Borislav Bjelicic The History of DVB Bank 1923 – 2013dubbed Deutsche Reichsbahn the “Most Valuable Asset of the Reich”. The railway’s history in Germany began with the inauguration

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The History of DVB Bank 1923 – 2013

Events – Decisions – Experience

Borislav Bjelicic

1923 – 2013The hisTory of DVB Bank

1923 –1932The Bank‘s foundation and development during the Weimar Republic – becoming the principal banking partner to Deutsche Reichsbahn, the German National Railway Page 04 – 21

Ten questions for: Karl-Heinz Boldt Page 22 – 23

1933 –1945The Bank during the Nazi regime Page 24 – 33

1946 –1949A new start in West GermanyPage 34 – 39

1950 –1973The Bank during the “Wirtschaftswunder“ – a reliable partner to Deutsche Bundesbahn, the German Federal RailwaysPage 40 – 51

Ten questions for: Kurt MüllerPage 52 – 53

The story begins with the institution set up as the financial services provider to the Deutsche Reichsbahn (the German National Railway). In fact, the Bank remained a wholly-owned subsidiary of Deutsche Bundesbahn (the German Federal 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.

18 June 2013 marks the 90th year of DVB‘s founding. it has been through quite a bit since 1923, and has little in common today with the Bank that was created back then.

inTroDucTion

90 years DVB Bank 02 | 03

1989 –1996German reunification – DZ BANK acquires a majority shareholding – the Bank evolves from a railway bank into a transport finance housePage 64 – 71

1997 – 2013The Bank develops into a global specialist for international transport financePage 72 – 83

Ten questions for: Wolfgang F. DriesePage 84 – 87 David Goring-ThomasPage 88 – 91Richard GroeneveldPage 92 – 95Marilyn GanPage 96 – 98

Concluding remarksPage 99

appendixMembers of the Bank‘s Board of Managing Directors and Supervisory Board Page 100 – 101

Branches and bureaux de changePage 102 – 103

List of pictures and imagesPage 104 – 105

ReferencesPage 106 – 107

ImprintPage 108

1974 –1988The “Wirtschaftswunder“ ends – partial privatisation and IPO Page 54 – 59

Ten questions for: Arno GrunholdPage 60 – 63

At the same time, this process has also been reflected in strong financial results. And looking ahead, the future has much in store for the Bank. The pace of change will continue to be rapid. This publication is dedicated to the Bank’s history. To date, only two such commemorative editions have been published, namely on the 40th (Merten/Schmidt 1963) and 50th anniversary of the Bank (Brestel 1973). The many things that the Bank has seen and done in the forty years that have passed since that time certainly merit retelling here. New information linked to historians’ research findings has also been discovered about the Bank’s early years. This publication will look at these findings. While this publication makes no claim to be a comprehensive and definitive history of DVB Bank, it will attempt to recount the major milestones in the Bank’s story, with all its highs and lows. And because the events of the Bank’s past need to be considered against the backdrop of general political and social transformation in order to be understood, it is also important to trace major developments in the history of Germany and the world.

This work covers different eras of the Bank. The first section (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) sees the beginning of globalisation and concludes with the momentous occasion of the Bank’s initial public offering. German reunification also represents an important milestone for the Bank, sparking years of business expansion into the new Federal states in East Germany (1989 – 1996). This period of time draws to a close with a reassessment of the Bank’s business strategy for the years ahead. The outcome is a decision to develop into a specialist bank in international transport finance, a process which is completed by the end of 2003 and has been steadfastly adhered to ever since (1997 – 2013).

In addition to the selection of publications listed in the biblio-graphy, the Annual Reports published since 1923 and the employee gazette published and distributed since 1959 are also important sources of information about the Bank’s history.

History is about people, and a company’s history is always shaped by its people. That is as true today as it was 90 years ago. As such, Bank employees from the past and present have been asked about what they have seen and experienced throughout the different phases of the Bank’s life.

vProf Dr Borislav Bjelicic,

Head of Corporate Communications and

author of “The History of DVB Bank“

hTwo 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.


1923 – 1932

The history of DVB Bank starts with the creation of Deutsche Verkehrs-Kredit-Bank Aktiengesellschaft on 18 June 1923 in Berlin. The First World War had ended just five years prior, and the German Reich is suffering as one of the defeated nations left in its wake. WWI’s fallout includes ceded territory and redrawn borders, as well as reparation demanded by the victors from the German Reich. Political uncertainty looms large. While the collapse of the monarchy signifies the end of an era for many people, causing some of them to reject the new democratic system, others view the political transformation as an oppor-tunity to spread new ideas and make them a reality. Strong forces emerge from both the right and the left, willing to do anything – even if it means the use of force – to achieve their political goals. One of these new forces is the Nationalsozialis-tische Deutsche Arbeiterpartei (NSDAP or Nazi party), which holds its first party convention in Munich in 1923; at the time, the party has 55,000 members. The economic situation remains tense. Inflation escalates throughout 1923, ultimately raging to hyperinflation before being curtailed at the end of 1923 with the introduction of the Rentenmark.

Deutsche Reichsbahn (the German National Railway), with which the foundation and development of Deutsche Verkehrs-Kredit- Bank is inextricably entwined, has a decisive role in the state’s economy in that year, and is the country’s largest employer. The American economic historian Alfred C. Mierzejewski even dubbed Deutsche Reichsbahn the “Most Valuable Asset of the Reich”.

The railway’s history in Germany began with the inauguration of the first stretch of track between Nuremberg and Fürth in 1835. Railroading then developed predominantly through the initiative of the private sector. But individual German states – for Germany is still a confederation of states at this point before they are unified under the Deutsche Reich in 1871 – begin to

establish state-owned railways. In the absence of a coordination of the different rail networks, the full economic potential of the railroad cannot be realised. And the birth of the German Kaiserreich in 1871 does not in itself bring about an end to the fragmentation of the railroad system. Baden, Bavaria, Hesse, Mecklenburg, Oldenburg, Prussia, Saxony and Wuerttemberg continue to operate their own state-owned railways. However, the economic crisis of 1873 leads to a consolidation, as state-owned railways acquire privately-owned railways in financial trouble. Between 1860 and 1890, state-owned railways increase from 58% of Germany’s total rail network to 92% (Ambrosius 1984, p. 29). During this era, technological developments in the rail sector increasingly drive the industrialisation of Germany. Railways thus become important sources of income for the states. Naturally the railway system also becomes important to the military, as a means of conveying troops and military goods – as was made apparent in WWI.

After the end of WWI, the economic situation deteriorates for the railways. Due to the decline in economic activity, income is shrinking. The railways also have to help to integrate those returning from war. The poor financial situation for individual state-owned railways in the wake of WWI contributes substan-tially to the decision to merge the different networks to create a nationwide Railway Administration. These factors eventually culminate in the State Treaty on the Transfer of the State-Owned Railways to the Reich, which provides for the formation of Deutsche Reichsbahn on 01 April 1920 in the Weimar Republic (Gottwaldt 2011, p. 21 et. seq.). Only a few months prior, on 01 October 1919, the Reich Transport Ministry (Reichsverkehrs-ministerium) had been formed.

However, some of the territories lost as a result of the war – and the railway lines that went with them – prove problematic for the economic development of the Reichsbahn, due to the loss of freight volumes. The Treaty of Versailles had planned for some territories to be ceded immediately. The largest such action related to Alsace-Lorraine (to France), as well as the majority of Western Prussia and the Poznan Province (both to Poland). In other regions, referendums were scheduled to decide on whether to remain within or secede from the German Reich. The most important popular vote involved Upper Silesia.

The Bank’s foundation and development during the Weimar republic – becoming the principal banking partner to Deutsche reichsbahn, the German national railway

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

Conflicts following the referendum in this region between Germany and Poland, which had been decided in favour of Germany, eventually led to Upper Silesia being divided – with a portion, including the coal mining region, going to Poland. The Saar region was occupied under a League of Nations mandate, with the coalfields awarded to France as reparations. A referen-dum was slated for 1935 to decide on the future of the Saar region. The Rheinland, including the Ruhr region, was to remain under Allied administration. These developments were impor-tant, because coal was not only a valuable resource for the steel industry at the time; it was far and away the most important fuel source for the nation, and its railways.

Despite all of these obstacles, Deutsche Reichsbahn is a transportation force to be reckoned with in 1923. By the end of the 1922 reporting year, it controls a rail network spanning 51,691 km (with another 3,658 km operated by privately- owned railways). More than 31,000 locomotives and nearly 700,000 freight cars are at work on the lines. 470 million tonnes of goods are conveyed and nearly 3 billion passengers trans-ported in 1922, underscoring the importance of the railway, for the economy and for society. With just over one million employees and civil servants, the railway represents the single most important employer of the German Reich (Statistisches Reichsamt 1925).

By way of contrast, road traffic and aviation have yet to assume any significant role in passenger and freight transport. The Statistical Yearbook for the German Reich (Statistisches Jahr-buch für das Deutsche Reich, 1925) reports that there are 100,340 motor vehicles registered in the country for passenger 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.

Rail transport statistics indicate not only that massive loads of goods are transported, but also that corresponding payment flows are generated, which require processing. To handle them, Deutsche Reichsbahn uses an official deferred freight payment procedure whereby all of the shippers’ fees are deferred for the freight carried within a specified period. This deferred freight payment procedure was also used by predecessor companies of Deutsche Reichsbahn. In the Encyclopaedia of Railways, Viktor von Röll describes the principle as follows: “Deferred freight payment is credit for freight amounts due. The railway foregoes immediate payment for goods conveyed, in order to streamline business processes and avoid unnecessary cash circulation by settling the forwarded freight against the bor-rower’s credit, and only taking payment after a certain period of time. […] Credit is generally only extended once collateral has been pledged” (Röll 1914, p.122). The various railways’ deferred freight payment structures predominantly differed only with regard to the amount of the freight credit permitted, the billing cycle, and the way collateral was measured.

In 1922, Deutsche Reichsbahn has in place both a one-day and monthly deferred freight payment procedure for its customers, despite the fact that the procedure requires quite intensive administration (Malotki 1935, p. 14 –16). Looking for ways to improve deferred freight payment, the Reich Transportation Ministry assembles a committee chaired by Otto Fischbeck, the former Prussian State Minister of Trade, that pays a visit to the Austrian Railway Administration in Vienna in April 1923. There the committee discovers that a bank has been using a new procedure to handle deferred freight payment since October 1922.

vOtto Fischbeck, co-initiator of the

Bank‘s foundation and the first Chairman

of the Supervisory Board of Deutsche Verkehrs-

Kredit-Bank


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 ratifies the ten-year contract. On 25 May 1923, the agreement is approved by the Reich Transportation Ministry, under the condition that a bank be established (Kaatz 1926, p. 2–3).

The interested partners (founding shareholders include Dresdner Bank, Bankhaus S. Bleichröder, Kur- und Neumärkische Ritterschaftsbank, Deutsches Kalisyndikat and Kommerzienrat Jakob Bronner) execute the Memorandum and Articles of Association on 18 June 1923 to create Deutsche Verkehrs- Kredit-Bank Aktiengesellschaft, which commences operations on 01 July 1923. To keep start-up time to a minimum, the shell of a bank that had been established on 1 July 1918 but was inactive – Pforzheimer Hypothekensicherungs-AG – is used, and renamed Deutsche Verkehrs-Kredit-Bank (Kaatz 1926, p. 2–4).

The first Board of Managing Directors of Deutsche Verkehrs- Kredit-Bank comprises Mr Ernst Schlesinger and Dr Walter Prerauer. In 1924 Richard von Schaewen becomes the Board’s third member. Otto Fischbeck becomes Chairman of the Super-visory Board. The new company’s registered office is in Berlin. The first premises are initially located on Bellevuestrasse, before the Bank moves to Schadowstrasse 6/7, where it remains until February 1925 (DVKB Gazette No. 3/1960). The headquarters of Deutsche Verkehrs-Kredit-Bank subsequently relocate to new premises in an office building on Markgrafenstrasse 46 at the intersection of Französische Strasse.

hHead office of Deutsche Verkehrs-Kredit-Bank, at Markgrafenstrasse in Berlin

(from 1925 to 1936)

hCompany logo from 1923

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

The agreement requires Deutsche Verkehrs-Kredit-Bank to create a clearing house for deferred freight payments in each of the Reichsbahn’s divisions (which are responsible for railway operations in a specified geographical area), to handle freight billing within that region. Because the newly founded Bank needs time to set up its own clearing houses, it initially out-sources the work to third-party banks for a fee. In the second half of 1923, nine renowned banks – among them the two founding shareholders Dresdner Bank and S. Bleichröder – help to set up 28 clearing offices (Kaatz 1926, p. 35).

Most clearing offices are later transformed into independent banks, with Deutsche Verkehrs-Kredit-Bank becoming a share-holder. Under the typical investment arrangement, Deutsche Verkehrs-Kredit-Bank holds a 50% stake, with the remainder going to the partner bank(s). In Munich, Bayerische Verkehrs- Kredit-Bank AG is established according to this arrangement. Bayerische Hypotheken- und Wechsel-Bank and Bayerische Vereinsbank hold half of the shares as partners. In the Königs-berg/East Prussia region, a partnership with Dresdner Bank yields the Ostpreußische Verkehrs-Kredit-Bank AG (Kaatz 1926, p. 36–37).

In addition, other banks are granted the right to take part in the deferred freight payment process as so-called delivery points. These banks can coordinate deferred freight payment for their own customers without them having to switch to one of the clearing house banks. The rationale for the arrangement is that the Reich Transport Ministry wanted to prevent Deutsche Verkehrs-Kredit-Bank from monopolising the new bank-based deferred freight payment procedure (Malotki 1935, p.14–19).

After Deutsche Verkehrs-Kredit-Bank commenced operations, the new procedure is rolled out while Deutsche Reichsbahn’s deferred freight payment procedure is still in use. This remains 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.

When Deutsche Verkehrs-Kredit-Bank is founded in 1923, Germany is experiencing currency devaluation which ultimately leads to hyperinflation. The most obvious cause is the increased supply of money by the Reichsbank, which eventually goes out of control. The underlying reason, however, relates to how German military expenses were financed during WWI, including the aftermath of the end of the war (James 1998, p. 46). During the war, the Kaiserreich relied minimally on taxes to fund the war and instead went into heavy debt by selling war bonds to its citizens. The remainder was financed through more state debt in the form of treasury bills and similar instruments. All of these decisions were based on the assumption that Germany would win the war and that the defeated nations would pay reparations for its cost, which Germany would then use to cancel out its debt (cf. Blaich 1994, esp. p. 38 et seq., and Ambrosius 2005, p. 302–303).

This miscalculation left Germany in a precarious position at the end of the war, which left it as the nation owing reparation payments. Other consequences of the war, such as caring for the war invalids and tending to surviving dependants of war victims, led to increased government spending. To prevent mass unemployment after soldiers returned from the front, the state implemented support measures. All of these developments were pitted against the backdrop of a sharp decline in state revenue as industrial output was initially far below its pre-war levels, causing the state deficit to grow. These factors, along with the continued payment of war bonds after the Kaiserreich collapsed, spurred the rise in state debt. In 1919 a series of tax increases were introduced with the aim of improving the state’s income situation, but politicians quickly shifted focus to promoting employment, which again led to increased spending. Ultimately, statutory measures were introduced that granted the Reich Finance Minister unlimited access to Reichsbank loans to finance the soaring deficit, which sparked inflation in 1921.

hDr Walter Prerauer

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

hRichard von Schaewen hErnst Schlesinger

90 years DVB Bank

In the 1920s, Berlin is the financial centre of the German Reich (cf. Berghoff 2002; James 2002). Berlin owes its position to the development of the railways, and the industrialisation that has gone hand in hand with it from 1840 onwards. Establishing a railway company requires considerable capital, and entrepreneurs increasingly look to the stock markets for financing. While Frankfurt assumes a sceptical stance towards this development, preferring to concentrate on traditional business with state bonds, as many as 87 railway companies are listed on the Berlin stock exchange by 1860. Berlin is also an industrial frontrunner as a centre for locomotive engineering, in addition to its position as an important location for mechanical engineering and the electronics industry. For instance, in 1847 Werner Siemens and Johann Georg Halske establish the Telegraphen

Bau-Anstalt von Siemens & Halske in Berlin. The railway boom makes the Aktiengesellschaft – the public limited- liability company – popular for other companies that emerge over the course of industrialisation. Ultimately, incorporated banks, or Aktienbanken, also emerge that far surpass the private banks and state institutions, which had been dominant until the mid-nineteenth century with regard to their ability to mobilise capital (Berghoff 2002, p. 89). Berlin becomes a hub for Germany’s equity business, and the corresponding growth of the Berlin stock exchange – coupled with its geographic proximity to the German central bank – represent two key factors behind Berlin’s impor-tance as a financial centre at the point in time when Deutsche Verkehrs-Kredit- Bank is founded. The shareholders of the Bank represent the premier names on the Berlin financial market. S. Bleichröder

and J. Mendelsohn & Co. number amongst Germany’s largest private banks. Disconto-Gesellschaft, which was founded in 1851 and merges with Deutsche Bank in 1929, along with Dresdner Bank, Darmstädter und Nationalbank, Bayerische Vereinsbank and Commerz- und Privatbank are amongst the nation’s leading banking institutions.

08 | 09

hRailways in the Weimar Republic:

Series 39 steam engine no. 39 151 of the German National Railway Company (1931)

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

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 Nazi Germany 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).

hBank notes printed during the 1923 period of hyperinflation


k

First annual report of

Deutsche Verkehrs-Kredit-Bank (1924)

In 1923 extensive reparation demands weigh heavily on Germany. While extensive payments in kind were made directly after the war ended – the railways, for example, saw roughly 5,000 loco-motives and 150,000 freight cars go to the victors as reparations (Ambrosius 1984, p. 77) – cash payments were now being demanded. The associated reparation negotiations are driven by a variety of different interests. France’s interests rest first and foremost with high reparation payments, while Weimar Republic governments seek to minimise reparations in light of the country’s economic problems. In 1921 the London Ulti-matum sees reparations set at Goldmark 132 billion, and a payment plan is drawn up (James 1998, p. 48). France seeks guarantees for the payments. At the beginning of 1923, faced with the spectre of default, French and Belgian troops occupy the Ruhr region. The Weimar government responds with so-called passive resistance. This leads railway workers from France and Belgium to take control of operations from their ousted German counterparts.

Both inflation and the occupied Ruhr territory shape social dis-course in Germany in 1923, and encourage radical opposition from both the right and the left to launch coups against the Weimar Republic. In October 1923, the German Communist Party attempts to overthrow the government; in November the Hitler coup follows. These attempts are ultimately quashed.

Hyperinflation is brought to a grinding halt with the introduction of the Rentenmark on 15 November 1923. At the beginning of 1924, progress is made in reparation negotiations with the formation of a committee of experts under the direction of Charles Dawes who is charged with creating a new reparation payment plan that takes Germany’s economic situation into account. The result is the Dawes Plan, which is presented to the Reichstag (the German parliament) in April 1924 and accepted in August. The Dawes Plan envisages a retreat of foreign troops from the Ruhr region, which becomes reality in July 1925. The Reichsbahn is at the very centre of the plan as a source of reparation payments.

Because Deutsche Reichsbahn has returned to being a highly profitable enterprise, its revenue is channelled into paying reparations. A key feature of the Dawes Plan is to have the Reichsbahn issue reparation bonds itself, subsequently made over to a trustee of the creditor nations. These debt securities are to accrue interest and be paid out according to a predefined schedule (cf. Ruser 1981 for more detail). In order to maintain a clear picture of the company’s financial position and profit and loss account at all times, the Reichsbahn has to be separated from the state budget and transitioned into a commercial enter-prise to ensure that it is run as a competitive business. The first step is the creation of Deutsche Reichsbahn, which is a public-sector enterprise at this stage, on 12 February 1924. On 11 October 1924, it is transformed into Deutsche Reichs-bahn-Gesellschaft (German National Railway Company), which is to function entirely as a private-sector business. The manage-ment structures reflect this. The company is run by a Manage-ment Board (Vorstand) comprising a General Director and other Directors, one of which serves as Deputy General Director. A Board of Directors (Verwaltungsrat) serves as the supervisory body of Deutsche Reichsbahn-Gesellschaft. The first General Director is former Reich Transport Minister Rudolf Oeser, while the industrialist Carl Friedrich von Siemens becomes Chairman of the Board of Directors. Pursuant to the requirements of the Dawes Plan, there are also four non-German members of the Board of Directors (one representative from Belgium, France, Great Britain and Italy, respectively). A Railway Commissioner with far-reaching supervisory rights is positioned alongside the Board of Directors. In 1926 Julius Dorpmüller assumes the role of General Director following the death of Rudolf Oeser, with Carl Friedrich von Siemens initiating this appointment at a meet-ing of the Board of Directors which coincidentally takes place on the same day as Oeser’s passing. In making the move, Siemens hopes to pre-empt the possible appointment of a politician (Siemens 1962, p. 206 et seq., and p. 219).

By extricating the Reichsbahn from the Reich Finance Ministry’s 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.

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

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 Reichs-Kredit-Gesellschaft (Document 2).

Before the capital increase, the Reichsbahn (as the majority shareholder), Deutsche Verkehrs-Kredit-Bank, and the banking consortium comprising both new and old shareholders, together reach an agreement that sets out guidelines for investing Reichs-bahn funds. These guidelines describe the role of the bank shareholders as follows: “Without prejudice to the discretion of the Reichsbahn to determine where to allocate available funds, but in the expectation that these funds will substantially flow to the Bank [i.e. Deutsche Verkehrs-Kredit-Bank], there is general consensus in the interests of the Bank’s liquidity that these funds first and foremost flow to the institutions represented within the Consortium, insofar as these Banks are prepared to match rates offered by top-quality institutions. The Bank shall offer and distribute these funds to the Consortium pursuant to the stipulated consortial shares” (Document 1).

In a subsequent letter to Léon Delacroix, the Belgian reparation trustee, Carl Friedrich von Siemens, President of the Board of Directors of Deutsche Reichsbahn-Gesellschaft, explains the reasons behind the Reichsbahn’s investment in Deutsche Verkehrs-Kredit-Bank in 1924: “At the very beginning during

its first meeting, the Board of Directors considered whether it would be better to have a special division within the company [the Deutsche Reichsbahn-Gesellschaft] dedicated to managing the company’s funds or to use an established bank for this pur-pose. It was beyond question that the existing resources in the company, namely the ranks of civil servants, were neither suffi-cient nor suitable. […] The Board of Directors therefore came to the decision to develop the bank in such a way that it would handle the company’s funds but be prohibited from engaging in any independent banking business that it may have begun. […] The Verkehrs-Kredit-Bank is therefore not to be treated as a separate and independent banking institution, but rather one of the company’s departments” (Document 5).

On 23 January 1925, the Board of Directors of Deutsche Reichsbahn-Gesellschaft decides to transfer responsibility for all of its deferred freight payment activities, as well as for the organisation of its cash flow and the administration of a portion of its financial transactions, to Deutsche Verkehrs-Kredit-Bank. Literally, this means that “The Board of Directors of Deutsche Reichsbahn-Gesellschaft agrees that Deutsche Verkehrs-Kredit- Bank in Berlin shall assume responsibility for deferred freight payment business under the condition that Deutsche Verkehrs- Kredit-Bank refrains from conducting general banking business,

k

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


and does not develop into a general commercial bank. The Board of Directors further agrees that the Reichsbahn-Gesellschaft shall at its discretion permit Deutsche Verkehrs-Kredit-Bank to manage liquid funds. These funds shall only be transferred to recognised banks in good standing” (Document 3).

However, any investments have to be short term in order to ensure that the Reichsbahn always has sufficient available liquidity. As such, the Reichsbahn funds are generally invested overnight or, on an exceptional basis, for one month. No invest-ments shall be made in foreign currency, or in securities, due to the risk involved. With the help of Deutsche Verkehrs-Kredit- Bank, internal payment flows between Reichsbahn cash-handling units can be rationalised and accelerated, which facilitates interest savings or benefits (Kaatz 1927, p. 11–12; p. 32 et seq.).

The transfer of the administration of the Reichsbahn’s funds is however challenged by the President of Deutsche Reichsbank (Germany’s central bank), Hjalmar Schacht. Because he believes, as a matter of policy, that all public-sector funds should be con-trolled or centrally administered by the Reichsbank, he tries to exert influence as to how Deutsche Reichsbahn-Gesellschaft’s funds are managed. On 17 March 1925, a meeting takes place at the Reichsbank between President Schacht, Otto Fischbeck, Ernst Schlesinger and Alexander Jahn (representing the Reichs-bahn). In this meeting, Schacht attacks “the decentralised management of funds, which he sees as contrary and damaging to the interests of a consistent picture of the money market” (Document 4). First, the Reichsbahn rejects his offer to deposit its cash exclusively with the Reichsbank. Later, however, a compromise is reached that requires Deutsche Verkehrs-Kredit- Bank to establish an account at Deutsche Golddiskontbank (Gold Discount Bank), which it opens in May 1927, where it must deposit a substantial portion of the funds it manages (Annual Report 1926–27; Mierzejewski 1999, p. 275–277). In the 1927–28 Annual Report (1 July 1927 to 30 June 1928), the Bank describes a working relationship with the Reichsbank that 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

required for regular payments are transferred to the railway pay offices. The Reichsbank is also more heavily involved in invest-ing the liquid funds available to us” (Annual Report 1927–28). In a letter to the Main Administration of Deutsche Reichsbahn- Gesellschaft dated January 1928, the Reichsbank writes that: “To our present understanding, it seems as though the involve-ment of the Reichsbank in the management of Reichsbahn funds […] is assured to a satisfactory level” (Document 6).

