered modest scope is proposed but ultimately not adopted. The job mass gatherings and unrest amongst the unemployed. creation programme, which includes awarding public-sector contracts, is passed in his successor’s term in government, Chancellor von Papen, who holds office form June 1932 to early He is appointed Chancellor on 30 January 1933 by President December 1932. And though the programme’s scope is slightly Paul von Hindenburg. In the runup to the appointment, meetings larger, it remains small. To implement the first job creation take place between Hitler and conservative politicians about programme under the Reichsbahn’s auspices comprising working together to form a coalition government. An important 280 million Reichsmark, a company called the Reichsbahn- secret meeting also is held on 4 January 1933 in the Cologne Beschaffungs GmbH [Reichsbahn Procurement Company] is home of Kurt von Schröder, who later becomes Chairman of established in 1932 as a wholly owned subsidiary of Deutsche the Supervisory Board of Deutsche Verkehrs-Kredit-Bank. He Verkehrs-Kredit-Bank. The Bank provides the Reichsbahn with works “with tremendous ambition and without scruple […] to the necessary funds for the programme, and receives financing secure a leading political position amongst the banking elite” from the Reichsbank (Annual Report 1932–33). Under the govern- (Kopper 2005, p. 42). A number of conservative politicians do ment of Chancellor von Schleicher, who holds office for only become members of Hitler’s first cabinet, but it is not long be- two months (03 December 1932 to 30 January 1933), the ground- fore they outlive their usefulness. work is laid for a broader job creation programme, the fruits of which are reaped by his successor Adolf Hitler (Humann 2011, p. 34–51). 1923 – 1933 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for Karl-Heinz Boldt

You started out as a trainee at Deutsche Verkehrs-Kredit-Bank in Berlin in 1937. What motivated you to apply for the job? Actually my father encouraged me to do it. I would have rather gone down the army officer track, but he believed that training at a bank was a better choice. A friend of my father suggested Deutsche Verkehrs-Kredit-Bank.

How did the application process go? It was actually quite straightforward, especially as the Bank had six apprenticeship positions to fill. It was certainly also unique that Deutsche Verkehrs-Kredit-Bank, unlike other large private- sector banks, did not require its apprentices to have an Abitur (the German university entrance qualification). After an interview in the personnel department, a placement was confirmed quite quickly.

Can you still remember your first day Karl-Heinz Boldt, born on 03 February 1920, began a of work at the Bank? traineeship at the Bank in 1937 but was forced to leave before Yes, I remember my first day of work at the Bank particularly completing it, due to the war. In 1949 he was able to rejoin the well, because I showed up wearing shorts. I was only 17 and Bank in Frankfurt/Main. In 1951 Mr Boldt attained power of totally wet behind the ears. Naturally it was immediately apparent attorney status, before becoming an authorised officer (Prokurist) from the way the other employees looked at me that I was in 1959 and later a departmental director in 1963. In 1970 he not properly attired. I didn’t offer a repeat performance. Back was appointed director and in 1972 he was invited to join the then, things were generally more formal and strict. You have Bank’s Board of Managing Directors, where he remained until to imagine that authorised officers were practically demigods his retirement in 1985. at a bank in those days.

How did you get to work? What sort of office hours were there? I lived with my parents in Kreuzberg on Mittenwalderstrasse. Berlin had a fantastic transit system for a big city even then. From my house it was really convenient to catch the U-Bahn to the Unter den Linden station, right next to the famous Hotel Adlon. The Bank was just a few steps away on the first floor of a very impressive office building. A day’s work was still eight hours back then. But what a lot of people aren’t aware of today is that it was a six-day work week, Saturday was usually a work- day. That means that the average work week was 48 hours. 90 years DVB Bank 22 | 23

»Yes, I remember my first day of work at the Bank particularly well, because I showed up wearing shorts.«

How did the politics of National Socialism impact the Bank? Did you find work there? I have a negative memory of two bank employees who wore Yes I got work at the Eisenbahnverkehrskasse, the East German the so-called Gold Party Badge with great pride because it was Railway Pay Office – sort of the newly founded successor to for party members with a membership number below 100,000. Deutsche Verkehrs-Kredit-Bank, which the Soviets had closed. They were kowtowed to and were practically more important I met three or four former banking colleagues there. At the Eisen- than the Board of Managing Directors. And anyone who wanted bahnverkehrskasse, we just worked on deferred freight payment. to make management had to be a party member. My wife and I decided to flee to the Western occupation zones of Germany, and we reached Frankfurt/Main in 1949, which What training phases did you undergo and when did you was in the American zone. And Deutsche Verkehrs-Kredit-Bank finish your apprenticeship? had already started doing business for the zone in Frankfurt. I The training period lasted two and a half years, and my very first contacted them and was able to start in Accounting a short post was in Accounting. Then I was sent to other departments. while later. When I first started I didn’t really feel like I was in the right place because I had other ideas about the sort of career I wanted, What sort of responsibilities did you have in the years as I already mentioned. But once I earned my first pay check I that followed before you were appointed to the Board of quickly felt more at home. I had just hit the two-year mark in my Managing Directors in 1972? apprenticeship programme when I was drafted into the army in I always specialised in cash management, in investing and October 1939. administering Bundesbahn funds. Almost all of my colleagues wanted to become branch managers. I wasn’t interested in And what happened then? that. I always wanted to work at the head office, to be at the In 1940 I went to Norway, which was occupied by the Wehr- centre of the decision-making. macht – the German armed forces – that year as is widely known. In Norway I met my wife, who was originally from the What do you think of the way the Bank has developed Berlin area, and we married in 1944 in Oslo. She returned since you retired? home to be with her parents – her father was a forest ranger – I have to pay Mr Driese an enormous compliment because he and I stayed in Norway right through the war. Then, just like has driven the Bank forward every year since he took over as everyone else in the Wehrmacht, I was sent to an internment CEO, and the Bank has performed very well. There is just no camp; finally, an English transport ship brought me to Hamburg. comparison between the Bank today and the old public-sector I lived with my aunt for a little while in the British zone before Deutsche Verkehrs-Kredit-Bank. But on the other hand, one going to look for my wife in Berlin. By the time we reunited, we could say we might never have made it so long without the had ended up in Magdeburg in the Soviet-occupied zone. That public sector. was 1946. h Portrait of „Verkehrs-Kredit-Bank as the Reichsbahn banking department“, shown in Deutsche Reichsbahn‘s 1932 calendar 90 years DVB Bank 24 | 25

1933 – 1945

The Bank during the Nazi regime is founded in 1934, which, like Reichsbahn-Beschaffungs GmbH, is also financed via Deutsche Verkehrs-Kredit-Bank (Merten/Schmidt 1963, p. 10–11, Brestel, p. 20).

Three steps swiftly lead to Nazi dictatorship after 30 January From 1933 onwards, the defence sector develops relatively 1933. The first is the Reichstag fire emergency order passed by quickly. With the expansion of the German air force and the the President in the wake of the Reichstag fire of 27 February, reintroduction of conscription, Germany deliberately breaches making it legal to prosecute opposition parties. The second various provisions of the June 1919 Treaty of Versailles. The step is the 5 March re-elections in which the Nazi party wins international community is provoked further when the German 43.9% of the vote but falls short of the absolute majority armed forces, the Wehrmacht, march into the demilitarised required, which had been seen as a virtual certainty. However, Rhineland in 1936. Just one year before, the population of the with the help of the conservative German National People’s Saar region, which had been under the control of the League Party (Deutschnationale Volkspartei, DNVP), which holds 8% of Nations since 1920, had voted to become part of Germany. of the vote, the Nazi Party is able to form a government. The With the 1936 Winter and Summer Olympic Games being held third and decisive final step is the Enabling Act of 24 March in Germany, the country attempts to create the impression of 1933 which vests power in the government to pass legislation a peaceful nation. At the same time, political relations with without the consent of parliament and without the President’s Mussolini’s Italian fascists are developed, and support is signature. With this, Parliament is completely shut out from provided to fascist Franco troops in the Spanish Civil War. In the process of legislating, leaving Hitler with dictatorial powers March 1938, German troops march on Austria and prepare to which he immediately takes advantage of. Political parties are annexe the country into the Reich. In 1938 Hitler demands that forbidden and political opposition is violently stamped out. Czechoslovakia cede Sudetenland (principally comprising the northwestern, ethnically German provinces of Bohemia and When Hitler takes office, there are high expectations about Moravia) to Germany. After Great Britain and France eventually solving the problem of unemployment. First the job creation give in to his demands at the September 1938 Munich Con­ programme prepared by the Schleicher government is imple- ference, Czechoslovakia is invaded and the land is divided. In mented, albeit with an incremental budget for military spend- August 1939 Germany and the Soviet Union sign a treaty of ing. Other measures follow, including the decision to build non-aggression, which also includes provisions for claiming national highways. To execute the plan, a company by the name areas of interest in Eastern Europe. of Reichsautobahnen is founded. Detailed plans for a network of national highways, which had already been developed over The German attack on Poland on 01 September 1939 signals the last several years, can now be used. Both Reichspost (the the start of WWII. Poland is occupied and divided by Hitler and German state postal service) and Reichsbahn also introduce Stalin (in 1940 the Soviet Union also occupies the three Baltic some of their own job creation programmes that increase the republics). Germany’s military power initially seems boundless. number of contracts awarded to private-sector companies During 1940 German troops occupy Denmark, the , (Humann 2011, p. 67 et seq.). Deutsche Verkehrs-Kredit-Bank Belgium and Luxembourg. In June 1940 the French army sur- (through its wholly-owned subsidiary, Reichsbahn-Beschaffungs renders. Air raids on Great Britain begin. In 1941 Yugoslavia is GmbH) provides financing for additional Reichsbahn-related job defeated, Greece is occupied and the invasion of the Soviet creation measures that total 560 million Reichsmark. To cover the Union begins. The tide turns when the United States enters the financing requirements of constructing the highways, Reichs­ war after the bombing of Pearl Harbor in December 1941 by autobahnen-Bedarfs GmbH [Reich National Highway Company] the Japanese, and German troops are defeated at the Battle of 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Adolf Hitler‘s rise to power 1933: Hitler at the window of the Reich Chancellery at Wilhelmstrasse in Berlin, accepting the people‘s ovations in the evening of 30 January 1933.

Stalingrad, which finally ended in February 1943. From that As Germany develops a wartime economy, the financial exploita- point onward the Wehrmacht retreats, under attack from Allied tion of defeated and occupied countries plays an important role troops and resistance groups in occupied countries. The carpet from 1939 onward. In addition to agricultural products and raw bombing of German cities escalate in 1943. Allied forces launch materials vital for Germany’s military sector, local production the invasion on the beaches of Normandy on 06 June 1944. plants are seized and expanded by German companies. The use While the American and British troops zero in on Germany from of forced labour, prisoners of war and concentration camp the west, Soviet forces reach Berlin in April 1945. The final prisoners is also a component of the German war economy. battle for Berlin ends on 02 May, and on 08 May 1945 Germany Relying on these measures more heavily within Germany frees declares its unconditional surrender. up more soldiers to be called away to war. By May 1945, there are roughly 370,000 forced labourers in Berlin while the German Because military production is given top priority after Hitler population of the city has dropped to 2.6 million (Pagenstecher/ seizes power, state intervention in the economy increases Buggeln 2013, p. 127). Production planning is continuously steadily from 1933 onwards. Industrial cartels are promoted improved and processes are rationalised so that the output of and the state begins investing in companies, naturally showing military goods – even towards the end of the war in 1944 – is a preference for the defence sector. Various state measures further increased (Ambrosius 2005, p. 347 et seq.). (e.g. subsidies) put pressure on companies to shift their research and production focus in the desired direction. Coordinated state In addition to the war, Nazi leaders target the persecution, targets are set for the production of fuel, rubber and synthetics. expulsion and mass execution of Jews and other minorities. As control over state and society inexorably tightens, new Directly after Adolf Hitler seizes power, the persecution of administration structures emerge, and existing ones are devel- Jewish citizens begins, even though many people had believed oped further. Administration and defence generate new jobs. that “Nazi anti-Semitism was only propaganda leftover from the State employment measures, including mandatory service and NSDAP campaign, and would eventually lose political currency. the construction of the national highway network and air raid They did not understand that radical anti-Semitism was one of bunkers, yield new jobs. Military spending is financed with the core elements of National Socialist politics, binding together debt. Extensive wage and price control measures prevent the the fragmented political ideology of National Socialism” (Kopper increased supply of money from leading to inflation(Ambrosius 2005, p. 50). 2005, p. 331 et seq). 90 years DVB Bank 26 | 27

The involvement of the Reichsbahn in the German Reich’s On 7 April 1933, NSBO members are also at work at Deutsche policies concerning Jewish fellow citizens can be summarised Verkehrs-Kredit-Bank. They dissolve the three-person Board of as follows: the Reichsbahn begins by dismissing Jewish civil Managing Directors – Ernst Schlesinger and Walter Prerauer servants and employees; it then organises boycotts of the are both of Jewish decent – and replace it with a single Nazi Reichsbahn’s Jewish suppliers and acquires Jewish property Party member to serve as Managing Director. They justify the under the Aryanization programme. Gradually Jews are no longer move by accusing the Board of having perpetrated some form allowed to use passenger trains or be present in train stations. of fraud, an accusation that naturally has no basis in reality Over the course of the war, forced Jewish labour (particularly in (Gottwaldt 2011, p. 87). Ernst Schlesinger emigrates that same railway construction) is used. The Reichsbahn’s most extensive year to London where he begins working at Barclays Bank, involvement in the crimes of the Nazi regime ultimately concerns while Walter Prerauer flees to the United States(as recalled its planning and operation of special trains to deport Jews to by Fritz Bergner, DVKB Gazette No. 2/87). The non-Jewish concentration camps (Gottwaldt 2011). member of the Board of Managing Directors, Richard von Schaewen, does not return to the Board and withdraws from The Reichsbahn is not alone; in every other sector of the banking entirely. Dr Max Martin Schlenker, Dr Karl Richter and economy, Nazi policies targeted against Jews are generally Alfred Stegner eventually take their place, the latter being implemented without resistance. Members of the NSDAP and replaced by Dr Hermann Jaeger in 1937. Schlenker leaves in associated organisations provide support at the outset. Party 1939, with the remaining members staying to manage the Bank members who had organised themselves within companies throughout the war. prior to Hitler’s rise to power now demand Jewish employees be removed from their jobs. Their underlying motivation is to advance quickly through the company as they fill the vacant x Berlin inner-city traffic in the 1930s: Potsdamer Platz positions. Flying the Swastika flag at offices is one of the first requirements. Quite early on, on 20 March 1933, members of the NS Fachschaft Reichsbahn, a professional association of Reichsbahn civil servants who were NS supporters, demand that the personnel pool be “cleansed”. Members of the National­ sozialistische Betriebszellenorganisation (“NSBO” or National Socialist Factory Cell Organization in which party members amongst workers and employees are organised) make similar demands (Gottwaldt 2011, p. 86 et seq. and Hachtmann/ Kreutzmüller 2013). 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

k Headquarters of Deutsche Verkehrs-Kredit-Bank in Berlin (from 1936 to 1945) – the building x Deutsche Verkehrs-Kredit-Bank bureau de change at Munich’s central station at Unter den Linden 10

The Law of the Restoration of Professional Civil Service also applies to Deutsche Verkehrs-Kredit-Bank, since its majority shareholder, Deutsche Reichsbahn, is a public company. Based on the existing, albeit no longer complete, personnel files in DVB’s company archive, there are four cases of employees being dismissed as a result of the Law in June 1933 (Fritz Cassel *1907, Dr. Othmar Ziegler *1896, Louise Hutter *1902, and Hildegard Lange). In 1936, Deutsche Verkehrs-Kredit-Bank exchanges employees with the Jewish Bankhaus Abraham Schlesinger (founded 1806): Karl Löwenthal is sent to join Abraham Schlesinger. In all of the cases named, the affected individuals survived the war and the Bank paid them compen- sation (including under the Federal Law on Compensation for Victims of National Socialism and the Law Governing the Resti- tution of National Socialist Injustice for Dependants of Civil Servants) and voluntary damages for its actions. Karl Löwenthal recommences employment at the Bank’s Berlin branch when the war is over. After the war ends, Othmar Ziegler returns to Shortly after Hitler seizes power, the Law for the Restoration Germany as a British Officer and lobbies for Deutsche Verkehrs- of Professional Civil Service (Gesetz zur Wiederherstellung des Kredit-Bank’s ability to continue trading in the British and Berufsbeamtentums) is passed on 7 April 1933, which makes American occupation zone (Documents 7–8; 10–13). it legal to fire the majority of Jewish civil servants. Only Jewish civil servants who have been in office since before WWI are Hitler’s regime immediately seeks to exert greater influence permitted to keep their jobs due to a special dispensation clause. over the Reichsbahn after coming to power. One of the attempts Later, in September 1935, the entry into force of the Nuremberg made to cement this influence is the establishment of a Liaison Laws will remove this exception (Kopper 2005, p. 37). With an Staff for Reichsbahn Issues (Führerstab Reichsbahnfragen) by executive order dated 4 May 1933, the Law is expanded to the Nazi Party in May 1933. The director of this Liaison Staff, apply to all workers and employees in the public sector or at who by virtue of the position is the interface point between the companies in which the state has a controlling stake (Kopper Reichsbahn and the Party, is Wilhelm Kleinmann, who goes on 2005, p. 53). The Law for the Restoration of Professional Civil to become deputy general director of the Reichsbahn after July Service does not apply to private companies. In non-Jewish 1933 (Gottwaldt 2011, p. 94–96). A series of politically motivated businesses, however, a wave of rising political opportunism changes take place at the Reichsbahn’s Board of Managing puts increasing pressure on Jewish employees to quit their Directors level and below. Ludwig Homberger is an exception, jobs. Moreover, businesses favourably inclined to Nazi policies as he continues to serve as the Director responsible for Law and terminate their business relationships with Jewish businesses. Finance from 1931 onwards. Despite the fact that he is Jewish State-owned companies and agencies cease placing orders with and the object of constant hostility, he is kept on the Board private Jewish companies. Ultimately, Aryanization prevents because he is deemed irreplaceable in his area of expertise Jewish enterprises from doing business completely. (Gottwaldt 2011, p. 104–106). 90 years DVB Bank 28 | 29

There are also personnel changes at the Board of Directors of The Nuremberg Laws enacted in 1935 mark the final blow for Deutsche Reichsbahn. Over the course of 1933, individual any remaining Jewish employees of the Reichsbahn. All Jewish members, including the Jewish industrialist Paul Silverberg, are civil servants are forced into retirement. Jewish employees are forced to relinquish their positions on the Board of Directors. Just dismissed. Now Ludwig Homberger, Director of Finance and as at other public companies and administrations, the positions Law at the Reichsbahn, is also let go; he subsequently relocates created by attrition are filled gradually by devotees of the new to the USA. His successor is Alfred Prang, who retains the regime. This is precisely how Kurt von Schröder is admitted into position through the war, until 1945. Beginning in 1941, his the Board of Directors. For a time, Carl Friedrich von Siemens activities extend to Deputy Chairman of the Supervisory Board remains Chairman of the Reichsbahn Board of Directors. of Deutsche Verkehrs-Kredit-Bank. After the war, he continues Although he is an important industrialist, he is deemed unreliable his career on the Board of Managing Directors of Deutsche by the Nazi regime due to his democratic political views. In Verkehrs-Kredit-Bank in Frankfurt/Main. Alfred Prang is amongst 1933 Otto Fischbeck retires from his role as Chairman of the the three Ministerial Directors who “demonstratively (wore) the Supervisory Board of Deutsche Verkehrs-Kredit-Bank, of which NSDAP party badge because they joined before the 1 May 1933 he had been a part since its founding in 1923. Carl Friedrich von membership freeze” (Gottwaldt 2011, p. 215). The freeze was Siemens becomes Supervisory Board Chairman of the Bank in imposed after membership exploded when Hitler’s rise to power his place. In 1934 Carl Friedrich von Siemens is forced to give up in January 1933 prompted a wave of people to join, and the his position as Chairman of the Reichsbahn Board of Directors, March 1933 Reichstag elections sparked another round of new which he has held since 1924 (Gottwaldt 2011, p. 73–80). One members. The membership freeze is not lifted until 1937. year later, he does the same with his Chairmanship of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank. Kurt von Schröder takes his place. In 1935, a high-ranking party func- tionary of the NSDAP, Herbert Stenger, joins the Supervisory Board of the Bank. (Annual Report 1934–35). 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Office scene at Deutsche Verkehrs-Kredit-Bank, Berlin (1938); Karl-Heinz Boldt, who would later be appointed Managing Director, is pictured on the right-hand side

In May 1936 the head office of Deutsche Verkehrs-Kredit-Bank Due to a large portion of West Prussia and the Poznan Province relocates to the impressive office building at Unter den Linden 10, being ceded to Poland, East Prussia was isolated from the rest where Schenker’s executive office used to be located. Their of the German Reich after the end of WWI. For train travel office is forced to move to another location in Berlin under an through the Polish corridor separating the Reich from East order by the Supervisory Committee, which had been appointed Prussia, various routes are established for which the Reichs- by the Reichsbahn after the Schenker takeover (Matis/Stiefel bahn has to pay transit fees to the Polish State Railway. Schnei- 2002, p. 44–45). demühl, Neu-Bentschen and Marienburg, where Deutsche Ver- kehrs-Kredit-Bank also operates bureaux de change, are In 1937 the special legal position of the railway changes when important border railway stations for rail traffic between the it is once again absorbed into the state as Deutsche Reichsbahn German Reich and East Prussia via the Polish territory in 1937. on 30 January. The integration of the Main Administration means At this stage the bureaux de change business is still subject to that ownership and operations are once again in the same hands. the foreign exchange control introduced after the financial crisis Julius Dorpmüller remains General Director, but takes the place of 1931, which means that there are still limits to the amount of of Reich Transport Minister Paul von Eltz-Rübenach upon Reichsmark that may be exchanged in international travel. Inter- his retirement. The former Deputy General Director Wilhelm state travel treaties govern the precise amounts (DVKB Gazette, Kleinmann becomes State Secretary, and other former members No. 12, 1962). Only in 1936 – the year of the Olympic Games in of the Management Board become Ministerial Directors. The Germany – the bureaux de change business posts better finan- Board of Directors (Verwaltungsrat) as an executive body is cial results. dissolved and replaced by an Advisory Board with a consultative function chaired by the banker Kurt von Schröder (Gottwaldt In 1937, 64.5% of the Reichsbahn’s freight income is settled 2011, p. 204 et seq.). through the deferred freight payment business. Stabilising the price of Reichsbahn securities is another important business In 1937 Deutsche Verkehrs-Kredit-Bank has 22 branches in the area for the Bank (Annual Report 1936–37). Over the course German Reich including the head office in Berlin. The network of 1937, the Annual Report is also brought into line with the of bureaux de change comprises 39 locations. Some are the calendar year. result of borders that were redrawn at the end of WWI. These include bureaux de change in Beuthen, Gleiwitz and Hindenburg In 1938 Austria is invaded and annexed into the German Reich. at border crossings that came about after part of Upper Silesia The central office of the Austrian National Railway is dissolved, went to Poland. In Gleiwitz on 31 August 1939, a Polish attack and the railway lines are absorbed into Deutsche Reichsbahn. on a local broadcaster is staged that is used as a pretence to Some of the lines are transferred to the Reichsbahn divisions in attack Poland, which begins on 1 September 1939 and marks Augsburg and Munich, the remaining portion is taken over by the beginning of WWII. Reichsbahn divisions in Vienna, Linz and Villach. Deutsche 90 years DVB Bank 30 | 31

v Annual report of Deutsche Verkehrs-Kredit-Bank (1943)

Verkehrs-Kredit-Bank establishes a branch in Vienna and takes In 1938 the first larger-scale deportations take place. At the end over the deferred freight payment business on 1 January 1939 of October, roughly 15,000 Polish Jews are removed from the that had been handled by the Wiener Giro- und Cassen-Verein, Reich and sent to Poland. After the Jewish pogrom on 9 Novem- and the Bank becomes responsible for managing the funds of ber (known as the Kristallnacht) more than 20,000 Jews are the former Austrian National Railway, which has become part transported to different concentration camps by rail, with the of the Reichsbahn. The operation of the lines in the occupied majority of them being released several weeks later. This Sudentenland is also transferred to the Reichsbahn, which movement, called the Rath Aktion, as well as an escalation of means that they fall under the Reichsbahn divisions in Oppeln, other measures designed to repress Jews in their day-to-day Breslau, Dresden and Nuremberg. The network in the newly lives, lead to a final wave of emigration that lasts until the war created Protectorate of Bohemia and Moravia is placed under begins on 01 September 1939. Very few people are able to the supervision of the German Reich (Gottwaldt 2011, p. 261 et leave the country legally after that point. In October 1941, Jews seq. and the Annual Report 1938). are forbidden to leave and deportation to the east begins. Only in exceptional cases do people manage to emigrate, illegally or Aryanization represents the climax of the exclusion of Jewish even legally (Gottwaldt 2011, p. 292–303). business people from the economic arena. German banks also participate in the Aryanization of Jewish assets. Some acquire After WWII begins, part of Poland is annexed into the German Jewish banks and investments. Others act as brokers, helping Reich after occupation. The railways lines in these areas are businesses in other sectors to acquire Jewish companies, prop- incorporated into the Reichsbahn, expanding the deferred freight erty and other assets by providing credit (Kopper 2005, p. 6). payment activities of Deutsche Verkehrs-Kredit-Bank. A branch Deutsche Verkehrs-Kredit-Bank has been presented with find- is founded in Poznan on 01 December 1939 for this purpose. ings in a report by the Austrian Historical Commission that the The administration of the remaining occupied area of Poland is expansion of the Bank’s business activities after the annexation undertaken by the so-called General Government located in of Austria and the expansion of the bureaux de change network Krakow. The rail network in this area falls under the administration to eleven locations entailed at least two cases of Aryanization of the General Directorate of the East Railway (Generaldirektion (Melichar 2004, p. 130–131). Ostbahn). In 1940 the Verkehrsbank Ost GmbH is founded to offer similar services to those offered by Deutsche Verkehrs- As noted in Deutsche Verkehrs-Kredit-Bank’s Annual Report Kredit-Bank. While the Bank is not involved in its founding, it for 1938, ideology was fostered amongst employees through offers the expertise of trained staff as support. In occupied a variety of measures, as at every company: “As in the past France in 1940, a new bank branch in Strasbourg is founded business year, we are making every effort to deepen our com- after the Reichsbahn takes over the operation of the railway pany community. Our fellowship events and company roll-calls lines in Alsace-Lorraine (cf. Annual Reports 1939 and 1940). have demonstrated that a sense of community and deep spirit of togetherness has truly been internalised by the flock”. Group leisure activities coordinated for Bank employees, which include sports and music clubs, and employee participation in retreats organised by the state travel company, called Strength through Joy (“Kraft durch Freude”), receive financial support from the Bank. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

