Borislav Bjelicic The History of DVB Bank 1923 – 2013 Events – Decisions – Experience Experience – Decisions – Events 2013 – The History of DVB Bank 1923 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 Deutsche Reichsbahn (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 Germany “Wirtschaftswunder“ – the Weimar 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. German reunification 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 East Germany (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 Weimar Republic. 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, Bavaria, 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 Berlin. The First World War had ended just five years prior, and trouble. Between 1860 and 1890, state-owned railways increase the German Reich 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 Munich 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.