As mentioned, the decision by the Board of Directors of Deutsche Reichsbahn-Gesellschaft of 23 January 1925 also involved con-centrating the entire deferred freight payment business within Deutsche Verkehrs-Kredit-Bank. By 1 March 1925, the monthly deferred freight payment procedure offered by the Reichsbahn has been replaced, though the one-day deferred freight payment arrangement remains in place for existing customers for a short period. Also on 1 March 1925, the delivery points are removed from the Bank’s deferred freight payment procedure. Now Deutsche Verkehrs-Kredit-Bank clearing offices in the Reichs-bahn divisions are exclusively responsible for the settlement of deferred freight payments. These existing offices are gradually transitioned into branch offices of Deutsche Verkehrs-Kredit- Bank. Where the clearing offices are independent banks based on a joint venture between Deutsche Verkehrs-Kredit-Bank and one or more other banks, the partners are bought out. By the end of 1925 the transition process has been completed. The branches in Essen, Cologne and Elberfeld are the Bank’s first own new offices to open. In the deferred freight payment busi-ness, longer credit terms are now also offered, which means that major shippers in particular are granted longer deferred payment periods. After 1925, Deutsche Verkehrs-Kredit-Bank offers its deferred freight payment service to smaller railway operators, industrial and works railways. The Bank also begins extending loans to Reichsbahn suppliers. A number of improve-ments are also made to the deferred freight payment procedure (Kaatz 1926, p. 12 et seq., p. 29, p. 37–38; Kaatz 1927, p. 37–41; Malotki 1935, p. 17–19).

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vMemorandum 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.


vClient 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 agreed on 25 October 1925, the Reichsbahn increases its share-holding to 75% (Kaatz 1927, p. 8). As part of this capital increase, some shareholders depart while other join the mix. In 1927 nine banks are part of the the shareholder structure: Dresdner Bank, Bank haus S. Bleichröder, Darmstädter- und Nationalbank (DANAT Bank), Commerz- und Privatbank, Reichs-Kredit-Gesellschaft, Diskonto-Gesellschaft, Mendelsohn & Co., Bayerische Hypo-theken- und Wechselbank and Bayerische Vereinsbank. The last capital increase to take place before the end of WWII in 1945 occurs on 1 July 1931 (from four million to twenty million Reichsmark). Deutsche Reichsbahn emerges as the owner of nearly all of the shares, with the exception of a few shares amounting to no more than 3,000 Reichsmark of the total share capital (Document 9).

In 1926 Deutsche Verkehrs-Kredit-Bank assumes responsibility for operating bureaux de change at train stations. The bureaux de change network is actively expanded, and continues to be operated by the Bank for several decades until ReiseBank AG is spun off in 1996 and sold to DZ BANK in 2003. In the 1920s, bureaux de change can be found in every major railway station where international routes begin or end, as well as at various border train stations. Rail is still the undisputed leader in inter-national European travel.

Aviation has yet to assume any substantial role in international transit, although the first consolidation in aviation occurs in 1926 with the foundation of the Deutsche Lufthansa. Unrelenting technological progress is spurred by the search for “higher, faster, further” in aviation. Charles Lindbergh’s non-stop solo flight across the Atlantic from New York to Paris causes a sen-sation. By April 1928, three pilots (Hünefeld, Köhl, Fitzmaurice) manage to make the first transatlantic flight in the other direction in a Junkers W 33 from Baldonnel (Ireland) to Greenly Island (Newfoundland). Speed plays a major role in intercontinental maritime passenger transport as well. In June 1929 the steam-ship “Bremen” wins the ”Blue Riband” for the fastest trans-atlantic trip, on its maiden voyage.

Due to the deferred freight payment business, which comprises 17,129 borrowers by 30 June 1926 (Annual Report 1925–26), Deutsche Verkehrs-Kredit-Bank’s customer base continues to grow. One of the large shippers in Germany is the German branch of Schenker, a forwarding company. Founded in 1872 by Gottfried Schenker (1842–1901) with two partners (Moritz Hirsch and Moritz Karpeles) in Vienna, Schenker & Co. enjoys unbridled growth up until the end of WWI. After the military defeat of the Central Powers of Germany and the Austro- Hungarian Empire, borders are redrawn and new transport connections develop as a result. The dissolution of the Habsburg Empire diminishes Vienna’s significance as one of Europe’s economic centres, while Berlin gains prominence despite Germany’s defeat. As a result in 1919 a German Schenker office is established in Berlin that is legally autonomous but financially dependent on the headquarters in Vienna. The Manag-ing Director, Marcell Holzer, who is also a partner, quickly begins a course of expansion – even in the face of opposition from the head office. Where the company once had 18 offices in Germany in 1919, it is represented at 126 different locations by 1923. The expansion is made possible by bank loans. After inflation ended in 1923, overcapacity in transportation became apparent, causing financial problems (for more information on Schenker, see Matis/Stiefel 1995 and Matis/Stiefel 2002).

In 1925 Schenker is granted a large loan by Deutsche Verkehrs- Kredit-Bank totalling 15 million marks, with a portion set aside for Schenker in Vienna. This loan is connected with an advertising commitment in favour of Deutsche Reichsbahn. Schenker’s German business assets, namely property, investments and the like, serve as collateral for the loan. In 1926 and 1927 the German office of Schenker receives two more loans in the amount of 3 million and 3.5 million marks, respectively, bringing the Bank’s total exposure to 21.5 million marks (cf. Matis/Stiefel 1995, p. 278–283).

The years immediately following hyperinflation are character-ised by a certain degree of stabilisation in the German economy, 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

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borrowing (cf. Ambrosius 2005, p. 317 et seq). In the United States, the years following WWI are a period of exceptional economic growth. Share prices soar as a consequence. In the belief that the stock market will continue to climb, investors looking to get involved finance their share purchases with loans. When the speculation bubble bursts on the New York Stock Exchange on 25 October 1929, known as Black Friday, it has dramatic repercussions for banks and the US economy. The fallout is not confined to the United States. On the contrary, Black Friday signals the start of a global economic crisis which peaks from 1930 to 1932, but has implications which last well into 1933. Germany, like other countries, relies on money borrowed from the United States and is affected when that financial support is revoked, sparking the beginning of a crisis. The contraction in global trade, exacerbated by the introduction of protectionist policies, leads to a decline in German exports – and as a result, to a drop in industrial output. Unemployment in Germany, which had already been severe prior to Black Friday, reaches record highs in 1930.

The outbreak of the global economic crisis also marks the beginning of the end of the Weimar Republic. The parliamentary system had already contended with a number of crises in the years before: forming stable parliamentary majorities was often impeded by the plethora of – often small – political parties, evidenced by the fact that there are sixteen different government cabinets between 1919 to March 1930. From March 1930 to January 1933, Germany is governed by Presidential Cabinets (under Chancellors Brüning, von Papen and von Schleicher) which rely increasingly on emergency orders. These are a form of legislation not backed by any parliamentary majority, but which came into use after being proposed by the government to President Paul von Hindenburg, who took office in 1925, and received full legal force through his signature.

Prior to the beginning of the global economic crisis, German banks relied on foreign capital to extend loans for investments, due to the limited capacity of the German capital market. The interest rates paid by German banks are quite high, because foreign creditors demand a premium for the poor credit rating of the German Reich. The funding costs are priced into the loans extended to German companies by German banks. As sales and company earnings shrink at the beginning of the global economic crisis, it becomes more difficult for companies to make their relatively expensive instalment payments on the loans, which means that credit risks mushroom on banks’ books. Darmstädter und Nationalbank (DANAT Bank) is no exception to the trend. There, the first rumours of troubled loans and pos-sible insolvency cause foreign investors to pull out their deposits. Although they are short-term in nature, the deposits form the basis for long-term loans, which causes the situation to esca-late; the long-term loans cannot be recouped because of the borrowers’ difficult financial situations (Kopper 2005, p. 7 et seq.).

In light of the problems at DANAT Bank, which eventually come to the attention of the Reich government, an emergency order is issued to guarantee all customer deposits at DANAT Bank. The purpose is to authorise the bank to inform its customers of the guarantee. The plan is to close the bank on 13 July 1931, in order to undertake the necessary preparations. However, unease amongst bank customers mounts. In his memoirs, Heinrich Brüning, the Chancellor at the time, writes that “my fears that one bank suspending payments could exacerbate the public run on other banks, requiring an all-out rescue package for all the banks was confirmed the following morning” [i.e. 13 July 1931] (Brüning 1970, p. 320). To prevent the situation from deteriorating further, all banks in Germany were closed on 14 and 15 July 1931. Uneasiness spread across the border.


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.

eMPloyee reGulaTions 1925

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Fritz Bergner, a long-standing branch manager of Deutsche Verkehrs-Kredit-Bank, remembers that DVKB was insulated from the banking crisis because the Management Board of the Bank – he names Ernst Schlesinger – “had already decided to withdraw any placements by Deutsche Verkehrs-Kredit-Bank once their terms expired. These funds were then kept on the Reichsbank account, at zero per cent interest. When all banks closed their doors on 13 July, [...] Deutsche Verkehrs-Kredit- Bank was the only institution that was not insolvent, because the Reichsbank was not affected” (DVKB Gazette No. 1/1990).

Eventually the Reich government had to stabilise the banking system by offering financial assistance and acquiring shares in the major banks affected by the crisis. A standardisation of terms (interest rates and fees), initiated by the state, eradicated banking competition. For the first time, a state banking super-visory authority was introduced. Any remaining bank deposits from foreign creditors were frozen. Foreign exchange control was also implemented, which would remain in place until 1958 (Kopper 2005, p. 7 et seq.).

Despite rising unemployment, the Chancellor in office at the time, Brüning, implements austerity measures. Taxes are increased and spending is cut, escalating the crisis. While the salary and wage cuts that ensue do manage to make German export products more competitive, other nations have long since erected import barriers to protect their own economies. However, the high unemployment levels cannot be attributed to the global economic crisis alone. Rationalisation measures also take their toll by replacing labour through capital invest-ments. The rising number of jobless, which surpasses the six million mark in Germany at the beginning of 1932, fuels radical political groups, namely the communist party on the left and the Nazi Party on the right of the political spectrum. At this point in time, the communists are able to point to the success of the Soviet Union model under the leadership of Joseph Stalin, which has managed to expand its economy while shielding it from the distortions of the global economic crisis (Blaich 1994, p. 75).


vHand-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, the global economic crisis translates into lower cargo volumes and declining earnings. Deferred freight payment sees increas-ing payment problems and defaults that the Bank manages to cope with successfully, as the 1929–30 Annual Report (01 July 1929 to 30 June 1930) attests: “Despite the almost unprece-dented payment difficulties plaguing the German economy, the freight balances owed to us have generally been collected without issue, and arrears never exceeded the levels of the last business year by any significant degree. Payment stoppages by shippers were more frequent than before, but our credit protection enabled us to realise our claims within a short period of time in nearly every case, so that no noteworthy defaults occurred”. As the economic crisis escalates, the Bank’s deferred freight payment business declines by roughly 20% in the 1930–31 reporting year (01 July 1930 to 30 June 1931) and by another 26.9% in the year that followed (01 July 1931 to 30 June 1932). But the Bank remains unscathed by large-scale defaults, “although we have had to resort to collateral more than in the past” (Annual Report 1931–32).

Schenker, which has been one of Deutsche Verkehrs-Kredit- Bank’s major borrowers, does not fare as well in the crisis. The economic crisis leaves Schenker unable to pay back its loan. Confronted with this situation, Deutsche Reichsbahn decides to acquire Schenker Germany through its holding company Deutsche Verkehrs-Kredit-Bank in 1931. The outstanding loans are converted into shares in Schenker, and the remainder is ac-quired directly (Mierzejewski 1999, p. 347–348).

Because reparation creditors had been told repeatedly of Germany’s difficult economic and financial situation when discussing reparation payments, the takeover has to be kept secret. The Chancellor at the time, Heinrich Brüning, writes in his memoirs that “the Reich government was practically pre-sented with a fait accompli with the Schenker contract. Only after the Reichsbahn had signed was the government told that the Reichsbahn had effectively held a controlling stake in Schenker for years” (Brüning 1970, p. 259). “Before the reparation issue was resolved, no one, under any circumstances whatsoever, could talk to anyone, including individual members of parliament, about the fact that the Reichsbahn had secretly acquired Schenker

and Behala (the company operating the inland ports of the City of Berlin). If any of the reparation creditors had found out at that stage that the Reichsbahn had such significant reserves – and for that length of time – it definitely would have been forced to continue paying the share of reparations demands that had been tied to it” (Brüning 1970, p. 258). In order to ensure that the transaction is kept confidential, a complex structure is adopted with Deutsche Verkehrs-Kredit-Bank holding the Schenker shares on trust for the Deutsche Reichsbahn. Despite isolated rumours that emerge and reported by the press, the contract of sale is kept a secret until 1938 (Matis/Stiefel 2002, p. 25).

The Brüning government constantly strove to minimise repara-tion obligations throughout its tenure, which it succeeds in doing under the Young Plan, the successor to the Dawes Plan. At the beginning of 1929, an expert commission begins work in Paris under the stewardship of Owen D. Young, who is officially appointed in May 1930 with retrospective effect to 1 September 1929. He defines a new total amount, changes the payment schedule again, and releases Deutsche Reichsbahn from its payment obligations (Ambrosius 2005, p. 322 et seq.). This also marks the end of the Railway Commissioner and the four foreign representatives on the Board of Directors. However the Reich government starts attempting to exercise greater authority over the Board of Directors (Siemens 1962, p. 272 et seq.). In August 1931 – shortly after the height of the banking crisis in Germany – US President Hoover’s proposed debt moratorium enters into force, suspending Germany’s reparation payments for a full year due to the country’s dire economic situation. Finally, at the Lausanne Conference in July 1932, all reparation payments are cancelled, with the exception of a deferred one-time payment.

While the fact that Schenker has been taken over by the Reichs-bahn is being kept secret, a separate rail forwarding contract is signed between Schenker and the Reichsbahn in 1931 that becomes the subject of intense public debate. Under this con-tract, Schenker’s help is used to change tariff structures and the costs of truck feeder services into and out of train station freight offices. The ultimate goal is to make rail more attractive than road haulage, which has expanded. This contract between Schenker and the Reichsbahn was seen as a positive develop-

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xLetterhead 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).


hThe world economic crisis led to huge unemployment in Germany:

the picture shows a large group of unemployed people outside an

employment agency in Berlin; on 4 May 1932, payment delays triggered

mass gatherings and unrest amongst the unemployed.

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 by British economist John Maynard Keynes. Shortly before his term in office comes to an end, a job creation programme of modest scope is proposed but ultimately not adopted. The job 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 December 1932. And though the programme’s scope is slightly larger, it remains small. To implement the first job creation programme under the Reichsbahn’s auspices comprising 280 million Reichsmark, a company called the Reichsbahn- Beschaffungs GmbH [Reichsbahn Procurement Company] is established in 1932 as a wholly owned subsidiary of Deutsche Verkehrs-Kredit-Bank. The Bank provides the Reichsbahn with the necessary funds for the programme, and receives financing from the Reichsbank (Annual Report 1932–33). Under the govern-ment of Chancellor von Schleicher, who holds office for only two months (03 December 1932 to 30 January 1933), the ground-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).

He is appointed Chancellor on 30 January 1933 by President Paul von Hindenburg. In the runup to the appointment, meetings take place between Hitler and conservative politicians about working together to form a coalition government. An important secret meeting also is held on 4 January 1933 in the Cologne home of Kurt von Schröder, who later becomes Chairman of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank. He works “with tremendous ambition and without scruple […] to secure a leading political position amongst the banking elite” (Kopper 2005, p. 42). A number of conservative politicians do become members of Hitler’s first cabinet, but it is not long be-fore they outlive their usefulness.

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1933

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 of work at the Bank? Yes, I remember my first day of work at the Bank particularly well, because I showed up wearing shorts. I was only 17 and totally wet behind the ears. Naturally it was immediately apparent from the way the other employees looked at me that I was not properly attired. I didn’t offer a repeat performance. Back then, things were generally more formal and strict. You have to imagine that authorised officers were practically demigods 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.

Karl-Heinz Boldt, born on 03 February 1920, began a traineeship at the Bank in 1937 but was forced to leave before completing it, due to the war. In 1949 he was able to rejoin the Bank in Frankfurt/Main. In 1951 Mr Boldt attained power of attorney status, before becoming an authorised officer (Prokurist) in 1959 and later a departmental director in 1963. In 1970 he was appointed director and in 1972 he was invited to join the Bank’s Board of Managing Directors, where he remained until his retirement in 1985.

Ten quesTions for

karl-heinz BolDT


How did the politics of National Socialism impact the Bank?I have a negative memory of two bank employees who wore the so-called Gold Party Badge with great pride because it was for party members with a membership number below 100,000. They were kowtowed to and were practically more important than the Board of Managing Directors. And anyone who wanted to make management had to be a party member.

What training phases did you undergo and when did you finish your apprenticeship? The training period lasted two and a half years, and my very first post was in Accounting. Then I was sent to other departments. 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, as I already mentioned. But once I earned my first pay check I quickly felt more at home. I had just hit the two-year mark in my apprenticeship programme when I was drafted into the army in October 1939.

And what happened then?In 1940 I went to Norway, which was occupied by the Wehr-macht – the German armed forces – that year as is widely known. In Norway I met my wife, who was originally from the Berlin area, and we married in 1944 in Oslo. She returned home to be with her parents – her father was a forest ranger – and I stayed in Norway right through the war. Then, just like everyone else in the Wehrmacht, I was sent to an internment camp; finally, an English transport ship brought me to Hamburg. I lived with my aunt for a little while in the British zone before going to look for my wife in Berlin. By the time we reunited, we had ended up in Magdeburg in the Soviet-occupied zone. That was 1946.

Did you find work there?Yes I got work at the Eisenbahnverkehrskasse, the East German Railway Pay Office – sort of the newly founded successor to Deutsche Verkehrs-Kredit-Bank, which the Soviets had closed. I met three or four former banking colleagues there. At the Eisen-bahnverkehrskasse, we just worked on deferred freight payment. My wife and I decided to flee to the Western occupation zones of Germany, and we reached Frankfurt/Main in 1949, which was in the American zone. And Deutsche Verkehrs-Kredit-Bank had already started doing business for the zone in Frankfurt. I contacted them and was able to start in Accounting a short while later.

What sort of responsibilities did you have in the years that followed before you were appointed to the Board of Managing Directors in 1972?I always specialised in cash management, in investing and administering Bundesbahn funds. Almost all of my colleagues wanted to become branch managers. I wasn’t interested in that. I always wanted to work at the head office, to be at the centre of the decision-making.

What do you think of the way the Bank has developed since you retired? I have to pay Mr Driese an enormous compliment because he has driven the Bank forward every year since he took over as CEO, and the Bank has performed very well. There is just no comparison between the Bank today and the old public-sector Deutsche Verkehrs-Kredit-Bank. But on the other hand, one could say we might never have made it so long without the public sector.

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

hPortrait of „Verkehrs-Kredit-Bank as the Reichsbahn banking department“,

shown in Deutsche Reichsbahn‘s 1932 calendar


Three steps swiftly lead to Nazi dictatorship after 30 January 1933. The first is the Reichstag fire emergency order passed by the President in the wake of the Reichstag fire of 27 February, making it legal to prosecute opposition parties. The second step is the 5 March re-elections in which the Nazi party wins 43.9% of the vote but falls short of the absolute majority required, which had been seen as a virtual certainty. However, with the help of the conservative German National People’s Party (Deutschnationale Volkspartei, DNVP), which holds 8% of the vote, the Nazi Party is able to form a government. The third and decisive final step is the Enabling Act of 24 March 1933 which vests power in the government to pass legislation without the consent of parliament and without the President’s signature. With this, Parliament is completely shut out from the process of legislating, leaving Hitler with dictatorial powers which he immediately takes advantage of. Political parties are forbidden and political opposition is violently stamped out.

When Hitler takes office, there are high expectations about solving the problem of unemployment. First the job creation programme prepared by the Schleicher government is imple-mented, albeit with an incremental budget for military spend-ing. Other measures follow, including the decision to build national highways. To execute the plan, a company by the name of Reichsautobahnen is founded. Detailed plans for a network of national highways, which had already been developed over the last several years, can now be used. Both Reichspost (the German state postal service) and Reichsbahn also introduce some of their own job creation programmes that increase the number of contracts awarded to private-sector companies (Humann 2011, p. 67 et seq.). Deutsche Verkehrs-Kredit-Bank (through its wholly-owned subsidiary, Reichsbahn-Beschaffungs GmbH) provides financing for additional Reichsbahn-related job creation measures that total 560 million Reichsmark. To cover the financing requirements of constructing the highways, Reichs-autobahnen-Bedarfs GmbH [Reich National Highway Company]

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).

From 1933 onwards, the defence sector develops relatively quickly. With the expansion of the German air force and the reintroduction of conscription, Germany deliberately breaches various provisions of the June 1919 Treaty of Versailles. The international community is provoked further when the German armed forces, the Wehrmacht, march into the demilitarised Rhineland in 1936. Just one year before, the population of the Saar region, which had been under the control of the League of Nations since 1920, had voted to become part of Germany. With the 1936 Winter and Summer Olympic Games being held in Germany, the country attempts to create the impression of a peaceful nation. At the same time, political relations with Mussolini’s Italian fascists are developed, and support is provided to fascist Franco troops in the Spanish Civil War. In March 1938, German troops march on Austria and prepare to annexe the country into the Reich. In 1938 Hitler demands that Czechoslovakia cede Sudetenland (principally comprising the northwestern, ethnically German provinces of Bohemia and Moravia) to Germany. After Great Britain and France eventually give in to his demands at the September 1938 Munich Con-ference, Czechoslovakia is invaded and the land is divided. In August 1939 Germany and the Soviet Union sign a treaty of non-aggression, which also includes provisions for claiming areas of interest in Eastern Europe.

The German attack on Poland on 01 September 1939 signals the start of WWII. Poland is occupied and divided by Hitler and Stalin (in 1940 the Soviet Union also occupies the three Baltic republics). Germany’s military power initially seems boundless. During 1940 German troops occupy Denmark, the Netherlands, Belgium and Luxembourg. In June 1940 the French army sur-renders. Air raids on Great Britain begin. In 1941 Yugoslavia is defeated, Greece is occupied and the invasion of the Soviet Union begins. The tide turns when the United States enters the war after the bombing of Pearl Harbor in December 1941 by the Japanese, and German troops are defeated at the Battle of

1933 –1945The Bank during the nazi regime

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Stalingrad, which finally ended in February 1943. From that point onward the Wehrmacht retreats, under attack from Allied troops and resistance groups in occupied countries. The carpet bombing of German cities escalate in 1943. Allied forces launch the invasion on the beaches of Normandy on 06 June 1944. While the American and British troops zero in on Germany from the west, Soviet forces reach Berlin in April 1945. The final battle for Berlin ends on 02 May, and on 08 May 1945 Germany declares its unconditional surrender.

Because military production is given top priority after Hitler seizes power, state intervention in the economy increases steadily from 1933 onwards. Industrial cartels are promoted and the state begins investing in companies, naturally showing a preference for the defence sector. Various state measures (e.g. subsidies) put pressure on companies to shift their research and production focus in the desired direction. Coordinated state targets are set for the production of fuel, rubber and synthetics. As control over state and society inexorably tightens, new administration structures emerge, and existing ones are devel-oped further. Administration and defence generate new jobs. State employment measures, including mandatory service and the construction of the national highway network and air raid bunkers, yield new jobs. Military spending is financed with debt. Extensive wage and price control measures prevent the increased supply of money from leading to inflation (Ambrosius 2005, p. 331 et seq).

As Germany develops a wartime economy, the financial exploita-tion of defeated and occupied countries plays an important role from 1939 onward. In addition to agricultural products and raw materials vital for Germany’s military sector, local production plants are seized and expanded by German companies. The use of forced labour, prisoners of war and concentration camp prisoners is also a component of the German war economy. Relying on these measures more heavily within Germany frees up more soldiers to be called away to war. By May 1945, there are roughly 370,000 forced labourers in Berlin while the German population of the city has dropped to 2.6 million (Pagenstecher/Buggeln 2013, p. 127). Production planning is continuously improved and processes are rationalised so that the output of military goods – even towards the end of the war in 1944 – is further increased (Ambrosius 2005, p. 347 et seq.).