While the Bank’s deferred freight payment business increases Einschränkung handelsrechtlicher Bekanntmachungen während after the war breaks out as the Reichbahn’s network expands, des Krieges] of 20 October 1943 prohibits, among other things, the bureaux de change business falters: 17 bureaux de change the publication of the annual financial statements(Reichs - have shut down by the time 1939 draws to a close. Two new gesetzblatt no. 92 of 21 October 1943). bureaux de change are opened in the Polish city of Lodz (now Litzmannstadt) and in occupied Gdansk (Danzig) that same year On 08 May 1945, the war ends in Europe with Germany’s (Annual Report 1939). In November 1941, 16 of the 37 existing surrender. WWII then concludes when Japan surrenders on bureaux de change are “temporarily closed” while others have 2 September 1945. Most Deutsche Verkehrs-Kredit-Bank reduced opening hours. branches and offices are in ruins. Among the few Bank build- ings that survive the war in relatively good condition is the head After the war begins in 1939, employees of Deutsche Verkehrs- office at Unter den Linden 10 in Berlin. However, it lies in Soviet- Kredit-Bank are called to serve in the war, which creates occupied Berlin. Numerous business documents are destroyed, widening gaps in staffing levels. These shortfalls are filled that is if they have not already been shifted to other locations. with employees from closed bureaux de change offices until Of the active staff during the twelve years of the Third Reich, roughly 1941, after which point more employees are called some are no longer alive, having fallen in battle or been lost in air away than there are people to take their place. As the end of the raids. Others are missing or prisoners of war. In a list published war draws near, the Bank’s business activities are increasingly on the Volkstrauertag (Day of National Mourning in Germany) in curtailed by Allied bomb raids on German cities. An increasing 1961, (DVKB Gazette No. 9/1961) 93 people are listed as dead number of branches are bombed out. Josef Hartmann, an and 14 as missing. Of the soldiers who survive the war, many employee at the Cologne branch office, wrote at the time in only return after 1945, some released from prisoner of war camps an issue of the company gazette in 1962 that “the first bombs with injuries. were dropped in autumn 1940. It didn’t take long before the bank offices on Komödienstrasse were damaged quite badly. Windows and doors were totally destroyed. After we put it all back together again as best we could a number of times, our offices burned down completely in 1942. Only the safe contain- ing our most important documents which we locked up every evening survived intact” (DVKB Gazette No. 11/1962, p. 3). At the time, business is conducted out of a rented conference room in one of Dresdner Bank’s offices. After more bombing prompts another relocation within Cologne, the rest of the business activities is transferred to Bad Godesberg (near Bonn). Doing business as usual becomes inconceivable. Whatever business is still being transacted at other branches is also trans- ferred; Stuttgart’s operations go to Nagold in 1943 before being moved to Obermarchtal (Danube) in April 1945 (DVKB Gazette No. 36/1968). In 1943 Deutsche Verkehrs-Kredit-Bank publishes what would prove to be its final financial statement and Annual Report for quite some time: the Ordinance on the Cessation of Financial Reporting during Wartime [Verordnung über die 90 years DVB Bank 32 | 33

v After the end of WW II, Kurt Freiherr von Schröder, Chairman of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank from 1935 to 1945, faces a de-nazification court

h Berlin in ruins, 1945 (Leipziger Straße/Leipziger Platz) 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h Currency reform in – with effect from 21 June 1948, the „D-Mark“ replaces the old Reichsmark in the Western sectors 90 years DVB Bank 34 | 35

1946 – 1949

A new start in West Germany doing business with one another. Because selling goods for money is no longer attractive, companies stop producing. Anticipating currency reform, they instead concentrate on expanding their stock of raw materials and goods, and on The Potsdam Agreement forms the basis of Germany’s further repairing their production facilities. In order to bring an end to development. In it the Allies agree to certain goals, including the excess currency in circulation and to put production back the democratisation, demilitarisation, denazification and decen- on track, the Deutsche Mark is introduced on 20 June 1948, tralisation of Germany. After Germany has been divided into four with a massive redenomination. Because the amount of the occupied zones, it quickly becomes clear that the occupying new currency in circulation has been attuned to the low supply forces have very different ideas about how to achieve these of goods available, the new currency is accepted immediately. goals. In the western zone, new states begin to be formed in Companies recommence production and stock reappears on 1946 that are later to become the federal states of the Federal store shelves which had been kept empty (Buchheim, 1998, Republic of Germany. Regional parliaments are constituted in p. 92–99). these states, and the first free elections since 1933 are held. In 1947, the USA introduces the , a programme Shortly before that point, on 18 June 1948, Deutsche Verkehrs- designed to reconstruct Europe’s economy, which the USSR Kredit-Bank has its 25th anniversary, but there is no celebration. rejects for its sphere of influence. This represents an early signal The employee gazette reports that “the 25th anniversary of the of the beginning of the Cold War that divides Europe with an Iron company’s founding, three years after the end of the war and Curtain, marking the border where two irreconcilable ideologies just a few days before the currency reform, came at a time when collide. The Americans and British in particular see the strength- no one had much of an appetite for remembering the past, as ening of Western Germany as a way to counter the Soviet the challenges of daily life demanded everyone’s full attention” Union’s growing power in Europe. They agree to merge their (DVKB Gazette No. 16/1963). occupied zones to create an Combined Economic Area (called the ) in early 1947. German politicians from the newly By implementing the currency reform in all three of the western formed democratic parties are recruited to the administration. occupied zones, the Bizone effectively becomes a Trizone, even though the Combined Economic Area does not officially The biggest challenge lies in getting the economy running again. extend to the French occupied territory until April 1949 (Wolf A significant portion of manufacturing and production facilities 1980, p. 17–21). The currency reform in the western zone are still in place, despite the damage sustained in the war and heightens tension between the Western Allies and the Soviet the dismantling required for reparation purposes. There are still Union. An immediate reaction to the development of the western substantial raw materials left over from before the war. But zones comes in the form of the currency reform in the Soviet money has lost its value. Because the German war effort was occupation zone on 23 June 1948. The very next day, the Soviet financed through state debt, inflation had been lying in wait Union begins a blockade of the roadways and inland waterways under the veneer of state-mandated price-fixing. After the war leading to , to which the United States responds by ends, the inflated money supply meets with a scarcity of goods. creating an Air Bridge to supply goods to people in West Berlin. The Reichsmark no longer has any buying power. The only thing This is the first open confrontation in the Cold War. Shortly of value left to individual citizens are ration coupons for food thereafter the Western Allies in July 1948 begin to prepare for and other natural products. Cigarettes also are an important the creation of Western Germany as a country. The Federal bartering currency; bartering is also common for companies Republic of Germany is born on 23 May 1949 with the promul- 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

gation of the Grundgesetz (Basic Law, i.e. the constitution of Deutsche Verkehrs-Kredit-Bank branch locations in the three the Federal Republic of Germany). In response, the German western occupation zones are initially assigned to three different Democratic Republic (GDR) is created to the east on 07 October main offices: Frankfurt (American zone) Hamburg (British zone) 1949. This year also sees the foundation of the People’s Republic and Speyer (French zone). The Saar region has a special status. of China, and of the North Atlantic Treaty Organization (NATO). While the is occupied by French troops, it is under the While the Federal Republic sees itself as the sole legal successor jurisdiction of the Allied Control Council and so is not part of to the German Reich, the GDR subscribes to the idea of two the French occupation zone. An official sequestrator is appointed independent states descended from the German Reich. The for Deutsche Verkehrs-Kredit-Bank’s Saarbrücken branch. The difference in opinion of the two states shapes their relations development of the Saar region is influenced for years to come going forward, and Germany remains divided for many years. by its political separation from Germany and its economic con- nection to France. The Saar region is tied to France economically The political changes that occur between the end of the war by virtue of a customs and currency union, under which the and 1949 are reflected in changes taking place on the railways French franc becomes the legal tender of the Saar region and at banks. First, independent administrative units are set up (beginning in November 1947). Only in 1957 is it politically reinte- in all four occupation zones to continue railway operations. In grated with Germany, with economic reintegration following in the American occupation zone, the railway is managed (from 1959. 19 July 1945) from Frankfurt/Main, while operations are directed from Bielefeld (after 20 August 1945) in the British Zone and After the emergence of the Combined Economic Area, the two from Speyer (from 01 August 1945) in the French zone. When main offices of Deutsche Verkehrs-Kredit-Bank in Frankfurt and the American and British occupation zones merge to form the Hamburg are merged into a single head office in Frankfurt. The Bizone, a central headquarters is then established in Bielefeld Bank’s business in the French occupied territory is not trans- for the railways, which is transferred to Offenbach in 1947 and ferred to the head office in Frankfurt until November 1951. On then to Frankfurt/Main in 1953. In the Soviet zone, trains con- 1 June 1949 the Director of the Main Administration of the tinue to operate under the name Deutsche Reichsbahn until the Reichsbahn in the Combined Economic Area tasks Alfred Prang fall of the GDR (Olten 2006, p. 92–93). with restructuring Deutsche Verkehrs-Kredit-Bank in the Com- bined Economic Area, including the French zone, and helping to At the centre of the Western Allies’ post-war banking policy is manage the Bank (DVKB Gazette No.1/1969, p. 2). Fritz Haas the breakup of the large private-sector banks (Commerzbank, provides him with support. Deutsche Bank, Dresdner Bank). Banks that have a more local or regional business focus – such as the savings banks and In the Soviet occupation zone, banks are immediately closed and cooperative banks – are less affected by the policies in the nationalised by the Soviet Military Administration in Germany occupied West. The formation of successor institutions to the after the war ends. Later, new state-owned banks are formed large private-sector banks is only permitted in the different with different remits. After the currency reform that takes place occupation zones and the newly formed states that have in the Soviet occupation zone on 23 June 1948, these banks emerged within them. These successor institutions oversee a are integrated into the German Notenbank [the central bank], defined geographical group of branches(Wolf 1980). resulting in a single-tier banking system in which the German 90 years DVB Bank 36 | 37

k Overcrowded trains – a familiar picture during the first post-war years

Notenbank serves as a central bank and a commercial bank for ually have to be reintegrated into the economy, which proves the entire financial system. Only for a brief while between 1968 challenging initially. For a while, the railway hires more people and 1974, the two functions are separated and a two-tier bank- than required, which helps to cushion the social problems in ing system exists. After 1974 this change is reversed and both the period immediately following the war (Kopper 2007). Begin- the central bank and commercial bank functions remain under ning in 1950, this latent labour force forms the foundation for one roof, the GDR Staatsbank, until 1990 (Thieme 1998). the Federal Republic of Germany’s economic boom.

Deutsche Verkehrs-Kredit-Bank – which is located in the Soviet Many of those returning from war naturally report to their former area of Berlin – does not escape the closure of the banks in the employers. Past employees of Deutsche Verkehrs-Kredit-Bank Soviet occupation zone. The Eisenbahnverkehrskasse (the Rail- are among those who find work this way. Hans Raffler, who way Pay Office) is formed as its successor institution, which is passed away on 16 December 1969, was one such person. The housed in the same building as the former head office – one of obituary recounts his life as follows: “Mr Raffler began working the only buildings to survive the war largely intact – on Unter den at DVKB in June 1926 in the registry of the Munich branch. Linden. 1939 he began military service. After being taken as a prisoner of war, Mr Raffler returned to the Munich office in August 1945 The Eisenbahn-Spar- und Darlehnskassen branches in the Soviet and found a position at his old workplace in the freight depart- Zone are also closed. While new Reichsbahnsparkassen [Reich ment. From 1945 to his retirement in 1961, he remained on the Railway Savings Banks] are established in 1946, later absorbed Works Council of the Munich office” (DVKB Gazette No. 41/1970). into the state banking sector of the GDR, the Reichsverkehrs- bank is not permitted to resume operations as a central bank. There was a certain “elite continuity” in the transition period For the Eisenbahn-Spar- und Darlehnskassen located in the three between National Socialism and democracy with regard to senior Western Allied occupation zones, the closure of the Reichs­ management. It could be found in every area of society, in political verkehrsbank creates a liquidity problem when the cash deposited parties, law, administration, universities or academia and com- there before the war ended becomes inaccessible. Hence, panies. Originally the Potsdam Agreement aimed at widespread Deutsche Verkehrs-Kredit-Bank becomes responsible for a “denazification” to purge the influence of National Socialism liquidity management role in the Western occupation zones from every aspect of society. Denazification provided for five (Olten 2006, p. 98–104). categories for affected people: (I) major offenders or war crimi- nals, (II) offenders, (III) lessor offenders, (IV) followers and (V) After the end of WWII, German soldiers begin to return home, exonerated persons. Right at the outset, a large number of people the last of them arriving in 1955. Scores of refugees flood the were grouped into the first and second categories. As denazifi- western zones, either because they do not want to live in the cation moved on, especially in the American zone, numerous Soviet occupation area of the Germany or because they have questionnaires were circulated and tribunals were held. been driven from their former homes. All of these people grad- 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

In 1951 the Eisenbahnverkehrskasse is the target of a spectacular bank heist, when a robbery gang led by Walter Pannewitz drills through the 90 cm-thick reinforced concrete ceiling of the building’s vault over a period of ten months. On 6 November 1951 they manage to break through into the vault from above. The safe is opened with blowtorches and 224 thousand Westmark and 1.7 million Ostmark are cleared out, the daily income generated from local and long-distance train traffic stored in the safe. All of the perpetrators are later apprehended by the police (Steinmann 1997). In 1988 a film entitled Der Bruch was made about the incident, although it was set in 1946. Directed by Frank Beyer, the film featured Otto Sander, Götz George and Rolf Hoppe in the main roles and was shown at the 1989 Berlinale (Berlin’s international film festival).

v Movie poster of “Der Bruch“ (“The Break-in“)

Josef Hartmann, an employee of the Cologne office who resided At less high-ranking levels of the railway, denazification is in Bad Godesberg when the war ended, recalled of that time not strictly adhered to out of the fear that operations would that: “gradually certain employees came back to work, and we be impossible to maintain otherwise. The denazification of had to set up shop in the barracks and work from there. The Reichsbahn civil servants is generally minimal: people are down- standard questionnaires had to be filled out and it wasn’t long graded to followers, and allowed to remain in their roles. Only a before we heard from the military administration that three few people are dismissed before then being re-hired a short employees were dismissed with immediate effect due to their while later. Even in the Soviet zone, former NSDAP members membership in the Nazi party. I intervened with the help of the remain in service at the Reichsbahn despite the dismissal of a interpreter, because they had been harmless followers” (DVKB significant number of Reichsbahn civil servants. Only the first Gazette No. 11 1962, p. 4). post-war Management board of Deutsche Bundesbahn succeeds at distancing itself significantly from Nazi legacy, but“there was The most spectacular outcome is undoubtedly the Nuremberg not so much as the beginnings of a change in elites amongst Trials, which pronounce judgement on some of the war’s most high-level Reichsbahn civil servants” (Kopper 2007, p. 58). A egregious offenders in 1946. However, denazification generally similar development can be seen in banking after the end of takes a very different course in the four occupation zones. the war, which means that “only the very worst black sheep Political tension between the Western Allies and Soviet Union on banking executive boards had to end their banking careers quickly causes interest in pursuing denazification measures in prematurely” (Kopper 2005, p. 5). the western zones to wane. The primary objective is to speed reconstruction, which means working together with people who Alfred Prang, who was tasked with organising the structure of held high-ranking management positions under the Nazi regime. Deutsche Verkehrs-Kredit-Bank in the western zones, is also In 1951 the Denazification Act in the Federal Republic drew an part of this continuity amongst the elite. In 1960 the employee official close to denazification(cf. Wolfrum 2006, p. 27). gazette cites the typical reason used to justify his appointment: “until the fall of the Third Reich in 1945, Director Prang main- Julius Dorpmüller, who oversaw Deutsche Reichsbahn until tained his excellent position at the forefront of the Reichsbahn the end of the war, is not interned. Instead he is tasked with without interruption, making him a man of indispensable expertise managing the Reichsbahn in the American zone right away, whom the military government then sent for only a few months though his death on 05 July 1945 prevents him from doing so. later” (DVKB Gazette No. 1/1960, p. 2). 90 years DVB Bank 38 | 39

v The former headquarters of Deutsche Verkehrs- Kredit-Bank are taken up by Eisenbahnverkehrskasse, the East German Railway Pay Office

An obituary published for Hans Schmückle (10 March 1891 to generation just mentioned. This same sentiment applies to 29 June 1970) in the employee gazette provides another example critical events in the history of the company, as the words of a of the career progression of someone returning from war. It branch manager of Deutsche Verkehrs-Kredit-Bank make clear: states that “he was initially not permitted to return to his former “At our branch manager conferences, the most senior branch job by order of the military government because he had been manager traditionally makes some closing remarks”. In April assigned to a defence post under the SS (the so-called “Protec- 1969, this honour falls to Fritz Bergner (*1903), who joined tion Squadron”, which was a paramilitary Nazi organisation the head office in 1925. He had been asked to speak about the responsible for many war crimes) as a high-ranking officer Bank’s history. Referring to the period of time after 1933, he says (Haupt­mann) of the Wehrmacht and was also a Party member in that: “in 1933, the era of this Management Board [meaning 1937. Only in March 1948 was he fully rehabilitated by a tribunal, Managing Directors Schlesinger, Prerauer and von Schaewen after compelling exonerating evidence had been submitted. This who were decommissioned for political reasons], came to an enabled him to return to the Bank, where he was welcomed end and an era began that I will not go into for obvious reasons, back with open arms” (DVKB Gazette No 44–45/1971, p. 6). given the festive nature of our gathering. Although it is naturally By the time he retires in 1957, Mr Schmückle had become clear to me that anyone tasked with writing the history of this Head of Credit at the head office in Frankfurt. company would have to address this period, it would be impor- tant to approach the topic properly with regard to whether it is At Deutsche Verkehrs-Kredit-Bank, as at many other German intended for internal consumption or for circulation outside the companies, (cf. Grunenberg 2006), many people born in the company” (DVKB Gazette No. 40/1969). years between 1890 and 1910 who later held management positions in the early years of the German Federal Republic experienced political and economic turmoil in their youth or during the early stages of their career, including inflation, the global economic crisis and high unemployment. “A palpable reticence pervaded virtually every social class and occupation, as people shielded themselves from the past surrounding them and carried a silence in their hearts” (Wolfrum 2006, p. 171), but this silence was arguably most prevalent amongst the 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h The German “Wirtschaftswunder“: production of VW‘s „Beetle“ at Volkswagen‘s main Wolfsburg plant (1953) 90 years DVB Bank 40 | 41

1950 – 1973

The Bank during the “Wirtschaftswunder” – average is still 4.4% (Statistisches Bundesamt 2012, table 12.1, a reliable partner to Deutsche Bundesbahn, p. 321). At the beginning, the economy is able to take advantage of the existing workforce, enhanced by the many refugees and the German Federal Railways displaced persons that enter the Federal Republic during the period immediately following the war. As growth makes staffing Despite the amnesia experienced by large swathes of the popu- shortfalls foreseeable, a decision is made to look abroad to fill lation during the post-war period with regard to the Nazi era, the gap. In 1955 the first labour agreement is concluded with Italy the Federal Republic of Germany develops into a recognised and the first “guest workers” (as international employees are democracy by 1949. Aside from the German economic ‘miracle’ called under the arrangement) arrive in Germany in January (the so-called ”Wirt­schaftswunder”) of the 1950s and 1960s, 1956. Other labour agreements are then executed with Greece as Edgar Wolfrum notes, the true miracle is “how the former and Spain (1960), Turkey (1961), Portugal (1964), Tunisia (1965) compatriots of Nazi dictatorship became citizens of a democracy” and Yugoslavia (1968). Before the Berlin wall is erected in 1961, (Wolfrum 2006, p. 14). The “patriarchal democracy” of the first many qualified workers enter the Federal Republic from the Chancellor, Konrad Adenauer, who embodies both authority and GDR, who strengthen the labour market. Only in 1973, when the democracy, makes a decisive contribution early on. But it is the first oil crisis causes unemployment to rise, is a ban placed on Wirtschaftswunder that facilitates the establishment of the recruitment from non-EC countries. modern welfare state, strengthening and stabilising the fledgling democracy (Wolfrum 2006, p. 53 – 54, p. 76, p. 87). Referring The period of time between 1950 and 1973 is one of important in particular to those who had begun their careers during the international political changes. The beginning of the period sees Third Reich, and had now found their place in a new state order, an end to colonialism – the formation of the Republic of India in Wolfrum remarks that: “Integration into the new democratic 1950 is just one example. Decolonialisation is not, however, state and the success they experienced in their personal and always a peaceful process, as the wars in Algeria and Indochina professional lives provided safeguards to prevent this democracy demonstrate. This period is also marked with an escalation of from being called into question or rejected” (Wolfrum 2006, p. 172). the Cold War, in which the West, led by the United States, faces off with the Soviet Union. Both sides seek to expand and safe- Those brought into the world between 1920 and 1930 have a guard their spheres of influence. The Soviet Union accordingly very special role to play, including later Chancellor Helmut Kohl quashes the 1956 uprising in Hungary. In 1968, Soviet intervention (born 1930). When the war breaks out, they are either still children brings an end to the “ Spring” in Czechoslovakia. The or young adults just beginning their careers. This age group, United States and the Soviet Union are brought to the brink of a many of whom have suffered the loss of parents or other family new world war by the October 1962 Cuban Missile Crisis. After members (in 1944 Helmut Kohl’s older brother, born in 1926, is Fidel Castro assumed power in Cuba in 1959, the Soviet Union killed in combat), devote themselves to work, in no small part begins planning a medium-range missile station, which the United to make up for lost time, and establish themselves as pillars of States regards as a threat. The crisis is averted at the eleventh democracy. hour. As a consequence, the United States strengthens its efforts to secure influence in South America. The Korean War The Wirtschaftswunder translates into strong economic growth. (1950 – 1953) only a few years earlier already saw a confrontation In the years between 1950 and 1960, the economy grows an between the two systems, with not only the USA and the USSR average of 8.2% a year. Between 1960 and 1970, the annual involved, but also the People’s Republic of China. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

The Cold War also influences how relations develop between the two German states. While the Western powers are interested in the increased western integration of the Federal Republic, the Soviet Union intensifies the GDR’s integration into its system of political power. As early as 1950, the GDR becomes a member of the Council for Mutual Economic Assistance (Comecon), the economic organisation of Socialist countries at the time. The defeat of the rebellion of 17 June 1953 in the GDR, with the aid of Soviet troops, underscores the Soviet Union’s claim to power. In 1954 the Federal Republic is invited to become a member of NATO. It joins in 1955 after the Federal Republic’s autonomy is largely restored by the Paris Agreements, with the exception of certain special rights reserved to the Allies. In the same year, the Bundes­wehr (Federal Armed Forces) is formed. The Soviet Union responds by forming the Warsaw Pact as a counterpart to NATO. The construction of the Berlin wall, which begins on 13 August 1961, marks another noteable stage in the conflict between the east and west.

From the mid-60s onwards, the ideological struggle between the superpowers spreads to German domestic politics. Children born after 1940 are especially receptive to the idea of communism, and rebel against their parents’ ideals. From 1968 onwards, violent protests increase against causes like the Vietnam war or the Shah regime in Iran, and are decidedly anti-American in tone. Amidst this atmosphere of dissent, a group of left-wing terrorists forms, almost all of the members of which represent this age group (Andreas Baader born 1943, Ulrike Meinhof born 1934, Gudrun Ensslin born 1940, Holger Meins born 1940, Jan-Carl Raspe born 1944). In the years to come, they carry out violent attacks that threaten the democracy of the Federal Republic, under the banner of the Rote Armee Fraktion (RAF, Red Army Faction). h Signing of the Treaty of Rome, establishing the European Economic Community on 25 March 1957 There are also student protests in other countries. In France in particular, civil unrest amongst students leads to bloody conflicts h Franco-German reconciliation – the Elysée Treaty (22 January 1963): with the police in 1968. Beginning in the late 50s, the civil rights Charles de Gaulle and Konrad Adenauer movement, which seeks to secure rights for African Americans, shapes political discourse in the USA. The 1968 assassination of civil rights leader Martin Luther King Jr. sparks protest and civil unrest. 90 years DVB Bank 42 | 43

murders are committed (CEO of Dresdner Bank Jürgen Ponto, Attorney General Siegfried Buback, and President of the Confed- eration of German Employers’ Associations, Hanns Martin Schleyer).

In 1973 the European Community is expanded to nine members with the accession of Denmark, the , and Ireland. This is an important event in the process of European unification that began in 1951, and which would undergo many iterations before becoming the European Union we know today. It begins with the formation of the European Coal and Steel Community in 1951. In 1957 the Treaty of Rome creates the European Economic Community (EEC). Germany, France, Italy and the Benelux states are the founding countries. The process of European unificationis enhanced and accompanied by German and French reconciliation, of which the 1967 Franco-German Friendship Treaty (the so-called Elysée Treaty) is a shining example.