In addition to the war, Nazi leaders target the persecution, expulsion and mass execution of Jews and other minorities. Directly after Adolf Hitler seizes power, the persecution of Jewish citizens begins, even though many people had believed that “Nazi anti-Semitism was only propaganda leftover from the NSDAP campaign, and would eventually lose political currency. They did not understand that radical anti-Semitism was one of the core elements of National Socialist politics, binding together the fragmented political ideology of National Socialism” (Kopper 2005, p. 50).

vAdolf 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.


The involvement of the Reichsbahn in the German Reich’s policies concerning Jewish fellow citizens can be summarised as follows: the Reichsbahn begins by dismissing Jewish civil servants and employees; it then organises boycotts of the Reichsbahn’s Jewish suppliers and acquires Jewish property under the Aryanization programme. Gradually Jews are no longer allowed to use passenger trains or be present in train stations. Over the course of the war, forced Jewish labour (particularly in railway construction) is used. The Reichsbahn’s most extensive involvement in the crimes of the Nazi regime ultimately concerns its planning and operation of special trains to deport Jews to concentration camps (Gottwaldt 2011).

The Reichsbahn is not alone; in every other sector of the economy, Nazi policies targeted against Jews are generally implemented without resistance. Members of the NSDAP and associated organisations provide support at the outset. Party members who had organised themselves within companies 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 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).

On 7 April 1933, NSBO members are also at work at Deutsche Verkehrs-Kredit-Bank. They dissolve the three-person Board of Managing Directors – Ernst Schlesinger and Walter Prerauer are both of Jewish decent – and replace it with a single Nazi Party member to serve as Managing Director. They justify the move by accusing the Board of having perpetrated some form of fraud, an accusation that naturally has no basis in reality (Gottwaldt 2011, p. 87). Ernst Schlesinger emigrates that same year to London where he begins working at Barclays Bank, while Walter Prerauer flees to the United States (as recalled by Fritz Bergner, DVKB Gazette No. 2/87). The non-Jewish member of the Board of Managing Directors, Richard von Schaewen, does not return to the Board and withdraws from banking entirely. Dr Max Martin Schlenker, Dr Karl Richter and Alfred Stegner eventually take their place, the latter being replaced by Dr Hermann Jaeger in 1937. Schlenker leaves in 1939, with the remaining members staying to manage the Bank throughout the war.

xBerlin inner-city traffic in the 1930s: Potsdamer Platz

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Shortly after Hitler seizes power, the Law for the Restoration of Professional Civil Service (Gesetz zur Wiederherstellung des Berufsbeamtentums) is passed on 7 April 1933, which makes it legal to fire the majority of Jewish civil servants. Only Jewish civil servants who have been in office since before WWI are permitted to keep their jobs due to a special dispensation clause. Later, in September 1935, the entry into force of the Nuremberg Laws will remove this exception (Kopper 2005, p. 37). With an executive order dated 4 May 1933, the Law is expanded to apply to all workers and employees in the public sector or at companies in which the state has a controlling stake (Kopper 2005, p. 53). The Law for the Restoration of Professional Civil Service does not apply to private companies. In non-Jewish businesses, however, a wave of rising political opportunism puts increasing pressure on Jewish employees to quit their jobs. Moreover, businesses favourably inclined to Nazi policies terminate their business relationships with Jewish businesses. State-owned companies and agencies cease placing orders with private Jewish companies. Ultimately, Aryanization prevents Jewish enterprises from doing business completely.

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 Germany as a British Officer and lobbies for Deutsche Verkehrs- Kredit-Bank’s ability to continue trading in the British and American occupation zone (Documents 7–8; 10–13).

Hitler’s regime immediately seeks to exert greater influence over the Reichsbahn after coming to power. One of the attempts made to cement this influence is the establishment of a Liaison Staff for Reichsbahn Issues (Führerstab Reichsbahnfragen) by the Nazi Party in May 1933. The director of this Liaison Staff, who by virtue of the position is the interface point between the Reichsbahn and the Party, is Wilhelm Kleinmann, who goes on to become deputy general director of the Reichsbahn after July 1933 (Gottwaldt 2011, p. 94–96). A series of politically motivated changes take place at the Reichsbahn’s Board of Managing Directors level and below. Ludwig Homberger is an exception, as he continues to serve as the Director responsible for Law and Finance from 1931 onwards. Despite the fact that he is Jewish and the object of constant hostility, he is kept on the Board because he is deemed irreplaceable in his area of expertise (Gottwaldt 2011, p. 104–106).

k

Headquarters of Deutsche Verkehrs-Kredit-Bank

in Berlin (from 1936 to 1945) – the building

at Unter den Linden 10 xDeutsche Verkehrs-Kredit-Bank bureau de change at Munich’s central station


There are also personnel changes at the Board of Directors of Deutsche Reichsbahn. Over the course of 1933, individual members, including the Jewish industrialist Paul Silverberg, are forced to relinquish their positions on the Board of Directors. Just as at other public companies and administrations, the positions created by attrition are filled gradually by devotees of the new regime. This is precisely how Kurt von Schröder is admitted into the Board of Directors. For a time, Carl Friedrich von Siemens remains Chairman of the Reichsbahn Board of Directors. Although he is an important industrialist, he is deemed unreliable by the Nazi regime due to his democratic political views. In 1933 Otto Fischbeck retires from his role as Chairman of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank, of which he had been a part since its founding in 1923. Carl Friedrich von Siemens becomes Supervisory Board Chairman of the Bank in his place. In 1934 Carl Friedrich von Siemens is forced to give up his position as Chairman of the Reichsbahn Board of Directors, which he has held since 1924 (Gottwaldt 2011, p. 73–80). One 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).

The Nuremberg Laws enacted in 1935 mark the final blow for any remaining Jewish employees of the Reichsbahn. All Jewish civil servants are forced into retirement. Jewish employees are dismissed. Now Ludwig Homberger, Director of Finance and Law at the Reichsbahn, is also let go; he subsequently relocates to the USA. His successor is Alfred Prang, who retains the position through the war, until 1945. Beginning in 1941, his activities extend to Deputy Chairman of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank. After the war, he continues his career on the Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank in Frankfurt/Main. Alfred Prang is amongst the three Ministerial Directors who “demonstratively (wore) the NSDAP party badge because they joined before the 1 May 1933 membership freeze” (Gottwaldt 2011, p. 215). The freeze was imposed after membership exploded when Hitler’s rise to power in January 1933 prompted a wave of people to join, and the March 1933 Reichstag elections sparked another round of new members. The membership freeze is not lifted until 1937.

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In May 1936 the head office of Deutsche Verkehrs-Kredit-Bank relocates to the impressive office building at Unter den Linden 10, where Schenker’s executive office used to be located. Their office is forced to move to another location in Berlin under an order by the Supervisory Committee, which had been appointed by the Reichsbahn after the Schenker takeover (Matis/Stiefel 2002, p. 44–45).

In 1937 the special legal position of the railway changes when it is once again absorbed into the state as Deutsche Reichsbahn on 30 January. The integration of the Main Administration means that ownership and operations are once again in the same hands. Julius Dorpmüller remains General Director, but takes the place of Reich Transport Minister Paul von Eltz-Rübenach upon his retirement. The former Deputy General Director Wilhelm Kleinmann becomes State Secretary, and other former members of the Management Board become Ministerial Directors. The Board of Directors (Verwaltungsrat) as an executive body is dissolved and replaced by an Advisory Board with a consultative function chaired by the banker Kurt von Schröder (Gottwaldt 2011, p. 204 et seq.).

In 1937 Deutsche Verkehrs-Kredit-Bank has 22 branches in the German Reich including the head office in Berlin. The network of bureaux de change comprises 39 locations. Some are the result of borders that were redrawn at the end of WWI. These include bureaux de change in Beuthen, Gleiwitz and Hindenburg at border crossings that came about after part of Upper Silesia went to Poland. In Gleiwitz on 31 August 1939, a Polish attack on a local broadcaster is staged that is used as a pretence to attack Poland, which begins on 1 September 1939 and marks the beginning of WWII.

Due to a large portion of West Prussia and the Poznan Province being ceded to Poland, East Prussia was isolated from the rest of the German Reich after the end of WWI. For train travel through the Polish corridor separating the Reich from East Prussia, various routes are established for which the Reichs-bahn has to pay transit fees to the Polish State Railway. Schnei-demühl, Neu-Bentschen and Marienburg, where Deutsche Ver-kehrs-Kredit-Bank also operates bureaux de change, are important border railway stations for rail traffic between the German Reich and East Prussia via the Polish territory in 1937. At this stage the bureaux de change business is still subject to the foreign exchange control introduced after the financial crisis of 1931, which means that there are still limits to the amount of Reichsmark that may be exchanged in international travel. Inter-state travel treaties govern the precise amounts (DVKB Gazette, No. 12, 1962). Only in 1936 – the year of the Olympic Games in Germany – the bureaux de change business posts better finan-cial results.

In 1937, 64.5% of the Reichsbahn’s freight income is settled through the deferred freight payment business. Stabilising the price of Reichsbahn securities is another important business area for the Bank (Annual Report 1936–37). Over the course of 1937, the Annual Report is also brought into line with the calendar year.

In 1938 Austria is invaded and annexed into the German Reich. The central office of the Austrian National Railway is dissolved, and the railway lines are absorbed into Deutsche Reichsbahn. Some of the lines are transferred to the Reichsbahn divisions in Augsburg and Munich, the remaining portion is taken over by Reichsbahn divisions in Vienna, Linz and Villach. Deutsche

vOffice 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


vAnnual report of Deutsche Verkehrs-Kredit-Bank (1943)

Verkehrs-Kredit-Bank establishes a branch in Vienna and takes over the deferred freight payment business on 1 January 1939 that had been handled by the Wiener Giro- und Cassen-Verein, and the Bank becomes responsible for managing the funds of the former Austrian National Railway, which has become part of the Reichsbahn. The operation of the lines in the occupied Sudentenland is also transferred to the Reichsbahn, which means that they fall under the Reichsbahn divisions in Oppeln, Breslau, Dresden and Nuremberg. The network in the newly created Protectorate of Bohemia and Moravia is placed under the supervision of the German Reich (Gottwaldt 2011, p. 261 et seq. and the Annual Report 1938).

Aryanization represents the climax of the exclusion of Jewish business people from the economic arena. German banks also participate in the Aryanization of Jewish assets. Some acquire Jewish banks and investments. Others act as brokers, helping businesses in other sectors to acquire Jewish companies, prop-erty and other assets by providing credit (Kopper 2005, p. 6). Deutsche Verkehrs-Kredit-Bank has been presented with find-ings in a report by the Austrian Historical Commission that the expansion of the Bank’s business activities after the annexation of Austria and the expansion of the bureaux de change network to eleven locations entailed at least two cases of Aryanization (Melichar 2004, p. 130–131).

As noted in Deutsche Verkehrs-Kredit-Bank’s Annual Report for 1938, ideology was fostered amongst employees through a variety of measures, as at every company: “As in the past business year, we are making every effort to deepen our com-pany community. Our fellowship events and company roll-calls 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.

In 1938 the first larger-scale deportations take place. At the end of October, roughly 15,000 Polish Jews are removed from the Reich and sent to Poland. After the Jewish pogrom on 9 Novem-ber (known as the Kristallnacht) more than 20,000 Jews are transported to different concentration camps by rail, with the majority of them being released several weeks later. This movement, called the Rath Aktion, as well as an escalation of other measures designed to repress Jews in their day-to-day lives, lead to a final wave of emigration that lasts until the war begins on 01 September 1939. Very few people are able to leave the country legally after that point. In October 1941, Jews are forbidden to leave and deportation to the east begins. Only in exceptional cases do people manage to emigrate, illegally or even legally (Gottwaldt 2011, p. 292–303).

After WWII begins, part of Poland is annexed into the German Reich after occupation. The railways lines in these areas are incorporated into the Reichsbahn, expanding the deferred freight payment activities of Deutsche Verkehrs-Kredit-Bank. A branch is founded in Poznan on 01 December 1939 for this purpose. The administration of the remaining occupied area of Poland is undertaken by the so-called General Government located in Krakow. The rail network in this area falls under the administration of the General Directorate of the East Railway (Generaldirektion Ostbahn). In 1940 the Verkehrsbank Ost GmbH is founded to offer similar services to those offered by Deutsche Verkehrs- Kredit-Bank. While the Bank is not involved in its founding, it offers the expertise of trained staff as support. In occupied France in 1940, a new bank branch in Strasbourg is founded after the Reichsbahn takes over the operation of the railway lines in Alsace-Lorraine (cf. Annual Reports 1939 and 1940).

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While the Bank’s deferred freight payment business increases after the war breaks out as the Reichbahn’s network expands, the bureaux de change business falters: 17 bureaux de change have shut down by the time 1939 draws to a close. Two new bureaux de change are opened in the Polish city of Lodz (now Litzmannstadt) and in occupied Gdansk (Danzig) that same year (Annual Report 1939). In November 1941, 16 of the 37 existing bureaux de change are “temporarily closed” while others have reduced opening hours.

After the war begins in 1939, employees of Deutsche Verkehrs- Kredit-Bank are called to serve in the war, which creates widening gaps in staffing levels. These shortfalls are filled with employees from closed bureaux de change offices until roughly 1941, after which point more employees are called away than there are people to take their place. As the end of the war draws near, the Bank’s business activities are increasingly curtailed by Allied bomb raids on German cities. An increasing number of branches are bombed out. Josef Hartmann, an employee at the Cologne branch office, wrote at the time in an issue of the company gazette in 1962 that “the first bombs 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

Einschränkung handelsrechtlicher Bekanntmachungen während des Krieges] of 20 October 1943 prohibits, among other things, the publication of the annual financial statements (Reichs-gesetzblatt no. 92 of 21 October 1943).

On 08 May 1945, the war ends in Europe with Germany’s surrender. WWII then concludes when Japan surrenders on 2 September 1945. Most Deutsche Verkehrs-Kredit-Bank branches and offices are in ruins. Among the few Bank build-ings that survive the war in relatively good condition is the head office at Unter den Linden 10 in Berlin. However, it lies in Soviet- occupied Berlin. Numerous business documents are destroyed, that is if they have not already been shifted to other locations. Of the active staff during the twelve years of the Third Reich, some are no longer alive, having fallen in battle or been lost in air raids. Others are missing or prisoners of war. In a list published on the Volkstrauertag (Day of National Mourning in Germany) in 1961, (DVKB Gazette No. 9/1961) 93 people are listed as dead and 14 as missing. Of the soldiers who survive the war, many only return after 1945, some released from prisoner of war camps with injuries.


hBerlin in ruins, 1945 (Leipziger Straße/Leipziger Platz)

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

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hCurrency reform in West Germany – with effect from 21 June 1948,

the „D-Mark“ replaces the old Reichsmark in the Western sectors


The Potsdam Agreement forms the basis of Germany’s further development. In it the Allies agree to certain goals, including the democratisation, demilitarisation, denazification and decen-tralisation of Germany. After Germany has been divided into four occupied zones, it quickly becomes clear that the occupying forces have very different ideas about how to achieve these goals. In the western zone, new states begin to be formed in 1946 that are later to become the federal states of the Federal Republic of Germany. Regional parliaments are constituted in these states, and the first free elections since 1933 are held. In 1947, the USA introduces the Marshall Plan, a programme designed to reconstruct Europe’s economy, which the USSR rejects for its sphere of influence. This represents an early signal of the beginning of the Cold War that divides Europe with an Iron Curtain, marking the border where two irreconcilable ideologies collide. The Americans and British in particular see the strength-ening of Western Germany as a way to counter the Soviet Union’s growing power in Europe. They agree to merge their occupied zones to create an Combined Economic Area (called the Bizone) in early 1947. German politicians from the newly formed democratic parties are recruited to the administration.

The biggest challenge lies in getting the economy running again. A significant portion of manufacturing and production facilities are still in place, despite the damage sustained in the war and the dismantling required for reparation purposes. There are still substantial raw materials left over from before the war. But money has lost its value. Because the German war effort was financed through state debt, inflation had been lying in wait under the veneer of state-mandated price-fixing. After the war ends, the inflated money supply meets with a scarcity of goods. The Reichsmark no longer has any buying power. The only thing of value left to individual citizens are ration coupons for food and other natural products. Cigarettes also are an important bartering currency; bartering is also common for companies

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 repairing their production facilities. In order to bring an end to the excess currency in circulation and to put production back on track, the Deutsche Mark is introduced on 20 June 1948, with a massive redenomination. Because the amount of the new currency in circulation has been attuned to the low supply of goods available, the new currency is accepted immediately. Companies recommence production and stock reappears on store shelves which had been kept empty (Buchheim, 1998, p. 92–99).

Shortly before that point, on 18 June 1948, Deutsche Verkehrs- Kredit-Bank has its 25th anniversary, but there is no celebration. The employee gazette reports that “the 25th anniversary of the company’s founding, three years after the end of the war and just a few days before the currency reform, came at a time when no one had much of an appetite for remembering the past, as the challenges of daily life demanded everyone’s full attention” (DVKB Gazette No. 16/1963).

By implementing the currency reform in all three of the western occupied zones, the Bizone effectively becomes a Trizone, even though the Combined Economic Area does not officially extend to the French occupied territory until April 1949 (Wolf 1980, p. 17–21). The currency reform in the western zone heightens tension between the Western Allies and the Soviet Union. An immediate reaction to the development of the western zones comes in the form of the currency reform in the Soviet occupation zone on 23 June 1948. The very next day, the Soviet Union begins a blockade of the roadways and inland waterways leading to West Berlin, to which the United States responds by creating an Air Bridge to supply goods to people in West Berlin. This is the first open confrontation in the Cold War. Shortly thereafter the Western Allies in July 1948 begin to prepare for the creation of Western Germany as a country. The Federal Republic of Germany is born on 23 May 1949 with the promul-

1946 – 1949a new start in West Germany

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gation of the Grundgesetz (Basic Law, i.e. the constitution of the Federal Republic of Germany). In response, the German Democratic Republic (GDR) is created to the east on 07 October 1949. This year also sees the foundation of the People’s Republic of China, and of the North Atlantic Treaty Organization (NATO). While the Federal Republic sees itself as the sole legal successor to the German Reich, the GDR subscribes to the idea of two independent states descended from the German Reich. The difference in opinion of the two states shapes their relations going forward, and Germany remains divided for many years.

The political changes that occur between the end of the war and 1949 are reflected in changes taking place on the railways and at banks. First, independent administrative units are set up in all four occupation zones to continue railway operations. In the American occupation zone, the railway is managed (from 19 July 1945) from Frankfurt/Main, while operations are directed from Bielefeld (after 20 August 1945) in the British Zone and from Speyer (from 01 August 1945) in the French zone. When the American and British occupation zones merge to form the Bizone, a central headquarters is then established in Bielefeld for the railways, which is transferred to Offenbach in 1947 and then to Frankfurt/Main in 1953. In the Soviet zone, trains con-tinue to operate under the name Deutsche Reichsbahn until the fall of the GDR (Olten 2006, p. 92–93).

At the centre of the Western Allies’ post-war banking policy is the breakup of the large private-sector banks (Commerzbank, Deutsche Bank, Dresdner Bank). Banks that have a more local or regional business focus – such as the savings banks and cooperative banks – are less affected by the policies in the occupied West. The formation of successor institutions to the large private-sector banks is only permitted in the different occupation zones and the newly formed states that have emerged within them. These successor institutions oversee a defined geographical group of branches (Wolf 1980).

Deutsche Verkehrs-Kredit-Bank branch locations in the three western occupation zones are initially assigned to three different main offices: Frankfurt (American zone) Hamburg (British zone) and Speyer (French zone). The Saar region has a special status. While the Saarland is occupied by French troops, it is under the jurisdiction of the Allied Control Council and so is not part of the French occupation zone. An official sequestrator is appointed for Deutsche Verkehrs-Kredit-Bank’s Saarbrücken branch. The development of the Saar region is influenced for years to come by its political separation from Germany and its economic con-nection to France. The Saar region is tied to France economically by virtue of a customs and currency union, under which the French franc becomes the legal tender of the Saar region (beginning in November 1947). Only in 1957 is it politically reinte-grated with Germany, with economic reintegration following in 1959.

After the emergence of the Combined Economic Area, the two main offices of Deutsche Verkehrs-Kredit-Bank in Frankfurt and Hamburg are merged into a single head office in Frankfurt. The Bank’s business in the French occupied territory is not trans-ferred to the head office in Frankfurt until November 1951. On 1 June 1949 the Director of the Main Administration of the Reichsbahn in the Combined Economic Area tasks Alfred Prang with restructuring Deutsche Verkehrs-Kredit-Bank in the Com-bined Economic Area, including the French zone, and helping to manage the Bank (DVKB Gazette No.1/1969, p. 2). Fritz Haas provides him with support.

In the Soviet occupation zone, banks are immediately closed and nationalised by the Soviet Military Administration in Germany after the war ends. Later, new state-owned banks are formed with different remits. After the currency reform that takes place in the Soviet occupation zone on 23 June 1948, these banks are integrated into the German Notenbank [the central bank], resulting in a single-tier banking system in which the German


Notenbank serves as a central bank and a commercial bank for the entire financial system. Only for a brief while between 1968 and 1974, the two functions are separated and a two-tier bank-ing system exists. After 1974 this change is reversed and both the central bank and commercial bank functions remain under one roof, the GDR Staatsbank, until 1990 (Thieme 1998).

Deutsche Verkehrs-Kredit-Bank – which is located in the Soviet area of Berlin – does not escape the closure of the banks in the Soviet occupation zone. The Eisenbahnverkehrskasse (the Rail-way Pay Office) is formed as its successor institution, which is housed in the same building as the former head office – one of the only buildings to survive the war largely intact – on Unter den Linden.

The Eisenbahn-Spar- und Darlehnskassen branches in the Soviet Zone are also closed. While new Reichsbahnsparkassen [Reich Railway Savings Banks] are established in 1946, later absorbed into the state banking sector of the GDR, the Reichsverkehrs-bank is not permitted to resume operations as a central bank. For the Eisenbahn-Spar- und Darlehnskassen located in the three Western Allied occupation zones, the closure of the Reichs-verkehrsbank creates a liquidity problem when the cash deposited there before the war ended becomes inaccessible. Hence, Deutsche Verkehrs-Kredit-Bank becomes responsible for a liquidity management role in the Western occupation zones (Olten 2006, p. 98–104).

After the end of WWII, German soldiers begin to return home, the last of them arriving in 1955. Scores of refugees flood the western zones, either because they do not want to live in the Soviet occupation area of the Germany or because they have been driven from their former homes. All of these people grad-

ually have to be reintegrated into the economy, which proves challenging initially. For a while, the railway hires more people than required, which helps to cushion the social problems in the period immediately following the war (Kopper 2007). Begin-ning in 1950, this latent labour force forms the foundation for the Federal Republic of Germany’s economic boom.

Many of those returning from war naturally report to their former employers. Past employees of Deutsche Verkehrs-Kredit-Bank are among those who find work this way. Hans Raffler, who passed away on 16 December 1969, was one such person. The obituary recounts his life as follows: “Mr Raffler began working at DVKB in June 1926 in the registry of the Munich branch. 1939 he began military service. After being taken as a prisoner of war, Mr Raffler returned to the Munich office in August 1945 and found a position at his old workplace in the freight depart-ment. From 1945 to his retirement in 1961, he remained on the Works Council of the Munich office” (DVKB Gazette No. 41/1970).

There was a certain “elite continuity” in the transition period between National Socialism and democracy with regard to senior management. It could be found in every area of society, in political parties, law, administration, universities or academia and com-panies. Originally the Potsdam Agreement aimed at widespread “denazification” to purge the influence of National Socialism from every aspect of society. Denazification provided for five categories for affected people: (I) major offenders or war crimi-nals, (II) offenders, (III) lessor offenders, (IV) followers and (V) exonerated persons. Right at the outset, a large number of people were grouped into the first and second categories. As denazifi-cation moved on, especially in the American zone, numerous questionnaires were circulated and tribunals were held.

k

Overcrowded trains – a familiar picture

during the first post-war years

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Josef Hartmann, an employee of the Cologne office who resided in Bad Godesberg when the war ended, recalled of that time that: “gradually certain employees came back to work, and we had to set up shop in the barracks and work from there. The standard questionnaires had to be filled out and it wasn’t long before we heard from the military administration that three employees were dismissed with immediate effect due to their membership in the Nazi party. I intervened with the help of the interpreter, because they had been harmless followers” (DVKB Gazette No. 11 1962, p. 4).

The most spectacular outcome is undoubtedly the Nuremberg Trials, which pronounce judgement on some of the war’s most egregious offenders in 1946. However, denazification generally takes a very different course in the four occupation zones. Political tension between the Western Allies and Soviet Union quickly causes interest in pursuing denazification measures in the western zones to wane. The primary objective is to speed reconstruction, which means working together with people who held high-ranking management positions under the Nazi regime. In 1951 the Denazification Act in the Federal Republic drew an official close to denazification (cf. Wolfrum 2006, p. 27).

Julius Dorpmüller, who oversaw Deutsche Reichsbahn until the end of the war, is not interned. Instead he is tasked with managing the Reichsbahn in the American zone right away, though his death on 05 July 1945 prevents him from doing so.

At less high-ranking levels of the railway, denazification is not strictly adhered to out of the fear that operations would be impossible to maintain otherwise. The denazification of Reichsbahn civil servants is generally minimal: people are down-graded to followers, and allowed to remain in their roles. Only a few people are dismissed before then being re-hired a short while later. Even in the Soviet zone, former NSDAP members remain in service at the Reichsbahn despite the dismissal of a significant number of Reichsbahn civil servants. Only the first post-war Management board of Deutsche Bundesbahn succeeds at distancing itself significantly from Nazi legacy, but “there was not so much as the beginnings of a change in elites amongst high-level Reichsbahn civil servants” (Kopper 2007, p. 58). A similar development can be seen in banking after the end of the war, which means that “only the very worst black sheep on banking executive boards had to end their banking careers prematurely” (Kopper 2005, p. 5).

Alfred Prang, who was tasked with organising the structure of Deutsche Verkehrs-Kredit-Bank in the western zones, is also part of this continuity amongst the elite. In 1960 the employee gazette cites the typical reason used to justify his appointment: “until the fall of the Third Reich in 1945, Director Prang main-tained his excellent position at the forefront of the Reichsbahn without interruption, making him a man of indispensable expertise whom the military government then sent for only a few months later” (DVKB Gazette No. 1/1960, p. 2).

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).

vMovie poster of “Der Bruch“ (“The Break-in“)


An obituary published for Hans Schmückle (10 March 1891 to 29 June 1970) in the employee gazette provides another example of the career progression of someone returning from war. It states that “he was initially not permitted to return to his former job by order of the military government because he had been assigned to a defence post under the SS (the so-called “Protec-tion Squadron”, which was a paramilitary Nazi organisation responsible for many war crimes) as a high-ranking officer (Haupt mann) of the Wehrmacht and was also a Party member in 1937. Only in March 1948 was he fully rehabilitated by a tribunal, after compelling exonerating evidence had been submitted. This enabled him to return to the Bank, where he was welcomed back with open arms” (DVKB Gazette No 44–45/1971, p. 6). By the time he retires in 1957, Mr Schmückle had become Head of Credit at the head office in Frankfurt.

At Deutsche Verkehrs-Kredit-Bank, as at many other German companies, (cf. Grunenberg 2006), many people born in the 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

generation just mentioned. This same sentiment applies to critical events in the history of the company, as the words of a branch manager of Deutsche Verkehrs-Kredit-Bank make clear: “At our branch manager conferences, the most senior branch manager traditionally makes some closing remarks”. In April 1969, this honour falls to Fritz Bergner (*1903), who joined the head office in 1925. He had been asked to speak about the Bank’s history. Referring to the period of time after 1933, he says that: “in 1933, the era of this Management Board [meaning Managing Directors Schlesinger, Prerauer and von Schaewen who were decommissioned for political reasons], came to an end and an era began that I will not go into for obvious reasons, given the festive nature of our gathering. Although it is naturally clear to me that anyone tasked with writing the history of this company would have to address this period, it would be impor-tant to approach the topic properly with regard to whether it is intended for internal consumption or for circulation outside the company” (DVKB Gazette No. 40/1969).

vThe former headquarters of Deutsche Verkehrs-

Kredit-Bank are taken up by Eisenbahnverkehrskasse,

the East German Railway Pay Office

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hThe German “Wirtschaftswunder“: production of VW‘s „Beetle“

at Volkswagen‘s main Wolfsburg plant (1953)


Despite the amnesia experienced by large swathes of the popu-lation during the post-war period with regard to the Nazi era, the Federal Republic of Germany develops into a recognised democracy by 1949. Aside from the German economic ‘miracle’ (the so-called ”Wirt schaftswunder”) of the 1950s and 1960s, as Edgar Wolfrum notes, the true miracle is “how the former compatriots of Nazi dictatorship became citizens of a democracy” (Wolfrum 2006, p. 14). The “patriarchal democracy” of the first Chancellor, Konrad Adenauer, who embodies both authority and democracy, makes a decisive contribution early on. But it is the Wirtschaftswunder that facilitates the establishment of the modern welfare state, strengthening and stabilising the fledgling democracy (Wolfrum 2006, p. 53 – 54, p. 76, p. 87). Referring in particular to those who had begun their careers during the Third Reich, and had now found their place in a new state order, Wolfrum remarks that: “Integration into the new democratic state and the success they experienced in their personal and professional lives provided safeguards to prevent this democracy from being called into question or rejected” (Wolfrum 2006, p. 172).

Those brought into the world between 1920 and 1930 have a very special role to play, including later Chancellor Helmut Kohl (born 1930). When the war breaks out, they are either still children or young adults just beginning their careers. This age group, many of whom have suffered the loss of parents or other family members (in 1944 Helmut Kohl’s older brother, born in 1926, is killed in combat), devote themselves to work, in no small part to make up for lost time, and establish themselves as pillars of democracy.

The Wirtschaftswunder translates into strong economic growth. In the years between 1950 and 1960, the economy grows an average of 8.2% a year. Between 1960 and 1970, the annual

average is still 4.4% (Statistisches Bundesamt 2012, table 12.1, p. 321). At the beginning, the economy is able to take advantage of the existing workforce, enhanced by the many refugees and displaced persons that enter the Federal Republic during the period immediately following the war. As growth makes staffing shortfalls foreseeable, a decision is made to look abroad to fill the gap. In 1955 the first labour agreement is concluded with Italy and the first “guest workers” (as international employees are called under the arrangement) arrive in Germany in January 1956. Other labour agreements are then executed with Greece and Spain (1960), Turkey (1961), Portugal (1964), Tunisia (1965) and Yugoslavia (1968). Before the Berlin wall is erected in 1961, many qualified workers enter the Federal Republic from the GDR, who strengthen the labour market. Only in 1973, when the first oil crisis causes unemployment to rise, is a ban placed on recruitment from non-EC countries.

The period of time between 1950 and 1973 is one of important international political changes. The beginning of the period sees an end to colonialism – the formation of the Republic of India in 1950 is just one example. Decolonialisation is not, however, always a peaceful process, as the wars in Algeria and Indochina demonstrate. This period is also marked with an escalation of 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-guard their spheres of influence. The Soviet Union accordingly quashes the 1956 uprising in Hungary. In 1968, Soviet intervention brings an end to the “Prague Spring” in Czechoslovakia. The United States and the Soviet Union are brought to the brink of a new world war by the October 1962 Cuban Missile Crisis. After Fidel Castro assumed power in Cuba in 1959, the Soviet Union begins planning a medium-range missile station, which the United States regards as a threat. The crisis is averted at the eleventh hour. As a consequence, the United States strengthens its efforts to secure influence in South America. The Korean War (1950 – 1953) only a few years earlier already saw a confrontation between the two systems, with not only the USA and the USSR involved, but also the People’s Republic of China.

1950 – 1973The Bank during the “Wirtschaftswunder” – a reliable partner to Deutsche Bundesbahn, the German federal railways

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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 Bundes wehr (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).

There are also student protests in other countries. In France in particular, civil unrest amongst students leads to bloody conflicts with the police in 1968. Beginning in the late 50s, the civil rights 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.

hSigning of the Treaty of Rome, establishing the European

Economic Community on 25 March 1957

hFranco-German reconciliation – the Elysée Treaty (22 January 1963):

Charles de Gaulle and Konrad Adenauer


Willy Brandt’s election to Chancellor in 1969 marks a key turning point in the history of the Federal Republic of Germany and the beginning of a policy of détente. In 1950 the GDR had already recognised the Oder-Neisse line as the official border between Germany and Poland, to which the majority of the German Parlia-ment (Bundes tag) objected in a declaration against the recognition. Only under the Brandt government was the Oder-Neisse border accepted as the western border of Poland under the Treaty of Warsaw, though official recognition does not occur until the German-Polish Border Treaty, enacted after reunification. At the beginning of the 70s, a degree of détente enters relations between the United States and the USSR, aimed at ending the arms race.

At the same time, terrorists launch a new wave of attacks in an attempt to further their objectives. In Germany, members of the RAF are active. The 1972 Munich Olympic Games are targeted by radical Palestinians (eleven Israeli athletes are killed in an assassination attempt and a failed rescue operation). In 1977 RAF left-wing terrorism reaches its high point as a number of political

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 United Kingdom, 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 unification is 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 Germany and France. After the population of the Saar region vote in 1955 to be reunited with the Federal Republic of Germany instead of transitioning into a European territory, Germany and France sign the Saar Treaty on 27 October 1956 that lays out the individual steps to reuniting the Saar with the Federal Republic of Germany. Political integration of the Saar region into the Federal Republic takes place on 1 January 1957. On 6 July 1959 the currency is changed in the Saar region from the French franc to the Deutsche Mark, which must be exchanged at a specified rate.

In October 1973 – the year of Deutsche Verkehrs-Kredit-Bank’s 50th anniversary, Egypt and Syria launch the Yom Kippur War against Israel. In support, Arab members of OPEC initiate an oil embargo against nations maintaining friendly relations with Israel and increase oil prices. This leads to the first energy and eco-nomic crisis in the west. Just one year prior, the Club of Rome had released a study entitled The Limits to Growth which was sceptical of the continued expansion of the global economy. The economic crisis sparked by the drastic hike in the price of oil marks the end of the German Wirtschaftswunder which had fostered such tremendous economic growth throughout the 50s and 60s, as discussed at the beginning of this section.

hWilly Brandt kneels at the Warsaw Ghetto memorial

on 7 December 1970, having laid a wreath commemorating the

victims of the Warsaw Ghetto uprising – a symbol for détente

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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 Meeting on 20 December 1958, the three provisional board members are appointed regular Managing Directors. At this 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.

hThe oil embargo in 1973 triggers a serious economic and energy crisis in

Germany; the picture shows the Cologne-Bonn Federal motorway without cars,

during the Sunday motor vehicle ban imposed at the time


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, p. 6).hIn 1950, upon application by the German Federal Railways,

Alfred Prang (shown on top) and Fritz Haas are appointed as

a stop-gap Executive Board of Deutsche Verkehrs-Kredit-Bank

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On 01 July 1972, the half-monthly billing period that has been in place since the deferred freight payment procedure was first introduced is shortened to a ten-day period. In 1973 – the Bank’s 50th year – roughly 90% of Deutsche Bundesbahn’s freight revenue is billed with a total of 37,765 deferred freight settlement accounts. Over the years to come, however, it becomes clear that this business segment’s potential is by no means unlimited, as Deutsche Bundesbahn begins losing market share to road transport. In short, freight growth moves to the roadways.

As the principal banking partner of Deutsche Bundesbahn, Deutsche Verkehrs-Kredit-Bank provides a variety of services. Amongst other things, it is responsible for all of Deutsche Bundes-bahn’s payment flows in Germany and abroad. It is also respon-sible for covering Deutsche Bundesbahn’s short-term cash requirements, which arise almost regularly at the end of the month. The Bank provides Deutsche Bundesbahn with liquidity as required. This is drawn primarily from deposits from other banks and different investors. Where more liquidity is needed, Deutsche Verkehrs-Kredit-Bank can borrow on the money market. At other times, it invests Deutsche Bundesbahn’s excess liquidity on the money market. Especially at the beginning of the 1950s, Deutsche Bundesbahn needs a considerable amount of cash, for which Deutsche Verkehrs-Kredit-Bank turns to the money market. Deutsche Bundesbahn gradually reduces the debt it builds up at the Bank by later issuing “Bundesbahn bonds”. Deutsche Verkehrs-Kredit-Bank is involved in these issues, and also has responsibility for price stabilisation. This task involves purchasing Bundesbahn securities offered on the market to prevent price declines when necessary, and then selling them again when the market improves (DVKB 1972, p. 12–13).

The Eisenbahn-Spar- und Darlehnskassen in particular place their considerable volume of deposits with Deutsche Verkehrs-Kredit- Bank. Nevertheless, it is a long time before Deutsche Bundesbahn allows “the Association of Eisenbahn-Spar- und Darlehnskassen to take a seat on the Supervisory Board of its central bank,

Deutsche Verkehrs-Kredit-Bank” (Olten 2006, p. 125). It is not until the 70s that a representative of the association is invited to sit in on the Bank’s Supervisory Board meetings as a guest (ibid, p. 125–126).

Before 1966 the Bank’s involvement in the money market is primarily limited to borrowing. In 1967 it becomes a funding provider for the first time. This has to do with Deutsche Bundes-bahn’s improved liquidity situation: in addition to issuing Bundes-bahn bonds, it makes use of the large amount of liquidity available in the Federal Republic to take out long-term loans. This task revolves around “ensuring that the Bundesbahn’s intermittently large account balances are lucratively invested over the long term while also making sure that the Bundesbahn can always meet its financial demands during occasional phases in which it suddenly has higher liquidity needs” (Annual Report 1967, p. 9).

In addition to short-term loans extended to Deutsche Bundes-bahn, the Bank also extends loans to companies with which Deutsche Bundesbahn does business. It offers these businesses a wide range of lending services. This includes guarantees as well as increased and longer-term deferred freight payment. Increased deferred freight payment is advanced for freight debt spikes, which occur in certain industries during short periods, for seasonal reasons (such as the sugar industry’s sugar beet campaign in autumn). Extended deferred freight payment offers longer deferment periods for freight. Furthermore, the Bank offers investment finance to enterprises doing rail business with Deutsche Bundesbahn: these may cover, for example, ware-houses on railway property, private sidings, freight cars, unloading terminals, as well as heavy goods vehicles and passenger buses operated on behalf of Deutsche Bundesbahn. The Bank also provides loans to the leaseholders for smaller businesses on railway land, working capital loans for Deutsche Bundesbahn subsidiaries, construction bridge loans to railway housing asso-ciations and cooperative housing companies, and pre-financing for Bundesbahn suppliers (DVKB 1972, p. 8–10).

vAdvertisement for deferred freight payment (1950s)


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 in 1961, a new one is opened at Cologne-Bonn airport in 1970.

vDeutsche Verkehrs-Kredit-Bank bureau de change

at Hamburg’s central station (ca. 1957)

cDeutsche Verkehrs-Kredit-Bank bureau de change

at Bremen airport (ca. 1957)

hFlyer listing Deutsche Verkehrs-Kredit-Bank‘s bureaux

de change and their opening hours (1960)

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At various road border checkpoints new bureaux de change are opened: Weil-Otterbach (1950), Schwarzbach (1951), Stuben (1953), Kehl/Rhine bridge (1955) and Kiefersfelden (1968). Ferry links also prove to be attractive places to establish bureaux de change. In 1951 a bureau de change opens its doors at the Grossenbrode ferry station. In 1953 the first bureau de change opens on board a ferry, christened the “Deutschland”. In 1957 the “Theodor Heuss” ferry gets its second bureau de change (Biermann 1971, p. 25 – 28). In 1960 Deutsche Verkehrs-Kredit- Bank still operates bureaux de change along the inner-German border for rail travellers, namely in Bebra, Büchen, Helmstedt and Ludwigsstadt (Oberfranken), which focus primarily on exchanging Ostmark.

During the 1960s, the bureaux de change generate increased income primarily due to the increase in tourist travel to foreign destinations. The rising number of guest workers living in the Federal Republic is also an important customer group. During

their holidays, they frequently travel home, primarily by train in the 1960s, in later years by car. Increasing car and plane travel is a boon for business at bureaux de change at airports and highway border crossings.

In 1963, in the Bank’s 40th year, there are 52 bureaux de change and 13 currency exchange agencies. By early 1973, that number has increased to 56 bureaux de change and 20 agencies.

Sometimes, as in October 1966 at the Frankfurt central train station, the inauguration of new business premises can even be a major event. The 50 guests in attendance include the First President of the Deutsche Bundesbahn – Heinz Oeftering – “a member of the Board of the Directors of the Bundesbank [the German central bank], the Vice President of Landeszentralbank [the Bundesbank main office in the Federal State of Hesse], the President of the Chamber of Commerce, the City Treasurer, the Managing Director of the Banking Association of Hesse, many

The bureaux de change at the inner- German border are a part of the history of inner-German transit. While limitations were placed on transit before the two German states were founded, the restrictions increase substantially after their formation (cf. Kuhlmann 2012). Travel between the West and East comes practically to a standstill after the Berlin Blockade by the Soviets begins. The Helmstedt Agreement of 11 May 1949 reinstates rail transit. After the two German states are formed, restrictions increase again. The Decree on measures to be taken at the demarcation line

between the German Democratic Republic and the Western Occupied Zones of Germany [Verordnung über Maßnahmen an der Demarkationslinie zwischen der Deutschen Demokra-tischen Republik und den westlichen Besatzungszonen Deutschlands] of 26 May 1952 marks the beginning of extensive GDR efforts to secure the border to the Federal Republic. At border crossings for rail traffic, security technology at the border train stations is gradually enhanced to prevent people from fleeing from the east to the west. Passenger traffic is monitored by pass-

port checks and other measures. These measures are also implemented at bor-der crossings in rail traffic between West and East Berlin after the construction of the Berlin wall. Only after 1971 is an agreement reached between the Federal Republic (under the Willy Brandt govern-ment) and the GDR that facilitates private cross-border travel to some extent. The strongholds at the border train stations remain until reunification (Kuhlmann 2012, p. 40).

vExchanging GDR Ostmark at a bureau de change

of Deutsche Verkehrs-Kredit-Bank


well-known financial journalists (including the Editor-in-chief of the Börsenzeitung) and representatives of local and regional transport associations.” The employee gazette, with good reason, sees the guests as “an exceptionally high-calibre group of people for the inauguration of a train station bureau de change” (DVKB gazette no. 28/1966).

In the 50s, business activities are still largely influenced by foreign exchange control and exchange regulations. Only in 1958 are the limitations on the inflow and outflow of foreign currency lifted. But foreign exchange rate fluctuations persist. In order to prevent losses in the bureaux de change business and currency stock-piling, the timing of depreciation and appreciation has to be antici-pated as accurately as possible, which is not always possible. Every now and again the Bank also has to contend with new currencies. In 1960, for example, France introduces the “Nouveau Franc”, with the new unit replacing 100 of the old franc. Finland changes its currency in 1963 (Biermann 1971).

The variety of the different tenders requires extensive training to recognise counterfeit notes. Over time, different measures are implemented to improve security for the cashiers. In December 1957, the bureau de change at the Nuremberg central train station is selected to pilot a bullet-proof counter. In 1960 the Nuremberg counter set up is fully reinforced with bullet-proof glass. By 1967, 26 bureaux de change have similar set ups and by 1969 legislation is introduced requiring all bureaux de change to feature bullet-proof glass (DVKB Gazette No. 17/1964, Biermann 1971, p. 20 – 21).

Operating the bureaux de change network requires a lot of man-power. When Saturday ceases to be a business day for German banks, costs increase for Deutsche Verkehrs-Kredit-Bank. While

normal bank branches remain closed on Saturdays, bureaux de change remain open to service tourists. The increased staffing levels lead to higher personnel expenses. When the Eurocheque system is introduced in 1968, making it possible to get cash via cheques and bank cards, bureaux de change are faced with heavier workloads. The 1969 Annual Report describes the problem as follows: “Many bank card users go to our bureaux de change because of their convenient locations and the longer opening hours – particularly on weekends – to get cash with their cheques instead of using them for the purpose originally intended, namely cashless payments, etc.” (Annual Report 1969, p. 10). The Bank soon responds to the new system by introducing a transaction fee of 2 DM (roughly EUR 1) for cashing cheques. In subsequent years, the number of cheques being cashed again causes per-sonnel expenses to rise at the bureaux de change.

Deutsche Verkehrs-Kredit-Bank continues to make investments only with the consent of the Deutsche Bundesbahn. All of its investments relate to the rail sector. In its 1957 Annual Report, the Bank reports a 75% stake in the company Collico GmbH in addition to an investment in Transport AG (formerly J. Hevecke). Collico was founded by Karl Dahmen in Solingen in 1947; the name refers to a collapsible reusable transport box he invented, made of steel. These boxes are used in general cargo transport. Given a decline in general rail cargo, the importance of Collico boxes will diminish several years later. By 1961 the Bank also holds stakes in Deutsche Touring Gesellschaft mbH [a bus operator] and Deutsche Eisenbahn-Reklame GmbH [a company selling advertising space on railway property]. In 1973 the Bank acquires the travel agency Ameropa-Reisen GmbH, which specialises in rail travel.

vPunchcard processing centre at

Deutsche Verkehrs-Kredit-Bank‘s Frankfurt/Main

head office (1968)

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hThe Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank AG in 1973 –

from left to right: Dr Heinz-Dietrich Tettenborn, Alois Meyer, Karl-Heinz Boldt

hDeutsche Verkehrs-Kredit-Bank‘s Frankfurt/Main

head office (1965)

In 1960, the Bank’s executive management undergoes its first generational change. On 31 January 1960, Alfred Prang leaves the Board of Managing Directors when he reaches retirement age. He is followed by Fritz Haas on 30 June 1961, who also retires. Not long before, in 1959, the Bank was saddened by the unexpected death of Fritz Bohle. Dr Gerhard Wersche (from 1960), Dr Wilhelm Wetzmüller and Friedrich Körting (both from 1 July 1961) take their places. Over years to come, they will manage the Bank together for a decade. In 1970 the Board of Managing Directors again welcomes a new generation. Ministry Director Alois Meyer succeeds Dr Wersche in 1969. At the end of 1970, Dr Wetzmüller retires. He is succeeded by Dr Heinz-Dietrich Tettenborn on 1 January 1971. At the end of the same year, Friedrich Körting reaches retirement age and leaves the Board. On 01 January 1972 Karl Heinz Boldt replaces him. On 31 Decem-ber 1973, Alois Meyer also goes into retirement after four years of serving on the Board of Managing Directors. Dr Klaus J. Menche is named his successor (DVKB Gazette Nos. 41/1970, 44/1970, 45/1971, 57/1973).

In 1973, the Bank’s fiftieth anniversary, a new generation is also ushered in at the Supervisory Board level. On 30 June 1973, Bundesbahn First President Heinz Oeftering relinquishes his chairmanship, held since 01 October 1959, to his successor Wolfgang Vaerst (DVKB Gazette Nos. 55 and 56/1973). Throughout his many years of service, Heinz Oeftering had demonstrated a strong sense of connection to the Bank. He always made a point of attending the Bank’s events and business gatherings, including the opening of the new bureau de change in 1966 at the Frankfurt central station mentioned above. On Heinz Oeftering’s 65th birthday in 1968, the employee gazette remembers the dedication he showed since becoming Chairman of the Supervisory Board in 1959: “In the 38 Supervisory Board meetings that have since been held, Professor Dr Oeftering has not sent someone in his stead on a single occasion” (DVKB Gazette No. 35/1968, p. 3). And in a speech he gives in 1970, he himself says with regard to Deutsche Verkehrs-Kredit-Bank that it “is Bundesbahn’s holding company that always caused him the least amount of worry. And that is why he considers DVKB to be its parent company’s favourite child” (DVKB Gazette No. 41/1970).


h(Upper picture): The Board of Managing Directors of Deutsche Verkehrs-

Kredit-Bank AG in 1963 – from left to right: Friedrich Körting, Dr Gerhard Wersche,

Dr Wilhelm Wetzmüller

hBranch managers‘ meeting of Deutsche Verkehrs-Kredit-Bank AG in 1963:

Kurt Müller, head of the Stuttgart branch, is fifth from the left

hSpeech by Heinz Oeftering, First President of Deutsche Bundesbahn,

to celebrate the opening of the Bank‘s bureau de change at Hamburg‘s central station

(1969)

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You started working at Deutsche Verkehrs-Kredit-Bank in 1950. Could you share your recollections of what life was like back then? What are your recollections about living conditions at the time? The currency reform of 1948 and the creation of the Federal Republic of Germany in 1949 were behind us, but there was still an immense amount of rubble in the cities to be cleared. My interview for Deutsche Verkehrs-Kredit-Bank took place in a bombed-out makeshift building. Shortly thereafter we relocated to a newly constructed banking office at Untermainkai in Frankfurt. Private housing was still being managed, and food rationing stopped in 1950. The Bank was able to organise 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 much more positive outlook towards the future.

Where was the Stuttgart branch located when you began managing it in 1962? The branch was located on a floor we leased in an office build-ing near the central train station, and about 40 people were employed there, with another 20 people working at the bureaux de change – which the branch oversaw. After the landlord terminated our lease in January 1963, the Bank’s Supervisory Board approved a new build – under the condition that any unused space be offered to the Stuttgart division of Deutsche Bundesbahn. It was a giant stride forward in terms of moderni-sation.

What was the Stuttgart branch’s core business at the time? Business centred around deferred freight payment. The branch serviced roughly 4,800 direct clients in this business, and another 1,200 customers of our so-called consolidated deferred freight payment product: this was available for smaller shippers who didn’t have enough freight volume for an individual account with us. Other banks, including the German cooperative banks (Volksbanken/Raiffeisenbanken), grouped multiple smaller cus-tomers together and then settled with us. The high number of 4,800 direct deferred freight payment clients, by the way, was a by-product of the economy in our branch’s catchment area, which was dominated by small- to medium-sized companies.