The Saar region is an important issue in post-war relations between h Willy Brandt kneels at the Warsaw Ghetto memorial Germany and France. After the population of the Saar region vote on 7 December 1970, having laid a wreath commemorating the in 1955 to be reunited with the Federal Republic of Germany victims of the Warsaw Ghetto uprising – a symbol for détente instead of transitioning into a European territory, Germany and France sign the Saar Treaty on 27 October 1956 that lays out the Willy Brandt’s election to Chancellor in 1969 marks a key turning individual steps to reuniting the Saar with the Federal Republic of point in the history of the Federal Republic of Germany and the Germany. Political integration of the Saar region into the Federal beginning of a policy of détente. In 1950 the GDR had already Republic takes place on 1 January 1957. On 6 July 1959 the recognised the Oder-Neisse line as the official border between currency is changed in the Saar region from the French franc to Germany and Poland, to which the majority of the German Parlia- the Deutsche Mark, which must be exchanged at a specified rate. ment (Bundes­tag) objected in a declaration against the recognition. Only under the Brandt government was the Oder-Neisse border In October 1973 – the year of Deutsche Verkehrs-Kredit-Bank’s accepted as the western border of Poland under the Treaty of 50th anniversary, Egypt and Syria launch the Yom Kippur War Warsaw, though official recognition does not occur until the against Israel. In support, Arab members of OPEC initiate an oil German-Polish Border Treaty, enacted after reunification. At the embargo against nations maintaining friendly relations with Israel beginning of the 70s, a degree of détente enters relations between and increase oil prices. This leads to the first energy and eco- the United States and the USSR, aimed at ending the arms race. nomic crisis in the west. Just one year prior, the Club of Rome had released a study entitled The Limits to Growth which was At the same time, terrorists launch a new wave of attacks in an sceptical of the continued expansion of the global economy. The attempt to further their objectives. In Germany, members of the economic crisis sparked by the drastic hike in the price of oil marks RAF are active. The 1972 Munich Olympic Games are targeted the end of the German Wirtschaftswunder which had fostered by radical Palestinians (eleven Israeli athletes are killed in an such tremendous economic growth throughout the 50s and 60s, assassination attempt and a failed rescue operation). In 1977 RAF as discussed at the beginning of this section. left-wing terrorism reaches its high point as a number of political 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Deutsche Verkehrs-Kredit-Bank shares in the prosperity of the 50s and 60s. The services it provides to its sole shareholder, Deutsche Bundesbahn, are essentially the same as those it provided for Deutsche Reichsbahn before the war.

At the beginning, it was vital to re-establish the ability of the Board of Managing Directors and the Supervisory Board to operate effectively. In 1950 Deutsche Bundesbahn makes an application (which is subsequently approved by the Frankfurt District Court) to appoint Alfred Prang and Fritz Haas to the provisional Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank. Super­ visory functions are carried out by a Supervisory Committee, comprising five members appointed by Deutsche Bundesbahn. Beginning in 1951, Fritz Bohle, who had been in charge of opera- tions in the French zone, becomes the third member of the pro- visional Board of Managing Directors. At the first Annual General h The oil embargo in 1973 triggers a serious economic and energy crisis in Meeting on 20 December 1958, the three provisional board Germany; the picture shows the Cologne-Bonn Federal motorway without cars, members are appointed regular Managing Directors. At this during the Sunday motor vehicle ban imposed at the time Annual General Meeting, the opening balance sheet on 1 January 1953 was presented, as well as the Annual Reports from 1953 to 1957, and the issued share capital was converted into Deutsche Marks (DM) in line with recently passed legislation. The issued share capital is reported at DM 20 million in the opening balance sheet. At the Annual General Meeting held on 20 December 1958, a resolution is passed to increase the Bank’s issued share capital from DM 20 million to DM 50 million, which is entered into the Commercial Register on 04 February 1959. The next share capital increase does not take place until 1977. 90 years DVB Bank 44 | 45

In the early 1950s, Deutsche Verkehrs-Kredit-Bank begins rebuilding or constructing new offices after years of working out of makeshift premises. In 1950 building begins in Frankfurt on a new office building located at Untermainkai at the corner of Mainluststrasse, where additional land had been purchased sur- rounding the site where the former offices had been destroyed by bombs in 1944. This new office houses both the head office and a branch. In 1953 employees move into a newly constructed office on Lindenallee 47 in Essen where their former building (which had been located at the same address since 1929) was annihilated in 1943. In Hamburg a bomb site on Ballindamm is acquired and a new office is constructed in 1956. On 2 February 1965, the cornerstone is laid for the new Stuttgart bank branch, which employees move into on 21 June 1966. In Saarbrücken, ground is broken on 03 December 1969 for the construction of a new branch office building that is eventually inaugurated on 19 March 1971. The existing buildings are expanded at other locations (DVKB Gazette Nos. 13/1962, 5/1960, 7/1961, 22/1965, 27/1966, 46 and 47/1971).

By the end of 1957, Deutsche Verkehrs-Kredit-Bank has fifteen branch offices in the Federal Republic of Germany. Both the head office and a branch are located in Frankfurt. The newest branch office is located in Saarbrücken. It begins trading on 2 May 1957, just a few months after the 1 January 1957 political reintegration of the Saar region into the Federal Republic of Germany after years of being managed under sequestration (DVKB Gazette No. 2/1988 and No. 1/1959, p. 3).

The Bank’s principal business continues to be deferred freight payment, which increases continuously on the back of robust economic growth, benefitting Deutsche Bundesbahn. In 1963 – forty years after its founding – the Bank manages exactly 30,012 freight settlement accounts. That same year, 91% of all Deutsche Bundesbahn freight revenue, as well as that of various private railway operators, is billed using the deferred freight payment procedure. As collateral for deferred freight payment, the Bank accepts deposit credit, letters of credit, pledged life insurance policies, securities and savings or liens on property (DVKB 1972, h In 1950, upon application by the German Federal Railways, p. 6). Alfred Prang (shown on top) and Fritz Haas are appointed as a stop-gap Executive Board of Deutsche Verkehrs-Kredit-Bank 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Advertisement for deferred freight payment (1950s)

On 01 July 1972, the half-monthly billing period that has been Deutsche Verkehrs-Kredit-Bank” (Olten 2006, p. 125). It is not in place since the deferred freight payment procedure was first until the 70s that a representative of the association is invited introduced is shortened to a ten-day period. In 1973 – the Bank’s to sit in on the Bank’s Supervisory Board meetings as a guest 50th year – roughly 90% of Deutsche Bundesbahn’s freight (ibid, p. 125–126). revenue is billed with a total of 37,765 deferred freight settlement accounts. Over the years to come, however, it becomes clear Before 1966 the Bank’s involvement in the money market is that this business segment’s potential is by no means unlimited, primarily limited to borrowing. In 1967 it becomes a funding as Deutsche Bundesbahn begins losing market share to road provider for the first time. This has to do with Deutsche Bundes- transport. In short, freight growth moves to the roadways. bahn’s improved liquidity situation: in addition to issuing Bundes- bahn bonds, it makes use of the large amount of liquidity available As the principal banking partner of Deutsche Bundesbahn, in the Federal Republic to take out long-term loans. This task Deutsche Verkehrs-Kredit-Bank provides a variety of services. revolves around “ensuring that the Bundesbahn’s intermittently Amongst other things, it is responsible for all of Deutsche Bundes- large account balances are lucratively invested over the long term bahn’s payment flows in Germany and abroad. It is also respon- while also making sure that the Bundesbahn can always meet its sible for covering Deutsche Bundesbahn’s short-term cash financial demands during occasional phases in which it suddenly requirements, which arise almost regularly at the end of the has higher liquidity needs” (Annual Report 1967, p. 9). month. The Bank provides Deutsche Bundesbahn with liquidity as required. This is drawn primarily from deposits from other In addition to short-term loans extended to Deutsche Bundes- banks and different investors. Where more liquidity is needed, bahn, the Bank also extends loans to companies with which Deutsche Verkehrs-Kredit-Bank can borrow on the money market. Deutsche Bundesbahn does business. It offers these businesses At other times, it invests Deutsche Bundesbahn’s excess liquidity a wide range of lending services. This includes guarantees as on the money market. Especially at the beginning of the 1950s, well as increased and longer-term deferred freight payment. Deutsche Bundesbahn needs a considerable amount of cash, for Increased deferred freight payment is advanced for freight debt which Deutsche Verkehrs-Kredit-Bank turns to the money market. spikes, which occur in certain industries during short periods, Deutsche Bundesbahn gradually reduces the debt it builds up for seasonal reasons (such as the sugar industry’s sugar beet at the Bank by later issuing “Bundesbahn bonds”. Deutsche campaign in autumn). Extended deferred freight payment offers Verkehrs-Kredit-Bank is involved in these issues, and also has longer deferment periods for freight. Furthermore, the Bank responsibility for price stabilisation. This task involves purchasing offers investment finance to enterprises doing rail business with Bundesbahn securities offered on the market to prevent price Deutsche Bundesbahn: these may cover, for example, ware- declines when necessary, and then selling them again when the houses on railway property, private sidings, freight cars, unloading market improves (DVKB 1972, p. 12–13). terminals, as well as heavy goods vehicles and passenger buses operated on behalf of Deutsche Bundesbahn. The Bank also The Eisenbahn-Spar- und Darlehnskassen in particular place their provides loans to the leaseholders for smaller businesses on considerable volume of deposits with Deutsche Verkehrs-Kredit- railway land, working capital loans for Deutsche Bundesbahn Bank. Nevertheless, it is a long time before Deutsche Bundesbahn subsidiaries, construction bridge loans to railway housing asso- allows “the Association of Eisenbahn-Spar- und Darlehnskassen ciations and cooperative housing companies, and pre-financing to take a seat on the Supervisory Board of its central bank, for Bundesbahn suppliers (DVKB 1972, p. 8–10). 90 years DVB Bank 46 | 47

v Deutsche Verkehrs-Kredit-Bank bureau de change at Hamburg’s central station (ca. 1957)

c Deutsche Verkehrs-Kredit-Bank bureau de change at Bremen airport (ca. 1957)

The German Wirtschaftswunder drives prosperity from the 1950s onwards, which translates into higher numbers of German travellers, first throughout Europe and then beyond. Deutsche Verkehrs-Kredit-Bank’s bureaux de change business benefits from this development. At the end of 1957, the Bank has 75 bureaux de change and currency exchange agencies. Currency exchange agencies are businesses such as travel agencies or tourist offices that are commissioned by Deutsche Verkehrs-Kredit-Bank to exchange currencies. With the currency changeover that occurred on 6 July 1959 in the Saar region, from the French franc to the Deutsche Mark, some of the bureaux de change at the former border crossing points between the Federal Republic and the Saarland are closed. The bureau de change at Saarbrücken central station remains active.

As in Saarbrücken, most bureaux de change continue to be located at train stations where Deutsche Verkehrs-Kredit-Bank enjoys the exclusive right to operate currency exchange busi- nesses. Bureaux de change at airports are operated according to agreements signed with airport operators. At the bureaux de change located at road border checkpoints, the Gesellschaft für Nebenbetriebe der Bundesautobahnen mbH (a company which was owned by the Federal Republic of Germany, operating the network of petrol stations and service areas alongside the Federal motorways) becomes the equivalent partner in 1948 (Biermann 1971, p. 2–3).

The first bureau de change at an airport is opened on 16 June 1949 at the Rhine-Main Airport in Frankfurt. Its humble begin- nings are described in the employee gazette: “In a corner of the arrivals area, there was a small room just large enough for a single person to stand in. The counter was an opening in the wall into the waiting room. Only a coarse wire grate separated the cashier from the customers. The bureau de change was so well hidden that passengers who wanted to exchange money had to be alerted to its existence with giant signs outside the customs area” (DVKB Gazette No. 52/1972, p. 3). Soon the bureau de change is moved to a new area, and then enlarged. Bureaux de change are also operated at other airports, including the addition of Bremen, Stuttgart and Munich in 1949, and at Dusseldorf in 1950. While the bureau de change at the Bremen airport is shut h Flyer listing Deutsche Verkehrs-Kredit-Bank‘s bureaux in 1961, a new one is opened at Cologne-Bonn airport in 1970. de change and their opening hours (1960) 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Exchanging GDR Ostmark at a bureau de change of Deutsche Verkehrs-Kredit-Bank

The bureaux de change at the inner- between the German Democratic port checks and other measures. These German border are a part of the Republic and the Western Occupied measures are also implemented at bor- history of inner-German transit. While Zones of Germany [Verordnung über der crossings in rail traffic between West limitations were placed on transit before Maßnahmen an der Demarkationslinie and East Berlin after the construction the two German states were founded, the zwischen der Deutschen Demokra- of the Berlin wall. Only after 1971 is an restrictions increase substantially after tischen Republik und den westlichen agreement reached between the Federal their formation (cf. Kuhlmann 2012). Besatzungszonen Deutschlands] of Republic (under the Willy Brandt govern- Travel between the West and East comes 26 May 1952 marks the beginning of ment) and the GDR that facilitates private practically to a standstill after the Berlin extensive GDR efforts to secure the cross-border travel to some extent. The Blockade by the Soviets begins. The border to the Federal Republic. At strongholds at the border train stations Helmstedt Agreement of 11 May 1949 border crossings for rail traffic, security remain until reunification(Kuhlmann reinstates rail transit. After the two technology at the border train stations 2012, p. 40). German states are formed, restrictions is gradually enhanced to prevent people increase again. The Decree on measures from fleeing from the east to the west. to be taken at the demarcation line Passenger traffic is monitored by pass-

At various road border checkpoints new bureaux de change are their holidays, they frequently travel home, primarily by train in opened: Weil-Otterbach (1950), Schwarzbach (1951), Stuben the 1960s, in later years by car. Increasing car and plane travel is (1953), Kehl/Rhine bridge (1955) and Kiefersfelden (1968). Ferry a boon for business at bureaux de change at airports and highway links also prove to be attractive places to establish bureaux border crossings. de change. In 1951 a bureau de change opens its doors at the Grossenbrode ferry station. In 1953 the first bureau de change In 1963, in the Bank’s 40th year, there are 52 bureaux de change opens on board a ferry, christened the “Deutschland”. In 1957 and 13 currency exchange agencies. By early 1973, that number the “Theodor Heuss” ferry gets its second bureau de change has increased to 56 bureaux de change and 20 agencies. (Biermann 1971, p. 25 – 28). In 1960 Deutsche Verkehrs-Kredit- Bank still operates bureaux de change along the inner-German Sometimes, as in October 1966 at the Frankfurt central train border for rail travellers, namely in Bebra, Büchen, Helmstedt station, the inauguration of new business premises can even be and Ludwigsstadt (Oberfranken), which focus primarily on a major event. The 50 guests in attendance include the First exchanging Ostmark. President of the Deutsche Bundesbahn – Heinz Oeftering – “a member of the Board of the Directors of the Bundesbank [the During the 1960s, the bureaux de change generate increased German central bank], the Vice President of Landeszentralbank income primarily due to the increase in tourist travel to foreign [the Bundesbank main office in the Federal State of Hesse],the destinations. The rising number of guest workers living in the President of the Chamber of Commerce, the City Treasurer, the Federal Republic is also an important customer group. During Managing Director of the Banking Association of Hesse, many 90 years DVB Bank 48 | 49

v Punchcard processing centre at Deutsche Verkehrs-Kredit-Bank‘s Frankfurt/Main head office (1968)

well-known financial journalists (including the Editor-in-chief normal bank branches remain closed on Saturdays, bureaux de of the Börsenzeitung) and representatives of local and regional change remain open to service tourists. The increased staffing transport associations.” The employee gazette, with good levels lead to higher personnel expenses. When the Eurocheque reason, sees the guests as “an exceptionally high-calibre group system is introduced in 1968, making it possible to get cash via of people for the inauguration of a train station bureau de change” cheques and bank cards, bureaux de change are faced with (DVKB gazette no. 28/1966). heavier workloads. The 1969 Annual Report describes the problem as follows: “Many bank card users go to our bureaux de change In the 50s, business activities are still largely influenced by foreign because of their convenient locations and the longer opening exchange control and exchange regulations. Only in 1958 are the hours – particularly on weekends – to get cash with their cheques limitations on the inflow and outflow of foreign currency lifted. instead of using them for the purpose originally intended, namely But foreign exchange rate fluctuations persist. In order to prevent cashless payments, etc.” (Annual Report 1969, p. 10). The Bank losses in the bureaux de change business and currency stock- soon responds to the new system by introducing a transaction piling, the timing of depreciation and appreciation has to be antici- fee of 2 DM (roughly EUR 1) for cashing cheques. In subsequent pated as accurately as possible, which is not always possible. years, the number of cheques being cashed again causes per- Every now and again the Bank also has to contend with new sonnel expenses to rise at the bureaux de change. currencies. In 1960, for example, France introduces the “Nouveau Franc”, with the new unit replacing 100 of the old franc. Finland Deutsche Verkehrs-Kredit-Bank continues to make investments changes its currency in 1963 (Biermann 1971). only with the consent of the Deutsche Bundesbahn. All of its investments relate to the rail sector. In its 1957 Annual Report, The variety of the different tenders requires extensive training to the Bank reports a 75% stake in the company Collico GmbH in recognise counterfeit notes. Over time, different measures are addition to an investment in Transport AG (formerly J. Hevecke). implemented to improve security for the cashiers. In December Collico was founded by Karl Dahmen in Solingen in 1947; the 1957, the bureau de change at the Nuremberg central train station name refers to a collapsible reusable transport box he invented, is selected to pilot a bullet-proof counter. In 1960 the Nuremberg made of steel. These boxes are used in general cargo transport. counter set up is fully reinforced with bullet-proof glass. By 1967, Given a decline in general rail cargo, the importance of Collico 26 bureaux de change have similar set ups and by 1969 legislation boxes will diminish several years later. By 1961 the Bank also holds is introduced requiring all bureaux de change to feature bullet-proof stakes in Deutsche Touring Gesellschaft mbH [a bus operator] glass (DVKB Gazette No. 17/1964, Biermann 1971, p. 20 – 21). and Deutsche Eisenbahn-Reklame GmbH [a company selling advertising space on railway property]. In 1973 the Bank acquires Operating the bureaux de change network requires a lot of man- the travel agency Ameropa-Reisen GmbH, which specialises in power. When Saturday ceases to be a business day for German rail travel. banks, costs increase for Deutsche Verkehrs-Kredit-Bank. While 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h Deutsche Verkehrs-Kredit-Bank‘s Frankfurt/Main h The Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank AG in 1973 – head office (1965) from left to right: Dr Heinz-Dietrich Tettenborn, Alois Meyer, Karl-Heinz Boldt

In 1960, the Bank’s executive management undergoes its first In 1973, the Bank’s fiftieth anniversary, a new generation is also generational change. On 31 January 1960, Alfred Prang leaves ushered in at the Supervisory Board level. On 30 June 1973, the Board of Managing Directors when he reaches retirement Bundesbahn First President Heinz Oeftering relinquishes his age. He is followed by Fritz Haas on 30 June 1961, who also chairmanship, held since 01 October 1959, to his successor retires. Not long before, in 1959, the Bank was saddened by the Wolfgang Vaerst (DVKB Gazette Nos. 55 and 56/1973). Throughout unexpected death of Fritz Bohle. Dr Gerhard Wersche (from 1960), his many years of service, Heinz Oeftering had demonstrated a Dr Wilhelm Wetzmüller and Friedrich Körting (both from 1 July strong sense of connection to the Bank. He always made a point 1961) take their places. Over years to come, they will manage of attending the Bank’s events and business gatherings, including the Bank together for a decade. In 1970 the Board of Managing the opening of the new bureau de change in 1966 at the Frankfurt Directors again welcomes a new generation. Ministry Director central station mentioned above. On Heinz Oeftering’s 65th Alois Meyer succeeds Dr Wersche in 1969. At the end of 1970, birthday in 1968, the employee gazette remembers the dedication Dr Wetzmüller retires. He is succeeded by Dr Heinz-Dietrich he showed since becoming Chairman of the Supervisory Board Tettenborn on 1 January 1971. At the end of the same year, in 1959: “In the 38 Supervisory Board meetings that have since Friedrich Körting reaches retirement age and leaves the Board. been held, Professor Dr Oeftering has not sent someone in his On 01 January 1972 Karl Heinz Boldt replaces him. On 31 Decem- stead on a single occasion” (DVKB Gazette No. 35/1968, p. 3). ber 1973, Alois Meyer also goes into retirement after four years And in a speech he gives in 1970, he himself says with regard to of serving on the Board of Managing Directors. Dr Klaus J. Deutsche Verkehrs-Kredit-Bank that it “is Bundesbahn’s holding Menche is named his successor (DVKB Gazette Nos. 41/1970, company that always caused him the least amount of worry. And 44/1970, 45/1971, 57/1973). that is why he considers DVKB to be its parent company’s favourite child” (DVKB Gazette No. 41/1970). 90 years DVB Bank 50 | 51

h (Upper picture): The Board of Managing Directors of Deutsche Verkehrs- h Speech by Heinz Oeftering, First President of Deutsche Bundesbahn, Kredit-Bank AG in 1963 – from left to right: Friedrich Körting, Dr Gerhard Wersche, to celebrate the opening of the Bank‘s bureau de change at Hamburg‘s central station Dr Wilhelm Wetzmüller (1969) h Branch managers‘ meeting of Deutsche Verkehrs-Kredit-Bank AG in 1963: Kurt Müller, head of the Stuttgart branch, is fifth from the left 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for Kurt Müller

»The solid working relationship between Deutsche Verkehrs-Kredit-Bank and the Bundesbahn at every level really resonated with our parent company’s desire to use the Bank’s services to promote rail traffic.«

You started working at Deutsche Verkehrs-Kredit-Bank What was the Stuttgart branch’s core business at the time? in 1950. Could you share your recollections of what life Business centred around deferred freight payment. The branch was like back then? What are your recollections about serviced roughly 4,800 direct clients in this business, and another living conditions at the time? 1,200 customers of our so-called consolidated deferred freight The currency reform of 1948 and the creation of the Federal payment product: this was available for smaller shippers who Republic of Germany in 1949 were behind us, but there was still didn’t have enough freight volume for an individual account an immense amount of rubble in the cities to be cleared. My with us. Other banks, including the German cooperative banks interview for Deutsche Verkehrs-Kredit-Bank took place in a (Volksbanken/Raiffeisenbanken), grouped multiple smaller cus- bombed-out makeshift building. Shortly thereafter we relocated tomers together and then settled with us. The high number of to a newly constructed banking office at Untermainkai in 4,800 direct deferred freight payment clients, by the way, was Frankfurt. Private housing was still being managed, and food a by-product of the economy in our branch’s catchment area, rationing stopped in 1950. The Bank was able to organise which was dominated by small- to medium-sized companies. accommodation for me in a flat, but I had to share it with two sub-letters. Overall, by that time people had already gained a What other business divisions did the much more positive outlook towards the future. Stuttgart branch have? After deferred freight payment, bureaux de change also gener- Where was the Stuttgart branch located when you began ated income. The lending business was comparatively small in managing it in 1962? the early 1960s, but we were able to expand it considerably. It The branch was located on a floor we leased in an office build- comprised predominantly rail-related financing, generally things ing near the central train station, and about 40 people were like commercial buildings on railway property secured by lien; employed there, with another 20 people working at the bureaux we also financed private sidings and transshipment equipment. de change – which the branch oversaw. After the landlord Other lending included operating loans in the form of three-month terminated our lease in January 1963, the Bank’s Supervisory deferred payment periods and overdraft facilities to subsidiaries, Board approved a new build – under the condition that any suppliers and residential property companies of the Bundesbahn, unused space be offered to the Stuttgart division of Deutsche as well as utility companies and businesses at the Stuttgart Bundesbahn. It was a giant stride forward in terms of moderni- airport. We also issued letters of credit for forwarding agencies. sation. On the funding side, we received overnight loans and term 90 years DVB Bank 52 | 53

Kurt Müller, born on 12 February 1922, first joined the Bank in 1950, initially working as a teller at various bureaux de change. In 1951 he moved to Head Office, where he was placed in the Securities, Loans and Foreign Exchange department before moving to Internal Audit in 1957. In 1962 he became director of the Stuttgart branch, where he remained until his retirement i n 19 8 7.

deposits, including from large-volume shippers working with Did that change later? Bundesbahn, from transport companies active outside the rail Yes, in the 80s as competition for clients grew fiercer, we were freight segment, but also from state-owned institutions and perceived as a more serious threat by other banks. Our ability residential housing enterprises. to hold our own against our competitors was due in no small part to the fact that we, unlike many other firms, could accept How was the working relationship with things like borrowers’ buildings on railway property, i.e. on Deutsche Bundesbahn in general? third-party ground, as collateral. The Chairman of our Bank’s Board of Managing Directors was seconded by Deutsche Bundesbahn. For that reason alone the How would you describe the working relationship relationship was good. And that set the tone of our relationship between the Board of Managing Directors and the with the local Bundesbahn divisions at the branch level. branches at the time? The branch manager was entitled to a great deal of independence How did you go about acquiring new business back then? within the established business segments. However, this inde- Generally branch managers brought in new business themselves pendence did not extend (for example) to becoming involved in because they were in touch with companies’ chief financial private automotive financing at the branch level, for example, officers. Owners of larger medium-sized enterprises also although the opportunity would have been there. Branch man- expected a competent representative of the Bank to visit them agers and the Board of Managing Directors could call meetings personally to discuss what was available, both deferred freight together at any time, and branch manager conferences were payment and other products. Over the years, we developed held annually. good relationships with agents and general representatives of Deutsche Bundesbahn – so we generally knew about potential What do you think of the way the Bank has developed investment projects. The solid working relationship between since you retired? Deutsche Verkehrs-Kredit-Bank and the Bundesbahn at every I think it is great that the Bank has been able to develop a global level really resonated with our parent company’s desire to use transport finance business after its connection to Deutsche the Bank’s services to promote rail traffic. Bundesbahn was severed. The niche position it has carved out for itself has stood the test of time. I am especially impressed What was the Bank’s position in Stuttgart in the 1960s? by the way it has dealt with the funding issue. I am also pleased Especially in the 1960s, but also in the 1970s, demand for loans that the Bank was not involved in the excesses in the financial was steadily spurred by economic growth. Companies were industry in recent history. And I feel very well taken care of by happy to have another provider in addition to their usual banking Human Resources since retiring. partner. We were not initially seen as a serious competitor by other banks. Our credit conditions were comparable. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013 Bitte interpolieren

h The Frankfurt Stock Exchange during the 1980s 90 years DVB Bank 54 | 55

1974 – 1988

The “Wirtschaftswunder” ends – partial For Germany, two important political changes take place in privatisation and IPO the government during the period under review. In May 1974, Chancellor Willy Brandt leaves office to be replaced by Helmut Schmidt, whose tenure lasts until 1982, when he is replaced by a conservative government led by Helmut Kohl whose time in The period spanning 1974 to 1988 sees a series of geopoliti- office runs through to 1998. Economically there are two periods cally important events. In 1974 US President Nixon is forced of recession that affect not only Germany but every industrialised to resign over the Watergate Affair. The death of Mao Zedong nation. The first is unleashed by OPEC’s decision to increase in 1976 ignites a period of political upheaval in China, largely the price of oil after the Yom Kippur war breaks out in 1973. connected with Deng Xiaoping who spearheads the reforms After 4.8 % growth in 1973, German economic growth plummets to China’s economy that pave the way to its boom phase in the to 0.9% in 1974 and contracts to –0.9% in 1975. In 1976 4.9% 90s. In 1979 the Shah of Iran is ousted and an Islamic Republic growth is achieved again. A second round of oil price hikes intro- emerges after the return of the Shiite Ayatollah Khomeini. In duced by OPEC in 1979 causes another recession. Economic 1985 Mikhail Gorbachev is elected General Secretary of the growth in Germany declines to 1.4% in 1980, 0.5% in 1981 Soviet Communist Party. He ushers in an era of reform under and then –0.5% in 1982. Positive growth of 1.6% is attained in the banner of glasnost (openness) and perestroika (restructur- 1983 (Statistisches Bundesamt 2012, table 12.1, p. 320). ing). He also reopens disarmament talks with the USA and in 1988 the Soviet Union and the United States agree to the elimi- Decreased economic growth in these years leads to a corre- nation of all atomic medium-range missiles. The European sponding decline in rail freight, causing a dip in the deferred Community welcomes three new members, Greece in 1981 freight payment business. Increased competition from lorries and Spain and Portugal in 1986. also has an impact. When economic growth is negative in 1975 for the first time in Germany in the post-war era, deferred freight An end comes to some conflicts. In 1975 the Vietnam war ends payment revenue decreases by 14% (Annual Report 1975, p. 7). and South and North Vietnam are reunited. In 1979 Israel and While the deferred freight payment business benefits from the Egypt reach a peace accord at Camp David, bringing an official period of recovery that follows, the years to come increasingly end to the Yom Kippur war that broke out in 1973. Yet new con- point to a phase of maturity or saturation in this line of business. flicts and hot spots break out in other areas. In 1974 Cyprus is In 1976 rail freight totalling DM 7.2 billion is invoiced with divided. In 1975 civil war begins in Lebanon. From 1976 to 1978 39,651 deferred freight payment borrowers. By 1988, the year the Khmer Rouge regime ushers in an era of bloodshed in Cam- of the Bank’s initial public offering, rail freight handled through bodia. In 1979 Soviet troops invade Afghanistan. They occupy deferred freight payment reaches DM 7.9 billion, with nearly the the country until their withdrawal in 1988. Not more than eight same number of borrowers as in 1976. However, the Bank has years later, the Taliban militants establish a reign of terror succeeded at expanding its deferred freight payment business throughout the country. In 1980 war breaks out between Iraq to areas beyond Deutsche Bundesbahn, so that total revenues and Iran which ends in a 1988 armistice. In 1982 Argentina and in the deferred freight payment business reach DM 9 billion Great Britain go to war over the Falkland Islands. In 1986 the in 1988. Of course, economic downturns heighten the risk of world is shocked by the Chernobyl nuclear reactor disaster. insolvency amongst deferred freight payment borrowers. In 1987 a major shipper declares bankruptcy, forcing the Bank to record a large write-down in the deferred freight payment business. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h Deutsche Verkehrs-Kredit-Bank bureau de change on h Deutsche Verkehrs-Kredit-Bank bureau de change the side of the Federal motorway at Schwarzbach (1978) at Berlin‘s Zoo railway station (1984)

Its lending business continues to focus on companies that have Fluctuations in economic growth also impact the bureaux de business relationships with Deutsche Bundesbahn and on invest- change business. The number of migrant workers in Germany ments that promote rail traffic. Its role as the principal bank of also stagnates in the wake of the ban placed on their recruitment Deutsche Bundesbahn continues to entail the processing of in 1973. Demand for currency exchange for travel purposes domestic and international payment flows, meeting liquidity thus gradually declines. In some cases, significant changes on requirements, investing excess liquidity on the money market, the foreign exchange market also influence the bureaux de issuing bonds and price stabilisation. Starting 1 December 1980, change financial results. an agreement is reached with Deutsche Bundesbahn relating to price stabilisation that releases the Bank from the price risks From the early 80s onwards, the Bank begins to rationalise associated to the performance of Bundesbahn bonds (Annual workflows in certain areas, with the introduction of computer- Report 1980, p. 9). assisted technologies. This approach is noted by the 1982 Annual Report for the first time. The different IT measures The Bank’s biggest depositor is Deutsche Bundesbahn, though include adopting SWIFT to process international payment flows. the size of the balances held fluctuates considerably. The Computers also find their place in the bureaux de change. In “Sparda” banks are another important depositor group. This is 1984 the first cash machine is set up at the bureau de change the new name that the Eisenbahn-Spar- und Darlehnskassen in Cologne’s central train station. Cash machines increasingly opted for in 1978: their service association was accordingly replace the process of cashing Eurocheques at bank counters changed to Verband der Sparda-Banken [Association of Sparda over the years to come. At the end of 1985, the Bank decides Banks] (Olten 2006, p. 133 and p. 143). Processing securities to roll out a customer-oriented dialogue system for banking transactions for Sparda Bank customers becomes increasingly transactions (Kundenorientiertes Dialogsystem für Bank- important for Deutsche Verkehrs-Kredit-Bank throughout the geschäfte – “KORDOBA”) to replace the existing IT system. 1980s. In 1986 the first cash machine capable of exchanging four currencies is installed at Frankfurt/Main’s central train station. 90 years DVB Bank 56 | 57

v IT processing at Deutsche Verkehrs-Kredit-Bank‘s Frankfurt/Main head office (1979)

h Changeover on the Board of Managing Directors (1985): h Company logo from 1986 Arno Grunhold succeeds Karl-Heinz Boldt

Automation is particularly attractive for the bureaux de change In 1987 it becomes official that Deutsche Bundesbahn is seeking business, which has traditionally required high staffing levels. partial privatisation of 24.9% of Deutsche Verkehrs-Kredit-Bank’s In 1987 the way securities orders are processed for Sparda Bank share capital, totalling DM 75 million. A banking syndicate led clients is improved with the introduction of a new IT-supported by DG BANK and Dresdner Bank is tasked with the IPO. They order management system. And by late 1988, twenty cash are responsible for placing DM 18.675 million in 373,500 shares machines are already in operation. at DM 50, a portion of which is to be offered for subscription to Deutsche Verkehrs-Kredit-Bank and Deutsche Bundesbahn In 1977 the Annual General Meeting passes a resolution for a employees. share capital increase (from DM 50 million to DM 65 million). In 1985 the share capital is increased another DM 10 million to a At an Extraordinary General Meeting on 24 September 1987, total of DM 75 million. Deutsche Bundesbahn, which is still the sole shareholder, amends the Articles of Association to expand the Supervisory In 1983 the Federal Government begins discussing the possibility Board from six to twelve members. Pursuant to the German and potential scope of privatising certain state enterprises. In Employees’ Representation Act (Betriebsverfassungsgesetz) October 1984, Deutsche Verkehrs-Kredit-Bank hosts the annual 1972, one third of the seats are allotted to employee represent- meeting of Management Board and Supervisory Board Chairmen atives (DVKB Gazette No. 1/1988). of Federal subsidiaries and investments in Berlin. On this occa- sion, Finance Minister Gerhard Stoltenberg makes public the news that the Federal Cabinet has instructed his ministry to investigate the sale of federal holdings (DVKB Gazette No. 100/1984). Even Federal state-owned enterprises are told to as- sess their holdings (Mayer 2006, p. 207 et seq.). 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Frankfurt airport on a German stamp (1979)

The official listing is planned for 3 December 1987. Shortly The investment holdings of Deutsche Verkehrs-Kredit-Bank before the flotation is to be made, shares plummet on the stock have undergone only minimal changes by 1988. The Bank con- markets on 19 October 1987, also known as Black Monday. tinues to own shares in the travel agency Ameropa-Reisen GmbH The Bank’s initial public offering has to be postponed (DVKB (100%) and Deutsche Eisenbahn-Reklame GmbH (40%). The Gazette No. 4/1987). It is eventually carried out in the spring COLLICO Verpackungslogistik und Service GmbH holding has of 1988. On 11 March 1988, advertisements are run and on increased from 75% to 100%. In 1979, the Bank invested in the 14 March the IPO candidate is presented to banks and repre- ferry operator Rømø-Sylt-Linie GmbH; by 1988 it owns a 24.8% sentatives of the press. The Chairman of the Board of Managing stake. It also has an investment in Transfracht Deutsche Trans- Directors, Dr Franz Schloßnikl, remarks that “the business policy portgesellschaft mbH on its books. of the Bank is aimed at complementing its primary business as the principal banking partner of Deutsche Bundesbahn and its During this period, the Board of Managing Directors and the Group companies with an equally valuable and important bank- Supervisory Board have undergone the following changes: on ing business with corporate clients” (DVKB Gazette No. 2/1988, 9 August 1977 Managing Director Dr Tettenborn passes away p. 4). The employees of Deutsche Bundesbahn and Deutsche unexpectedly, only shortly before he planned to retire at the end Verkehrs-Kredit-Bank are offered 112,500 shares for subscription. of that year. His designated successor, Dr Franz Schloßnikl, is 186,000 shares are to be issued in free float by the syndicate, thus appointed to the Board of Managing Directors on 1 Decem- which is led by DG BANK and Dresdner Bank. The remaining ber 1977 (DVKB Gazette No. 71/1977). In December 1982, 75,000 shares are to be placed with the Sparda banks as long- Dr Wolfgang Vaerst hands over chairmanship of the Supervisory term investments (Olten 2006, p. 133 and p. 143). Board to Wilhelm Pällmann, who serves on the Management Board of Deutsche Bundesbahn. On 31 March 1985, member An issue price of DM 155 is set for each DM 50 share. The Karl-Heinz Boldt leaves the Board of Managing Directors to go subscription period is from 15 to 18 March. Deutsche Bundes- into retirement. Arno Grunhold is invited to join the Board of bahn and Deutsche Verkehrs-Kredit-Bank employees apply for Managing Directors on 1 April 1985 as his replacement. 145,201 shares and are ultimately assigned 118,486 shares. The IPO takes place on 6 April 1988 and the share price is DM 162 by the time the market closes (DVKB Gazette No. 2/1988). Deutsche Bundesbahn now holds a 75.1% stake in the issued share capital. The first General Meeting following partial privati- sation takes place on 26 August 1988, with roughly 500 share- holders attending. In July 1989, the Bundesbahn shares are transferred to Deutsche Bundesbahn Holding GmbH, which is formed in Frankfurt in 1988 as a wholly owned subsidiary of Deutsche Bundesbahn. 90 years DVB Bank 58 | 59

x Shares of Deutsche Verkehrs-Kredit-Bank AG – IPO in 1988 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for Arno Grunhold

Arno Grunhold, born on 30 October 1935, began his career in the savings bank sector after earning a degree from the Savings Bank Academy in Bonn. After becoming a Deputy Management Board member at Kreissparkasse Verden/Aller (1963) and Chair- man of the Management Board of Sparkasse Hameln-Pyrmont in Hameln (1970), he assumed a new role in 1974 as Senior General Manager of Norddeutsche Landesbank – Girozentrale, Hanover/Brunswick. In 1976 he joined the Management Board of Norddeutsche Landesbank, before moving to the Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank in 1985. After retiring from the Board of Managing Directors in 1995, he maintained his connection with the Bank and spearheaded the creation of a historical company archive. 90 years DVB Bank 60 | 61

Back in 1988, Deutsche Verkehrs-Kredit-Bank was listed A major historic event, the reunification of Germany, on the stock exchange; through the IPO, Deutsche Bundes­ occurred on 3 October 1990. Beforehand, the banking sector bahn – the German Federal Railways – relinquished a of the German Democratic Republic (GDR) had already portion of its holding. How did employees feel about that undergone structural changes, and a new bank was founded at the time? Was it seen as an opportunity or a risk? with an investment from Deutsche Verkehrs-Kredit-Bank. Both the Board of Managing Directors and employees felt a What role was envisaged for the joint venture? certain degree of trepidation. Amongst Managing Directors, At the time so much was in flux, and most of it wasn’t foresee- we did not see how partial privatisation benefited Deutsche able. At the beginning of our talks in January 1990, Staatsbank – Verkehrs-Kredit-Bank in any way, but we accepted it as a political the GDR’s central bank – still conducted all the banking business decision, because that was what it was all about. Deutsche there. An industrial bank branch of the Staatsbank was respon- Bundesbahn’s assurance that the partial privatisation would not sible for Deutsche Reichsbahn, the GDR’s railways. By founding change its business relationships with us – quantitatively or Deutsche Kreditbank AG in April 1990, commercial banking qualitatively – was of tremendous importance to the Board of was separated from central bank functions. We advised both the Managing Directors, and to the Bank’s employees. newly formed Deutsche Kreditbank and Deutsche Reichsbahn on training their employees in technical and organisational matters. How did listed status then affect the Bank’s business? Deutsche Verkehrs-Bank AG was founded as a joint venture at What were the biggest changes that listing entailed for the guest house of Deutsche Reichsbahn on 19 June 1990. In employees? the GDR, its remit generally corresponded to what the Deutsche Our flotation on 06 April 1988 on the Frankfurt/Main and Berlin Verkehrs-Kredit-Bank did in the Federal Republic of Germany. stock exchanges garnered a great deal of interest. Clients and We shared our expertise in banking, especially as the principal correspondent banks applied for so many shares that we were banking partner to Deutsche Bundesbahn, as well as our training oversubscribed ten times over. The 112,500 shares that had been support. set aside for those with preferred status, namely employees of Deutsche Verkehrs-Kredit-Bank and Deutsche Bundesbahn, Who were your primary contacts in Eastern Germany? were also oversubscribed. Ultimately 118,486 shares were Whose initiative was it? assigned in the end. All in all, the subscription results were Our goal was to acquire Deutsche Reichsbahn as a client for excellent. The initial public offering and the related public relations the services we had been providing for decades to Deutsche work created recognition for Deutsche Verkehrs-Kredit-Bank Bundesbahn – including freight billing, principal bank services across Germany, but day-to-day work at the Bank went on for the railway, bureaux de change, etc. That is why it was as usual. There wasn’t really any anxiety about job cuts from important for us to establish contacts at Deutsche Reichsbahn. structural changes. Because Deutsche Reichsbahn’s banking business was con- 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

»One day the Central Archive of informed us that renovation work in the former head office of Deutsche Verkehrs-Kredit-Bank, at Unter den Linden 10, had uncovered a room behind some bricked-up doors. This room contained a cache of files from the former Reichsbahn and the Deutsche Verkehrs-Kredit-Bank.«

centrated at the Staatsbank, we needed a point of contact there as well. Our first contacts in January 1990 were the Head of Finance at Deutsche Reichsbahn and the directors of Staatsbank’s industrial bank branch covering Deutsche Reichsbahn. We also met with representatives of VEB Schienenfahrzeuge Export- Import and VEB Außenhandelsbetrieb – two state-owned enter- prises of the GDR. Later this group was expanded to include the Vice President of the Staatsbank, the General Director and the Deputy General Director of Deutsche Reichsbahn, the Head of the Transport Billing Office of the GDR and the Director of the Reichsbahnsparkasse (Railway Savings Bank).

What do you believe were your greatest challenges? It had to be the political uncertainties surrounding the unification process, especially in early 1990. The major political and eco- nomic changes and radical shifts were regarded by both sides as the beginning of a new era – full of new opportunities, but also full of risks as well. From both sides of the negotiation table, it required a lot of courage to embrace the different far-reaching structural changes, especially because skill sets and responsi- bilities were changing constantly in the GDR.

Were there any major obstacles or problems in the negotiations at the time? In our negotiations, we were able to achieve a consensus with regard to aligning business targets and measures in a relatively short period of time, despite the uncertainties. There were areas of discussion and irritation in a lot of meetings, particularly with regard to the ownership of the former headquarters of Deutsche Verkehrs-Kredit-Bank in Berlin – the building at Unter den Linden 10. We would have liked to regain ownership of the Bank’s former office, which ultimately remained out of reach. 90 years DVB Bank 62 | 63

After reunification, Deutsche Verkehrs-Kredit-Bank One portion of the company archive was only discovered opened branch offices in Eastern Germany. What did in 1996. How did that happen? people hope to accomplish? What sort of start-up Right after reunification, we got in touch with the Head of Central difficulties were there? Archives at Deutsche Bundesbahn in Berlin to talk about certain In Western Germany, Deutsche Bundesbahn was divided into questions and problem areas that interested us both. We then railway divisions geographically, and we needed an office for visited each other’s offices in Berlin and Frankfurt. One day the every division to carry out the railway’s transactions. We hadn’t Central Archive of Deutsche Bahn informed us that renovation initially envisaged that for Eastern Germany, but we needed work in the former head office of Deutsche Verkehrs-Kredit- offices to ensure market coverage for our specific target groups. Bank, at Unter den Linden 10, had uncovered a room behind We ultimately oriented the offices we established towards eco- some bricked-up doors. This room contained a cache of files nomic centres, for example the branch offices in Dresden and from the former Reichsbahn and the Deutsche Verkehrs-Kredit- Leipzig. New bureaux de change were also added. Bank. Deutsche Bahn took the files that related to it, and we took our old files. A lot of it concerned audit reports and copies of After retiring, you oversaw the company archive for correspondence from the deferred freight payment and lending quite a few years. What motivated you to devote yourself divisions. The documents mattered to us because they enabled to the history of DVB? us to find answers to various restitution cases over the last In the run-up to the partial privatisation of Deutsche Verkehrs- several years. Kredit-Bank from 1987 onwards, and then again later, we kept having to refer back to historical documentation and information How do you feel about DVB today? from the Bank’s history. We discovered that the files tended to The change in focus, namely the transformation from a pure be located at different Bank branches and administration offices, railway bank to a bank specialising in aircraft and shipping finance but not at a central location. In the early 1990s I took the initiative was an absolutely monumental change. And it was an out- to lay the groundwork for a central storage and administration standing success. That was by no means a foregone conclusion. point for historically important files and other documents. I then I have tremendous respect for such an achievement. To be brief: started by addressing basic archiving questions quite extensively; my feelings about the DVB Bank of today are entirely positive. namely, how should historical files be set up, how should we systemise the files, what software works best for archive man- agement, etc.? I have been involved in the Bank’s historical archive for more than twenty years now. Because I have always been interested in historical matters and developments, the setup and administration of an archive was really a labour of love and a hobby rolled into one. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h Fall of the Berlin Wall: people from East and West Berlin climb the Wall at the Brandenburg Gate on 11 November 1989 90 years DVB Bank 64 | 65

1989 – 1996

German reunification – DZ BANK acquires a Kingdom, the United States and the Soviet Union – work with majority shareholding – the Bank evolves from the two German states to sign off the Treaty on the Final Settle- ment with respect to Germany [Vertrag über die abschließende a railway bank into a transport finance house Regelung in Bezug auf Deutschland], granting a united Germany full sovereignty. On 3 October 1990, the reunification takes In 1989 the Soviet Union under the leadership of Mikhail place, and on that same day the Allied sovereign rights expire Gorbachev grants countries within the Eastern Bloc – which is that had existed since the end of WWII. still in place – the freedom to determine national politics for themselves. The societal transformation that had already been set in motion is now hastened considerably, ending in the breakup of the Soviet Union and the emergence of Russia and other independent states out of the former Soviet Republics. Independence is restored to the Baltic states of Estonia, Lithuania and Latvia, which they had lost with their annexation to the Soviet Union in 1940. Political systems also begin to change in the former Eastern European satellite states. Political reform takes hold in Poland, Hungary and Czechoslovakia (which in 1993 splits into the Czech Republic and the Republic of Slovakia). Communist parties lose power, and new parties emerge as the transition is made from a planned to a free-market economy. In late 1989 those in power in Bulgaria and Romania are overthrown, with the upheaval in Romania triggering a bloody revolution.

The German Democratic Republic is also in political flux. Monday demonstrations start in Leipzig in September 1989 and steadily gain support. The demonstrators demand reform and the freedom to travel. Not long before this, a flood of people from the GDR had emigrated to the West after Hungary opened its border to the West. In October, the German Democratic Republic’s Head of State, Erich Honecker, leaves office. On the night of 9 November 1989, the inner-German border opens. The sentence uttered by former German Chancellor and Nobel Peace Prize laureate Willy Brandt, that “what belongs together can now grow together” is soon expressed in countless political discussions that are ultimately followed by the reunification of both German states. On 1 July 1990, the Monetary, Economic and Social Union established between the Federal Republic of h Glasnost and perestroika under Mikhail Gorbachev lead to disarmament talks with Germany and the German Democratic Republic enters into the USA: the General Secretary of the Soviet Union‘s Communist Party and Ronald Reagan, force, leaving the Deutsche Mark as the only legal tender. The President of the United States, face the international press after their third meeting at the four victorious powers of World War II – France, the United „Höfdi“ guest house in Reykjavik, Iceland 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v Break during negotiations in Kaulsdorf (1990): (from right to left) Arno Grunhold, Hanns Mauthner, Deputy General Director of GDR‘s Deutsche Reichsbahn, Dr Klaus Menche

Political developments throughout Europe ultimately mean an The Monetary, Economic and Social Union of 1 July 1990 is an end to the Cold War between West and East. But there are other event that confronts the banking sectors in both West and East important geopolitical events. In South Africa, the Apartheid Germany with tremendous challenges. The direction of the regime is peacefully ended in 1991 and democratisation begins. GDR’s banking system has to quickly be brought into line with In 1994 Nelson Mandela becomes the first black president of financial structures in the Federal Republic. Preparations also South Africa. Many conflict zones, including in the Middle East have to be made for the DM changeover, which entails having a and Somalia, persist and new troubled areas emerge. The 1990 sufficient cash supply for 1 July. occupation of Kuwait by Iraq is ended in early 1991 with inter- national military intervention led by the USA. In 1991 Slovenia As part of a first step, the single-tier banking system is dissolved and Croatia declare their independence, beginning the dissolution and the central and commercial banking functions united under of Yugoslavia – which takes an increasingly violent course before the GDR Staatsbank are divided. The GDR Staatsbank retains being ended by NATO intervention in 1999. In 1994 Rwanda is only its function as a central bank, while the newly founded shaken by a bloody civil war. In Afghanistan the Taliban funda- Deutsche Kreditbank AG assumes responsibility for commercial mentalists seize Kabul in 1996, gaining control of most of the banking. Institutional changes also go into effect at other banks country. subordinate to the GDR Staatsbank.

The political events in the GDR quickly affect the bureaux de Banks in the Federal Republic of Germany had already formed change business of Deutsche Verkehrs-Kredit-Bank. The opening relationships with contacts at the GDR Staatsbank and its of the inner-German border on 10 November 1989 leads to a various financial offshoots, in order to explore potential areas flood of visitors from the GDR, who provide the bureaux de for collaboration, including joint ventures. The first relationships change of Deutsche Verkehrs-Kredit-Bank with no shortage of that Deutsche Verkehrs-Kredit-Bank forms are with the Head of work. In addition to dispensing the “welcome money” offered Finance at Deutsche Reichsbahn and the directors of the GDR to every GDR visitor by the Federal Republic, the demand for Staatsbank’s industrial bank branch responsible for Deutsche exchanging Ostmark to DM is very high at bureaux de change, Reichsbahn in January 1990. After Deutsche Kreditbank AG is even though taking Ostmark across the border is actually pro- formed on 01 April 1990, negotiations enter into a new phase. hibited (cf. Gries 2003). On 18 November, a provisional bureau Deutsche Verkehrs-Kredit-Bank, Deutsche Reichsbahn, Deutsche de change is opened at Helmstedt train station. The agencies Kreditbank AG and Reichsbahn-Sparkasse e.G. come to an that had been closed years ago in Bebra, Hof and Coburg open agreement to enter into a joint venture under the name of the on a temporary basis (DVKB Gazette No. 4/1989). Exchanging Deutsche Verkehrs-Bank AG to be registered in Berlin. A charter the currency is still highly speculative at the time, as no one application is submitted by the General Director of Deutsche knows what the future has in store for the Ostmark. But a market Reichsbahn to the President of the GDR Staatsbank. Deutsche does indeed develop. While GDR citizens sell their Ostmark in Reichsbahn (75%), Deutsche Verkehrs-Kredit-Bank (20%), the west, other people from the GDR, Federal Republic and Deutsche Kreditbank AG (3%) and Reichsbahn-Sparkasse e. G. neighbouring states (including Poland, for instance) become (2%) have different holdings in the joint venture. According to a interested buyers. Ostmarks eventually flow back into the GDR. “Documentation of mutual agreement” signed on 04 May 1990 People from the Federal Republic and abroad benefit in particular in Berlin (Document 14), the joint venture is to carry out the fol- from the favourable exchange rate by purchasing goods in the lowing business activities: GDR that some of them then sell on the other side of the border. The income they generate can then be exchanged for Ostmark again (Spiegel 1989). 90 years DVB Bank 66 | 67

v Company logo from 1991

– Carrying out a deferred freight payment procedure in line There are only eight weeks left before the GDR’s currency with the one operated by Deutsche Verkehrs-Kredit-Bank changeover to Deutsche Mark on 1 July 1990, which is when for Deutsche Bundesbahn bank branches need to be stocked with notes and coins. Like – Establishing and operating bureaux de change at Deutsche every other bank branch within the GDR, the bureaux de change Reichsbahn train stations of the newly founded Deutsche Verkehrs-Bank in Berlin, – Holding Deutsche Reichsbahn’s available liquidity at market Leipzig, Sassnitz, Magdeburg and Warnemünde receive their interest rates first DMs, as well as a stock of foreign currency and travel – Covering Deutsche Reichsbahn’s short-term liquidity cheques. With organisational help from Deutsche Verkehrs- requirements, where operationally and legally possible, Kredit-Bank, they are equipped with proper materials and teller at market rates machines (DVKB Gazette No.3/1990). The Ostmark exchange – Processing domestic and international payment flows is suspended at Western bureaux de change before 1 July 1990. – Stabilising the price of Deutsche Reichsbahn’s listed bearer bonds After the Monetary, Economic and Social Union enters into force on 1 July 1990, the GDR financial system undergoes other The joint venture is also tasked with attracting the available institutional changes. On that day, the GDR Staatsbank becomes liquidity of Reichsbahn-Sparkasse as a depositor. In the event Staatsbank Berlin, which later (1994) is merged into Kreditanstalt that Sparda Banks are established in the GDR similar to those für Wiederaufbau. This paves the way for banks of the Federal in the Federal Republic, the joint enterprise is to try to position Republic and foreign banks to acquire former GDR state banks itself as their central institution (Document 14). This does indeed (Streit 1998). come to pass in May 1990 with the formation of Sparda-Bank Berlin eG from Reichsbahn Sparkasse, with eight branches and At the General Meeting of Deutsche Verkehrs-Kredit-Bank AG responsibility for the entire former GDR (Streit 1998; Olten on 19 July 1991, the merger of Deutsche Verkehrs-Kredit- 2006, p. 190 et seq.). Bank AG and Deutsche Verkehrs-Bank AG is announced with retrospective effect to 1 January 1991, with the new bank doing The legal formation of Deutsche Verkehrs-Bank AG takes place business under the name of Deutsche Verkehrs-Bank AG. on 19 June 1990, at Deutsche Reichsbahn’s guest house in Kaulsdorf (DVKB Gazette No. 3/1990). The registration of the Important milestones are reached in the process of European joint enterprise takes place on 27 June 1990 in Berlin, just in integration as well. The Maastricht Treaty of 1992 creates the time for the entry into force of the Monetary, Economic and European Union, which includes common foreign and security Social Union. Deutsche Kreditbank transfers the employees that policy and the creation of an economic and monetary union. used to service Deutsche Reichsbahn into the joint venture, which The single European currency, the euro, is to be introduced in as of July 1990, has its head office at Unter den Linden 10 in the European Union no later than 1 January 1999. In order Berlin – Deutsche Verkehrs-Kredit-Bank’s headquarters from to be part of the monetary union, member states must meet 1935 to 1945. A floor is leased in the building, which is the certain economic criteria (the so-called Maastricht Criteria) property of Deutsche Reichsbahn. At a later stage, DVB will aimed at ensuring the stability of the common currency. attempt to assert its former ownership interests, albeit without success. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

On 1 January 1993, the single European market becomes a would have been possible. China itself was instrumental in reality. The clearest sign is the absence of customs control at supporting this process from the very beginning by making internal borders, facilitating the free movement of goods. The major investments in its transport infrastructure. The creation free movement of people and services, as well as capital, is also of shipbuilding capacity and the emergence of capable trans- instituted. On 1 January 1994, another trade bloc is created in port companies, especially in maritime shipping and aviation the form of the North American Free Trade Agreement (NAFTA) transport were also important factors. between the USA, Canada and Mexico. In 1995 the European Union grows to fifteen Member States with the addition of Against the background of the political changes taking shape in Austria, Finland and Sweden. In 1998 the European Central Europe, Deutsche Verkehrs-Kredit-Bank revises its business Bank is established and on 01 January 1999, eleven member strategy over the course of 1990. Four strategic business areas states introduce the euro for cashless payments on the financial are targeted: (1) corporate banking focusing on the transport markets (Greece follows in 2001). At the same time, steps sector, (2) the currency exchange and bureaux de change busi- are taken to standardise the European transport market. This ness, (3) the central banking services for the Sparda Banks, and includes the liberalisation and deregulation of cross-border (4) proprietary trading in money, foreign exchange, and securities. inner-European traffic. The inner-European aviation market is made a reality in three steps, with a planned introduction of In the transport sector, the goal is to grow beyond the Bank’s cabotage at the end in 1997. The inner-European road transport traditional rail business to become “the recognised bank of markets are also liberalised relatively quickly. However, the the transport industry – the bank for transport companies, their process of liberalisation is much slower for rail. The free clients and suppliers. The Bank is targeting relationships with movement of goods instituted on 01 January 1993 and im- larger and medium-sized firms” (Annual Report 1990, p. 4). By proved transport services spurs growth in freight traffic be- concentrating its efforts on transport as its strategic business tween member states, and the momentum increases with the area, the Bank intends “to make it the central pillar of the entire accession of ten new member states in 2004. Bank” (Annual Report ibid).