What other business divisions did the Stuttgart branch have?After deferred freight payment, bureaux de change also gener-ated income. The lending business was comparatively small in the early 1960s, but we were able to expand it considerably. It comprised predominantly rail-related financing, generally things like commercial buildings on railway property secured by lien; we also financed private sidings and transshipment equipment. Other lending included operating loans in the form of three-month deferred payment periods and overdraft facilities to subsidiaries, suppliers and residential property companies of the Bundesbahn, as well as utility companies and businesses at the Stuttgart airport. We also issued letters of credit for forwarding agencies. On the funding side, we received overnight loans and term

»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.«

Ten quesTions for

kurT Müller


deposits, including from large-volume shippers working with Bundesbahn, from transport companies active outside the rail freight segment, but also from state-owned institutions and residential housing enterprises.

How was the working relationship with Deutsche Bundesbahn in general? The Chairman of our Bank’s Board of Managing Directors was seconded by Deutsche Bundesbahn. For that reason alone the relationship was good. And that set the tone of our relationship with the local Bundesbahn divisions at the branch level.

How did you go about acquiring new business back then? Generally branch managers brought in new business themselves because they were in touch with companies’ chief financial officers. Owners of larger medium-sized enterprises also expected a competent representative of the Bank to visit them personally to discuss what was available, both deferred freight payment and other products. Over the years, we developed good relationships with agents and general representatives of Deutsche Bundesbahn – so we generally knew about potential investment projects. 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.

What was the Bank’s position in Stuttgart in the 1960s? Especially in the 1960s, but also in the 1970s, demand for loans was steadily spurred by economic growth. Companies were happy to have another provider in addition to their usual banking partner. We were not initially seen as a serious competitor by other banks. Our credit conditions were comparable.

Did that change later?Yes, in the 80s as competition for clients grew fiercer, we were perceived as a more serious threat by other banks. Our ability to hold our own against our competitors was due in no small part to the fact that we, unlike many other firms, could accept things like borrowers’ buildings on railway property, i.e. on third-party ground, as collateral.

How would you describe the working relationship between the Board of Managing Directors and the branches at the time? The branch manager was entitled to a great deal of independence within the established business segments. However, this inde-pendence did not extend (for example) to becoming involved in private automotive financing at the branch level, for example, although the opportunity would have been there. Branch man-agers and the Board of Managing Directors could call meetings together at any time, and branch manager conferences were held annually.

What do you think of the way the Bank has developed since you retired? I think it is great that the Bank has been able to develop a global transport finance business after its connection to Deutsche Bundesbahn was severed. The niche position it has carved out for itself has stood the test of time. I am especially impressed by the way it has dealt with the funding issue. I am also pleased that the Bank was not involved in the excesses in the financial industry in recent history. And I feel very well taken care of by Human Resources since retiring.

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 in 1987.

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932Bitte interpolieren

hThe Frankfurt Stock Exchange during the 1980s


The period spanning 1974 to 1988 sees a series of geopoliti-cally important events. In 1974 US President Nixon is forced to resign over the Watergate Affair. The death of Mao Zedong in 1976 ignites a period of political upheaval in China, largely connected with Deng Xiaoping who spearheads the reforms to China’s economy that pave the way to its boom phase in the 90s. In 1979 the Shah of Iran is ousted and an Islamic Republic emerges after the return of the Shiite Ayatollah Khomeini. In 1985 Mikhail Gorbachev is elected General Secretary of the Soviet Communist Party. He ushers in an era of reform under the banner of glasnost (openness) and perestroika (restructur-ing). He also reopens disarmament talks with the USA and in 1988 the Soviet Union and the United States agree to the elimi-nation of all atomic medium-range missiles. The European Community welcomes three new members, Greece in 1981 and Spain and Portugal in 1986.

An end comes to some conflicts. In 1975 the Vietnam war ends and South and North Vietnam are reunited. In 1979 Israel and Egypt reach a peace accord at Camp David, bringing an official end to the Yom Kippur war that broke out in 1973. Yet new con-flicts and hot spots break out in other areas. In 1974 Cyprus is divided. In 1975 civil war begins in Lebanon. From 1976 to 1978 the Khmer Rouge regime ushers in an era of bloodshed in Cam-bodia. In 1979 Soviet troops invade Afghanistan. They occupy the country until their withdrawal in 1988. Not more than eight years later, the Taliban militants establish a reign of terror throughout the country. In 1980 war breaks out between Iraq and Iran which ends in a 1988 armistice. In 1982 Argentina and Great Britain go to war over the Falkland Islands. In 1986 the world is shocked by the Chernobyl nuclear reactor disaster.

For Germany, two important political changes take place in 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 office runs through to 1998. Economically there are two periods of recession that affect not only Germany but every industrialised nation. The first is unleashed by OPEC’s decision to increase the price of oil after the Yom Kippur war breaks out in 1973. After 4.8 % growth in 1973, German economic growth plummets to 0.9% in 1974 and contracts to –0.9% in 1975. In 1976 4.9% growth is achieved again. A second round of oil price hikes intro-duced by OPEC in 1979 causes another recession. Economic growth in Germany declines to 1.4% in 1980, 0.5% in 1981 and then –0.5% in 1982. Positive growth of 1.6% is attained in 1983 (Statistisches Bundesamt 2012, table 12.1, p. 320).

Decreased economic growth in these years leads to a corre-sponding decline in rail freight, causing a dip in the deferred freight payment business. Increased competition from lorries also has an impact. When economic growth is negative in 1975 for the first time in Germany in the post-war era, deferred freight payment revenue decreases by 14% (Annual Report 1975, p. 7). While the deferred freight payment business benefits from the period of recovery that follows, the years to come increasingly point to a phase of maturity or saturation in this line of business. In 1976 rail freight totalling DM 7.2 billion is invoiced with 39,651 deferred freight payment borrowers. By 1988, the year of the Bank’s initial public offering, rail freight handled through deferred freight payment reaches DM 7.9 billion, with nearly the same number of borrowers as in 1976. However, the Bank has succeeded at expanding its deferred freight payment business to areas beyond Deutsche Bundesbahn, so that total revenues in the deferred freight payment business reach DM 9 billion in 1988. Of course, economic downturns heighten the risk of 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.

1974 – 1988The “Wirtschaftswunder” ends – partial privatisation and iPo

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Its lending business continues to focus on companies that have business relationships with Deutsche Bundesbahn and on invest-ments that promote rail traffic. Its role as the principal bank of Deutsche Bundesbahn continues to entail the processing of domestic and international payment flows, meeting liquidity requirements, investing excess liquidity on the money market, issuing bonds and price stabilisation. Starting 1 December 1980, an agreement is reached with Deutsche Bundesbahn relating to price stabilisation that releases the Bank from the price risks associated to the performance of Bundesbahn bonds (Annual Report 1980, p. 9).

The Bank’s biggest depositor is Deutsche Bundesbahn, though the size of the balances held fluctuates considerably. The “Sparda” banks are another important depositor group. This is the new name that the Eisenbahn-Spar- und Darlehnskassen opted for in 1978: their service association was accordingly changed to Verband der Sparda-Banken [Association of Sparda Banks] (Olten 2006, p. 133 and p. 143). Processing securities transactions for Sparda Bank customers becomes increasingly important for Deutsche Verkehrs-Kredit-Bank throughout the 1980s.

Fluctuations in economic growth also impact the bureaux de change business. The number of migrant workers in Germany also stagnates in the wake of the ban placed on their recruitment in 1973. Demand for currency exchange for travel purposes thus gradually declines. In some cases, significant changes on the foreign exchange market also influence the bureaux de change financial results.

From the early 80s onwards, the Bank begins to rationalise workflows in certain areas, with the introduction of computer- assisted technologies. This approach is noted by the 1982 Annual Report for the first time. The different IT measures include adopting SWIFT to process international payment flows. Computers also find their place in the bureaux de change. In 1984 the first cash machine is set up at the bureau de change in Cologne’s central train station. Cash machines increasingly replace the process of cashing Eurocheques at bank counters over the years to come. At the end of 1985, the Bank decides to roll out a customer-oriented dialogue system for banking transactions (Kundenorientiertes Dialogsystem für Bank-geschäfte – “KORDOBA”) to replace the existing IT system. In 1986 the first cash machine capable of exchanging four currencies is installed at Frankfurt/Main’s central train station.

hDeutsche Verkehrs-Kredit-Bank bureau de change

at Berlin‘s Zoo railway station (1984)

hDeutsche Verkehrs-Kredit-Bank bureau de change on

the side of the Federal motorway at Schwarzbach (1978)


Automation is particularly attractive for the bureaux de change business, which has traditionally required high staffing levels. In 1987 the way securities orders are processed for Sparda Bank clients is improved with the introduction of a new IT-supported order management system. And by late 1988, twenty cash machines are already in operation.

In 1977 the Annual General Meeting passes a resolution for a share capital increase (from DM 50 million to DM 65 million). In 1985 the share capital is increased another DM 10 million to a total of DM 75 million.

In 1983 the Federal Government begins discussing the possibility and potential scope of privatising certain state enterprises. In October 1984, Deutsche Verkehrs-Kredit-Bank hosts the annual meeting of Management Board and Supervisory Board Chairmen 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.).

In 1987 it becomes official that Deutsche Bundesbahn is seeking partial privatisation of 24.9% of Deutsche Verkehrs-Kredit-Bank’s share capital, totalling DM 75 million. A banking syndicate led by DG BANK and Dresdner Bank is tasked with the IPO. They are responsible for placing DM 18.675 million in 373,500 shares at DM 50, a portion of which is to be offered for subscription to Deutsche Verkehrs-Kredit-Bank and Deutsche Bundesbahn employees.

At an Extraordinary General Meeting on 24 September 1987, Deutsche Bundesbahn, which is still the sole shareholder, amends the Articles of Association to expand the Supervisory Board from six to twelve members. Pursuant to the German Employees’ Representation Act (Betriebsverfassungsgesetz) 1972, one third of the seats are allotted to employee represent-atives (DVKB Gazette No. 1/1988).

hChangeover on the Board of Managing Directors (1985):

Arno Grunhold succeeds Karl-Heinz Boldt

vIT processing at Deutsche Verkehrs-Kredit-Bank‘s

Frankfurt/Main head office (1979)


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The official listing is planned for 3 December 1987. Shortly before the flotation is to be made, shares plummet on the stock markets on 19 October 1987, also known as Black Monday. The Bank’s initial public offering has to be postponed (DVKB Gazette No. 4/1987). It is eventually carried out in the spring of 1988. On 11 March 1988, advertisements are run and on 14 March the IPO candidate is presented to banks and repre-sentatives of the press. The Chairman of the Board of Managing Directors, Dr Franz Schloßnikl, remarks that “the business policy of the Bank is aimed at complementing its primary business as the principal banking partner of Deutsche Bundesbahn and its Group companies with an equally valuable and important bank-ing business with corporate clients” (DVKB Gazette No. 2/1988, p. 4). The employees of Deutsche Bundesbahn and Deutsche Verkehrs-Kredit-Bank are offered 112,500 shares for subscription. 186,000 shares are to be issued in free float by the syndicate, which is led by DG BANK and Dresdner Bank. The remaining 75,000 shares are to be placed with the Sparda banks as long-term investments (Olten 2006, p. 133 and p. 143).

An issue price of DM 155 is set for each DM 50 share. The subscription period is from 15 to 18 March. Deutsche Bundes-bahn and Deutsche Verkehrs-Kredit-Bank employees apply for 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.

The investment holdings of Deutsche Verkehrs-Kredit-Bank have undergone only minimal changes by 1988. The Bank con-tinues to own shares in the travel agency Ameropa-Reisen GmbH (100%) and Deutsche Eisenbahn-Reklame GmbH (40%). The COLLICO Verpackungslogistik und Service GmbH holding has increased from 75% to 100%. In 1979, the Bank invested in the ferry operator Rømø-Sylt-Linie GmbH; by 1988 it owns a 24.8% stake. It also has an investment in Transfracht Deutsche Trans-portgesellschaft mbH on its books.

During this period, the Board of Managing Directors and the Supervisory Board have undergone the following changes: on 9 August 1977 Managing Director Dr Tettenborn passes away unexpectedly, only shortly before he planned to retire at the end of that year. His designated successor, Dr Franz Schloßnikl, is thus appointed to the Board of Managing Directors on 1 Decem-ber 1977 (DVKB Gazette No. 71/1977). In December 1982, Dr Wolfgang Vaerst hands over chairmanship of the Supervisory Board to Wilhelm Pällmann, who serves on the Management Board of Deutsche Bundesbahn. On 31 March 1985, member Karl-Heinz Boldt leaves the Board of Managing Directors to go into retirement. Arno Grunhold is invited to join the Board of Managing Directors on 1 April 1985 as his replacement.

vFrankfurt airport on a German stamp (1979)


xShares of Deutsche Verkehrs-Kredit-Bank AG – IPO in 1988

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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.

Ten quesTions for

arno GrunholD


Back in 1988, Deutsche Verkehrs-Kredit-Bank was listed on the stock exchange; through the IPO, Deutsche Bundes-bahn – the German Federal Railways – relinquished a portion of its holding. How did employees feel about that at the time? Was it seen as an opportunity or a risk?Both the Board of Managing Directors and employees felt a certain degree of trepidation. Amongst Managing Directors, we did not see how partial privatisation benefited Deutsche Verkehrs-Kredit-Bank in any way, but we accepted it as a political decision, because that was what it was all about. Deutsche Bundesbahn’s assurance that the partial privatisation would not change its business relationships with us – quantitatively or qualitatively – was of tremendous importance to the Board of Managing Directors, and to the Bank’s employees.

How did listed status then affect the Bank’s business? What were the biggest changes that listing entailed for employees? Our flotation on 06 April 1988 on the Frankfurt/Main and Berlin stock exchanges garnered a great deal of interest. Clients and correspondent banks applied for so many shares that we were oversubscribed ten times over. The 112,500 shares that had been set aside for those with preferred status, namely employees of Deutsche Verkehrs-Kredit-Bank and Deutsche Bundesbahn, were also oversubscribed. Ultimately 118,486 shares were assigned in the end. All in all, the subscription results were excellent. The initial public offering and the related public relations work created recognition for Deutsche Verkehrs-Kredit-Bank across Germany, but day-to-day work at the Bank went on as usual. There wasn’t really any anxiety about job cuts from structural changes.

A major historic event, the reunification of Germany, occurred on 3 October 1990. Beforehand, the banking sector of the German Democratic Republic (GDR) had already undergone structural changes, and a new bank was founded with an investment from Deutsche Verkehrs-Kredit-Bank. What role was envisaged for the joint venture?At the time so much was in flux, and most of it wasn’t foresee-able. At the beginning of our talks in January 1990, Staatsbank – the GDR’s central bank – still conducted all the banking business there. An industrial bank branch of the Staatsbank was respon-sible for Deutsche Reichsbahn, the GDR’s railways. By founding Deutsche Kreditbank AG in April 1990, commercial banking was separated from central bank functions. We advised both the newly formed Deutsche Kreditbank and Deutsche Reichsbahn on training their employees in technical and organisational matters. Deutsche Verkehrs-Bank AG was founded as a joint venture at the guest house of Deutsche Reichsbahn on 19 June 1990. In the GDR, its remit generally corresponded to what the Deutsche Verkehrs-Kredit-Bank did in the Federal Republic of Germany. We shared our expertise in banking, especially as the principal banking partner to Deutsche Bundesbahn, as well as our training support.

Who were your primary contacts in Eastern Germany? Whose initiative was it?Our goal was to acquire Deutsche Reichsbahn as a client for the services we had been providing for decades to Deutsche Bundesbahn – including freight billing, principal bank services for the railway, bureaux de change, etc. That is why it was important for us to establish contacts at Deutsche Reichsbahn. Because Deutsche Reichsbahn’s banking business was con-

1946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932 1974 – 1988

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.

»one day the central archive of Deutsche Bahn 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.«


After reunification, Deutsche Verkehrs-Kredit-Bank opened branch offices in Eastern Germany. What did people hope to accomplish? What sort of start-up difficulties were there?In Western Germany, Deutsche Bundesbahn was divided into railway divisions geographically, and we needed an office for every division to carry out the railway’s transactions. We hadn’t initially envisaged that for Eastern Germany, but we needed offices to ensure market coverage for our specific target groups. We ultimately oriented the offices we established towards eco-nomic centres, for example the branch offices in Dresden and Leipzig. New bureaux de change were also added.

After retiring, you oversaw the company archive for quite a few years. What motivated you to devote yourself to the history of DVB? In the run-up to the partial privatisation of Deutsche Verkehrs- Kredit-Bank from 1987 onwards, and then again later, we kept having to refer back to historical documentation and information from the Bank’s history. We discovered that the files tended to be located at different Bank branches and administration offices, but not at a central location. In the early 1990s I took the initiative to lay the groundwork for a central storage and administration point for historically important files and other documents. I then started by addressing basic archiving questions quite extensively; 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.

One portion of the company archive was only discovered in 1996. How did that happen? Right after reunification, we got in touch with the Head of Central Archives at Deutsche Bundesbahn in Berlin to talk about certain questions and problem areas that interested us both. We then visited each other’s offices in Berlin and Frankfurt. One day the Central Archive of Deutsche Bahn 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. 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 correspondence from the deferred freight payment and lending divisions. The documents mattered to us because they enabled us to find answers to various restitution cases over the last several years.

How do you feel about DVB today? The change in focus, namely the transformation from a pure railway bank to a bank specialising in aircraft and shipping finance was an absolutely monumental change. And it was an out-standing success. That was by no means a foregone conclusion. I have tremendous respect for such an achievement. To be brief: my feelings about the DVB Bank of today are entirely positive.

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hFall of the Berlin Wall: people from East and West Berlin climb the Wall at the

Brandenburg Gate on 11 November 1989


In 1989 the Soviet Union under the leadership of Mikhail Gorbachev grants countries within the Eastern Bloc – which is 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 Germany and the German Democratic Republic enters into force, leaving the Deutsche Mark as the only legal tender. The four victorious powers of World War II – France, the United

Kingdom, the United States and the Soviet Union – work with the two German states to sign off the Treaty on the Final Settle-ment with respect to Germany [Vertrag über die abschließende Regelung in Bezug auf Deutschland], granting a united Germany full sovereignty. On 3 October 1990, the reunification takes place, and on that same day the Allied sovereign rights expire that had existed since the end of WWII.

1989 – 1996German reunification – Dz Bank acquires a majority shareholding – the Bank evolves from a railway bank into a transport finance house

hGlasnost and perestroika under Mikhail Gorbachev lead to disarmament talks with

the USA: the General Secretary of the Soviet Union‘s Communist Party and Ronald Reagan,

President of the United States, face the international press after their third meeting at the

„Höfdi“ guest house in Reykjavik, Iceland

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Political developments throughout Europe ultimately mean an end to the Cold War between West and East. But there are other important geopolitical events. In South Africa, the Apartheid regime is peacefully ended in 1991 and democratisation begins. In 1994 Nelson Mandela becomes the first black president of South Africa. Many conflict zones, including in the Middle East and Somalia, persist and new troubled areas emerge. The 1990 occupation of Kuwait by Iraq is ended in early 1991 with inter-national military intervention led by the USA. In 1991 Slovenia and Croatia declare their independence, beginning the dissolution of Yugoslavia – which takes an increasingly violent course before being ended by NATO intervention in 1999. In 1994 Rwanda is shaken by a bloody civil war. In Afghanistan the Taliban funda-mentalists seize Kabul in 1996, gaining control of most of the country.

The political events in the GDR quickly affect the bureaux de change business of Deutsche Verkehrs-Kredit-Bank. The opening of the inner-German border on 10 November 1989 leads to a flood of visitors from the GDR, who provide the bureaux de change of Deutsche Verkehrs-Kredit-Bank with no shortage of work. In addition to dispensing the “welcome money” offered to every GDR visitor by the Federal Republic, the demand for exchanging Ostmark to DM is very high at bureaux de change, even though taking Ostmark across the border is actually pro-hibited (cf. Gries 2003). On 18 November, a provisional bureau de change is opened at Helmstedt train station. The agencies that had been closed years ago in Bebra, Hof and Coburg open on a temporary basis (DVKB Gazette No. 4/1989). Exchanging the currency is still highly speculative at the time, as no one knows what the future has in store for the Ostmark. But a market does indeed develop. While GDR citizens sell their Ostmark in the west, other people from the GDR, Federal Republic and neighbouring states (including Poland, for instance) become interested buyers. Ostmarks eventually flow back into the GDR. People from the Federal Republic and abroad benefit in particular from the favourable exchange rate by purchasing goods in the 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).

The Monetary, Economic and Social Union of 1 July 1990 is an event that confronts the banking sectors in both West and East Germany with tremendous challenges. The direction of the GDR’s banking system has to quickly be brought into line with financial structures in the Federal Republic. Preparations also have to be made for the DM changeover, which entails having a sufficient cash supply for 1 July.

As part of a first step, the single-tier banking system is dissolved and the central and commercial banking functions united under the GDR Staatsbank are divided. The GDR Staatsbank retains only its function as a central bank, while the newly founded Deutsche Kreditbank AG assumes responsibility for commercial banking. Institutional changes also go into effect at other banks subordinate to the GDR Staatsbank.

Banks in the Federal Republic of Germany had already formed relationships with contacts at the GDR Staatsbank and its various financial offshoots, in order to explore potential areas for collaboration, including joint ventures. The first relationships that Deutsche Verkehrs-Kredit-Bank forms are with the Head of Finance at Deutsche Reichsbahn and the directors of the GDR Staatsbank’s industrial bank branch responsible for Deutsche Reichsbahn in January 1990. After Deutsche Kreditbank AG is formed on 01 April 1990, negotiations enter into a new phase. Deutsche Verkehrs-Kredit-Bank, Deutsche Reichsbahn, Deutsche Kreditbank AG and Reichsbahn-Sparkasse e.G. come to an agreement to enter into a joint venture under the name of the Deutsche Verkehrs-Bank AG to be registered in Berlin. A charter application is submitted by the General Director of Deutsche Reichsbahn to the President of the GDR Staatsbank. Deutsche Reichsbahn (75%), Deutsche Verkehrs-Kredit-Bank (20%), Deutsche Kreditbank AG (3%) and Reichsbahn-Sparkasse e. G. (2%) have different holdings in the joint venture. According to a “Documentation of mutual agreement” signed on 04 May 1990 in Berlin (Document 14), the joint venture is to carry out the fol-lowing business activities:

vBreak during negotiations in Kaulsdorf (1990): (from right to left) Arno Grunhold,

Hanns Mauthner, Deputy General Director of GDR‘s Deutsche Reichsbahn,

Dr Klaus Menche

90 years DVB Bank

– Carrying out a deferred freight payment procedure in line with the one operated by Deutsche Verkehrs-Kredit-Bank for Deutsche Bundesbahn

– Establishing and operating bureaux de change at Deutsche Reichsbahn train stations

– Holding Deutsche Reichsbahn’s available liquidity at market interest rates

– Covering Deutsche Reichsbahn’s short-term liquidity requirements, where operationally and legally possible, at market rates

– Processing domestic and international payment flows– Stabilising the price of Deutsche Reichsbahn’s listed

bearer bonds

The joint venture is also tasked with attracting the available liquidity of Reichsbahn-Sparkasse as a depositor. In the event that Sparda Banks are established in the GDR similar to those in the Federal Republic, the joint enterprise is to try to position itself as their central institution (Document 14). This does indeed come to pass in May 1990 with the formation of Sparda-Bank Berlin eG from Reichsbahn Sparkasse, with eight branches and responsibility for the entire former GDR (Streit 1998; Olten 2006, p. 190 et seq.).

The legal formation of Deutsche Verkehrs-Bank AG takes place on 19 June 1990, at Deutsche Reichsbahn’s guest house in Kaulsdorf (DVKB Gazette No. 3/1990). The registration of the joint enterprise takes place on 27 June 1990 in Berlin, just in time for the entry into force of the Monetary, Economic and Social Union. Deutsche Kreditbank transfers the employees that used to service Deutsche Reichsbahn into the joint venture, which as of July 1990, has its head office at Unter den Linden 10 in Berlin – Deutsche Verkehrs-Kredit-Bank’s headquarters from 1935 to 1945. A floor is leased in the building, which is the property of Deutsche Reichsbahn. At a later stage, DVB will attempt to assert its former ownership interests, albeit without success.

There are only eight weeks left before the GDR’s currency changeover to Deutsche Mark on 1 July 1990, which is when bank branches need to be stocked with notes and coins. Like every other bank branch within the GDR, the bureaux de change of the newly founded Deutsche Verkehrs-Bank in Berlin, Leipzig, Sassnitz, Magdeburg and Warnemünde receive their first DMs, as well as a stock of foreign currency and travel cheques. With organisational help from Deutsche Verkehrs- Kredit-Bank, they are equipped with proper materials and teller machines (DVKB Gazette No.3/1990). The Ostmark exchange is suspended at Western bureaux de change before 1 July 1990.

After the Monetary, Economic and Social Union enters into force on 1 July 1990, the GDR financial system undergoes other institutional changes. On that day, the GDR Staatsbank becomes Staatsbank Berlin, which later (1994) is merged into Kreditanstalt für Wiederaufbau. This paves the way for banks of the Federal Republic and foreign banks to acquire former GDR state banks (Streit 1998).