In 1995 the World Trade Organisation (WTO) is founded, with Beginning in 1991, Deutsche Verkehrs-Bank starts to imple- the primary aim of promoting the liberalisation of international ment its strategy to transform “from the ‘railway bank’ to a trade relations and decreasing barriers to trade. Freer trade ‘transport and travel bank’” (Annual Report 1993, p. 2). Through relations, in connection with advancements in productivity in the targeted acquisition of clients, new corporate banking the transport markets, which themselves are the result of the business in Germany is to be opened up in the transport sector liberalisation and deregulation of the transport markets as well amongst freight and passenger transport companies, trans- technological progress, lead to the geographical decentralisation port infrastructure providers, manufacturers and lessors of of procurement, production and sales relations. This leads in transport assets. In doing so, existing business relationships turn to increasing globalisation of the world’s economy. The in the deferred freight payment business are to be leveraged, rise of China to the status of a new economic powerhouse is in order to expand lending. In the transport infrastructure seg- the result of this globalisation. In China, low wages are a key ment, increased investment is forecasted in light of the reunifi- factor in motivating companies from industrialised nations to cation. Indeed, the 1991 German Unity Transport Projects outsource labour-intensive production processes. Without high- provide for the development of central West-East transport performance transport connections, however, none of this connections between Germany’s two parts. 90 years DVB Bank 68 | 69

Opening up the Eastern German market for corporate customer In the currency exchange and bureau de change business, business is now a focus area for the Bank. Over the course of avenues are explored to expand the range of services, in part 1991, new bureaux de change are opened and a branch network due to the introduction of a common currency under the 1992 established in the new federal states. The first bureau de change Maastricht Treaty, which will lead to a precipitous drop in revenue opens on 08 April 1991 at Dresden’s central train station. in the foreign currency business over the long term. To be able Branches are opened in Erfurt, Halle, Dresden and Rostock. to compensate for this difference, one of the measures adopted Market coverage in the new Federal states is initially concen- involves expanding fees through cash machine and credit card trated on the deferred freight payment business with Deutsche transactions at the bureaux de change. Gradually new cash Reichsbahn. At the beginning, acquiring corporate clients in machines are installed: their number increases from 24 in 1989 the lending business is hampered by the frequent lack of tradi- to 121 in 1996. In the meantime – in 1994 – the number climbed tional bank collateral, or by assets that are difficult to value as high as 169 cash machines, before a network optimisation (DVB Gazette No. 1/1992, p. 11). By introducing the deferred exercise was implemented. Because credit card cash disburse- freight payment business at Deutsche Reichsbahn, revenue ments steadily increase at bureaux de change, cash machines in this area increases. In 1991 the deferred freight payments are upgraded to handle major credit cards in 1990. The American surpass DM 10 billion. Express card is the first in December 1990. Beginning in early 1992, Eurocard/Mastercard and VISA are also accepted by the The Bank’s division responsible for providing central banking machines. Revenue from cash machines helps to compensate services to Sparda banks is repositioned on a new foundation for the stagnation in foreign exchange. This stagnation has to after a cooperation agreement is signed to enter into force on do with the fact that international travellers increasingly are able 1 January 1992. In connection with the agreement, the Sparda to get cash from cash machines at their destination, or they pay banks assume a 10% stake in the share capital of Deutsche by credit card when abroad. From 1992 onwards, successful Verkehrs-Bank by acquiring shares from Deutsche Bundesbahn new attempts are made to operate cash machines at shopping Holding, whose stake is thereby reduced to 65.1%. At the same centres and major petrol stations. By the end of 1992, a new time, Deutsche Verkehrs-Bank is officially recognised as the service is offered at the bureaux de change for international central bank of the Sparda banks by the Federal Banking Super- money transfers using the network of the Bank’s new business visory Authority [Bundesaufsichtsamt für das Kreditwesen]. The partner, Western Union Financial Services. During the 1996 duties assumed by Deutsche Verkehrs-Bank for the Sparda business year, 128,000 transactions are executed, with an aggre- banks comprise international payment flows, processing securi- gate volume of DM 155 million. The range of services at the ties business, investing available liquidity and covering any bureaux de change is expanded to include other products, such liquidity requirements that may arise. In the securities business, as selling international phone cards, gold and silver, and tickets Deutsche Verkehrs-Bank assumes responsibility for the execu- to concerts, etc. The stagnation in the foreign exchange business tion and settlement of securities orders for Sparda customers also affects the foreign currency trading division, which supplies (which is designated as the ‘Depot B’ or agency business). the Bank’s bureaux de change with foreign notes and coins. Deutsche Verkehrs-Bank also handles and consults on Sparda In order to compensate for this development, the service is banks’ investments (dubbed the ‘Depot A’ or own-account increasingly offered to other institutions and corporate clients. business). The activities of the foreign currency trading division also include precious metals and coins and the selling and purchasing of gold and silver certificates. On 1 January 1997, DG BANK transfers its trading activities in foreign notes and coins and precious metals to Deutsche Verkehrs-Bank. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

v German reunification: the people of Berlin celebrate at the Brandenburg Gate on 3 October 1990

In the early 1990s, the Bank begins to develop plans for cash- Despite the changes to the shareholder structure, the Bank’s less payments for passenger tickets on public transport. Ticket business relationship with Deutsche Bahn remains unchanged machines are pre-financed for public transport associations, for the time being. Its working relationship is defined by a long- where season tickets for public transport can be purchased term cooperation agreement signed on 7 November 1994. by card. The ticket machines are financed by the fees for the Deferred freight payment continues to be processed as before. season tickets sold by the machines. The locations of the bureaux de change at the train stations also remain unchanged: in any construction or renovation projects Furthermore, in 1996 the Bank is licensed by the Central Credit at train stations, Deutsche Verkehrs-Bank’s bureaux de change Committee (Zentraler Kreditausschuss) as a network operator receive preferential treatment, as long as they pay market lease for processing cashless payments (EC cards/credit cards). By rates (DVB Gazette No. 3/1994). However, price stabilisation 1998 the network includes as many as 5,000 terminals in retail services for Deutsche Bundesbahn’s capital market paper are shops and other points of sale, which are supplied by third-party stopped at year-end 1995 and transferred to the Bundesbank. providers. Individual transactions at season ticket machines are also processed using the Bank’s network. Both activities are By 1996, there have been significant changes to the Bank’s bundled under the Electronic Banking division. investment holdings. In 1993 the 100% shareholding in Ameropa Reisen GmbH, which was acquired in 1973, is transferred to On 1 January 1994, Deutsche Bundesbahn (the railway of the Deutsche Bundesbahn Holding GmbH. The investment the Bank former Federal Republic of Germany) and Deutsche Reichsbahn made many years previously in Collico Verpackungslogistik und (the railway of the former GDR) merge to become Deutsche Service GmbH, and the shares in Deutsche Eisenbahn-Reklame Bahn AG, the new German railway company. That same year, GmbH, Transfracht Deutsche Transportgesellschaft mbh and the Management Board of Deutsche Bahn AG decides to sell Deutsche Touring GmbH are also transferred to the holding the majority of its 65.1% holding in Deutsche Verkehrs-Bank’s company. In their place, new investments are made as part of share capital and retain only a minority shareholding. Both the strategic business focuses adopted in 1990. At the end of Dusseldorf-based Westdeutsche Landesbank and Frankfurt- 1991, the Bank becomes a shareholder in Union Investment based DG BANK (now DZ BANK) express interest in becoming Gesellschaft mbH in order to facilitate the sale of investment the new majority shareholder. DG BANK is particularly interested certificates via the Sparda banks. With the formation of IBG in “integrating Sparda banks and their association into the Immobilien Beratungsgesellschaft mbH and an investment German Cooperative Financial Services Network for the long in Deutsche Verkehrs-Leasing GmbH, an attempt is made to term by expanding DVB’s central banking functions” (Annual provide transport companies with advisory services for property Report, p. 2). DG BANK wins the bidding competition and and lease finance. In the 1996 financial year, the bureaux de becomes the majority shareholder with 50.1% of the Bank’s change, which had been part of the Bank’s business divisions, are share capital, with effect from 31 December 1994. Deutsche spun off into a newly founded company named ReiseBankAG. Bahn also sells 5% to the Sparda banks, bringing their holding Cash Express GmbH is also created to provide marketing (as to 15%. Deutsche Bahn now only holds a 10% stake. well as other) services for ReiseBank. 90 years DVB Bank 70 | 71

Nowadays, DZ BANK AG is the contrast, the “Raiffeisenbanken”, which Genossenschaftskasse founded in 1949, controlling institution within the were part of the cooperative banking as a central credit institution for the decentralised Cooperative Financial movement influenced by Friedrich cooperative banking sector. On 1 January Services Network. It was Hermann Wilhelm Raiffeisen, had a rural focus. 1976, Deutsche Genossenschaftskasse Schulze-Delitzsch who originally took These rural credit cooperatives also becomes DG BANK, which continues the initiative to form a commercial were generally founded from the mid- to grow over the next several years by cooperative banking system by found- nineteenth century onward. Only in late acquiring and merging with regional ing lending associations, later called 1971 do the two cooperative banking central banks. In 1998, it changes its “Volks­banken”. They focus primarily groups finally merge, bringing the organ- name to DG BANK AG and, after a on commercial businesses and trades- isational segregation of Volksbanken and takeover of GZ BANK in 2001, becomes people, which is why – particularly in Raiffeisenbanken to an end. At the time, DZ BANK AG (cf. Guinnane et al. 2013 the mid-nineteenth century – they were there are a series of regional central for more information on the history of founded mainly in urban areas. By banks in addition to the Deutsche DZ BANK).

On the Board of Managing Directors and Supervisory Board, business sees increased write-downs in 1992 and 1993, due there are the following changes during this period: on 2 October in part to a weakening economy. In the 1994 financial year, 1990 Dr Schloßnikl, who had joined the Board in 1977 and also Deutsche Verkehrs-Bank falls victim to fraud perpetrated by served as its spokesman, retires. Dr Klaus Zeidler takes his seat. Balsam AG and Procedo GmbH, to which it had credit exposure. Managing Director Dr Klaus Menche enters retirement on As a consequence of the write-downs, there is no dividend pay- 31 March 1992 and is replaced by Dr Dietrich Landes. That same ment that year. In 1995 high allowances for credit losses and year, Wilhelm Pällmann hands over his chairmanship of the the one-off expense for certain restructuring measures weigh Supervisory Board to Heinz Neuhaus (Chairman of the Manage- on the financial result. Ingeneral, pressure mounts to improve ment Board of Deutsche Bundesbahn Holding GmbH), who in internal banking processes. As a result, in 1996 the deferred turn is succeeded by Diethelm Sack after a short time. The freight payment transactions that had been processed locally new role of DG BANK as majority shareholder prompts a new by branches are centralised at an office in Mainz. The relocation round of changes to the Supervisory Board. The chairmanship of the head office to the City House on Frankfurt/Main’s Platz goes to DG BANK, represented by Dr Berthold Eichwald, der Republik in 1996 is another sign of organisational changes. and another seat that becomes available is also assumed by For the first time, the Bank downsizes on a larger scale, cutting DG BANK (Uwe E. Flach). On 01 January 1995 Anne-Rose 100 jobs and agreeing a social plan with the Works Council. Heibel-Dietrich replaces Arno Grunhold on the Board of Manag- ing Directors. In June Michael Wiedenroth succeeds Dr Dietrich In 1995 the Bank begins to consider establishing a stronger Landes. profile as a centre of competence for transport within DG BANK’s German Cooperative Financial Services Network (Annual Report The period between 1989 and 1996 saw a great deal of changes – 1996). There is also the promise of new business opportunities compared to the years before – in the Bank’s history. Among in road haulage, for example financing off-motorway service other things, DG BANK’s new role as the majority shareholder, areas, by partnering with KRAVAG insurance group and cooper- which had been Deutsche Bundesbahn’s (later Deutsche atives founded by associations and companies of the road Bahn’s) role for many years, prompts the Bank to reassess its transport industry. In late 1996, this partnership is cemented strategic positioning. between KRAVAG and Deutsche Verkehrs-Bank: each company acquires a 10% shareholding in the other. The international Revenue from price stabilisation services for Deutsche Bahn’s lending business is virtually non-existent, and to the extent that capital market paper dries up entirely at the end of 1995. The there is any activity, it is focused on syndicate lending and is deferred freight payment system is generating lower returns: managed exclusively within Germany. While the Bank is still in only DM 8.2 billion is settled in 1996. The bureaux de change the black when 1996 draws to a close, the earnings forecast is business model is threatened by the introduction of the euro as not exactly gleaming. The question of how it can be improved the common single currency. A new strategy is developed in for the long term remains unresolved in spite of the many 1990 and gradually implemented. The corporate customer measures taken, including the use of strategic consultants. h DVB Bank‘s business divisions 90 years DVB Bank 72 | 73

1997 – 2013

The Bank develops into a global specialist In Germany there are two important government changes in for international transport finance the period under review. In 1998 Chancellor Helmut Kohl, who was in office 16 years as part of the Christian Liberal Coalition (CDU/CSU, FDP) is replaced by a red-green coalition led by Gerhard Schröder (SPD, DIE GRÜNEN). Following his re-election September 11, 2001, is the date indelibly imprinted upon the in 2003, Chancellor Schröder and his government respond to world’s collective memory during this period: the Al Qaeda- rising unemployment by formulating Agenda 2010, which initiates perpetrated terrorist attacks in the United States. The imme­ radical economic and labour market measures aimed at reforming diate and clear reaction is a large-scale military offensive in the German welfare state and making Germany more competitive Afghanistan led by the United States. It is followed by other by 2010. These reforms, however, meet with fierce resistance major terrorist attacks, including Madrid (2004) and London from the Chancellor Schröder’s own party. He calls for a vote of (2005), and the terrorist network has yet to be fully defeated confidence in the , which he loses, prompting a fresh as the events in Mali at the beginning of 2013 have shown. In election in September 2005. The outcome sees the Schröder 2003 the Iraq War begins. American and British troops invade government replaced with a broad coalition (CDU/CSU, SPD) led the country to overthrow the Saddam Hussein regime. The last by Angela Merkel. After the Bundestag elections in September American troops do not withdraw until 2011. 2009, a Christian Liberal Coalition (CDU/CSU, FDP) government is formed, with Angela Merkel as Chancellor. In the area of former Yugoslavia, NATO intervention in 1999 brings about the end of the Yugoslav wars of secession and the At the end of 2008 a severe financial markets crisis erupts, begin- stabilisation of the new states. Northern Ireland, Sri Lanka and ning in the United States and rapidly spreading to other regions Sudan – where the new Republic of South Sudan is formed in due to the globalisation of the financial sector in recent years. 2011 – see an end to long-standing conflicts. Civil protest in The collapse of Lehman Brothers on 15 September 2008 jump- Tunisia in December 2010 develops into the so-called Arab starts the crisis. Directly thereafter the crisis impacts the econ- Spring, resulting in regime changes for Egypt and Libya. The omy, spurring declines in the production and transport of goods. bloodiest – which is still raging in mid-2013 – is the civil war in It is the worst economic crisis the world has experienced since Syria. 1931. Thanks to state economic stimulus programmes and the various initiatives from central banks that are implemented fairly Eleven member states of the European Union (Belgium, the rapidly in 2009, further economic contraction is averted, but Netherlands, Luxembourg, Germany, France, Ireland, Italy, the price is a surge in public-sector debt. A sovereign debt crisis Finland, Austria, Portugal and Spain) introduce cashless pay- eventually ensues from the financial markets crisis, something ments in euro on 1 January 1999. Greece follows on 1 January that has yet to be resolved as of 2013. The euro zone in particular 2001. At the beginning of 2002, euro notes and coins are is confronted with new challenges: member states have been introduced in euro zone member states. Marking the largest able to build a currency union, but have yet to form a true eco- expansion of the European Union to date, ten new member nomic union. Germany’s ability to withstand the major economic states join in 2004 – Latvia, Lithuania, Estonia, Poland, Hungary, crisis relatively well compared to other European countries is Czech Republic, Slovakia, Slovenia, Cyprus and Malta. Five of due in no small part to the Agenda 2010 reform. these countries subsequently join the euro zone: Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009) and Estonia (2011). The total number of European Union member states rises to 27 when Bulgaria and Romania join in 2007. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

1997 is an important year for the Bank, marking another decisive “Recruiting experts for aircraft and shipping finance and change in its strategy. Wolfgang Driese, who is named the infrastructure was more difficult than I had initially envisioned,” new CEO and Chairman of the Board of Managing Directors on Wolfgang Driese remarks in an interview with the internal 1 April 1997, and his fellow members of the Board of Managing Gazette in late 1997 (DVB Gazette No. 1, 1997, p. 1). At the Directors, decide to retain the foundational approach of a same time, an opportunity arises to accelerate the change in specialist bank for the transport sector, but shift the focus from strategy when Deutsche VerkehrsBank is alerted to an upcoming land transport towards aviation and maritime shipping on a sale of the aircraft and ship loan portfolio of the Long Term global level. Aviation and maritime shipping, in contrast to land Credit Bank of Japan (LTCB). As part of a bidding process, the transport, show much stronger growth in demand. Maritime Bank’s bid is finally accepted. The contract of sale is concluded shipping, above all, benefits from increasing globalisation of with LTCB on 12 June 1998. The takeover proves to be a quantum economic relations. Aviation benefits from global tourism, and leap, making it possible for the Bank to acquire not only a major also stands to benefit from the liberalisation of the transport loan portfolio of approximately €1.4 billion, comprising 200 markets, which has now reached Europe after being instigated financing structures, but also all of the employees of LTCB’s by political initiatives in the USA. The single European air aviation and shipping finance employees working at their London, transport market is completed in 1997. Liberalisation changes and Tokyo offices. Wolfgang Driese believes the competition dramatically. The highest-profile effect is the takeover accelerated the “positioning in the target segment by increase in market entries of low-cost carriers: their innovative three years, compared to organic growth in business volume” business models place notable pressure on incumbent airlines. (DVB Gazette No. 3, 1998, p. 3). In other areas of the world, first in Asia and then Latin America, similar developments unfold. Liberalisation and general growth Klaus Heinemann, who built up the LTCB portfolio over a period in air transport demand go hand in hand. of ten years, becomes Michael Wiedenroth’s successor on the Board of Managing Directors of Deutsche VerkehrsBank in With the goal of offering finance on the international shipping and August 1998. The acquisition of the LCTB portfolio also means aviation market beyond Germany, Deutsche VerkehrsBank AG the Bank has to confront significant organisational challenges. (the name the bank has been trading under since 1997) has to Now that the specialist teams have split away from LTCB, new compete with a whole series of well-known banks that have offices need to be found at the three new locations – and new been active for years. These include not only major international IT systems put into place. For both IT and other central depart- banks, but also some German Landesbanken that have already ments of the Bank, English becomes a critical second language; established a strong market position in international shipping special courses in Germany are held to facilitate the learning and aviation finance and, significantly, have access to cheap process. sources of funding. The changes in the Bank are not limited to the expansion of The Bank’s transport finance ambitions make it a sort of David business activities in Structured Finance. They also extend to all pitted against a whole host of Goliaths in the international bank- of the other existing business divisions. In the traditional corpo- ing business. The first task is to expand its expertise in the inter- rate customer business, which traditionally focused on the national target markets. In 1997 recruitment begins for the new German market and is supported by a network of 19 branches, Structured Finance division. The division is to combine financing there is an organisational change in how clients and loans are for aircraft, seagoing vessels, and railway rolling stock. Shortly managed based on a regional plan. This brings about the closure thereafter, Structured Finance also begins financing transport of branches in Dresden, Erfurt, Kassel, Leipzig, Magdeburg, infrastructure projects – including airports and privately-financed Münster, Rostock and Saarbrücken. A decision is also made to and operated motorways. cut back on non-transport customer business, and to boost business with transport clients. High write-downs in 1997 justify the move. 90 years DVB Bank 74 | 75

h Signing of the contract for the takeover of Nedship Bank by Deutsche VerkehrsBank (1999): (from left to right) Klaus Heinemann, Anne-Rose Heibel-Dietrich, Wolfgang F. Driese, Harry de Roo (Rabobank Nederland)

Nedship Bank’s roots date back to bank. At the end of the 1970s, the by Rabobank Nederland (Coöperative 1899, when Rotterdamsche Scheeps­ company strengthens its international Centrale Raiffeisen-Boeren Leenbank hypotheekbank was founded in presence by opening locations abroad. B.A.). The global expansion of the Rotterdam. In 1968, the company In 1979, for example, an office opens bank’s business activities continues merges with Nederlandsche Scheeps- in Piraeus, Greece, and in 1982 another through the mid-1990s with new offices Hypotheekbank and Eerste Nederland- office is established in New York. In opening in Hong Kong, Singapore, sche Scheepsverband Maatschappij to 1982 the bank’s name is changed to London, Bergen and Curaçao (Nedship form Nederlandse Scheepshypotheek­ Nedship Bank N. V. In 1986 it is acquired Bank 1999).