At the General Meeting of Deutsche Verkehrs-Kredit-Bank AG on 19 July 1991, the merger of Deutsche Verkehrs-Kredit- Bank AG and Deutsche Verkehrs-Bank AG is announced with retrospective effect to 1 January 1991, with the new bank doing business under the name of Deutsche Verkehrs-Bank AG.

Important milestones are reached in the process of European integration as well. The Maastricht Treaty of 1992 creates the European Union, which includes common foreign and security policy and the creation of an economic and monetary union. The single European currency, the euro, is to be introduced in the European Union no later than 1 January 1999. In order to be part of the monetary union, member states must meet certain economic criteria (the so-called Maastricht Criteria) aimed at ensuring the stability of the common currency.

66 | 67

vCompany logo from 1991

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On 1 January 1993, the single European market becomes a reality. The clearest sign is the absence of customs control at internal borders, facilitating the free movement of goods. The free movement of people and services, as well as capital, is also instituted. On 1 January 1994, another trade bloc is created in the form of the North American Free Trade Agreement (NAFTA) between the USA, Canada and Mexico. In 1995 the European Union grows to fifteen Member States with the addition of Austria, Finland and Sweden. In 1998 the European Central Bank is established and on 01 January 1999, eleven member states introduce the euro for cashless payments on the financial markets (Greece follows in 2001). At the same time, steps are taken to standardise the European transport market. This includes the liberalisation and deregulation of cross-border inner-European traffic. The inner-European aviation market is made a reality in three steps, with a planned introduction of cabotage at the end in 1997. The inner-European road transport markets are also liberalised relatively quickly. However, the process of liberalisation is much slower for rail. The free movement of goods instituted on 01 January 1993 and im-proved transport services spurs growth in freight traffic be-tween member states, and the momentum increases with the accession of ten new member states in 2004.

In 1995 the World Trade Organisation (WTO) is founded, with the primary aim of promoting the liberalisation of international trade relations and decreasing barriers to trade. Freer trade relations, in connection with advancements in productivity in the transport markets, which themselves are the result of the liberalisation and deregulation of the transport markets as well technological progress, lead to the geographical decentralisation of procurement, production and sales relations. This leads in turn to increasing globalisation of the world’s economy. The rise of China to the status of a new economic powerhouse is the result of this globalisation. In China, low wages are a key factor in motivating companies from industrialised nations to outsource labour-intensive production processes. Without high- performance transport connections, however, none of this

would have been possible. China itself was instrumental in supporting this process from the very beginning by making major investments in its transport infrastructure. The creation of shipbuilding capacity and the emergence of capable trans-port companies, especially in maritime shipping and aviation transport were also important factors.

Against the background of the political changes taking shape in Europe, Deutsche Verkehrs-Kredit-Bank revises its business strategy over the course of 1990. Four strategic business areas are targeted: (1) corporate banking focusing on the transport sector, (2) the currency exchange and bureaux de change busi-ness, (3) the central banking services for the Sparda Banks, and (4) proprietary trading in money, foreign exchange, and securities.

In the transport sector, the goal is to grow beyond the Bank’s traditional rail business to become “the recognised bank of the transport industry – the bank for transport companies, their clients and suppliers. The Bank is targeting relationships with larger and medium-sized firms” (Annual Report 1990, p. 4). By concentrating its efforts on transport as its strategic business area, the Bank intends “to make it the central pillar of the entire Bank” (Annual Report ibid).

Beginning in 1991, Deutsche Verkehrs-Bank starts to imple-ment its strategy to transform “from the ‘railway bank’ to a ‘transport and travel bank’” (Annual Report 1993, p. 2). Through the targeted acquisition of clients, new corporate banking business in Germany is to be opened up in the transport sector amongst freight and passenger transport companies, trans-port infrastructure providers, manufacturers and lessors of transport assets. In doing so, existing business relationships in the deferred freight payment business are to be leveraged, in order to expand lending. In the transport infrastructure seg-ment, increased investment is forecasted in light of the reunifi-cation. Indeed, the 1991 German Unity Transport Projects provide for the development of central West-East transport connections between Germany’s two parts.


Opening up the Eastern German market for corporate customer business is now a focus area for the Bank. Over the course of 1991, new bureaux de change are opened and a branch network established in the new federal states. The first bureau de change opens on 08 April 1991 at Dresden’s central train station. Branches are opened in Erfurt, Halle, Dresden and Rostock. Market coverage in the new Federal states is initially concen-trated on the deferred freight payment business with Deutsche Reichsbahn. At the beginning, acquiring corporate clients in the lending business is hampered by the frequent lack of tradi-tional bank collateral, or by assets that are difficult to value (DVB Gazette No. 1/1992, p. 11). By introducing the deferred freight payment business at Deutsche Reichsbahn, revenue in this area increases. In 1991 the deferred freight payments surpass DM 10 billion.

The Bank’s division responsible for providing central banking services to Sparda banks is repositioned on a new foundation after a cooperation agreement is signed to enter into force on 1 January 1992. In connection with the agreement, the Sparda banks assume a 10% stake in the share capital of Deutsche Verkehrs-Bank by acquiring shares from Deutsche Bundesbahn Holding, whose stake is thereby reduced to 65.1%. At the same time, Deutsche Verkehrs-Bank is officially recognised as the central bank of the Sparda banks by the Federal Banking Super-visory Authority [Bundesaufsichtsamt für das Kreditwesen]. The duties assumed by Deutsche Verkehrs-Bank for the Sparda banks comprise international payment flows, processing securi-ties business, investing available liquidity and covering any liquidity requirements that may arise. In the securities business, Deutsche Verkehrs-Bank assumes responsibility for the execu-tion and settlement of securities orders for Sparda customers (which is designated as the ‘Depot B’ or agency business). Deutsche Verkehrs-Bank also handles and consults on Sparda banks’ investments (dubbed the ‘Depot A’ or own-account business).

In the currency exchange and bureau de change business, avenues are explored to expand the range of services, in part due to the introduction of a common currency under the 1992 Maastricht Treaty, which will lead to a precipitous drop in revenue in the foreign currency business over the long term. To be able to compensate for this difference, one of the measures adopted involves expanding fees through cash machine and credit card transactions at the bureaux de change. Gradually new cash machines are installed: their number increases from 24 in 1989 to 121 in 1996. In the meantime – in 1994 – the number climbed as high as 169 cash machines, before a network optimisation exercise was implemented. Because credit card cash disburse-ments steadily increase at bureaux de change, cash machines are upgraded to handle major credit cards in 1990. The American Express card is the first in December 1990. Beginning in early 1992, Eurocard/Mastercard and VISA are also accepted by the machines. Revenue from cash machines helps to compensate for the stagnation in foreign exchange. This stagnation has to do with the fact that international travellers increasingly are able to get cash from cash machines at their destination, or they pay by credit card when abroad. From 1992 onwards, successful new attempts are made to operate cash machines at shopping centres and major petrol stations. By the end of 1992, a new service is offered at the bureaux de change for international money transfers using the network of the Bank’s new business partner, Western Union Financial Services. During the 1996 business year, 128,000 transactions are executed, with an aggre-gate volume of DM 155 million. The range of services at the bureaux de change is expanded to include other products, such as selling international phone cards, gold and silver, and tickets to concerts, etc. The stagnation in the foreign exchange business also affects the foreign currency trading division, which supplies the Bank’s bureaux de change with foreign notes and coins. In order to compensate for this development, the service is increasingly offered to other institutions and corporate clients. 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.

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In the early 1990s, the Bank begins to develop plans for cash-less payments for passenger tickets on public transport. Ticket machines are pre-financed for public transport associations, where season tickets for public transport can be purchased by card. The ticket machines are financed by the fees for the season tickets sold by the machines.

Furthermore, in 1996 the Bank is licensed by the Central Credit Committee (Zentraler Kreditausschuss) as a network operator for processing cashless payments (EC cards/credit cards). By 1998 the network includes as many as 5,000 terminals in retail shops and other points of sale, which are supplied by third-party providers. Individual transactions at season ticket machines are also processed using the Bank’s network. Both activities are bundled under the Electronic Banking division.

On 1 January 1994, Deutsche Bundesbahn (the railway of the former Federal Republic of Germany) and Deutsche Reichsbahn (the railway of the former GDR) merge to become Deutsche Bahn AG, the new German railway company. That same year, the Management Board of Deutsche Bahn AG decides to sell the majority of its 65.1% holding in Deutsche Verkehrs-Bank’s share capital and retain only a minority shareholding. Both Dusseldorf-based Westdeutsche Landesbank and Frankfurt- based DG BANK (now DZ BANK) express interest in becoming the new majority shareholder. DG BANK is particularly interested in “integrating Sparda banks and their association into the German Cooperative Financial Services Network for the long term by expanding DVB’s central banking functions” (Annual Report, p. 2). DG BANK wins the bidding competition and becomes the majority shareholder with 50.1% of the Bank’s share capital, with effect from 31 December 1994. Deutsche Bahn also sells 5% to the Sparda banks, bringing their holding to 15%. Deutsche Bahn now only holds a 10% stake.

Despite the changes to the shareholder structure, the Bank’s business relationship with Deutsche Bahn remains unchanged for the time being. Its working relationship is defined by a long-term cooperation agreement signed on 7 November 1994. Deferred freight payment continues to be processed as before. The locations of the bureaux de change at the train stations also remain unchanged: in any construction or renovation projects at train stations, Deutsche Verkehrs-Bank’s bureaux de change receive preferential treatment, as long as they pay market lease rates (DVB Gazette No. 3/1994). However, price stabilisation services for Deutsche Bundesbahn’s capital market paper are stopped at year-end 1995 and transferred to the Bundesbank.

By 1996, there have been significant changes to the Bank’s investment holdings. In 1993 the 100% shareholding in Ameropa Reisen GmbH, which was acquired in 1973, is transferred to Deutsche Bundesbahn Holding GmbH. The investment the Bank made many years previously in Collico Verpackungslogistik und Service GmbH, and the shares in Deutsche Eisenbahn-Reklame GmbH, Transfracht Deutsche Transportgesellschaft mbh and Deutsche Touring GmbH are also transferred to the holding company. In their place, new investments are made as part of the strategic business focuses adopted in 1990. At the end of 1991, the Bank becomes a shareholder in Union Investment Gesellschaft mbH in order to facilitate the sale of investment certificates via the Sparda banks. With the formation of IBG Immobilien Beratungsgesellschaft mbH and an investment in Deutsche Verkehrs-Leasing GmbH, an attempt is made to provide transport companies with advisory services for property and lease finance. In the 1996 financial year, the bureaux de change, which had been part of the Bank’s business divisions, are spun off into a newly founded company named ReiseBankAG. Cash Express GmbH is also created to provide marketing (as well as other) services for ReiseBank.

vGerman reunification: the people of Berlin celebrate at the Brandenburg Gate

on 3 October 1990


On the Board of Managing Directors and Supervisory Board, there are the following changes during this period: on 2 October 1990 Dr Schloßnikl, who had joined the Board in 1977 and also served as its spokesman, retires. Dr Klaus Zeidler takes his seat. Managing Director Dr Klaus Menche enters retirement on 31 March 1992 and is replaced by Dr Dietrich Landes. That same year, Wilhelm Pällmann hands over his chairmanship of the Supervisory Board to Heinz Neuhaus (Chairman of the Manage-ment Board of Deutsche Bundesbahn Holding GmbH), who in turn is succeeded by Diethelm Sack after a short time. The new role of DG BANK as majority shareholder prompts a new round of changes to the Supervisory Board. The chairmanship goes to DG BANK, represented by Dr Berthold Eichwald, and another seat that becomes available is also assumed by DG BANK (Uwe E. Flach). On 01 January 1995 Anne-Rose Heibel-Dietrich replaces Arno Grunhold on the Board of Manag-ing Directors. In June Michael Wiedenroth succeeds Dr Dietrich Landes.

The period between 1989 and 1996 saw a great deal of changes – compared to the years before – in the Bank’s history. Among other things, DG BANK’s new role as the majority shareholder, which had been Deutsche Bundesbahn’s (later Deutsche Bahn’s) role for many years, prompts the Bank to reassess its strategic positioning.

Revenue from price stabilisation services for Deutsche Bahn’s capital market paper dries up entirely at the end of 1995. The deferred freight payment system is generating lower returns: only DM 8.2 billion is settled in 1996. The bureaux de change business model is threatened by the introduction of the euro as the common single currency. A new strategy is developed in 1990 and gradually implemented. The corporate customer

business sees increased write-downs in 1992 and 1993, due in part to a weakening economy. In the 1994 financial year, Deutsche Verkehrs-Bank falls victim to fraud perpetrated by Balsam AG and Procedo GmbH, to which it had credit exposure. As a consequence of the write-downs, there is no dividend pay-ment that year. In 1995 high allowances for credit losses and the one-off expense for certain restructuring measures weigh on the financial result. In general, pressure mounts to improve internal banking processes. As a result, in 1996 the deferred freight payment transactions that had been processed locally by branches are centralised at an office in Mainz. The relocation of the head office to the City House on Frankfurt/Main’s Platz der Republik in 1996 is another sign of organisational changes. For the first time, the Bank downsizes on a larger scale, cutting 100 jobs and agreeing a social plan with the Works Council.

In 1995 the Bank begins to consider establishing a stronger profile as a centre of competence for transport within DG BANK’s German Cooperative Financial Services Network (Annual Report 1996). There is also the promise of new business opportunities in road haulage, for example financing off-motorway service areas, by partnering with KRAVAG insurance group and cooper-atives founded by associations and companies of the road transport industry. In late 1996, this partnership is cemented between KRAVAG and Deutsche Verkehrs-Bank: each company acquires a 10% shareholding in the other. The international lending business is virtually non-existent, and to the extent that there is any activity, it is focused on syndicate lending and is managed exclusively within Germany. While the Bank is still in the black when 1996 draws to a close, the earnings forecast is not exactly gleaming. The question of how it can be improved for the long term remains unresolved in spite of the many measures taken, including the use of strategic consultants.

Nowadays, DZ BANK AG is the controlling institution within the decentralised Cooperative Financial Services Network. It was Hermann Schulze-Delitzsch who originally took the initiative to form a commercial cooperative banking system by found-ing lending associations, later called “Volks banken”. They focus primarily on commercial businesses and trades-people, which is why – particularly in the mid-nineteenth century – they were founded mainly in urban areas. By

contrast, the “Raiffeisenbanken”, which were part of the cooperative banking movement influenced by Friedrich Wilhelm Raiffeisen, had a rural focus. These rural credit cooperatives also were generally founded from the mid- nineteenth century onward. Only in late 1971 do the two cooperative banking groups finally merge, bringing the organ-isational segregation of Volksbanken and Raiffeisenbanken to an end. At the time, there are a series of regional central banks in addition to the Deutsche

Genossenschaftskasse founded in 1949, as a central credit institution for the cooperative banking sector. On 1 January 1976, Deutsche Genossenschaftskasse becomes DG BANK, which continues to grow over the next several years by acquiring and merging with regional central banks. In 1998, it changes its name to DG BANK AG and, after a takeover of GZ BANK in 2001, becomes DZ BANK AG (cf. Guinnane et al. 2013 for more information on the history of DZ BANK).

hDVB Bank‘s business divisions


September 11, 2001, is the date indelibly imprinted upon the world’s collective memory during this period: the Al Qaeda- perpetrated terrorist attacks in the United States. The imme-diate and clear reaction is a large-scale military offensive in Afghanistan led by the United States. It is followed by other major terrorist attacks, including Madrid (2004) and London (2005), and the terrorist network has yet to be fully defeated as the events in Mali at the beginning of 2013 have shown. In 2003 the Iraq War begins. American and British troops invade the country to overthrow the Saddam Hussein regime. The last American troops do not withdraw until 2011.

In the area of former Yugoslavia, NATO intervention in 1999 brings about the end of the Yugoslav wars of secession and the stabilisation of the new states. Northern Ireland, Sri Lanka and Sudan – where the new Republic of South Sudan is formed in 2011 – see an end to long-standing conflicts. Civil protest in Tunisia in December 2010 develops into the so-called Arab Spring, resulting in regime changes for Egypt and Libya. The bloodiest – which is still raging in mid-2013 – is the civil war in Syria.

Eleven member states of the European Union (Belgium, the Netherlands, Luxembourg, Germany, France, Ireland, Italy, Finland, Austria, Portugal and Spain) introduce cashless pay-ments in euro on 1 January 1999. Greece follows on 1 January 2001. At the beginning of 2002, euro notes and coins are introduced in euro zone member states. Marking the largest expansion of the European Union to date, ten new member states join in 2004 – Latvia, Lithuania, Estonia, Poland, Hungary, Czech Republic, Slovakia, Slovenia, Cyprus and Malta. Five of 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.

In Germany there are two important government changes in 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 in 2003, Chancellor Schröder and his government respond to rising unemployment by formulating Agenda 2010, which initiates radical economic and labour market measures aimed at reforming the German welfare state and making Germany more competitive by 2010. These reforms, however, meet with fierce resistance from the Chancellor Schröder’s own party. He calls for a vote of confidence in the Bundestag, which he loses, prompting a fresh election in September 2005. The outcome sees the Schröder government replaced with a broad coalition (CDU/CSU, SPD) led by Angela Merkel. After the Bundestag elections in September 2009, a Christian Liberal Coalition (CDU/CSU, FDP) government is formed, with Angela Merkel as Chancellor.

At the end of 2008 a severe financial markets crisis erupts, begin-ning in the United States and rapidly spreading to other regions due to the globalisation of the financial sector in recent years. The collapse of Lehman Brothers on 15 September 2008 jump-starts the crisis. Directly thereafter the crisis impacts the econ-omy, spurring declines in the production and transport of goods. It is the worst economic crisis the world has experienced since 1931. Thanks to state economic stimulus programmes and the various initiatives from central banks that are implemented fairly rapidly in 2009, further economic contraction is averted, but the price is a surge in public-sector debt. A sovereign debt crisis eventually ensues from the financial markets crisis, something that has yet to be resolved as of 2013. The euro zone in particular is confronted with new challenges: member states have been able to build a currency union, but have yet to form a true eco-nomic union. Germany’s ability to withstand the major economic crisis relatively well compared to other European countries is due in no small part to the Agenda 2010 reform.

1997 – 2013The Bank develops into a global specialist for international transport finance

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1997 is an important year for the Bank, marking another decisive change in its strategy. Wolfgang Driese, who is named the new CEO and Chairman of the Board of Managing Directors on 1 April 1997, and his fellow members of the Board of Managing Directors, decide to retain the foundational approach of a specialist bank for the transport sector, but shift the focus from land transport towards aviation and maritime shipping on a global level. Aviation and maritime shipping, in contrast to land transport, show much stronger growth in demand. Maritime shipping, above all, benefits from increasing globalisation of economic relations. Aviation benefits from global tourism, and also stands to benefit from the liberalisation of the transport markets, which has now reached Europe after being instigated by political initiatives in the USA. The single European air transport market is completed in 1997. Liberalisation changes competition dramatically. The highest-profile effect is the increase in market entries of low-cost carriers: their innovative business models place notable pressure on incumbent airlines. In other areas of the world, first in Asia and then Latin America, similar developments unfold. Liberalisation and general growth in air transport demand go hand in hand.

With the goal of offering finance on the international shipping and aviation market beyond Germany, Deutsche VerkehrsBank AG (the name the bank has been trading under since 1997) has to compete with a whole series of well-known banks that have been active for years. These include not only major international banks, but also some German Landesbanken that have already established a strong market position in international shipping and aviation finance and, significantly, have access to cheap sources of funding.

The Bank’s transport finance ambitions make it a sort of David pitted against a whole host of Goliaths in the international bank-ing business. The first task is to expand its expertise in the inter-national target markets. In 1997 recruitment begins for the new Structured Finance division. The division is to combine financing for aircraft, seagoing vessels, and railway rolling stock. Shortly thereafter, Structured Finance also begins financing transport infrastructure projects – including airports and privately-financed and operated motorways.

“Recruiting experts for aircraft and shipping finance and infrastructure was more difficult than I had initially envisioned,” Wolfgang Driese remarks in an interview with the internal Gazette in late 1997 (DVB Gazette No. 1, 1997, p. 1). At the same time, an opportunity arises to accelerate the change in strategy when Deutsche VerkehrsBank is alerted to an upcoming sale of the aircraft and ship loan portfolio of the Long Term Credit Bank of Japan (LTCB). As part of a bidding process, the Bank’s bid is finally accepted. The contract of sale is concluded with LTCB on 12 June 1998. The takeover proves to be a quantum leap, making it possible for the Bank to acquire not only a major loan portfolio of approximately €1.4 billion, comprising 200 financing structures, but also all of the employees of LTCB’s aviation and shipping finance employees working at their London, New York City and Tokyo offices. Wolfgang Driese believes the takeover accelerated the “positioning in the target segment by three years, compared to organic growth in business volume” (DVB Gazette No. 3, 1998, p. 3).

Klaus Heinemann, who built up the LTCB portfolio over a period of ten years, becomes Michael Wiedenroth’s successor on the Board of Managing Directors of Deutsche VerkehrsBank in August 1998. The acquisition of the LCTB portfolio also means the Bank has to confront significant organisational challenges. Now that the specialist teams have split away from LTCB, new offices need to be found at the three new locations – and new IT systems put into place. For both IT and other central depart-ments of the Bank, English becomes a critical second language; special courses in Germany are held to facilitate the learning process.

The changes in the Bank are not limited to the expansion of business activities in Structured Finance. They also extend to all of the other existing business divisions. In the traditional corpo-rate customer business, which traditionally focused on the German market and is supported by a network of 19 branches, there is an organisational change in how clients and loans are managed based on a regional plan. This brings about the closure of branches in Dresden, Erfurt, Kassel, Leipzig, Magdeburg, Münster, Rostock and Saarbrücken. A decision is also made to cut back on non-transport customer business, and to boost business with transport clients. High write-downs in 1997 justify the move.


In 1999 another opportunity to accelerate the pace of global expansion is presented to the Bank. In the Netherlands, Nedship Bank, which is dedicated solely to shipping finance, is up for sale.

On 20 December 1999, the Boards of Rabobank and Deutsche VerkehrsBank sign the contract of sale and schedule the takeover 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-ordinary General Meeting of Deutsche VerkehrsBank held on 8 March 2000, resolutions are passed for a share capital increase and other capital measures that are necessary to acquire Nedship Bank’s risk-weighted assets.

Similar to the acquisition of the LTCB portfolio, the IT systems, credit processes, portfolio management, controlling and report-ing systems, etc. all have to be harmonised. Directly after the contract of sale is signed, a project team is formed for the complex integration process in which both Nedship Bank and Deutsche VerkehrsBank employees collaborate.

Shortly thereafter, on 01 January 2001, a new SAP-based IT platform is introduced – but the rollout initially causes serious problems. To this day, considerable investment is made every year in IT in order to meet the demands of a global work envi-ronment (connecting travel users from anywhere in the work to the Bank’s IT system, connecting home offices, making internet, intranet and extranet applications available).

When the takeover is completed on 31 May 2000, Deutsche VerkehrsBank’s shipping portfolio is transferred to Nedship Bank. Dagfinn Lunde assumes charge of Nedship Bank as CEO. The same year, a decision is made to close all remaining German branches, with the exception of Hamburg. The Hamburg branch is integrated into the Nedship Bank network. In Frankfurt, the Land Transport Division is created, combining all of the related financing activities from the branches to be closed in the areas of rail and road transport. The financing of international transport infrastructure projects continues to be managed from Frankfurt. As part of the integration process of Nedship Bank, Deutsche VerkehrsBank’s aircraft financing teams and the maritime shipping teams of Nedship Bank share offices in London and New York.

Nedship Bank’s roots date back to 1899, when Rotterdamsche Scheeps-hypotheekbank was founded in Rotterdam. In 1968, the company merges with Nederlandsche Scheeps- Hypotheekbank and Eerste Nederland-sche Scheepsverband Maatschappij to form Nederlandse Scheepshypotheek-

bank. At the end of the 1970s, the company strengthens its international presence by opening locations abroad. In 1979, for example, an office opens in Piraeus, Greece, and in 1982 another office is established in New York. In 1982 the bank’s name is changed to Nedship Bank N. V. In 1986 it is acquired

by Rabobank Nederland (Coöperative Centrale Raiffeisen-Boeren Leenbank B.A.). The global expansion of the bank’s business activities continues through the mid-1990s with new offices opening in Hong Kong, Singapore, London, Bergen and Curaçao (Nedship Bank 1999).

hSigning 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)

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Over the next few years offices take on new business activities; aircraft financing is added to Singapore, and railway finance is undertaken in New York. The Hong Kong office is closed in 2008 and the business relationships in shipping finance are thenceforth managed out of Singapore.