In 1999 another opportunity to accelerate the pace of global Shortly thereafter, on 01 January 2001, a new SAP-based IT expansion is presented to the Bank. In the Netherlands, Nedship platform is introduced – but the rollout initially causes serious Bank, which is dedicated solely to shipping finance, is up for problems. To this day, considerable investment is made every sale. year in IT in order to meet the demands of a global work envi- ronment (connecting travel users from anywhere in the work On 20 December 1999, the Boards of Rabobank and Deutsche to the Bank’s IT system, connecting home offices, making VerkehrsBank sign the contract of sale and schedule the takeover internet, intranet and extranet applications available). for the second quarter of 2000. At the end of 1999, Nedship Bank has a lending volume of roughly €2.4 billion. In an Extra­ When the takeover is completed on 31 May 2000, Deutsche ordinary General Meeting of Deutsche VerkehrsBank held on VerkehrsBank’s shipping portfolio is transferred to Nedship 8 March 2000, resolutions are passed for a share capital increase Bank. Dagfinn Lunde assumes charge of Nedship Bank as CEO. and other capital measures that are necessary to acquire Nedship The same year, a decision is made to close all remaining German Bank’s risk-weighted assets. branches, with the exception of Hamburg. The Hamburg branch is integrated into the Nedship Bank network. In Frankfurt, the Similar to the acquisition of the LTCB portfolio, the IT systems, Land Transport Division is created, combining all of the related credit processes, portfolio management, controlling and report- financing activities from the branches to be closed in the areas ing systems, etc. all have to be harmonised. Directly after the of rail and road transport. The financing of international transport contract of sale is signed, a project team is formed for the infrastructure projects continues to be managed from Frankfurt. complex integration process in which both Nedship Bank and As part of the integration process of Nedship Bank, Deutsche Deutsche VerkehrsBank employees collaborate. VerkehrsBank’s aircraft financing teams and the maritime shipping teams of Nedship Bank share offices in London and New York. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Over the next few years offices take on new business activities; since 2000 – which includes his time as CEO of Nedship Bank, aircraft financing is added to Singapore, and railway finance is joins the Board of Managing Directors. Klaus Heinemann and undertaken in New York. The Hong Kong office is closed in 2008 Rainer Irmen step down that same year. Wolfgang Driese takes and the business relationships in shipping finance are thenceforth over Aviation Finance from Klaus Heinemann, and Rolf Michael managed out of Singapore. Betz, who joins the Board of Managing Directors on 1 January 2003, assumes responsibility for the Land Transport Finance With the three pillars of Aviation, Shipping and Land Transport, division. In 2005 Bertrand Grabowski becomes a Board member the Bank defines its target segments for the years to come. to oversee Aviation Finance, shortly before also taking on Legally, Nedship Bank initially remains a wholly owned subsidiary the Land Transport Finance division after Rolf Michael Betz’s of Deutsche VerkehrsBank, but internally it is treated as the departure. From 2005 onwards, the Bank is managed by a Shipping Finance division – on an equal footing with the two three-person Board of Managing Directors comprising Wolfgang other business divisions, Aviation Finance and Land Transport Driese (as Chairman), Dagfinn Lunde and Bertrand Grabowski. Finance. From April 2000, the Bank conducts business and mar- Ralf Bedranowsky joins the Board of Managing Directors in keting activities under the umbrella brand DVB Group. Under July 2013. this umbrella brand, the DVB NedshipBank name stands for international shipping finance and the DVB VerkehrsBank name On the Supervisory Board, Uwe E. Flach, who is a Manage- represents aviation and land transport finance, as well as trans- ment Board member of DG BANK (which began trading as port infrastructure projects. A new logo is also introduced to DZ BANK in 2001), becomes Chairman, succeeding his colleague reflect these changes. Dr Berthold Eichwald. From 2003 to 2009, Dr Thomas Duhnkrack, Management Board member of DZ BANK, serves as Chairman In 2002 the name Deutsche VerkehrsBank AG is changed of the Supervisory Board. After his departure in 2009, the Super- to something more catchy for the international market – visory Board is chaired by Frank Westhoff who became a DVB Bank AG. Where the Nedship name is still used by Group member of the DZ BANK Board in 2006. entities, it is gradually replaced by DVB. On 01 March 2004 Nedship Bank N.V. is officially renamed DVB Bank N.V. In 2008 While the international Transport Finance business is continu- DVB Bank N.V. is merged with DVB Bank AG to become DVB ously expanded from 1997 onwards, all of the activities outside Bank SE, which entails a change in legal form to a European the realm of transport finance are gradually ceased or reorganised public limited-liability company (Societas Europea, SE), marking elsewhere by 2003. In an interview with the employee gazette the fourth change to the company’s name since the Bank’s in 1997, Wolfgang Driese explains why the change in strategy founding in 1923. is necessary: “The era of the small universal bank, which means being everything to everyone, is long gone. Competition today 1923: Deutsche Verkehrs-Kredit-Bank AG means we are always exchangeable against a competitor. Hard 1991: Deutsche Verkehrs-Bank AG work and price flexibility are not enough. Only by specialising 1997: Deutsche VerkehrsBank AG in a few core areas of expertise, just as we have laid out for 2002: DVB Bank AG ourselves – with an emphasis on advisory services – do we 2008: DVB Bank SE have the chance to make it on the market for the long term” (DVB Gazette No. 1/1997, p. 2–3). There are also changes at the executive management level after 1999. At year-end 2000, Anne-Rose Heibel-Dietrich leaves To truly put the focus on the transport finance business into the Board of Managing Directors. On 1 January Rainer Irmen effect, beginning in late 2000 all of the Bank’s non-transport becomes a deputy Managing Director. In 2002 Dagfinn Lunde, business are bundled into a unit called D-Marketing, where who had been responsible for international shipping finance specialists will downsize the loan portfolio. Over the course of 90 years DVB Bank 76 | 77

x Company logo from 2000 (umbrella brand and individual brands)

2002, other loans from the Land Transport Finance division are On 31 December 2003, as a result of the clear focus on the selected for inclusion in the wind-down portfolio because they no international Transport Finance business, ReiseBank AG and longer meet the Bank’s long-term volume and earnings require- CashExpress GmbH are sold to DZ BANK, which further ments. In 2000 the Electronic Banking division also sees change. strengthens DVB’s capital base. The sale marks DVB Bank’s The Bank’s EC Cash Network business is hived off and transi- departure from another long-standing business area in which tioned into an independent entity called DVB Processing GmbH, it had successfully overcome many challenges. This includes which becomes one of the three largest network operators first and foremost the introduction of euro notes and coins on for handling cashless payments in Germany. In March 2001 01 January 2002. In preparation for the loss of earnings asso- Deutsche Postbank AG (Germany’s former postal giro service) ciated with the introduction of euro notes and coins, many acquires 51% of the company. In 2005 the Bank sells the bureaux de change expanded their range or services. This remaining 49% to Postbank. included collaborating with Western Union, which began in 1993. The Western Union Money Transfer product, to transfer The Sparda banks terminate the cooperation agreement held money worldwide, sees significant growth. In 2003, 1.4 million with DVB on 18 July 2001. By the end of 2002, the central transactions are processed by the Bank’s bureaux de change. banking functions, with the exception of providing and balancing Five years earlier, in 1998, the volume was just 336,000 trans- liquidity, will have been transferred to other service providers. actions – about a quarter of the volume in 2003. Cash machines, Securities processing and management for the Sparda Banks placed predominantly at train stations and airports, represent had already been outsourced to another service provider in another important business. In 2003, 170 cash machines are in 1998. The liquidity provision and balancing activities are still operation. carried out by DVB Bank in accordance with a new central banking agreement entered into with the Sparda banks in April The sale of ReiseBank and CashExpress at the end the 2003 2002. Other changes over the course of 2002 include a sale of marks the completion of the Bank’s transformation to a pure the shareholding in Union Asset Management Holding, as well transport finance specialist. as the suspension of trading in securities, foreign exchange, and precious metals. Due to the strategic repositioning of the Bank that began in 1997, there are also changes to the shareholder structure. In On 01 January 2003, all of the activities associated with col- the 1998 financial year, 63% of the shares are held by DG BANK, lecting and settling receivables in the passenger and freight 15% by the Sparda banks, 10% by KRAVAG, 1% by Deutsche transport business are transferred to DVB LogPay GmbH, a Bahn and 11% are in free float. In December 2002, DZ BANK subsidiary founded in 2001. This also includes the traditional (the former DG BANK) acquires KRAVAG’s holding. Over the deferred freight payment franchise that was the Bank’s original course of 2003, the Sparda banks and Deutsche Bahn sell their founding purpose in 1923. The electronic banking product for holdings in the Bank. DZ BANK acquires their stakes of 13.28% cashless payment in public passenger transportation offered by and 0.75% respectively, leaving DZ BANK with a total of 92.27% the Bank is also transferred to DVB LogPay GmbH. DVB LogPay of the shares. By the end of 2012, it has increased its holding is also active in collecting toll charges, and offers operators of to 95.4%. Only 4.6% of the shares remain in free float. toll systems settlement services for accrued usage fees over a period of time. Beginning in 2004, DVB Bank sets its sights on expanding the market position it has established in international transport On 06 November 2003, the Association of Sparda Banks finance, and generating greater returns. Henceforth, all lending announces that the agreement with DVB entered into in April business is developed exclusively through organic growth. The 2002 regarding liquidity provision and balancing services will only exception comes in 2011, when a small portfolio of aircraft be assumed by DZ BANK with effect from 31 December 2004. loans is purchased on the secondary market and becomes the first acquisition since the major takeovers in 1998 and 1999/2000. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

h Company logo from 2002

x To prepare for the introduction of the new common currency on 1 January 2002, banks in Germany sell ‚starter kits‘ (containing a mix of euro and cent coins) at a price of DM 20 each

Other important additions and changes to the lending business are still in effect: in 2004 an Aero Engine Finance unit is estab- lished that specialises in financing aircraft engines. Just one year prior, the creation of a Container Box unit tapped another attractive niche market. In 2006 a decision was made to enter into the offshore sector with a FPSO unit (Floating Production Storage and Offloading) to finance projects there. On the other side, the Bank’s withdrawal from the financing of transport infra- structure projects is announced at the end of 2006. The portfolio of loans held at the time are then managed and allowed to expire. In 2007 the newly founded subsidiary International Transport Finance (“ITF”) Suisse AG, headquartered in Zurich, opens for business. It specialises in collateralised asset financ- ing deals by purchasing and selling tranches on the interbank market. An innovative organisational structure is introduced to the Shipping Finance division in early 2008. Sector expertise is bundled into dedicated teams to manage client relationships. To begin with, ten sector teams are created. They are responsible for global lending originations from the local offices, which remain in place. In 2011 the sector team structure is revisited once again and the number is reduced to seven in two phases. On 1 January 2013, the offshore financing activities are spun off from the Shipping Finance division and positioned as a fourth business division, on an equal footing with Shipping, Aviation Because DVB’s business model is geared exclusively towards and Land Transport Finance. The shipping portfolio is now man- collateralised finance for mobile transport assets, individual aged by four teams, and the offshore portfolio by two sector valuation of the assets with regard to its collateral value is the teams. basis of every lending decision. The assessment of the markets in which the assets are used also plays an important role. Accord- DVB Bank generates earnings not only from interest income, ingly, market and asset-related research is crucially important. but also from commission income from the lending business In 2001 a Shipping Research unit is established, followed by and independent advisory services. In 2001 the Corporate the Aviation Research unit in 2003 and Land Transport Research Finance business division is set up, with a product palette includ- in 2006. Today all four divisions have access to extensive market ing advisory services. Later these consulting activities are and asset expertise, which has been affirmed over the past few decentralised, and today are carried out by the four divisions years with a series of awards from trade journals. This specialist Aviation Finance, Shipping Finance, Offshore Finance and Land expertise is integrated into all of the Bank’s decision-making Transport Finance by corresponding teams of specialists. The processes, as well as in Investment Management. Bank’s Investment Management division, which has evolved from Corporate Finance, now manages a whole series of closed- end investment funds in Shipping, Aviation and Land Transport for third parties, in which it is also invested. 90 years DVB Bank 78 | 79

h Singapore – DVB‘s business hub in the Asian growth region

To amass additional asset expertise, with the concurrent goal loan syndications. Accordingly the Bank takes part in Standard of selling to third parties, some very uncharacteristic decisions & Poor’s international rating procedure for the first time in 1999. were made at the Bank. In 2006 Aviation Asset Management In 2000 the Bank is rated by Moody’s Investor Services for the was founded. The London-based team offers clients a variety of first time. Starting in 2005, it also receives a rating from Fitch services that span leasing advisory and management, technical Ratings as part of the German Cooperative Financial Services management and analysis services, as well as aircraft sales. Network. In 2012 the Bank terminates its rating relationship In 2007, DVB Bank acquires a majority shareholding in TES with Moody’s. Holdings Limited, based in Cardiff, Wales, the parent company of TES Aviation Services Limited, a leading service provider in Over the past several years, the share capital has been increased managing aircraft engines and the reconditioning and disposal a number of times. In 1999 it is increased to €57.4 million with of engine components. In 2012, 60% of the shares in TES are the issuance of new shares in that year. The takeover of Nedship sold to two strategic investors (Mitsubishi Corp., and Develop- Bank and its roughly €2.2 billion in risk-weighted assets prompts ment Bank of Japan), but the Bank remains the largest individual another share capital increase of EUR 19.3 million to a total shareholder with 40%. amount of €76.7 million. In 2005 and 2008 two further share capital increases follow; the first exercise sees 850,000 new The Bank’s international positioning and the momentum of notional no-par value bearer shares issued, and the second growth in the lending business make increasing the capital exercise sees 664,000. Since the last capital increase conducted base and refinancing via the capital markets more important. in 2008, the share capital totals €118,791,945.12 and is divided On the capital market the Bank has been present with various into 46,467,370 notional no-par value shares. instruments since 1999. This includes promissory note loans, commercial paper and debt issuance programmes. Ratings are The financial markets crisis that erupts in 2008 proves decisive important in order to access to the international capital markets, and challenging for DVB, affecting not only funding, but also but also because of the Bank’s goal of assuming a lead role in the transport markets themselves. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

O Wolfgang F. Driese (CEO)

The financial markets crisis is first and foremost a crisis of con- fidence between banks: essentially, it blocks interbank trading. This in turn leads to an enormous shortage of liquidity, which of course also becomes much more expensive. The actual inter- bank offering rates (lending rates) are far above LIBOR, which is the benchmark used by international banks and customers to price money and capital market transactions – in the weeks following the collapse of Lehman Brothers in September 2008. LIBOR thus stops reflecting true interbank offering rates. At this point no one is aware that LIBOR has been manipulated by certain banks for many years, a fact that is only revealed in 2012. O Ralf Bedranowsky The consequences are readily apparent for DVB, because the majority of the Bank’s loans are contractually tied to LIBOR as a reference interest rate. That means that a client who is granted a loan during this time period pays this reference interest rate, whilst the Bank’s funding costs are significantly higher because DVB has to resort to the interbank market rate. DVB is however able to cover its liquidity requirements during this critical situa- tion, something it owes in no small part to its membership in the German Cooperative Financial Services Network led by DZ BANK, which provides DVB with access to retail liquidity generated by German cooperative banks, but naturally at market rates.

In order to get the increased costs under control the Bank takes O Dagfinn Lunde advantage of a market disruption clause contained it its loan agreements with clients. This adjusts the calculation basis of numerous client exposures, replacing the distorted LIBOR reference rates with current interbank rates. The sudden over- whelming demand amongst clients for one-month interest rate fixings is caused by a global wave of aggressive interest rate cuts in the wake of the collapse of Lehman Brothers, and presents another problem. Because the majority of DVB’s assets and liabilities roll over on a quarterly basis, which is in line with customary international practice at the time, the relationship between the quarterly interest rate fixing period on the assets and liabilities side becomes totally out of line by the end of 2008. A spike in loans with interest fixed on a one-month basis on the assets side is juxtaposed with refinancing fixed on a O Bertrand Grabowski quarterly basis on the liabilities side. This also puts pressure on DVB’s results, and the Bank enters into negotiations with clients to persuade them to return to the conventional three-month h DVB‘s Board of Managing Directors in 2013 practice. 90 years DVB Bank 80 | 81

h DVB Bank‘s Global Management Conference (2008)

The dramatic events on the financial markets prompt DVB there are regional differences. From 2010, demand for transport to change its refinancing objectives: to expand its funding in begins to recover and in most regions and transport sectors the US dollars, to expand long-term funding and to grow its investor pre-crisis level has been achieved or exceed by 2012. The fact base for long-term issues. Because the international Transport that the economic situation for many transport companies has Finance business is predominantly based in US dollars, more not improved to the same extent has to do with supply: certain of the total financing volume is issued in US dollars, thus achiev- key sectors in international maritime shipping such as dry bulk, ing a natural hedge between assets and liabilities through container and crude oil shipping are particularly hard-hit. These currency. Long-term funding is expanded so that long-term areas saw high levels of newbuild ordering before the crisis, refinancing vehicles account for 97.5% of the total by year-end which ultimately leads to a surge in new shipping capacity, far 2012. A new circle of investors is tapped, with the first ship outpacing the growth in demand. mortgage bond issued in 2010. In 2011 and 2012 further ship mortgage bonds are issued, including a portion placed in US A shipping crisis that specifically affects the aforementioned dollars directly with American investors. Due to limited interbank sectors causes some banks to withdraw from international financing, a problem which still persists, the majority of the shipping finance. As lenders, banks are replaced to some issues continue to be placed within the German Cooperative extent by state export credit agencies, which provide export Financial Services Network. loans. While no equivalent crisis develops in aviation, due largely to the fact that demand and supply are in line with one another, Directly after the beginning of the turbulence on the financial some banks nevertheless withdraw from aircraft financing, and markets, the crisis grips the real economy. Throughout 2009 a funding gap is also avoided by increased export loans. the transport markets are affected by falling demand, though 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

The combination of the financial markets crisis and the crisis in segments of the international shipping market has left its mark on the Bank’s results. The costs of the dramatic distortions on the interbank market cause earnings to decline in 2008 and 2009. The protracted duration of the crisis – in 2013 we are now in its fifth year – has hit the transport markets quite hard, especially segments of international maritime shipping. The corresponding risk situation causes write-downs to weigh on the result.

Nevertheless, the decision DVB made in 1997 to develop the Bank into a leading advisory bank in international transport finance has proved financially successful in every financial year, indeed every single quarter. The remarkable thing is that the Bank has been able to achieve financial success even in years plagued by tremendous uncertainty and economic downturn, such as 2008. The only comparable period previously is the aviation crisis following 11 September 2001. DVB’s tried-and- tested business model has proved its mettle. 90 years DVB Bank 82 | 83

Customer lending volume Employees at DVB Bank SE as at 31 December 2012 as at 1 January 2013

€22.2 billion 40 nationalities 558 employees

shipping Finance 42.3% German 40.9% Transport Finance/Investment Management 305 aviation Finance 31.1% Dutch 12.9% service areas 199 offshore Finance 11.3% British 11.6% DVB LogPay GmbH 54 land Transport Finance 7.7% norwegian 5.5% iTF Suisse 4.0% us-American 5.4% investment Management 2.7% singaporean 5.2% Business no longer in line Greek 3.6% with DVB’s strategy 0.9% 33 other nationalities 14.9%

Operating profit/consolidated net income before taxes, 1997–2012

€ mn

150 147.7 141.4 131.1 120 118.7 101.5 100.2 86.6 90 58.5 60 47.0 44.8 51.8 35.7 36.1 30 22.8 1.9 6.7 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Conversion HGB / IFRS* completed

* Financial results up to and including the 2004 business year are based on German GAAP (HGB); from the 2005 financial year onwards, they are stated in accordance with IFRS. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for Wolfgang F. Driese

Wolfgang F. Driese, born on 26 February 1949, began his vocational training in banking at Dresdner Bank before completing a degree in Industrial Engineering. His career started at Citibank in 1974. In 1982 he moved to Trinkaus & Burkhardt in Dusseldorf, where his responsibilities included overseeing the business with large international corporates. In 1986 he became General Manager of the Singapore office of Deutsche Bank. After assum- ing other management roles at Deutsche Bank in Munich and Leipzig, he joined DVB Bank where he became Chairman of the Board of Managing Directors in 1997. 90 years DVB Bank 84 | 85

» As I was looking them [documents about the Bank] over at home over the weekend, I thought to myself “nobody needs this bank”. But at the same time, it had triggered something in me and I started to think about how the Bank would need to look in order to make it succeed over the long term.«

You spent quite a few years working at renowned banks, After joining the Bank, you developed a vision for the new sometimes internationally. How was it that your career role of DVB relatively quickly that involved a realignment path led you to DVB? towards becoming an internationally active specialist bank My thinking at the time was that I had already worked for the for Transport Finance. How did you envision that transition best names in banking. So I asked myself what I could do that I taking place at the time? had never done before. I was then approached by a head hunter All things being equal, I would have liked to build the Bank up who put me in touch with Dr Eichwald, who was Chairman of from scratch because there is really nothing harder than question- the Supervisory Board of Deutsche Verkehrs-Bank – as DVB ing the very foundation of a business model, changing it and was still called at the time. I was quite impressed by how open turning everything on its head while operations are ongoing. The he was, he gave me virtually every bit of documentation on the challenge was realising the new business model – i.e. becoming Bank imaginable for me to review. As I was looking them over an international specialist bank for transport finance – while at home over the weekend, I thought to myself “nobody needs simultaneously conducting business as usual in order to finance this bank”. But at the same time, it had triggered something that transition into something new. In fact, we needed to expand in me and I started to think about how the Bank would need to our old business at times in order to generate greater returns look in order to make it succeed over the long term. And then I even though we knew that it was business we wouldn’t want wanted to make that happen. in three to five years. It was a very difficult balancing act. But the steadily increasing operating profit gave me the freedom I What expectations did the majority shareholder at the time, needed. DG BANK, have for you? DG BANK acquired a majority shareholding in the Bank in 1995, What was the significance of the two acquisitions in 1998 but did not seem to be happy with how it was performing. That and 2000 for your vision? is why they were thinking about a change in CEO. At the time, They gave us a real jump start. Sometimes a vision just needs a the goal was to make processes better and more efficient, and bit of luck. LTCB’s planned sale of an aircraft and ship loan port- to grow the Transport Finance segment with German forwarding folio was brought to my attention at an event. I then flew to Lon- and railway companies, but only within Germany. My instinct don for a presentation for interested banks held by JP Morgan, told me that course was not a sustainable path for the Bank in which was tasked with the sale, but I arrived much too late. the long term. I was given tremendous latitude to decide what The presentation was over but I was able to get my hands on to do and I never had to – and almost no one ever believes me an Information Memorandum in the hallway. I then sought out when I say this – present strategy plans or even quarterly actual/ two consultancy firms – Clifford Chance and Babcock & Brown – target reports. and met with very well-versed and experienced professionals 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

» It may sound arrogant, but I’m not concerned about there being any successful copycats in the foreseeable future. Why? Our exclusive focus on the transport sector protects us.«

who were able to advise us on making the acquisition, as I had I had lost control of the Bank. So naturally I was relieved – to say never acquired a part of a bank before. Our primary interest the least – when we were able to work with a team of PWC was in the employees’ expertise and the client relationships. consultants to fix the problem. The third decisive experience The fact that JP Morgan then received a mandate to sell a whole was the financial markets crisis of 2008/09, when I suddenly bank, namely Nedship Bank, just a year later was another great was confronted with a situation where we weren’t getting any coincidence. It naturally made sense to approach us about it, quotes for EUR/USD swaps and long-term, or even short-term, and I expressed our interest. The partnership talks that were funding. It became clear to me that the banking world had taking place at the time between Rabobank as vendor and our changed radically, and that the markets could fail completely. majority shareholder DG BANK also helped us to secure pre- ferred status, but we still had to make our case in terms of con- Today DVB is a brand name in global transport finance. cept and price. The timing of the venture was actually all wrong The company logo is pretty eye-catching. What can you because we had yet to finish taking over the LCTB portfolio. tell us about how it was created? We introduced the logo after we acquired Nedship Bank because When you look back today, what was the most challenging we wanted to make it clear from the outside that we were time in all the years you have been at DVB? Was there ever creating something new together. The logo is eye-catching a situation that you consider critical? because of the bright yellow colour, but also because the letters Even though hindsight has a way of casting a rosy glow over are slightly blurred. It is meant to signify movement and momen- tough times, there are certain experiences that have stuck with tum, something that is particularly important in our market. At me. First I needed to be an advocate for taking over the LTCB the time people were still sending a lot of faxes, and one of the portfolio and its employees with the majority shareholder, and main criticisms was how fax transmission made the logo illegible. there were certainly people opposed to internationalisation. But we persevered. And because the logo generated so much The next hurdle to overcome was our IT setup. Naturally, the buzz, it also cemented itself as something unique. Bank already had an IT system in place at the time, but it was German and all of the employees spoke German. So we began DVB’s business model has performed very well. offering English language courses and reworked our IT applica- To what do you attribute this success? tions in English. The cost and effort was considerable. And there Are you worried about people copying the model? was another important IT situation. In the transition from 1999 It may sound arrogant, but I’m not concerned about there being to 2000 we didn’t just have to deal with the Y2k problem, we any successful copycats in the foreseeable future. Why? Our also said goodbye to our old KORDOBA IT system and intro- exclusive focus on the transport sector protects us. A lot of duced SAP. The SAP changeover seemed to be going fine at other banks were and are active in financing seagoing vessels first, or at least that was what a series of tests led us to believe. and aircraft, etc., but all of them are active in a lot of other areas So we decommissioned the old system only to discover shortly as well. And if anything has really been put to the test quite a thereafter that we didn’t have the foggiest idea what was going bit, it has been the transport sector. In fact we’re experiencing on in terms of postings, balances, income positions and balance it again now. For us, exclusivity means that this is our only target sheet items and all that. The computer was spitting out rubbish. market and we know that we have to get a lot right if we want 90 years DVB Bank 86 | 87

to survive in the long term. Secondly, where would a copycat What challenges to you see DVB facing go to get all the necessary people that we have at our firm – in the years ahead? who have internalised our business ideas of appreciating team- It isn’t the discussion about the image of banks and bankers, work, and are passionate about finding solutions for our clients? which really isn’t fair for the majority of employees at a great To put it bluntly, they all have either seawater, diesel or kerosene many banks, but rather political challenges in the years ahead. in their veins. The key to our success lies in our employees, who Political actionism and populism hold the potential to drown come from more than forty different countries, and the way banks in regulations. It causes me great concern indeed. Banks they all work together so successfully. That is no easy thing to are facing the challenge of virtually unmanageable complexity, replicate. which is making it harder for them to perform their vital role in the economy. Another issue is of course the changes taking How does the Bank handle the cycles that are typical place at different levels of management, including the Board of for the transport sector? Managing Directors. New people will always bring their own It’s true that the transport markets are cyclical. But our approach individual style with them, and have their own ideas about is cycle-neutral, which means that we can offer solutions that putting their plans into action. That is a good thing, because suit any point in a cycle. That is also why we like cyclicality, when a business model is successful for a long time, there may because the down phases – as we are experiencing in some be a dangerous temptation to think that change isn’t necessary sub-markets of maritime shipping right now – showcase our and so to leave opportunities unexplored. But we always need expertise. It is easy to finance aircraft and vessels during boom to remember that those who stop improving stop being any good. phases and then cut and run during a downturn. That isn’t our Management change is normal, and helps us to progress. way. In fact, downturn phases are the best time to earn money, provided of course that you can handle risk and manage it well.

How has the financial markets crisis affected the Bank’s business? How have you dealt with its repercussions? The disappearance of funding options on the markets was a very critical experience for us. It also showed that banks operating according to a wholesale concept, which means that customer deposits are not a funding option, cannot survive without a strong refinancing partner. It took us all by surprise: in this, we are fortunate to have DZ BANK. Step by step, we are trying to re-enter funding markets, but I hope that we don’t forget the lesson we learned that markets can collapse completely, and that we need to prepare for such an eventuality. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for David Goring-Thomas

David Goring-Thomas, born on 11th July 1965, is Managing Director & Global Head of Aviation at DVB Bank SE. Based in London, he is head of the team responsible for worldwide business generation and relationship management with DVB´s aviation industry clients. He joined DVB in 1998 from The Long- Term Credit Bank of Japan, Ltd (LTCB). During his time at LTCB, Mr. Goring-Thomas had regional head responsibilities for the Bank’s aviation marketing activities in Europe/Middle East/Africa and Asia-Pacific, including a two-year secondment (1995 – 1997) to its Singapore office. Before joining LTCB in 1994, he had worked at Swiss Bank Corporation in the merchant banking group with responsibility for lease and asset-based finance for aircraft. David Goring-Thomas holds a Bachelor’s degree in Economics from the University of Manchester. 90 years DVB Bank 88 | 89

When did you first become involved in aviation finance? specialised team, and had a network of airline, lessor and OEM Was this a profession you were thinking about at an relationships, which underpinned transaction origination. For early stage in your career, or rather something you got LTCB, this proved to be a good decision, as they were able to into by accident? receive an enhanced value for the loan portfolio. Like many University students, I didn’t have a great vision for what I wanted to do when I graduated, but decided to look at What meaning did London as a financial hub have for careers in banking and insurance. In 1994, I joined the transpor- international aviation finance back in 1998? Did the financial tation department of NatWest International as a graduate trainee. markets crisis which broke out in 2008 change any of this? On my first day at NatWest, I joined the Aerospace/Aviation Back in 1998, London was certainly a key hub for aviation finance. team covering Asia, and, as they say, “the rest is history”. I feel There was a crowd of active banks, but this picture has changed lucky that I stumbled across such an interesting profession. massively since that time – including, but not only, as a result of the 2008 financial crisis. We were only discussing the other What importance did LTCB have in the international day how few of the specialised aviation finance teams are aviation finance business back in 1998? Were there any nowadays based in London. focal points in the business? By 1998, LTCB had become, under the leadership of Klaus What were your first thoughts when DVB was first Heinemann, one of the prominent players in the Aviation/ mooted as a potential buyer for LTCB’s portfolio? Aircraft Finance market. LTCB’s main focus was on arranging I had been aware of DVB – or “Deutsche VerkehrsBank” as it and underwriting commercial aircraft finance, and – exactly as was then – as a new entrant to the aviation finance arena, for it is today for DVB – we were not targeting export credit sup- about 18 months, and indeed DVB had already participated in a ported transactions, but rather preferred to take true airline and financing which we led (at LTCB) for Thai Airways. Our main asset risk for an appropriate higher reward. A further notable contact was Frank Wulf, who had already been hired by DVB activity was the arranging of Japanese Leveraged Lease (JLL) from Bayerische Landesbank. So, although DVB was not exactly financing, where naturally we could benefit from LTCB’s estab- a household name in Aircraft Finance at the time, the team at lished activity and relationships in Japan. Looking back, I think LTCB could see the mutual benefits of a transaction between it is fair to describe LTCB as a smart arranger, underwriter and the two parties. provider of aircraft finance, and this is the foundation from which we have developed our aviation activities at DVB. What was indeed notable for a relative newcomer (as DVB was) to aviation finance was that DVB were well prepared and What made LTCB put its aviation finance portfolio professional in their approach to assessing and negotiating the up for sale? purchase, which was actually in contrast to some other bidders LTCB was in financial difficulties and undergoing restructuring, who were (supposedly) “experienced” in the industry. DVB and was forced to slow down or possibly cease international retained the advisory services of Clifford Chance and Babcock & business. Klaus Heinemann managed to persuade senior Japa- Brown, both well recognised, and this made a significant differ- nese management of the merits of selling the aviation and ence to the way in which DVB’s approach and offer was viewed. shipping portfolios of LTCB as a business, together with the respective teams, on the basis that LTCB would be able to One other consideration for us folks at LTCB was that, of the benefit from the franchise value which had been developed over three short-listed bidders, I believe DVB was the only party who time. LTCB was one of the first Japanese banks to set up a were keen to acquire the portfolio AND team. The other serious 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

»This has been an incredible achievement by all concerned over the years, as a circa US$9bn portfolio was difficult to imagine (for me at least) given our relative ‘niche’ approach (e.g. no export credit financing, no low-priced secured lending to top tier airlines).«

bidders seemed keen to take the portfolio, but had their own, All changes and integration measures which took place had to sizeable established teams in place. This was certainly a factor be achieved by a bank whose (IT) systems were exclusively in in favour of DVB, from the perspective of the LTCB team. German. This was a challenge to German and English speakers alike, as, for example, all relevant information on the purchased DVB finally achieved their objective to become an established LTCB portfolio of loans had to be transferred from LTCB’s English force in aviation finance, not only by purchasing a US$1.5bn (IT) systems (with English-language loan documentation) on to exposure to the industry, but by recruiting a team to supplement DVB’s own German-language systems. Many a fun hour was their own, capable of originating and arranging business to spent by the teams to ensure that the purchased portfolio could develop and grow this activity over time. be accurately reflected at DVB.

When the sale to DVB finally took place, various From your point of view, what were the success factors integration measures were launched. Back then, that have allowed DVB to maintain such a strong market what were the greatest organisational challenges? position in aviation finance to date? At the time, DVB had just one representative office in Basle, Our specialisation – supported in particular by the world class , and with the recruitment of LTCB’s aviation and advice from our Aviation Research team – has allowed us, on shipping teams, it had been decided to establish a branch the one hand, to avoid many of the pitfalls found by our com- office in London and a representative office in New York. This petitors, and, on the other hand, to originate and conclude was a significant undertaking for the Bank, but an excellent structured lending business across a broad range of aircraft working group of existing DVB and former LTCB staff worked assets and obligors. This has meant that we have been able with dedication, and under great time pressure, to achieve the to consistently identify and add the right cocktail of “risk and objectives set. reward” to our portfolio.

Of course the task of arranging loan transfers, change of agency With addition over time of our Aviation Investment, Advisory and security trustee functions, and so on, relating to the portfolio and Asset Management activities and teams, we have been able to be purchased was massive, and from beginning to end this to develop a range of (balance sheet) risk and non-risk services took about 18 months. At the same time we wanted to maintain to our clients and a ‘cradle-to-grave’ coverage of aircraft assets, momentum to conclude new business: even in 1998, Wolfgang from pre-delivery finance at one end of the spectrum to end-of Driese’s mantra was “Keep on running!” life (teardown) solutions at the other end of the spectrum. This has enabled us to be consistently active across various industry 90 years DVB Bank 90 | 91

and liquidity cycles, and thus clearly differentiate DVB as a reliable Otherwise, I’d tend to say that little has changed in Aviation partner to our customers. This reliability is also ensured by virtue Finance in recent years, save that – for an industry where airlines of our specialised, lean decision-making (credit approval, etc.) struggle for profitability even in good times, and where external processes. events can have quite devastating consequences – there is a much greater appreciation of the importance of getting the air- Comparing today’s portfolio to what it was like back craft collateral analysis right, as a means of minimising the in 1998 – what has changed the most? ‘Loss Given Default’ (LGD) of a financing. The portfolio is now six times the size! This has been an incred- ible achievement by all concerned over the years, as a circa Let us close with a view to the future: what changes and US$9bn portfolio was difficult to imagine (for me at least) given challenges do you perceive for the years ahead? our relative ‘niche’ approach (e.g. no export credit financing, no As discussed, we have developed a business we can rightly low-priced secured lending to top tier airlines). Of course, it is be proud of, but we must continue to evolve and adapt to com- not all about volume, but what we have developed is a scaled petition and changing markets. We have a team of creative, (and further scalable) business, built around a diverse portfolio innovative people, which we must harness properly to ensure of risks, and a rich group of clients and prospects. we stay ahead of our competitors.

Overall, how has the aviation finance business changed in More generally for the bank, I believe we need to do more recent years? What have been the most fundamental to identify and develop synergies across our four industries changes you have witnessed? (aviation, shipping, offshore, land transport), if we want to One of the most significant trends in the business has been the exploit the full value of our unique status as a specialist increased demand from the airlines for operating leases, and transportation bank. the financial and operational flexibility which goes with it. This, combined with the growing attractiveness of aircraft assets as an investment class, has led to huge demand for financing (from lessors and owners) for aircraft on operating lease to airline customers. Such financing structures typically require the lender to take a ‘residual value’ view / risk on the aircraft, and this has played to our strength as an institution which has developed over time a deep understanding and appreciation of what impacts aircraft values. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for Richard Groeneveld

Richard Groeneveld, born on 18 August 1967, began his career with an auditor traineeship in 1989 at KPMG. In 1994 he moved to ECT (Europe Container Terminals), a container terminal operator located at the port of Rotterdam, where his work included acquisitions and special projects, as well as auditing and controlling duties. In 1998 he joined Nedship Bank. Today he is DVB’s Chief Operations Officer with responsibility for DVB Bank’s global business processes. 90 years DVB Bank 92 | 93

What precipitated your career move to Nedship Bank? How did the sale to DVB, or Deutsche VerkehrsBank as it A headhunter approached me. I was a bit surprised, as I had was called then, come about? initially considered going to a major consumer goods company. First Rabobank informed Nedship Bank management of its in- I didn’t have any banking experience, but the chance to be tentions to sell, and asked the bank to suggest some potential involved in putting a five-year plan into action as Controller and buyers. A special data room was set up, but to keep everything Deputy Managing Director was appealing. We had just finished secret all the work took place outside of normal business hours. putting reorganisational measures into place when Rabobank Because talks were under way about a closer collaboration informed management of its intention to sell Nedship Bank. between Rabobank and DG BANK, the latter brought its sub- sidiary Deutsche VerkehrsBank into the mix and it obtained What was Nedship Bank’s position at the time preferred status. in shipping finance in the Netherlands and on the international banking market? How did employees react to the news of the DVB takeover? Nedship Bank was certainly an important financing provider, At the beginning there was a lot of anxiety and scepticism, both for inland navigation as well as international shipping because very little was known about the potential buyer. But finance. Its network of locations in key maritime shipping that was resolved very quickly because the Board of Managing centres, including Piraeus, Bergen, New York and Hong Kong Directors of Deutsche VerkehrsBank opened up a dialogue with meant it was able to provide extensive services. Nedship Bank employees more or less immediately. They were always in the office and communicated openly. I remember that Nedship Bank used to be owned by Rabobank. Mr Driese once said, right at the outset, that he thought the What is the background story there? takeover of Nedship bank was a bit early for him because they Rabobank acquired Nedship Bank in 1986. At the time, Dutch were still working on integrating the portfolio they had acquired banks such as Nedship Bank, which had funded themselves by from LTCB and were still in the midst of reorganising the German issuing covered bonds, were having problems placing their paper. branch office network. But on the other hand he saw it as an Traditional covered bond buyers were shaken by the bankruptcy opportunity that was too good to pass up. That’s an example of of a major Dutch issuing bank. The takeover solved Nedship the openness they embodied right from the beginning. Bank’s funding problems and cleared the way for further expan- sion. At the same time, it was able to retain its independence. As you know, the Netherlands is still a major location for Euro- pean inland waterway transport: the sector largely comprises small to medium-sized enterprises. For Rabobank, as a cooper- ative bank, this complemented their business at domestic branches. But they had also acquired the bank’s international shipping finance business, and they didn’t see it as one of their areas of expertise. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

»I am pleased to work for a company with such a long history, but am also glad that tradition has not paralysed the company and that it constantly develops and always sets new goals for itself, which makes an impact on its financial results over the long term. «

What was it that made the takeover such a success When you compare today with yesterday, what do in the end? you think has changed the most in the shipping finance As the buyer, Deutsche VerkehrsBank never made decisions business? about individual steps towards integration on its own. Instead it Individual transactions are getting more complex. No two loans rounded up all the employees of Nedship Bank into the same are alike. And the entire shipping industry has become more proverbial boat, and everyone worked together to figure out the challenging, especially over the last few years. That is why best way to merge the strengths of both institutions. From our lending facilities, unlike in the past, need to be monitored much side, that enabled us to contribute our international experience more closely over their entire lifetime, and active management so that Deutsche VerkehrsBank could adjust its processes at may require intervention. In recent history, we have had to step the head office in Frankfurt to cope with the requirements of in and actively manage transactions a number of times, but internationalisation. most could be repaired. Managing loan portfolios also takes more than it used to. We have to be prepared to place shipping The year it was taken over by Deutsche VerkehrsBank loans on the syndication market if it recovers, which doesn’t was also Nedship Bank’s 100th anniversary. Its history look likely at the minute. has become a part of DVB’s. How do you feel about the company’s history? Is it something that interests you? Yes, in fact I’m very interested in it. I am pleased to work for a company with such a long history, but am also glad that tradition has not paralysed the company and that it constantly develops and always sets new goals for itself, which makes an impact on its financial results over the long term. 90 years DVB Bank 94 | 95

You are currently responsible for the organisation of banking processes and the associated IT infrastructure at DVB. In your opinion, what have been the biggest changes over the last several years? Based on the number of employees, we are a relatively small organisation, but still we manage a very complex global company. That is a constant challenge. Standardising processes and IT systems is critical to cutting through this complexity. We have been very hard at work on this exact issue over the last several years, and we will not shy away from it in the future either. It is important that our technology is always up to date. One example is that I can now log into DVB’s systems no matter where I am in the world.

Where do you see your remit developing in future? First there’s the regulatory environment, which is becoming increasingly complicated. We can only lessen the impact if we catch it right from the beginning with smart IT systems and solid process management. It is the only way that we will be able to cope with things like the extensive documentation and reporting requirements that are headed our way. Nothing works any more without IT systems, but they will be even more important in the future. Especially in Risk Management, and in Market and Asset Research, we’ll be introducing new applications. And as part of business process improvement, we are trying to make business processes as efficient as possible. We also want to make sure the service divisions work more smoothly with the sales units in their daily work. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Ten questions for Marilyn Gan

Marilyn Gan started her career with Singapore Aircraft Leasing Enterprise (SALE) where she spent seven years focusing on the financing and leasing of aircraft to airlines globally. She joined the structured asset financing aviation division of DVB Bank based in Singapore in January 2006 as Vice President and Senior Relationship Manager with responsibility for airline clients in the Asia-Pacific region. She was promoted to the role of Deputy Regional Head in January 2012. Prior to joining DVB Bank, Marilyn gained further experience in the aviation market as Assistant Vice President at Marsh and McLennan Inc., one of the world’s largest aviation insurance brokerage. Marilyn holds a Bachelor of Laws (Hons) from University College London and a certificate in commercial general insurance from the Singapore Insurance Institute. She has also attended various executive programs at INSEAD and the London Business School.

What are your current tasks at DVB? How did you come to join DVB? What did you know about I am deputy to the regional head of Asia Pacific and a senior DVB when you applied for your position? relationship manager within the Singapore Aviation team. As Prior to joining DVB, I was with SALE, the predecessor to BOC such, my main tasks are to maintain the relationship with our Aviation, one of the largest aircraft leasing companies globally. many clients in Asia. As we split Asia amongst three relationship As such, I was aware of DVB and its reputation as a specialist managers, I have a set number of countries for which I have bank with good and experienced people throughout the organi- client responsibility. This means that I am in active contact with sation. I had also dealt with DVB before and was impressed airlines and lessors on the various products that DVB has to with the level of detail that they asked of their clients. offer, from lending, to investments and asset management. As deputy regional head I am also in touch with the administration Does history of the enterprise play a role side of the business and I am involved in internal/external audits in business life in Asia? amongst others. Yes this is relevant although with the new generation of people coming into the workplace, this is getting less relevant. Whilst history and relationships are important, they only get you through the door. What you do after that and how you win a deal still boils down very much to being the most competitive bid out in the market. 90 years DVB Bank 96 | 97

From your point of view, what is special about working and advanced than in Asia. However, I am happy to say that for a bank in Asia? What are the differences you have over the last ten years, Singapore has developed its niche in perceived in corporate culture between banks with an Asia and we have managed to bring the name of DVB to almost Asian or European background? all aviation clients in this region. Our client list has certainly I believe that the 21st century is indeed Asia’s century and as expanded across all areas of the platform, from lending, the such, it is especially exciting for me to be based in Asia at this equity investments to advisory services etc. This has also time. This is in stark contrast to the situation ten years ago resulted in the Asian team numbers tripling in the last five to where people were generally keen to work in Europe and the six years. US as those markets were seen as being growth markets. As we read in the news daily, we have so many countries in Asia Compared to other regions are there any differences or (in particular China, Indonesia) that are on a double digit growth particular challenges in Asian aviation finance? track annually. How many regions in the world can claim to have In today’s market, we see a lot of competition in Asia. There this level of growth? As for corporate culture, I do not believe is a huge amount of liquidity at the bank level but also on the that there is one “Asian corporate culture” e.g. Japanese banks equity side. As a result, we see many airlines/lessors coming work differently from Singapore banks etc. However, by and into Asia for fund raising so competition on both the debt and large, European banks tend to be more creative and have a much equity side is keen. We have also seen Asian investors coming more open culture than Asian banks. in to swallow big portfolios like SMBC’s purchase of RBS and Mitsubishi’s purchase of JSA (Jackson Square Aviation). Another There is a lot of discussion going on in Europe about challenge with working in Asia is the way people do business how the role of women in executive positions can be here. Clients have no qualms in telling the competition what strengthened. Is this a subject that has raised interest we have quoted in the hope of getting a better deal. This is in Asia as well? what we have to deal with and the relationships we have with Absolutely. However, in Asia’s case, there is still a lot of catching our clients help us overcome this hurdle. up to do. In many industries, there still exists the informal “old boys network” where many positions (both at Board and senior DVB is covering the Asian markets almost exclusively from executive level) are filled through knowing the right people. In Singapore. What is the fundamental basis for Singapore’s order for more women to succeed in the work place, companies role in international aviation finance? need to acknowledge the importance of “work/life balance”. DVB is well covered from Singapore, both on the shipping and Only if this is successfully implemented will we start to see aviation side. From an aviation perspective, Singapore has now more women going higher up in the organisation. DVB is one become the Asian hub for many lessors. This was not the case such employer and I feel very fortunate to be able to work for 10 years ago when most lessors and aviation banks had their an organisation that values both job performance and family life Asian presence in Hong Kong. This has now changed, thanks at the same time. in large part to the Singapore government’s efforts to enhance Singapore’s position in the industry. This is done through the Is DVB a known institution in Asia in its line of business – aircraft leasing scheme which provides for favourable corporate or do you still have to explain what we do? What are income tax level to lessors in Singapore if they meet certain DVB’s unique selling points, considering the numerous requirements. As you know, Singapore is also a very easy place other banks which are active in the loan business in Asia? to live and popular amongst the expatriate community. As such, DVB is fairly well known in Asia. In the past, principally because I believe that, with the support of the government, Singapore our business model favoured lessor financings, DVB was better will be well placed to continue its position as the Asian hub for known in the US and European markets. This was also due, in aviation. large part, to the markets in these regions being more developed 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

»As for corporate culture, I do not believe that there is one “Asian corporate culture” e.g. Japanese banks work differently from Singapore banks etc. However, by and large, European banks tend to be more creative and have a much more open culture than Asian banks.«

Many observers refer to the 21st century as being “Asia’s What is it that European banks can learn from Asia – century”. What developments do you envisage for the and what can Asian banks learn from their European pan-Asian banking sector in particular? counterparts? Yes, that has indeed been the catchphrase on many lips these At the moment, European banks (and US banks as well) have days. To a certain extent, that is correct and the banks in the an advantage over Asian banks in their ability to think out of the region are all flush with liquidity. However, Asian banks still tend box and being at the forefront of developing new products that to be very credit focused and rely on the corporate standing of their clients require. Asian banks are more conservative, prefer- a company in its assessment of the loan. This is slowly starting ring to keep to the tried and tested products that have served to change and as Asian banks become savvier in their inter­ them well in the past. Both methodologies are good and I believe national dealings, we will start to see a bit more diversity in the European banks can learn from the Asian banks and not over- array of products being offered to clients. This will then lead expose themselves to uncertain markets. Equally, Asian banks to the development of different markets (e.g. bond markets), can also try to be a little more adventurous in their product offer- which are still far behind our counterparts in the US and Europe. ings to clients. 90 years DVB Bank 98 | 99

Concluding remarks

Now in its 90th year, DVB Bank is a robust provider of financing Although there is plenty of documentation to serve as a portal services on every transport market in the world. The search for to the Bank’s past, there is no way to look into the future – even what has made DVB a success can only reveal a whole series an annual forecast can be turned on its head in less than a of factors that work together to enhance one another. First there day. Changes, both political and otherwise, to the landscape in is the Bank’s focus on its transport finance market niche that which the Bank operates have yet to take shape – and will have represents a massive market on a global scale. Within this niche, an impact on the Bank’s business in the future. The Bank will DVB is amongst the market leaders as a provider of collateral- also be an agent of change itself. Just as the Bank of ninety ised asset finance. This position is due first and foremost to years ago is not the Bank of today, the Bank as we know it will its market and specialist expertise. It strives to offer the best not be the same in the future. In any case, it is brilliantly posi- product, not the cheapest. DVB offers bespoke, and not off-the- tioned in 2013 to look ahead with great optimism. peg, solutions in its market. To do so successfully requires highly qualified professional staff, which it also has. Employees hailing from more than forty different nations represent the internationalism of the company. Expert knowledge plays a part in every corner of the Bank – be it the Research unit that focuses on market and asset observation and analysis, or in the forward- looking and steadfast Risk Management unit that oversees all loans from cradle to grave. Different service divisions provide the necessary infrastructure. The company’s size is manageable, and its hierarchy is flat. Though small – in terms of its total workforce – it makes big things happen for its clients. The words from an international customer survey describe DVB: knowledge- able, experienced, responsive and flexible. Long-lasting client relationships are a sign of customer satisfaction; three quarters of the Bank’s relationships with clients can look back on more than five years of collaboration. In fact, one third of its client re- lationships have endured for more than ten years. 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Appendix

Former members Chairmen of the Supervisory Board * of the Board of Managing Directors Otto Fischbeck, Government Minister (ret‘d.) (1923 –1933) Dr Carl Friedrich von Siemens (1933 –1935) Dr Walter Prerauer (1923 –1933) Kurt Freiherr von Schröder, owner of J. H. Stein Bank Ernst Schlesinger (1923 –1933) (1935 –1945) Richard von Schaewen (1924 –1933) Dr Wilhelm Bein (Deputy Managing Director) (1924 –1926) Dr Walther Helberg, Ministerial Director (1950 –1959) Ernst Samwer (Deputy Managing Director) (1924 –1929) Prof Dr Heinz Oeftering, First President of Deutsche Erich Venske (Deputy Managing Director) (1925 –1933) Bundesbahn (1959 –1973) Alfred Stegner (1933 –1937) Dr Wolfgang Vaerst, First President and Chairman of the Dr Max Martin Schlenker (1933 –1939) Management Board of Deutsche Bundesbahn (1973 –1982) Dr Karl Richter (1933 –1945) Wilhelm Pällmann, member of the Management Board Dr Hermann Jaeger (1937 –1945) of Deutsche Bundesbahn (1982 –1992) Heinz Neuhaus, member of the Management Board Alfred Prang (1950 –1960) of Deutsche Bundesbahn Holding GmbH (1992 –1993) Fritz Haas (1950 –1961) Diethelm Sack, member of the Management Board Fritz Bohle (1951 –1959) of Deutsche Bundesbahn (1993 –1994) Dr Gerhard Wersche (1960 –1969) Dr Berthold Eichwald, member of the Board of Managing Dr Wilhelm Wetzmüller (1961 –1970) Directors of DG BANK Deutsche Genossenschaftsbank AG Friedrich Körting (1961 –1971) (1994 –1999) Alois Meyer (1970 –1973) Uwe E. Flach, member of the Board of Managing Directors Dr Heinz-Dietrich Tettenborn (1971 –1977) of DG BANK Deutsche Genossenschaftsbank AG (1999 –2003) Karl-Heinz Boldt (1972 –1985) Dr Thomas Duhnkrack, member of the Board of Managing Dr Klaus Menche (1974 –1992) Directors of DZ BANK Deutsche Zentral-Genossenschaftsbank Dr Franz Schloßnikl (1977 –1990) (2003 –2009) Arno Grunhold (1985 –1994) Dr Klaus Zeidler (1990 –1997) Dr Dietrich Landes (1992 –1995) Michael Wiedenroth (1995 –1998) Chairman of the Supervisory Board in 2013 Anne-Rose Heibel-Dietrich (1995 –2000) Klaus Heinemann (1998 –2002) Frank Westhoff, member of the Board of Managing Rainer Irmen (Deputy Managing Director) (2001 –2002) Directors of DZ BANK Deutsche Zentral-Genossenschaftsbank Rolf Michael Betz (2003 –2006) (since 2009)

The Board of Managing Directors in 2013

Wolfgang F. Driese (since 1997) Dagfinn Lunde (since 2002) Bertrand Grabowski (since 2005) Ralf Bedranowsky (since 2013) 90 years DVB Bank 100 | 101

Deputy Chairmen of the Supervisory Board *

Jacques Bronner, Councillor of Commerce (1923 –1924) Max Holtze, Ministerial Director (ret‘d.) (1924 –1928) Alexander Jahn, Ministerial Director (1928 –1933) Carl Bergmann, State Secretary (ret‘d.), member of the Management Board of Dresdner Bank (1933 –1935) Dr Conrad Dauer, member of the Management Board of Deutsche Golddiskontbank (1935 –1940) Alfred Prang, Ministerial Director (1941 –1945)

Dr Gerhard Wersche, Assistant Under-Secretary (1950 –1959) Dr Bernhard Benning, member of the Board of Directors of Deutsche Bundesbank (1959 –1973) Dr Heinrich Irmler, member of the Board of Directors of Deutsche Bundesbank (1973 –1980) Prof Dr Claus Köhler, member of the Board of Directors of Deutsche Bundesbank (1980 –1995) Dr Peter Scharpf, Chairman of the Executive Board of the Sparda-Banken Association (1995 –2004) Prof Dr Manfred Schölch, Deputy Chairman of the Manage- ment Board of Fraport AG (2004 –2009) Frank Westhoff, member of the Board of Managing Directors of DZ BANK Deutsche Zentral-Genossenschaftsbank (2009)