With the three pillars of Aviation, Shipping and Land Transport, the Bank defines its target segments for the years to come. Legally, Nedship Bank initially remains a wholly owned subsidiary of Deutsche VerkehrsBank, but internally it is treated as the Shipping Finance division – on an equal footing with the two other business divisions, Aviation Finance and Land Transport Finance. From April 2000, the Bank conducts business and mar-keting activities under the umbrella brand DVB Group. Under this umbrella brand, the DVB NedshipBank name stands for international shipping finance and the DVB VerkehrsBank name represents aviation and land transport finance, as well as trans-port infrastructure projects. A new logo is also introduced to reflect these changes.

In 2002 the name Deutsche VerkehrsBank AG is changed to something more catchy for the international market – DVB Bank AG. Where the Nedship name is still used by Group entities, it is gradually replaced by DVB. On 01 March 2004 Nedship Bank N.V. is officially renamed DVB Bank N.V. In 2008 DVB Bank N.V. is merged with DVB Bank AG to become DVB Bank SE, which entails a change in legal form to a European public limited-liability company (Societas Europea, SE), marking the fourth change to the company’s name since the Bank’s founding in 1923.

1923: Deutsche Verkehrs-Kredit-Bank AG1991: Deutsche Verkehrs-Bank AG1997: Deutsche VerkehrsBank AG2002: DVB Bank AG2008: DVB Bank SE

There are also changes at the executive management level after 1999. At year-end 2000, Anne-Rose Heibel-Dietrich leaves the Board of Managing Directors. On 1 January Rainer Irmen becomes a deputy Managing Director. In 2002 Dagfinn Lunde, who had been responsible for international shipping finance

since 2000 – which includes his time as CEO of Nedship Bank, joins the Board of Managing Directors. Klaus Heinemann and Rainer Irmen step down that same year. Wolfgang Driese takes over Aviation Finance from Klaus Heinemann, and Rolf Michael Betz, who joins the Board of Managing Directors on 1 January 2003, assumes responsibility for the Land Transport Finance division. In 2005 Bertrand Grabowski becomes a Board member to oversee Aviation Finance, shortly before also taking on the Land Transport Finance division after Rolf Michael Betz’s departure. From 2005 onwards, the Bank is managed by a three-person Board of Managing Directors comprising Wolfgang Driese (as Chairman), Dagfinn Lunde and Bertrand Grabowski. Ralf Bedranowsky joins the Board of Managing Directors in July 2013.

On the Supervisory Board, Uwe E. Flach, who is a Manage-ment Board member of DG BANK (which began trading as DZ BANK in 2001), becomes Chairman, succeeding his colleague Dr Berthold Eichwald. From 2003 to 2009, Dr Thomas Duhnkrack, Management Board member of DZ BANK, serves as Chairman of the Supervisory Board. After his departure in 2009, the Super-visory Board is chaired by Frank Westhoff who became a member of the DZ BANK Board in 2006.

While the international Transport Finance business is continu-ously expanded from 1997 onwards, all of the activities outside the realm of transport finance are gradually ceased or reorganised elsewhere by 2003. In an interview with the employee gazette in 1997, Wolfgang Driese explains why the change in strategy is necessary: “The era of the small universal bank, which means being everything to everyone, is long gone. Competition today means we are always exchangeable against a competitor. Hard work and price flexibility are not enough. Only by specialising in a few core areas of expertise, just as we have laid out for ourselves – with an emphasis on advisory services – do we have the chance to make it on the market for the long term” (DVB Gazette No. 1/1997, p. 2–3).

To truly put the focus on the transport finance business into effect, beginning in late 2000 all of the Bank’s non-transport business are bundled into a unit called D-Marketing, where specialists will downsize the loan portfolio. Over the course of


2002, other loans from the Land Transport Finance division are selected for inclusion in the wind-down portfolio because they no longer meet the Bank’s long-term volume and earnings require-ments. In 2000 the Electronic Banking division also sees change. The Bank’s EC Cash Network business is hived off and transi-tioned into an independent entity called DVB Processing GmbH, which becomes one of the three largest network operators for handling cashless payments in Germany. In March 2001 Deutsche Postbank AG (Germany’s former postal giro service) acquires 51% of the company. In 2005 the Bank sells the remaining 49% to Postbank.

The Sparda banks terminate the cooperation agreement held with DVB on 18 July 2001. By the end of 2002, the central banking functions, with the exception of providing and balancing liquidity, will have been transferred to other service providers. Securities processing and management for the Sparda Banks had already been outsourced to another service provider in 1998. The liquidity provision and balancing activities are still carried out by DVB Bank in accordance with a new central banking agreement entered into with the Sparda banks in April 2002. Other changes over the course of 2002 include a sale of the shareholding in Union Asset Management Holding, as well as the suspension of trading in securities, foreign exchange, and precious metals.

On 01 January 2003, all of the activities associated with col-lecting and settling receivables in the passenger and freight transport business are transferred to DVB LogPay GmbH, a subsidiary founded in 2001. This also includes the traditional deferred freight payment franchise that was the Bank’s original founding purpose in 1923. The electronic banking product for cashless payment in public passenger transportation offered by the Bank is also transferred to DVB LogPay GmbH. DVB LogPay is also active in collecting toll charges, and offers operators of toll systems settlement services for accrued usage fees over a period of time.

On 06 November 2003, the Association of Sparda Banks announces that the agreement with DVB entered into in April 2002 regarding liquidity provision and balancing services will be assumed by DZ BANK with effect from 31 December 2004.

On 31 December 2003, as a result of the clear focus on the international Transport Finance business, ReiseBank AG and CashExpress GmbH are sold to DZ BANK, which further strengthens DVB’s capital base. The sale marks DVB Bank’s departure from another long-standing business area in which it had successfully overcome many challenges. This includes first and foremost the introduction of euro notes and coins on 01 January 2002. In preparation for the loss of earnings asso-ciated with the introduction of euro notes and coins, many bureaux de change expanded their range or services. This included collaborating with Western Union, which began in 1993. The Western Union Money Transfer product, to transfer money worldwide, sees significant growth. In 2003, 1.4 million transactions are processed by the Bank’s bureaux de change. Five years earlier, in 1998, the volume was just 336,000 trans-actions – about a quarter of the volume in 2003. Cash machines, placed predominantly at train stations and airports, represent another important business. In 2003, 170 cash machines are in operation.

The sale of ReiseBank and CashExpress at the end the 2003 marks the completion of the Bank’s transformation to a pure transport finance specialist.

Due to the strategic repositioning of the Bank that began in 1997, there are also changes to the shareholder structure. In the 1998 financial year, 63% of the shares are held by DG BANK, 15% by the Sparda banks, 10% by KRAVAG, 1% by Deutsche Bahn and 11% are in free float. In December 2002, DZ BANK (the former DG BANK) acquires KRAVAG’s holding. Over the course of 2003, the Sparda banks and Deutsche Bahn sell their holdings in the Bank. DZ BANK acquires their stakes of 13.28% and 0.75% respectively, leaving DZ BANK with a total of 92.27% of the shares. By the end of 2012, it has increased its holding to 95.4%. Only 4.6% of the shares remain in free float.

Beginning in 2004, DVB Bank sets its sights on expanding the market position it has established in international transport finance, and generating greater returns. Henceforth, all lending business is developed exclusively through organic growth. The only exception comes in 2011, when a small portfolio of aircraft loans is purchased on the secondary market and becomes the first acquisition since the major takeovers in 1998 and 1999/2000.

xCompany logo from 2000 (umbrella brand and individual brands)

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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 and Land Transport Finance. The shipping portfolio is now man-aged by four teams, and the offshore portfolio by two sector teams.

DVB Bank generates earnings not only from interest income, but also from commission income from the lending business and independent advisory services. In 2001 the Corporate Finance business division is set up, with a product palette includ-ing advisory services. Later these consulting activities are decentralised, and today are carried out by the four divisions Aviation Finance, Shipping Finance, Offshore Finance and Land Transport Finance by corresponding teams of specialists. The 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.

Because DVB’s business model is geared exclusively towards collateralised finance for mobile transport assets, individual valuation of the assets with regard to its collateral value is the basis of every lending decision. The assessment of the markets in which the assets are used also plays an important role. Accord-ingly, market and asset-related research is crucially important. In 2001 a Shipping Research unit is established, followed by the Aviation Research unit in 2003 and Land Transport Research in 2006. Today all four divisions have access to extensive market and asset expertise, which has been affirmed over the past few years with a series of awards from trade journals. This specialist expertise is integrated into all of the Bank’s decision-making processes, as well as in Investment Management.

xTo 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



To amass additional asset expertise, with the concurrent goal of selling to third parties, some very uncharacteristic decisions were made at the Bank. In 2006 Aviation Asset Management was founded. The London-based team offers clients a variety of services that span leasing advisory and management, technical management and analysis services, as well as aircraft sales. In 2007, DVB Bank acquires a majority shareholding in TES Holdings Limited, based in Cardiff, Wales, the parent company of TES Aviation Services Limited, a leading service provider in managing aircraft engines and the reconditioning and disposal of engine components. In 2012, 60% of the shares in TES are sold to two strategic investors (Mitsubishi Corp., and Develop-ment Bank of Japan), but the Bank remains the largest individual shareholder with 40%.

The Bank’s international positioning and the momentum of growth in the lending business make increasing the capital base and refinancing via the capital markets more important. On the capital market the Bank has been present with various instruments since 1999. This includes promissory note loans, commercial paper and debt issuance programmes. Ratings are important in order to access to the international capital markets, but also because of the Bank’s goal of assuming a lead role in

loan syndications. Accordingly the Bank takes part in Standard & Poor’s international rating procedure for the first time in 1999. In 2000 the Bank is rated by Moody’s Investor Services for the first time. Starting in 2005, it also receives a rating from Fitch Ratings as part of the German Cooperative Financial Services Network. In 2012 the Bank terminates its rating relationship with Moody’s.

Over the past several years, the share capital has been increased a number of times. In 1999 it is increased to €57.4 million with the issuance of new shares in that year. The takeover of Nedship Bank and its roughly €2.2 billion in risk-weighted assets prompts another share capital increase of EUR 19.3 million to a total amount of €76.7 million. In 2005 and 2008 two further share capital increases follow; the first exercise sees 850,000 new notional no-par value bearer shares issued, and the second exercise sees 664,000. Since the last capital increase conducted in 2008, the share capital totals €118,791,945.12 and is divided into 46,467,370 notional no-par value shares.

The financial markets crisis that erupts in 2008 proves decisive and challenging for DVB, affecting not only funding, but also the transport markets themselves.

hSingapore – DVB‘s business hub in the Asian growth region

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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.

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 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 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 practice.

OWolfgang F. Driese (CEO)

ORalf Bedranowsky

ODagfinn Lunde

OBertrand Grabowski

hDVB‘s Board of Managing Directors in 2013


The dramatic events on the financial markets prompt DVB to change its refinancing objectives: to expand its funding in US dollars, to expand long-term funding and to grow its investor base for long-term issues. Because the international Transport Finance business is predominantly based in US dollars, more of the total financing volume is issued in US dollars, thus achiev-ing a natural hedge between assets and liabilities through currency. Long-term funding is expanded so that long-term refinancing vehicles account for 97.5% of the total by year-end 2012. A new circle of investors is tapped, with the first ship mortgage bond issued in 2010. In 2011 and 2012 further ship mortgage bonds are issued, including a portion placed in US dollars directly with American investors. Due to limited interbank financing, a problem which still persists, the majority of the issues continue to be placed within the German Cooperative Financial Services Network.

Directly after the beginning of the turbulence on the financial markets, the crisis grips the real economy. Throughout 2009 the transport markets are affected by falling demand, though

there are regional differences. From 2010, demand for transport begins to recover and in most regions and transport sectors the pre-crisis level has been achieved or exceed by 2012. The fact that the economic situation for many transport companies has not improved to the same extent has to do with supply: certain key sectors in international maritime shipping such as dry bulk, container and crude oil shipping are particularly hard-hit. These areas saw high levels of newbuild ordering before the crisis, which ultimately leads to a surge in new shipping capacity, far outpacing the growth in demand.

A shipping crisis that specifically affects the aforementioned sectors causes some banks to withdraw from international shipping finance. As lenders, banks are replaced to some extent by state export credit agencies, which provide export loans. While no equivalent crisis develops in aviation, due largely to the fact that demand and supply are in line with one another, some banks nevertheless withdraw from aircraft financing, and a funding gap is also avoided by increased export loans.

hDVB Bank‘s Global Management Conference (2008)

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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.


€ mn

150 147.7 141.4131.1

120 118.7101.5 100.2 86.6

9058.5

60 47.0 44.8 51.835.7 36.1

30 22.81.9 6.7

01997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Customer lending volumeas at 1 January 2013

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

Employees at DVB Bank SE as at 31 December 2012

€22.2 billion

shipping finance 42.3% aviation finance 31.1% offshore finance 11.3% land Transport finance 7.7% iTf suisse 4.0% investment Management 2.7% Business no longer in line

with DVB’s strategy 0.9%

40 nationalities

German 40.9% Dutch 12.9% British 11.6% norwegian 5.5% us-american 5.4% singaporean 5.2% Greek 3.6% 33 other nationalities 14.9%

558 employees

Transport finance/investment Management 305 service areas 199 DVB logPay Gmbh 54

HGB / IFRS*Conversion 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.

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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.

Ten quesTions for

WolfGanG f. Driese


You spent quite a few years working at renowned banks, sometimes internationally. How was it that your career path led you to DVB?My thinking at the time was that I had already worked for the best names in banking. So I asked myself what I could do that I had never done before. I was then approached by a head hunter who put me in touch with Dr Eichwald, who was Chairman of the Supervisory Board of Deutsche Verkehrs-Bank – as DVB was still called at the time. I was quite impressed by how open he was, he gave me virtually every bit of documentation on the Bank imaginable for me to review. As I was looking them 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. And then I wanted to make that happen.

What expectations did the majority shareholder at the time, DG BANK, have for you?DG BANK acquired a majority shareholding in the Bank in 1995, but did not seem to be happy with how it was performing. That is why they were thinking about a change in CEO. At the time, the goal was to make processes better and more efficient, and to grow the Transport Finance segment with German forwarding and railway companies, but only within Germany. My instinct told me that course was not a sustainable path for the Bank in the long term. I was given tremendous latitude to decide what to do and I never had to – and almost no one ever believes me when I say this – present strategy plans or even quarterly actual/target reports.

After joining the Bank, you developed a vision for the new role of DVB relatively quickly that involved a realignment towards becoming an internationally active specialist bank for Transport Finance. How did you envision that transition taking place at the time? All things being equal, I would have liked to build the Bank up from scratch because there is really nothing harder than question-ing the very foundation of a business model, changing it and turning everything on its head while operations are ongoing. The challenge was realising the new business model – i.e. becoming an international specialist bank for transport finance – while simultaneously conducting business as usual in order to finance that transition into something new. In fact, we needed to expand our old business at times in order to generate greater returns even though we knew that it was business we wouldn’t want in three to five years. It was a very difficult balancing act. But the steadily increasing operating profit gave me the freedom I needed.

What was the significance of the two acquisitions in 1998 and 2000 for your vision?They gave us a real jump start. Sometimes a vision just needs a bit of luck. LTCB’s planned sale of an aircraft and ship loan port-folio was brought to my attention at an event. I then flew to Lon-don for a presentation for interested banks held by JP Morgan, which was tasked with the sale, but I arrived much too late. The presentation was over but I was able to get my hands on an Information Memorandum in the hallway. I then sought out two consultancy firms – Clifford Chance and Babcock & Brown – and met with very well-versed and experienced professionals

» 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.«

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who were able to advise us on making the acquisition, as I had never acquired a part of a bank before. Our primary interest was in the employees’ expertise and the client relationships. The fact that JP Morgan then received a mandate to sell a whole bank, namely Nedship Bank, just a year later was another great coincidence. It naturally made sense to approach us about it, and I expressed our interest. The partnership talks that were taking place at the time between Rabobank as vendor and our majority shareholder DG BANK also helped us to secure pre-ferred status, but we still had to make our case in terms of con-cept and price. The timing of the venture was actually all wrong because we had yet to finish taking over the LCTB portfolio.

When you look back today, what was the most challenging time in all the years you have been at DVB? Was there ever a situation that you consider critical?Even though hindsight has a way of casting a rosy glow over tough times, there are certain experiences that have stuck with me. First I needed to be an advocate for taking over the LTCB portfolio and its employees with the majority shareholder, and there were certainly people opposed to internationalisation. The next hurdle to overcome was our IT setup. Naturally, the 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 offering English language courses and reworked our IT applica-tions in English. The cost and effort was considerable. And there was another important IT situation. In the transition from 1999 to 2000 we didn’t just have to deal with the Y2k problem, we also said goodbye to our old KORDOBA IT system and intro-duced SAP. The SAP changeover seemed to be going fine at first, or at least that was what a series of tests led us to believe. So we decommissioned the old system only to discover shortly thereafter that we didn’t have the foggiest idea what was going on in terms of postings, balances, income positions and balance sheet items and all that. The computer was spitting out rubbish.

I had lost control of the Bank. So naturally I was relieved – to say the least – when we were able to work with a team of PWC consultants to fix the problem. The third decisive experience was the financial markets crisis of 2008/09, when I suddenly was confronted with a situation where we weren’t getting any quotes for EUR/USD swaps and long-term, or even short-term, funding. It became clear to me that the banking world had changed radically, and that the markets could fail completely.

Today DVB is a brand name in global transport finance. The company logo is pretty eye-catching. What can you tell us about how it was created?We introduced the logo after we acquired Nedship Bank because we wanted to make it clear from the outside that we were creating something new together. The logo is eye-catching because of the bright yellow colour, but also because the letters are slightly blurred. It is meant to signify movement and momen-tum, something that is particularly important in our market. At the time people were still sending a lot of faxes, and one of the main criticisms was how fax transmission made the logo illegible. But we persevered. And because the logo generated so much buzz, it also cemented itself as something unique.

DVB’s business model has performed very well. To what do you attribute this success? Are you worried about people copying the model?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. A lot of other banks were and are active in financing seagoing vessels and aircraft, etc., but all of them are active in a lot of other areas as well. And if anything has really been put to the test quite a bit, it has been the transport sector. In fact we’re experiencing it again now. For us, exclusivity means that this is our only target market and we know that we have to get a lot right if we want

» 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.«


to survive in the long term. Secondly, where would a copycat go to get all the necessary people that we have at our firm – who have internalised our business ideas of appreciating team-work, and are passionate about finding solutions for our clients? To put it bluntly, they all have either seawater, diesel or kerosene in their veins. The key to our success lies in our employees, who come from more than forty different countries, and the way they all work together so successfully. That is no easy thing to replicate.

How does the Bank handle the cycles that are typical for the transport sector?It’s true that the transport markets are cyclical. But our approach is cycle-neutral, which means that we can offer solutions that suit any point in a cycle. That is also why we like cyclicality, because the down phases – as we are experiencing in some sub-markets of maritime shipping right now – showcase our expertise. It is easy to finance aircraft and vessels during boom phases and then cut and run during a downturn. That isn’t our 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.

What challenges to you see DVB facing in the years ahead?It isn’t the discussion about the image of banks and bankers, which really isn’t fair for the majority of employees at a great many banks, but rather political challenges in the years ahead. Political actionism and populism hold the potential to drown banks in regulations. It causes me great concern indeed. Banks are facing the challenge of virtually unmanageable complexity, which is making it harder for them to perform their vital role in the economy. Another issue is of course the changes taking place at different levels of management, including the Board of Managing Directors. New people will always bring their own individual style with them, and have their own ideas about putting their plans into action. That is a good thing, because when a business model is successful for a long time, there may be a dangerous temptation to think that change isn’t necessary and so to leave opportunities unexplored. But we always need to remember that those who stop improving stop being any good. Management change is normal, and helps us to progress.

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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.

Ten quesTions for

DaViD GorinG-ThoMas


When did you first become involved in aviation finance? Was this a profession you were thinking about at an early stage in your career, or rather something you got into by accident?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 careers in banking and insurance. In 1994, I joined the transpor-tation department of NatWest International as a graduate trainee. On my first day at NatWest, I joined the Aerospace/Aviation team covering Asia, and, as they say, “the rest is history”. I feel lucky that I stumbled across such an interesting profession.

What importance did LTCB have in the international aviation finance business back in 1998? Were there any focal points in the business? By 1998, LTCB had become, under the leadership of Klaus Heinemann, one of the prominent players in the Aviation/ Aircraft Finance market. LTCB’s main focus was on arranging and underwriting commercial aircraft finance, and – exactly as it is today for DVB – we were not targeting export credit sup-ported transactions, but rather preferred to take true airline and asset risk for an appropriate higher reward. A further notable activity was the arranging of Japanese Leveraged Lease (JLL) financing, where naturally we could benefit from LTCB’s estab-lished activity and relationships in Japan. Looking back, I think it is fair to describe LTCB as a smart arranger, underwriter and provider of aircraft finance, and this is the foundation from which we have developed our aviation activities at DVB.

What made LTCB put its aviation finance portfolio up for sale?LTCB was in financial difficulties and undergoing restructuring, and was forced to slow down or possibly cease international business. Klaus Heinemann managed to persuade senior Japa-nese management of the merits of selling the aviation and shipping portfolios of LTCB as a business, together with the respective teams, on the basis that LTCB would be able to benefit from the franchise value which had been developed over time. LTCB was one of the first Japanese banks to set up a

specialised team, and had a network of airline, lessor and OEM relationships, which underpinned transaction origination. For LTCB, this proved to be a good decision, as they were able to receive an enhanced value for the loan portfolio.

What meaning did London as a financial hub have for international aviation finance back in 1998? Did the financial markets crisis which broke out in 2008 change any of this?Back in 1998, London was certainly a key hub for aviation finance. There was a crowd of active banks, but this picture has changed massively since that time – including, but not only, as a result of the 2008 financial crisis. We were only discussing the other day how few of the specialised aviation finance teams are nowadays based in London.

What were your first thoughts when DVB was first mooted as a potential buyer for LTCB’s portfolio?I had been aware of DVB – or “Deutsche VerkehrsBank” as it was then – as a new entrant to the aviation finance arena, for about 18 months, and indeed DVB had already participated in a financing which we led (at LTCB) for Thai Airways. Our main contact was Frank Wulf, who had already been hired by DVB from Bayerische Landesbank. So, although DVB was not exactly a household name in Aircraft Finance at the time, the team at LTCB could see the mutual benefits of a transaction between the two parties.

What was indeed notable for a relative newcomer (as DVB was) to aviation finance was that DVB were well prepared and professional in their approach to assessing and negotiating the purchase, which was actually in contrast to some other bidders who were (supposedly) “experienced” in the industry. DVB retained the advisory services of Clifford Chance and Babcock & Brown, both well recognised, and this made a significant differ-ence to the way in which DVB’s approach and offer was viewed.

One other consideration for us folks at LTCB was that, of the three short-listed bidders, I believe DVB was the only party who were keen to acquire the portfolio AND team. The other serious

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bidders seemed keen to take the portfolio, but had their own, sizeable established teams in place. This was certainly a factor in favour of DVB, from the perspective of the LTCB team.

DVB finally achieved their objective to become an established force in aviation finance, not only by purchasing a US$1.5bn exposure to the industry, but by recruiting a team to supplement their own, capable of originating and arranging business to develop and grow this activity over time.

When the sale to DVB finally took place, various integration measures were launched. Back then, what were the greatest organisational challenges?At the time, DVB had just one representative office in Basle, Switzerland, and with the recruitment of LTCB’s aviation and shipping teams, it had been decided to establish a branch office in London and a representative office in New York. This was a significant undertaking for the Bank, but an excellent working group of existing DVB and former LTCB staff worked with dedication, and under great time pressure, to achieve the objectives set.

Of course the task of arranging loan transfers, change of agency and security trustee functions, and so on, relating to the portfolio to be purchased was massive, and from beginning to end this took about 18 months. At the same time we wanted to maintain momentum to conclude new business: even in 1998, Wolfgang Driese’s mantra was “Keep on running!”

All changes and integration measures which took place had to be achieved by a bank whose (IT) systems were exclusively in German. This was a challenge to German and English speakers alike, as, for example, all relevant information on the purchased LTCB portfolio of loans had to be transferred from LTCB’s English (IT) systems (with English-language loan documentation) on to DVB’s own German-language systems. Many a fun hour was spent by the teams to ensure that the purchased portfolio could be accurately reflected at DVB.

From your point of view, what were the success factors that have allowed DVB to maintain such a strong market position in aviation finance to date?Our specialisation – supported in particular by the world class advice from our Aviation Research team – has allowed us, on the one hand, to avoid many of the pitfalls found by our com-petitors, and, on the other hand, to originate and conclude structured lending business across a broad range of aircraft assets and obligors. This has meant that we have been able to consistently identify and add the right cocktail of “risk and reward” to our portfolio.

With addition over time of our Aviation Investment, Advisory and Asset Management activities and teams, we have been able to develop a range of (balance sheet) risk and non-risk services to our clients and a ‘cradle-to-grave’ coverage of aircraft assets, from pre-delivery finance at one end of the spectrum to end-of life (teardown) solutions at the other end of the spectrum. This has enabled us to be consistently active across various industry

»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).«


and liquidity cycles, and thus clearly differentiate DVB as a reliable partner to our customers. This reliability is also ensured by virtue of our specialised, lean decision-making (credit approval, etc.) processes.