Deputy Chairman of the Supervisory Board in 2013

Dr Peter Klaus, Member of the Management Board (ret‘d) of the KfW Banking Group (since 2009)

* Between 1950 to 1958, a Supervisory Committee existed 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Branches And Bureaux de Change

1937

Branches Munich Berlin Dresden Leipzig Berlin (HO) Münster – Zoo railway station Dusseldorf Marienburg Bremen (A) Nuremberg – Anhalt railway Emmerich Mittenwald Breslau Oldenburg (A) station Flensburg Munich Dresden Saarbrücken – Potsdam railway Frankfurt/Main Neu Bentschen Erfurt Schwerin station Friedrichshafen Nuremberg Essen Stettin – Silesian railway Garmisch- Passau Frankfurt/Main Stuttgart station Partenkirchen Saarbrücken Halle/ Wuppertal – Stettin railway Gleiwitz Saßnitz Harbour Hamburg station Hamburg Schneidemühl Hanover Bureaux de Change – Friedrichstrasse Hindenburg Stettin Karlsruhe Aachen railway station – Upper Silesia Stuttgart Kassel Basel Beuthen Karlsruhe Warnemünde Cologne – German Reichsbahn – Upper Silesia Kehl Königsberg railway station Bremen Cologne Mainz Bentheim Breslau Königsberg

1960

Branches Bureaux de Change Berlin Train stations Frankfurt/Main Lindau Airports Ferries Essen Aachen Freiburg Ludwigsstadt (Ofr.) Bremen »Deutschland« Frankfurt/Main (HO) Basel Freilassing Lübeck Frankfurt/Main »Theodor Heuss« Hamburg – German Friedrichshafen Mannheim Dusseldorf Hanover railway station Großenbrode Mittenwald Stuttgart Karlsruhe Bebra Hamburg Munich Munich Kassel Berchtesgaden Hanover Nuremberg Cologne Berlin Heidelberg Osnabrück Road border Mainz – Zoo railway station Helmstedt Passau crossings Munich Bochum (A) Kaiserslautern (A) Regensburg (A) Kehl Rhine bridge Münster Bonn Karlsruhe Saarbrücken Kiefersfelden Nuremberg Brunswick Kassel Salzburg Schellenberg Oldenburg Bremen Kehl Stuttgart Schwarzbach Saarbrücken Büchen Kiel (A) Trier Stuben Stuttgart Dusseldorf Koblenz (A) Wiesbaden Weil-Otterbach Wuppertal Emmerich Cologne Wolfsburg Flensburg Konstanz Würzburg (A)

Legend (HO) Head Office (A) Agency * and German ferries 90 years DVB Bank 102 | 103

1980

Branches Bureaux de Change Berlin Train stations Friedrichshafen (A) Ludwighafen (A) Airports Ferries Essen Aachen Garmisch- Mainz Frankfurt/Main »Deutschland« Frankfurt/Main (HO) Augsburg (A) Partenkirchen (A) Mannheim Dusseldorf »Theodor Heuss« Hamburg Basel Gießen (A) Munich Stuttgart Hanover – German Hamburg Nuremberg Munich Karlsruhe railway station Hanover Passau Kassel Bebra (A) Heidelberg Pforzheim (A) Road border Cologne Berlin Kaiserslautern (A) Puttgarden crossings Mainz – Zoo railway station Karlsruhe Regensburg (A) Kehl Rhine bridge Munich Bochum (A) Kassel Saarbrücken Kiefersfelden Münster Bonn Kehl Stuttgart Saarbrücken Nuremberg Brunswick Kiel (A) Trier (French motorway) Saarbrücken Bremen Koblenz (A) Ulm (A) Schwarzbach Stuttgart Dusseldorf Cologne Wiesbaden Weil-Otterbach Wuppertal Essen Konstanz Wolfsburg Frankfurt/Main Lindau Würzburg (A) Freiburg Lübeck

1991

Branches Saarbrücken Bremen Magdeburg Road border Berlin Stuttgart Dresden Mainz crossings Dresden Wuppertal Dusseldorf Mannheim Kehl Rhine bridge Erfurt Essen Munich Kiefersfelden Essen Bureaux de Change Frankfurt/Main Münster Saarbrücken Frankfurt/Main (HO) Train stations Freiburg Nuremberg – (French motorway) Halle/Saale Aachen Halle/Saale Saarbrücken Schwarzbach Hamburg Basel Hamburg Stuttgart Weil-Otterbach Hanover – German Hamburg-Altona Trier Puttgarden * Karlsruhe railway station Hanover Wiesbaden Saßnitz * Kassel Berlin Heidelberg Wolfsburg Warnemünde * Cologne – Central Station Karlsruhe Mainz – Zoo railway station Kassel Airports Munich – Friedrichstrasse Cologne Frankfurt/Main Münster railway station Konstanz Dusseldorf Nuremberg Bonn Leipzig Stuttgart Rostock Brunswick Lübeck Munich

2013

Branches New York Athens Oslo Bergen Rotterdam Curaçao Singapore Frankfurt/Main (HO) Tokyo Hamburg Zurich London 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

List of ILLUSTRATIONS

Title page 21. Berlin inner-city traffic in the 1930s,German Federal Archives, 01. DVB Bank head office, Frankfurt/Main (since 1996), picture 183-H25713 / no details provided DVB Picture Archives 22. Deutsche Verkehrs-Kredit-Bank bureau de change at Munich’s 02. Head office of Deutsche Verkehrs-Kredit-Bank, Berlin central station, DVB Picture Archives (from 1925 to 1936), DVB Picture Archives 23. Head office of Deutsche Verkehrs-Kredit-Bank, Berlin (from 1936 to 1945), DVB Picture Archives Introduction 24. Office scene at Deutsche Verkehrs-Kredit-Bank, Berlin (1938), 03. Prof Dr Borislav Bjelicic, Head of Corporate Communications, DVB Picture Archives DVB Picture Archives 25. Annual report of Deutsche Verkehrs-Kredit-Bank (1943), DVB Picture Archives 1923 – 1932 26. Kurt Freiherr von Schröder, Chairman of the Supervisory Board 04. Two telegrams dated 12 May 1923, DVB Picture Archives of Deutsche Verkehrs-Kredit-Bank (1935 – 1945), WikiCommons 05. Otto Fischbeck, first Chairman of the Supervisory Board of 27. Berlin in ruins, 1945, German Federal Archives, picture 212 – 113 / Deutsche Verkehrs-Kredit-Bank AG, DVB Picture Archives Ugo Proietti 06. Company logo from 1923, DVB Picture Archives 07. Head office of Deutsche Verkehrs-Kredit-Bank, Berlin 1946 – 1949 (from 1925 to 1936), DVB Picture Archives 28. Currency reform in West Germany, German Federal 08. The first Board of Managing Directors of Deutsche government / Puck archives Verkehrs-Kredit-Bank, Reichshandbuch der Deutschen 29. Overcrowded trains – a familiar picture during the Gesellschaft 1930 – 31 first post-war years,German Federal Archives, 09. Railways in the Weimar Republic, German Federal Archives, B 145 Bild-F080295-0001 / Vollrath picture 146-1995-037-21 / no details provided 30. Movie poster of “Der Bruch” (“The Break-in”) 10. Bank notes printed during the 1923 period of hyperinflation, 31. The former headquarters of Deutsche Verkehrs-Kredit-Bank DVB Picture Archives are taken up by Eisenbahnverkehrskasse, the East German 11. First annual report of Deutsche Verkehrs-Kredit-Bank (1924), Railway Pay Office,DVB Picture Archives DVB Picture Archives 12. Shares of Deutsche Verkehrs-Kredit-Bank (1924 – 1925), 1950 – 1973 DVB Picture Archives 32. The German “Wirtschaftswunder”, German Federal 13. Memorandum dated 25 September 1924 on the handling government / Rolf Unterberg of Reichsbahn funds, DVB Picture Archives 33. Signing of the Treaty of Rome, establishing the European 14. Client note concerning a deferred freight payment to Economic Community, German Federal government / the Essen branch of Deutsche Verkehrs-Kredit-Bank (1927), no details provided DVB Picture Archives 34. Franco-German reconciliation – the Elysée Treaty, 15. Hand-written application of Mr Walter Lohrenscheit, German Federal government / Ernst Schwahn dated 9 November 1928, who was subsequently employed 35. Willy Brandt kneels at the Warsaw Ghetto memorial, by the Bank, DVB Picture Archives German Federal government / Engelbert Reineke 16. Letterhead of Deutsche Verkehrs-Kredit-Bank’s head office 36. Oil embargo 1973, bringing about the first serious (1931), DVB Picture Archives economic and energy crisis, German Federal government / 17. Global economic crisis, German Federal Archives, Detlef Gräfingholt picture 146-1976-033-023 / Seiler 37. Alfred Prang and Fritz Haas, DVB Picture Archives 18. Karl-Heinz Boldt, member of the Board of Managing Directors 38. Advertisement for deferred freight payment (1950s), from 1972 to 1985, DVB Picture Archives DVB Picture Archives 39. Deutsche Verkehrs-Kredit-Bank bureau de change at 1933 – 1945 Hamburg’s central station (ca. 1957), DVB Picture Archives 19. Portrait of “Verkehrs-Kredit-Bank as the Reichsbahn banking 40. Deutsche Verkehrs-Kredit-Bank bureau de change at department”, shown in Deutsche Reichsbahn’s 1932 calendar, Bremen airport (ca. 1957), DVB Picture Archives DVB Picture Archives 41. Flyer listing Deutsche Verkehrs-Kredit-Bank’s bureaux de 20. Adolf Hitler’s rise to power 1933, German Federal Archives, change and their opening hours (1960), DVB Picture Archives picture 146-1972-026-11 / Robert Sennecke 90 years DVB Bank 104 | 105

42. Exchanging GDR Ostmark at a bureau de change of Deutsche 1997 – 2013 Verkehrs-Kredit-Bank, DVB Picture Archives 64. DVB’s business divisions, DVB Picture Archives 43. Punchcard processing centre at Deutsche Verkehrs-Kredit-Bank’s 65. Signing of the contract for the takeover of Nedship Bank Frankfurt/Main head office (1968),DVB Picture Archives (1999), DVB Picture Archives 44. Deutsche Verkehrs-Kredit-Bank’s Frankfurt/Main head office 66. Singapore – DVB’s business hub in the Asian growth region, (1965), DVB Picture Archives Shutterstock 45. The Board of Managing Directors of Deutsche Verkehrs- 67. Company logo from 2000, DVB Picture Archives Kredit-Bank in 1963, DVB Picture Archives 68. Company logo from 2002, DVB Picture Archives 46. The Board of Managing Directors of Deutsche Verkehrs- 69. Introduction of euro notes and coins on 1 January 2002, Kredit-Bank AG in 1973, DVB Picture Archives German Federal government / Bernd Kühler 47. Branch managers’ meeting of Deutsche Verkehrs-Kredit- 70. DVB’s Board of Managing Directors in 2013, Bank AG in 1963, DVB Picture Archives DVB Picture Archives 48. Speech by Mr Heinz Oeftering, First President of 71. DVB Bank’s Global Management Conference (2008), Deutsche Bundesbahn (1969), DVB Picture Archives DVB Picture Archives 49. Mr Kurt Müller, manager of the Stuttgart branch (1962 – 1987), 72. DVB Bank’s nominal customer lending as at 1 January 2013, DVB Picture Archives DVB Bank 73. DVB Bank’s employees as at 31 December 2012, DVB Bank 1974 – 1988 74. DVB Bank’s consolidated net income before taxes, 1997–2012, 50. The Frankfurt Stock Exchange floor in the 1980s,German DVB Bank Federal Archives, picture F078983-0036 / no details provided 75. Wolfgang Driese, CEO and Chairman of the Board of Managing 51. Deutsche Verkehrs-Kredit-Bank bureau de change on the side Directors of DVB Bank, Frankfurt/Main, DVB Picture Archives of the Federal motorway at Schwarzbach (1978), DVB Picture 76. David Goring-Thomas, Managing Director, Aviation Finance Archives Division, DVB Bank, London, DVB Picture Archives 52. Deutsche Verkehrs-Kredit-Bank bureau de change at Berlin’s 77. Richard Groeneveld, Chief Operating Officer, DVB Bank, Zoo railway station (1984), DVB Picture Archives Frankfurt/Main, DVB Picture Archives 53. IT processing at Deutsche Verkehrs-Kredit-Bank’s 78. Marilyn Gan, Deputy Head of Asia/Pacific region, Aviation Frankfurt/Main head office (1979),DVB Picture Archives Finance Division, DVB Bank, Singapore, DVB Picture Archives 54. Changeover on the Board of Managing Directors (1985): Arno Grunhold succeeds Karl-Heinz Boldt, DVB Picture Archives 55. Company logo from 1986, DVB Picture Archives 56. Frankfurt airport on a German stamp (1979), Shutterstock 57. Shares of Deutsche Verkehrs-Kredit-Bank AG – IPO in 1988, DVB Picture Archives 58. Arno Grunhold, member of the Board of Managing Directors from 1985 to 1994, DVB Picture Archives

1989 – 1996 59. Fall of the Berlin Wall in 1989, German Federal government / Klaus Lehnartz 60. Glasnost and perestroika under Mikhail Gorbachev, German Federal Archives, picture 183-1986-1012-009 / Peter Koard 61. Break during negotiations in Kaulsdorf (1990), DVB Picture Archives 62. Company logo from 1991, DVB Picture Archives 63. German reunification, German Federal government / Klaus Lehnartz 1923 – 1932 1933 – 1945 1946 – 1949 1950 – 1973 1974 – 1988 1989 – 1996 1997 – 2013

Humann, Detlev (Humann 2011): Arbeitsschlacht – Bibliography Arbeitsbeschaffung und Propaganda in der NS-Zeit 1933 – 1939. Göttingen 2011 James, Harold (James 1998): Die Reichsbank 1876 bis 1945, in: Fünfzig Jahre Deutsche Mark – Notenbank und Währung in Deutschland seit 1948. Munich 1998, p. 29 – 89 Ambrosius, Gerold (Ambrosius 1984): Der Staat als James, Harold (James 2002): Strukturwandel in Kriegs- Unternehmer. Göttingen 1984 und Krisenzeiten 1914 – 1945, in: Geschichte des Finanzplatzes Ambrosius, Gerold (Ambrosius 2005): Von Kriegswirtschaft Berlin. Frankfurt/Main 2002, p. 157 – 213 zu Kriegswirtschaft 1914 – 1945, in: Deutsche Kaatz, Hermann (Kaatz 1926): Die Organisation der Deutschen Wirtschafts­geschichte. Published by Michael North, Verkehrs-Kredit-Bank Aktiengesellschaft. Inaugural dissertation 2nd Edition Munich 2005, p. 287 – 355 at the Economics and Social Sciences Faculty of Frankfurt Author not named (Der Spiegel 1989): Ostmark zum University. Frankfurt/Main 1926 Willkür-Kurs, in: Der Spiegel, No. 48 1989, p. 112 – 113 Kaatz, Hermann (Kaatz 1927): Entwicklung der Geschäfts­ Berghoff, Hartmut (Berghoff 2002): Der Berliner Kapitalmarkt bedingungen der Deutschen Verkehrs-Kredit-Bank, excerpt im Aufbruch (1830 – 1870), in: Geschichte des Finanzplatzes from the dissertation entitled: Die Organisation der Deutschen Berlin. Frankfurt/Main 2002, p. 53 – 102 Verkehrs-Kredit-Bank Aktiengesellschaft. Frankfurt/Main 1927 Biermann, Gerhard (Biermann 1971): Wechselstuben Kopper, Christopher (Kopper 2005): Bankiers unterm der DVKB – Chronik 1948 – 1970. Self-publication, Hakenkreuz. Munich Vienna 2005 Frankfurt/Main 1971 Kopper, Christopher (Kopper 2007): Die Bahn im Wirtschafts­ Blaich, Fritz (Blaich 1994): Der Schwarze Freitag. 3rd Edition, wunder – Deutsche Bundesbahn und Verkehrspolitik in der Munich 1994 Nachkriegsgesellschaft. Frankfurt/Main 2007 Brestel, Heinz (Brestel 1973): 50 Jahre Deutsche Verkehrs- Kuhlmann, Bernd (Kuhlmann 2012): Deutsch-Deutsche Kredit-Bank – Ein halbes Jahrhundert im Dienste der Eisenbahn. Grenzbahnhöfe – Ost-West-Eisenbahnverkehr 1945 – 1990. Published by Deutsche Verkehrs-Kredit-Bank AG, Frankfurt/ Munich 2012 Main 1973 Malotki, Alfred (Malotki 1935): Die Frachtstundung der Brüning, Heinrich (Brüning 1970): Memoiren 1918 – 1934. Deutschen Reichsbahn-Gesellschaft, Königsberg. Berlin 1935 Stuttgart 1970 Matis, Herbert; Stiefel, Dieter (Matis/Stiefel 1995): Das Buchheim, Christoph (Buchheim 1998): Die Errichtung Haus Schenker – die Geschichte der internationalen Spedition der Bank Deutscher Länder und die Währungsreform in West- 1872 – 1931. Vienna 1995 deutschland, in: Fünfzig Jahre Deutsche Mark – Notenbank und Matis, Herbert; Stiefel, Dieter (Matis/Stiefel 2002): Die Währung in Deutschland seit 1948. Munich 1998, Geschichte der Spedition Schenker 1931 – 1991. Vienna 2002 p. 91 – 138 Mayer, Florian (Mayer 2006): Vom Niedergang des Deutsche Verkehrs-Kredit-Bank AG (DVKB 1972): Die unter­nehmerisch tätigen Staates – Privatisierungspolitik Deutsche Verkehrs-Kredit-Bank Aktiengesellschaft – ihre in Groß­britannien, Frankreich, Italien und Deutschland. Stellung und Aufgabe als Hausbank der Deutschen Bundesbahn. Wiesbaden 2006 Self-publication, 2nd Edition, Frankfurt/Main 1972 Melichar, Peter (Melichar 2004): Neuordnung im Bankwesen – Gottwaldt, Alfred (Gottwaldt 2011): Die Reichsbahn und Die NS-Maßnahmen und die Problematik der Restitution. die Juden 1933 – 1939 – Antisemitismus bei der Eisenbahn in Publications of the Austrian Commission of Historians: der Vorkriegszeit. Wiesbaden 2011 Vermögensentzug während der NS-Zeit sowie Rückstellungen Gries, Rainer (Gries 2003): Die Mark der DDR – Eine und Entschädigungen seit 1945 in Österreich. Volume 11, Kommunikationsgeschichte der sozialistischen deutschen Munich 2004 Währung. Edited by Landeszentrale für politische Bildung, Merten,Th.; Schmidt, E. (Merten; Schmidt 1963): 40 Jahre Erfurt 2003 Deutsche Verkehrs-Kredit-Bank. Published by Deutsche Grunenberg, Nina (Grunenberg 2006): Die Wundertäter – Verkehrs-Kredit-Bank AG, Frankfurt/Main 1963 Netzwerke der deutschen Wirtschaft 1942 – 1966. Munich 2006 Mierzejewski, Alfred C. (Mierzejewski 1999): Most Valuable Guinnane, Timothy; Bormann, Patrick; Scholtysek, Asset of the Reich – A History of the German National Railway Joachim; Wixforth, Harald; Paul, Stephan; Theurl, Volume 1, 1920 – 1932. Chapel Hill, London 1999 Theresia (Guinnane et. al. 2013): Die Geschichte der Mierzejewski, Alfred C. (Mierzejewski 2000): Most Valuable DZ BANK – das genossenschaftliche Zentralbankwesen in Asset of the Reich – A History of the German National Railway Deutschland vom 19. Jahrhundert bis heute. Munich 2013 Volume 2, 1933 – 1945. Chapel Hill, London 2000 Hachtmann, Rüdiger; Kreutzmüller, Christoph Nedship Bank (Nedship Bank 1999): 100 years of international (Hachtmann/Kreutzmüller 2013): Arbeiter und Arbeiter­ ship mortgaging. Rotterdam 1999 organisationen in Berlin (1930 – 1945), in: Berlin 1933 – 1945, Olten, Rainer (Olten 2006): 100 Jahre Verband der Sparda- edited by Michael Wildt and Christoph Kreutzmüller. Munich Banken e. V. – Zeitreise 1906 – 2006. Frankfurt/Main 2006 2013, p. 111 – 126 90 years DVB Bank 106 | 107

Pagenstecher, Cord; Buggeln, Marc (Pagenstecher/ Letter from Carl Friedrich von Siemens, President of the Buggeln 2013): Zwangsarbeit, in: Berlin 1933 – 1945. Edited by Supervisory Board of the Deutsche Reichsbahn-Gesellschaft Michael Wildt and Christoph Kreutzmüller, Munich 2013, dated 04 December 1926 to the Belgian Reparation Trustee p. 127 – 142 Léon Delacroix (Document 5) Röll, Viktor von (Röll 1914): Enzyklopädie des Eisenbahn­ Letter from the Reichsbank Board of Directors (no. II 421) wesens. Second fully revised edition, volume 5: Fahrpersonal – dated 23 January 1928, Berlin, to the Main Administration Gütertarife, Berlin, Vienna, 1914 of the Deutsche Reichsbahn-Gesellschaft (Document 6) Ruser, Ursula-Maria (Ruser 1981): Die Reichsbahn als Letter from the Personnel department of the Deutsche Reparationsobjekt. Freiburg 1981 Verkehrs-Kredit-Bank dated 28 January 1936 to Abraham Siemens, Georg (Siemens 1962): Carl Friedrich von Siemens – Schlesinger (Document 7) ein großer Unternehmer, Freiburg, Munich 1962 Letter from Bankhaus Abraham Schlesinger dated Statistisches Reichsamt (Statistisches Reichsamt 1925): 30 January 1936 to the Deutsche Verkehrs-Kredit-Bank Statistical Yearbook for the German Reich, 44th Year 1924/25. (Document 8) Berlin 1925 Internal report by the Deutsche Verkehrs-Kredit-Bank Statistisches Bundesamt (Statistisches Bundesamt 2012): on the “Structure, Future and Current Legal State of Affairs” Statistical Yearbook 2012. Wiesbaden 2012 dated 30 August 1952 (Document 9) Steinmann, Carl-Peter (Steinmann 1997): Das Millionen- Internal communication within the Deutsche Verkehrs- Ding im Osten – Der Schränker Walter Pannewitz, in: TatOrt Kredit-Bank dated 20 February 1954 regarding the claim for Berlin. Berlin 1997, p. 112 – 132 compensation of Frank (Fritz) Cassel (Document 10) Streit, Manfred E. (Streit 1998): Die deutsche Währungsunion, Letter from the Deutsche Verkehrs-Kredit-Bank to the in: Fünfzig Jahre Deutsche Mark – Notenbank und Währung in Finanzamt Frankfurt/Main-Mitte dated 10 January 1955 Deutschland seit 1948. Munich 1998, p. 675 – 719 regarding the payment for compensation to Mr Frank (Fritz) Thieme, H. Jörg (Thieme 1998): Notenbank und Währung in Cassel, USA (Document 11) der DDR, in: Fünfzig Jahre Deutsche Mark – Notenbank und Letter from the Board of Managing Directors of Währung in Deutschland seit 1948. Munich 1998, p. 609 – 653 Deutsche Verkehrs-Kredit-Bank regarding the reparation Wolf, Herbert (Wolf 1980): 30 Jahre Nachkriegsentwicklung case of Dr. Othmar Ziegler (Document 12) im deutschen Bankwesen. Mainz 1980 Letter from the Board of Managing Directors of Deutsche Wolfrum, Edgar (Wolfrum 2006): Die geglückte Demokratie – Verkehrs-Kredit-Bank to Dr Wolfgang Vaerst, First President Geschichte der Bundesrepublik Deutschland von den Anfängen and Chairman of the Management Board of Deutsche bis zur Gegenwart. Stuttgart 2006 Bundesbahn dated 26 March 1976 regarding Dr Othmar Ziegler Zweig, Stefan (Zweig 1958): Die Welt von Gestern – (Document 13) Erinnerungen eines Europäers. Berlin 1958 Documentation of mutual agreement, Berlin 4 May 1990, signed by the Deutsche Kreditbank AG, Reichsbahn- Selected documents from the corporate archive Sparkasse e.G., Deutsche Verkehrs-Kredit-Bank AG and of DVB Bank (chronological order) Deutsche Reichsbahn (Document 14) Memo dated 25 September 1924 regarding an agreement governing the investment of Reichsbahn funds between Additional sources Reichsbahn Administration, Board of Managing Directors and Annual reports since 1923 Supervisory Board of Deutsche Verkehrs-Kredit-Bank, as well Bank employee gazettes since 1959 as Bankhaus S. Bleichröder, Dresdner Bank, Commerz- und For general information relating to German and international Privatbank, Darmstädter und National-Bank and Deutsche Bank history, the Living Virtual Online Museum (LeMO), a joint (Document 1) project between the German Historical Museum (DHM), the Report on the Verkehrs-Kredit-Bank and the takeover of House of History of the Federal Republic of Germany (HdG) the deferred freight payment business by the Bank, prepared and the Fraunhofer Institute for Software and Systems Technol- by Deutsche Reichsbahn-Gesellschaft – Main Administration, ogy was consulted – http://www.dhm.de/lemo/home.html Berlin, 5 January 1925 (Document 2) Notification of the decision of the Supervisory Board of Deutsche Reichsbahn-Gesellschaft dated 23 January 1925 to Deutsche Verkehrs-Kredit-Bank; Letter dated 27 January 1925, Berlin, sent by Deutsche Reichsbahn-Gesellschaft – Main Admin- istration – represented by Ministry Director Alexander Jahn (Document 3) Memo regarding a meeting about the organisation and duties of the Verkehrs-Kredit-Bank at the Reichsbank on 17 March 1925 (Document 4) Imprint

Author: Prof Dr Borislav Bjelicic Head of Group Corporate Communications

Publisher: DVB Bank SE Platz der Republik 6 60325 Frankfurt/Main [email protected] www.dvbbank.com

Design concept and realisation: GolinHarris B&L GmbH, Frankfurt/Main

Holger Ziemann www.erzaehlzeichen.net

ISBN 978-3-00-043344-3

Events – Decisions Experience 2013

–

DVB Bank SE Platz der Republik 6 60325 Frankfurt/Main www.dvbbank.com

ISBN 978-3-00-043344-3 The History of DVB Bank 1923