Comparing today’s portfolio to what it was like back in 1998 – what has changed the most? The portfolio is now six times the size! This has been an incred-ible 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). Of course, it is not all about volume, but what we have developed is a scaled (and further scalable) business, built around a diverse portfolio of risks, and a rich group of clients and prospects.

Overall, how has the aviation finance business changed in recent years? What have been the most fundamental changes you have witnessed?One of the most significant trends in the business has been the increased demand from the airlines for operating leases, and 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.

Otherwise, I’d tend to say that little has changed in Aviation Finance in recent years, save that – for an industry where airlines struggle for profitability even in good times, and where external events can have quite devastating consequences – there is a much greater appreciation of the importance of getting the air-craft collateral analysis right, as a means of minimising the ‘Loss Given Default’ (LGD) of a financing.

Let us close with a view to the future: what changes and challenges do you perceive for the years ahead? As discussed, we have developed a business we can rightly be proud of, but we must continue to evolve and adapt to com-petition and changing markets. We have a team of creative, innovative people, which we must harness properly to ensure we stay ahead of our competitors.

More generally for the bank, I believe we need to do more to identify and develop synergies across our four industries (aviation, shipping, offshore, land transport), if we want to exploit the full value of our unique status as a specialist transportation bank.

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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.

Ten quesTions for

richarD GroeneVelD


What precipitated your career move to Nedship Bank? A headhunter approached me. I was a bit surprised, as I had initially considered going to a major consumer goods company. I didn’t have any banking experience, but the chance to be involved in putting a five-year plan into action as Controller and Deputy Managing Director was appealing. We had just finished putting reorganisational measures into place when Rabobank informed management of its intention to sell Nedship Bank.

What was Nedship Bank’s position at the time in shipping finance in the Netherlands and on the international banking market? Nedship Bank was certainly an important financing provider, both for inland navigation as well as international shipping finance. Its network of locations in key maritime shipping centres, including Piraeus, Bergen, New York and Hong Kong meant it was able to provide extensive services.

Nedship Bank used to be owned by Rabobank. What is the background story there? Rabobank acquired Nedship Bank in 1986. At the time, Dutch banks such as Nedship Bank, which had funded themselves by issuing covered bonds, were having problems placing their paper. Traditional covered bond buyers were shaken by the bankruptcy of a major Dutch issuing bank. The takeover solved Nedship 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.

How did the sale to DVB, or Deutsche VerkehrsBank as it was called then, come about?First Rabobank informed Nedship Bank management of its in-tentions to sell, and asked the bank to suggest some potential buyers. A special data room was set up, but to keep everything secret all the work took place outside of normal business hours. Because talks were under way about a closer collaboration between Rabobank and DG BANK, the latter brought its sub-sidiary Deutsche VerkehrsBank into the mix and it obtained preferred status.

How did employees react to the news of the DVB takeover? At the beginning there was a lot of anxiety and scepticism, because very little was known about the potential buyer. But that was resolved very quickly because the Board of Managing Directors of Deutsche VerkehrsBank opened up a dialogue with Nedship Bank employees more or less immediately. They were always in the office and communicated openly. I remember that Mr Driese once said, right at the outset, that he thought the takeover of Nedship bank was a bit early for him because they were still working on integrating the portfolio they had acquired from LTCB and were still in the midst of reorganising the German branch office network. But on the other hand he saw it as an opportunity that was too good to pass up. That’s an example of the openness they embodied right from the beginning.

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What was it that made the takeover such a success in the end?As the buyer, Deutsche VerkehrsBank never made decisions about individual steps towards integration on its own. Instead it rounded up all the employees of Nedship Bank into the same proverbial boat, and everyone worked together to figure out the best way to merge the strengths of both institutions. From our side, that enabled us to contribute our international experience so that Deutsche VerkehrsBank could adjust its processes at the head office in Frankfurt to cope with the requirements of internationalisation.

The year it was taken over by Deutsche VerkehrsBank was also Nedship Bank’s 100th anniversary. Its history 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.

When you compare today with yesterday, what do you think has changed the most in the shipping finance business?Individual transactions are getting more complex. No two loans are alike. And the entire shipping industry has become more challenging, especially over the last few years. That is why lending facilities, unlike in the past, need to be monitored much more closely over their entire lifetime, and active management may require intervention. In recent history, we have had to step in and actively manage transactions a number of times, but most could be repaired. Managing loan portfolios also takes more than it used to. We have to be prepared to place shipping loans on the syndication market if it recovers, which doesn’t look likely at the minute.

»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. «


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.

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What are your current tasks at DVB?I am deputy to the regional head of Asia Pacific and a senior relationship manager within the Singapore Aviation team. As such, my main tasks are to maintain the relationship with our many clients in Asia. As we split Asia amongst three relationship managers, I have a set number of countries for which I have client responsibility. This means that I am in active contact with airlines and lessors on the various products that DVB has to offer, from lending, to investments and asset management. As deputy regional head I am also in touch with the administration side of the business and I am involved in internal/external audits amongst others.

How did you come to join DVB? What did you know about DVB when you applied for your position?Prior to joining DVB, I was with SALE, the predecessor to BOC Aviation, one of the largest aircraft leasing companies globally. As such, I was aware of DVB and its reputation as a specialist bank with good and experienced people throughout the organi-sation. I had also dealt with DVB before and was impressed with the level of detail that they asked of their clients.

Does history of the enterprise play a role in business life in Asia? 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.

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.

Ten quesTions for

Marilyn Gan


From your point of view, what is special about working for a bank in Asia? What are the differences you have perceived in corporate culture between banks with an Asian or European background?I believe that the 21st century is indeed Asia’s century and as such, it is especially exciting for me to be based in Asia at this time. This is in stark contrast to the situation ten years ago where people were generally keen to work in Europe and the US as those markets were seen as being growth markets. As we read in the news daily, we have so many countries in Asia (in particular China, Indonesia) that are on a double digit growth track annually. How many regions in the world can claim to have this level of growth? 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.

There is a lot of discussion going on in Europe about how the role of women in executive positions can be strengthened. Is this a subject that has raised interest in Asia as well?Absolutely. However, in Asia’s case, there is still a lot of catching up to do. In many industries, there still exists the informal “old boys network” where many positions (both at Board and senior executive level) are filled through knowing the right people. In order for more women to succeed in the work place, companies need to acknowledge the importance of “work/life balance”. Only if this is successfully implemented will we start to see more women going higher up in the organisation. DVB is one such employer and I feel very fortunate to be able to work for an organisation that values both job performance and family life at the same time.

Is DVB a known institution in Asia in its line of business – or do you still have to explain what we do? What are DVB’s unique selling points, considering the numerous other banks which are active in the loan business in Asia? DVB is fairly well known in Asia. In the past, principally because our business model favoured lessor financings, DVB was better known in the US and European markets. This was also due, in large part, to the markets in these regions being more developed

and advanced than in Asia. However, I am happy to say that over the last ten years, Singapore has developed its niche in Asia and we have managed to bring the name of DVB to almost all aviation clients in this region. Our client list has certainly expanded across all areas of the platform, from lending, the equity investments to advisory services etc. This has also resulted in the Asian team numbers tripling in the last five to six years.

Compared to other regions are there any differences or particular challenges in Asian aviation finance? In today’s market, we see a lot of competition in Asia. There is a huge amount of liquidity at the bank level but also on the equity side. As a result, we see many airlines/lessors coming into Asia for fund raising so competition on both the debt and equity side is keen. We have also seen Asian investors coming in to swallow big portfolios like SMBC’s purchase of RBS and Mitsubishi’s purchase of JSA (Jackson Square Aviation). Another challenge with working in Asia is the way people do business here. Clients have no qualms in telling the competition what we have quoted in the hope of getting a better deal. This is what we have to deal with and the relationships we have with our clients help us overcome this hurdle.

DVB is covering the Asian markets almost exclusively from Singapore. What is the fundamental basis for Singapore’s role in international aviation finance?DVB is well covered from Singapore, both on the shipping and aviation side. From an aviation perspective, Singapore has now become the Asian hub for many lessors. This was not the case 10 years ago when most lessors and aviation banks had their Asian presence in Hong Kong. This has now changed, thanks in large part to the Singapore government’s efforts to enhance Singapore’s position in the industry. This is done through the aircraft leasing scheme which provides for favourable corporate income tax level to lessors in Singapore if they meet certain requirements. As you know, Singapore is also a very easy place to live and popular amongst the expatriate community. As such, I believe that, with the support of the government, Singapore will be well placed to continue its position as the Asian hub for aviation.

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Many observers refer to the 21st century as being “Asia’s century”. What developments do you envisage for the pan-Asian banking sector in particular? Yes, that has indeed been the catchphrase on many lips these days. To a certain extent, that is correct and the banks in the region are all flush with liquidity. However, Asian banks still tend to be very credit focused and rely on the corporate standing of a company in its assessment of the loan. This is slowly starting to change and as Asian banks become savvier in their inter-national dealings, we will start to see a bit more diversity in the array of products being offered to clients. This will then lead to the development of different markets (e.g. bond markets), which are still far behind our counterparts in the US and Europe.

What is it that European banks can learn from Asia – and what can Asian banks learn from their European counterparts?At the moment, European banks (and US banks as well) have an advantage over Asian banks in their ability to think out of the box and being at the forefront of developing new products that their clients require. Asian banks are more conservative, prefer-ring to keep to the tried and tested products that have served them well in the past. Both methodologies are good and I believe European banks can learn from the Asian banks and not over- expose themselves to uncertain markets. Equally, Asian banks can also try to be a little more adventurous in their product offer-ings to clients.

»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.«


Now in its 90th year, DVB Bank is a robust provider of financing services on every transport market in the world. The search for what has made DVB a success can only reveal a whole series of factors that work together to enhance one another. First there is the Bank’s focus on its transport finance market niche that represents a massive market on a global scale. Within this niche, DVB is amongst the market leaders as a provider of collateral-ised asset finance. This position is due first and foremost to its market and specialist expertise. It strives to offer the best product, not the cheapest. DVB offers bespoke, and not off-the-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.

Although there is plenty of documentation to serve as a portal to the Bank’s past, there is no way to look into the future – even an annual forecast can be turned on its head in less than a day. Changes, both political and otherwise, to the landscape in which the Bank operates have yet to take shape – and will have an impact on the Bank’s business in the future. The Bank will also be an agent of change itself. Just as the Bank of ninety years ago is not the Bank of today, the Bank as we know it will not be the same in the future. In any case, it is brilliantly posi-tioned in 2013 to look ahead with great optimism.

concluDinG reMarks

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former members of the Board of Managing Directors

Dr Walter Prerauer (1923 –1933)Ernst Schlesinger (1923 –1933)Richard von Schaewen (1924 –1933)Dr Wilhelm Bein (Deputy Managing Director) (1924 –1926)Ernst Samwer (Deputy Managing Director) (1924 –1929)Erich Venske (Deputy Managing Director) (1925 –1933)Alfred Stegner (1933 –1937)Dr Max Martin Schlenker (1933 –1939)Dr Karl Richter (1933 –1945)Dr Hermann Jaeger (1937 –1945)

Alfred Prang (1950 –1960)Fritz Haas (1950 –1961)Fritz Bohle (1951 –1959)Dr Gerhard Wersche (1960 –1969)Dr Wilhelm Wetzmüller (1961 –1970)Friedrich Körting (1961 –1971)Alois Meyer (1970 –1973)Dr Heinz-Dietrich Tettenborn (1971 –1977)Karl-Heinz Boldt (1972 –1985)Dr Klaus Menche (1974 –1992)Dr Franz Schloßnikl (1977 –1990)Arno Grunhold (1985 –1994)Dr Klaus Zeidler (1990 –1997)Dr Dietrich Landes (1992 –1995)Michael Wiedenroth (1995 –1998)Anne-Rose Heibel-Dietrich (1995 –2000)Klaus Heinemann (1998 –2002)Rainer Irmen (Deputy Managing Director) (2001 –2002)Rolf Michael Betz (2003 –2006)

The Board of Managing Directors in 2013

Wolfgang F. Driese (since 1997)Dagfinn Lunde (since 2002)Bertrand Grabowski (since 2005)Ralf Bedranowsky (since 2013)

chairmen of the supervisory Board *

Otto Fischbeck, Government Minister (ret‘d.) (1923 –1933)Dr Carl Friedrich von Siemens (1933 –1935) Kurt Freiherr von Schröder, owner of J. H. Stein Bank (1935 –1945)

Dr Walther Helberg, Ministerial Director (1950 –1959)Prof Dr Heinz Oeftering, First President of Deutsche Bundesbahn (1959 –1973)Dr Wolfgang Vaerst, First President and Chairman of the Management Board of Deutsche Bundesbahn (1973 –1982)Wilhelm Pällmann, member of the Management Board of Deutsche Bundesbahn (1982 –1992)Heinz Neuhaus, member of the Management Board of Deutsche Bundesbahn Holding GmbH (1992 –1993)Diethelm Sack, member of the Management Board of Deutsche Bundesbahn (1993 –1994)Dr Berthold Eichwald, member of the Board of Managing Directors of DG BANK Deutsche Genossenschaftsbank AG (1994 –1999)Uwe E. Flach, member of the Board of Managing Directors of DG BANK Deutsche Genossenschaftsbank AG (1999 –2003)Dr Thomas Duhnkrack, member of the Board of Managing Directors of DZ BANK Deutsche Zentral-Genossenschaftsbank (2003 –2009)

chairman of the supervisory Board in 2013

Frank Westhoff, member of the Board of Managing Directors of DZ BANK Deutsche Zentral-Genossenschaftsbank (since 2009)

aPPenDix


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

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

Branches BerlinEssen Frankfurt/Main (HO)HamburgHanoverKarlsruheKasselCologneMainzMunich MünsterNurembergOldenburg SaarbrückenStuttgartWuppertal

Bureaux de Change Train stationsAachenBasel – German

railway stationBebraBerchtesgadenBerlin – Zoo railway stationBochum (A)BonnBrunswickBremenBüchenDusseldorfEmmerichFlensburg

Frankfurt/MainFreiburgFreilassingFriedrichshafenGroßenbrodeHamburgHanoverHeidelbergHelmstedtKaiserslautern (A)KarlsruheKasselKehlKiel (A)Koblenz (A)CologneKonstanz

LindauLudwigsstadt (Ofr.)LübeckMannheimMittenwaldMunichNurembergOsnabrückPassauRegensburg (A)SaarbrückenSalzburgStuttgartTrier WiesbadenWolfsburgWürzburg (A)

AirportsBremen Frankfurt/MainDusseldorfStuttgartMunich

Road border crossingsKehl Rhine bridgeKiefersfelden SchellenbergSchwarzbachStubenWeil-Otterbach

Ferries»Deutschland«»Theodor Heuss«

1960

Legend(HO) Head Office(A) Agency* and German ferries

1937

BranchesBerlin (HO)Bremen (A)BreslauDresdenErfurtEssen Frankfurt/MainHalle/SaaleHamburgHanoverKarlsruheKasselCologneKönigsbergMainz

Munich MünsterNurembergOldenburg (A)SaarbrückenSchwerinStettinStuttgartWuppertal

Bureaux de Change AachenBasel – German Reichsbahn

railway stationBentheim

Berlin– Zoo railway station– Anhalt railway

station– Potsdam railway

station– Silesian railway

station– Stettin railway

station– Friedrichstrasse

railway stationBeuthen – Upper SilesiaBremenBreslau

DresdenDusseldorfEmmerichFlensburgFrankfurt/MainFriedrichshafenGarmisch- PartenkirchenGleiwitzHamburgHindenburg – Upper SilesiaKarlsruheKehlCologneKönigsberg

LeipzigMarienburgMittenwaldMunichNeu BentschenNurembergPassauSaarbrückenSaßnitz HarbourSchneidemühlStettinStuttgartWarnemünde

Branches anD Bureaux De chanGe


Branches BerlinDresdenErfurtEssen Frankfurt/Main (HO)Halle/SaaleHamburgHanoverKarlsruheKasselCologneMainzMunich MünsterNurembergRostock

SaarbrückenStuttgartWuppertal

Bureaux de Change Train stationsAachenBasel – German

railway stationBerlin – Central Station– Zoo railway station– Friedrichstrasse

railway stationBonnBrunswick

BremenDresdenDusseldorfEssenFrankfurt/MainFreiburgHalle/SaaleHamburgHamburg-AltonaHanoverHeidelbergKarlsruheKasselCologneKonstanzLeipzigLübeck

MagdeburgMainzMannheimMunichMünsterNurembergSaarbrückenStuttgartTrier WiesbadenWolfsburg

AirportsFrankfurt/MainDusseldorfStuttgartMunich

1980

Road border crossingsKehl Rhine bridgeKiefersfelden Saarbrücken– (French motorway)SchwarzbachWeil-OtterbachPuttgarden *Saßnitz *Warnemünde *

1991

Branches AthensBergenCuraçaoFrankfurt/Main (HO)HamburgLondon

New YorkOsloRotterdamSingaporeTokyoZurich

2013

Branches BerlinEssen Frankfurt/Main (HO)HamburgHanoverKarlsruheKasselCologneMainzMunich MünsterNurembergSaarbrückenStuttgartWuppertal

Bureaux de Change Train stationsAachenAugsburg (A)Basel– German

railway stationBebra (A)Berlin – Zoo railway stationBochum (A)BonnBrunswickBremenDusseldorfEssenFrankfurt/MainFreiburg

Friedrichshafen (A)Garmisch- Partenkirchen (A)Gießen (A)HamburgHanoverHeidelbergKaiserslautern (A)KarlsruheKasselKehlKiel (A)Koblenz (A)CologneKonstanzLindauLübeck

Ludwighafen (A)MainzMannheimMunichNurembergPassauPforzheim (A)PuttgardenRegensburg (A)SaarbrückenStuttgartTrier Ulm (A)WiesbadenWolfsburgWürzburg (A)

AirportsFrankfurt/MainDusseldorfStuttgartMunich

Road border crossingsKehl Rhine bridgeKiefersfelden Saarbrücken (French motorway)SchwarzbachWeil-Otterbach

Ferries»Deutschland«»Theodor Heuss«

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

Title page

01. DVB Bank head office, Frankfurt/Main (since 1996), DVB Picture Archives

02. Head office of Deutsche Verkehrs-Kredit-Bank, Berlin (from 1925 to 1936), DVB Picture Archives

Introduction

03. Prof Dr Borislav Bjelicic, Head of Corporate Communications, DVB Picture Archives

1923 – 1932

04. Two telegrams dated 12 May 1923, DVB Picture Archives05. Otto Fischbeck, first Chairman of the Supervisory Board of

Deutsche Verkehrs-Kredit-Bank AG, DVB Picture Archives06. Company logo from 1923, DVB Picture Archives07. Head office of Deutsche Verkehrs-Kredit-Bank, Berlin

(from 1925 to 1936), DVB Picture Archives08. The first Board of Managing Directors of Deutsche

Verkehrs-Kredit-Bank, Reichshandbuch der Deutschen Gesellschaft 1930 – 31

09. Railways in the Weimar Republic, German Federal Archives, picture 146-1995-037-21 / no details provided

10. Bank notes printed during the 1923 period of hyperinflation, DVB Picture Archives

11. First annual report of Deutsche Verkehrs-Kredit-Bank (1924), DVB Picture Archives

12. Shares of Deutsche Verkehrs-Kredit-Bank (1924 – 1925), DVB Picture Archives

13. Memorandum dated 25 September 1924 on the handling of Reichsbahn funds, DVB Picture Archives

14. Client note concerning a deferred freight payment to the Essen branch of Deutsche Verkehrs-Kredit-Bank (1927), DVB Picture Archives

15. Hand-written application of Mr Walter Lohrenscheit, dated 9 November 1928, who was subsequently employed by the Bank, DVB Picture Archives

16. Letterhead of Deutsche Verkehrs-Kredit-Bank’s head office (1931), DVB Picture Archives

17. Global economic crisis, German Federal Archives, picture 146-1976-033-023 / Seiler

18. Karl-Heinz Boldt, member of the Board of Managing Directors from 1972 to 1985, DVB Picture Archives

1933 – 1945

19. Portrait of “Verkehrs-Kredit-Bank as the Reichsbahn banking department”, shown in Deutsche Reichsbahn’s 1932 calendar, DVB Picture Archives

20. Adolf Hitler’s rise to power 1933, German Federal Archives, picture 146-1972-026-11 / Robert Sennecke

21. Berlin inner-city traffic in the 1930s, German Federal Archives, picture 183-H25713 / no details provided

22. Deutsche Verkehrs-Kredit-Bank bureau de change at Munich’s central station, DVB Picture Archives

23. Head office of Deutsche Verkehrs-Kredit-Bank, Berlin (from 1936 to 1945), DVB Picture Archives

24. Office scene at Deutsche Verkehrs-Kredit-Bank, Berlin (1938), DVB Picture Archives

25. Annual report of Deutsche Verkehrs-Kredit-Bank (1943), DVB Picture Archives

26. Kurt Freiherr von Schröder, Chairman of the Supervisory Board of Deutsche Verkehrs-Kredit-Bank (1935 – 1945), WikiCommons

27. Berlin in ruins, 1945, German Federal Archives, picture 212 – 113 / Ugo Proietti

1946 – 1949

28. Currency reform in West Germany, German Federal government / Puck archives

29. Overcrowded trains – a familiar picture during the first post-war years, German Federal Archives, B 145 Bild-F080295-0001 / Vollrath

30. Movie poster of “Der Bruch” (“The Break-in”)31. The former headquarters of Deutsche Verkehrs-Kredit-Bank

are taken up by Eisenbahnverkehrskasse, the East German Railway Pay Office, DVB Picture Archives

1950 – 1973

32. The German “Wirtschaftswunder”, German Federal government / Rolf Unterberg

33. Signing of the Treaty of Rome, establishing the European Economic Community, German Federal government / no details provided

34. Franco-German reconciliation – the Elysée Treaty, German Federal government / Ernst Schwahn

35. Willy Brandt kneels at the Warsaw Ghetto memorial, German Federal government / Engelbert Reineke

36. Oil embargo 1973, bringing about the first serious economic and energy crisis, German Federal government / Detlef Gräfingholt

37. Alfred Prang and Fritz Haas, DVB Picture Archives38. Advertisement for deferred freight payment (1950s),

DVB Picture Archives39. Deutsche Verkehrs-Kredit-Bank bureau de change at

Hamburg’s central station (ca. 1957), DVB Picture Archives40. Deutsche Verkehrs-Kredit-Bank bureau de change at

Bremen airport (ca. 1957), DVB Picture Archives41. Flyer listing Deutsche Verkehrs-Kredit-Bank’s bureaux de

change and their opening hours (1960), DVB Picture Archives

lisT of illusTraTions


42. Exchanging GDR Ostmark at a bureau de change of Deutsche Verkehrs-Kredit-Bank, DVB Picture Archives

43. Punchcard processing centre at Deutsche Verkehrs-Kredit-Bank’s Frankfurt/Main head office (1968), DVB Picture Archives

44. Deutsche Verkehrs-Kredit-Bank’s Frankfurt/Main head office (1965), DVB Picture Archives

45. The Board of Managing Directors of Deutsche Verkehrs- Kredit-Bank in 1963, DVB Picture Archives

46. The Board of Managing Directors of Deutsche Verkehrs- Kredit-Bank AG in 1973, DVB Picture Archives

47. Branch managers’ meeting of Deutsche Verkehrs-Kredit- Bank AG in 1963, DVB Picture Archives

48. Speech by Mr Heinz Oeftering, First President of Deutsche Bundesbahn (1969), DVB Picture Archives

49. Mr Kurt Müller, manager of the Stuttgart branch (1962 – 1987), DVB Picture Archives

1974 – 1988

50. The Frankfurt Stock Exchange floor in the 1980s, German Federal Archives, picture F078983-0036 / no details provided

51. Deutsche Verkehrs-Kredit-Bank bureau de change on the side of the Federal motorway at Schwarzbach (1978), DVB Picture Archives

52. Deutsche Verkehrs-Kredit-Bank bureau de change at Berlin’s Zoo railway station (1984), DVB Picture Archives

53. IT processing at Deutsche Verkehrs-Kredit-Bank’s Frankfurt/Main head office (1979), 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 Archives56. Frankfurt airport on a German stamp (1979), Shutterstock57. Shares of Deutsche Verkehrs-Kredit-Bank AG – IPO in 1988,

DVB Picture Archives58. 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 Archives63. German reunification, German Federal government /

Klaus Lehnartz

1997 – 2013

64. DVB’s business divisions, DVB Picture Archives65. Signing of the contract for the takeover of Nedship Bank

(1999), DVB Picture Archives66. Singapore – DVB’s business hub in the Asian growth region,

Shutterstock67. Company logo from 2000, DVB Picture Archives68. Company logo from 2002, DVB Picture Archives69. Introduction of euro notes and coins on 1 January 2002,

German Federal government / Bernd Kühler70. DVB’s Board of Managing Directors in 2013,

DVB Picture Archives71. DVB Bank’s Global Management Conference (2008),

DVB Picture Archives72. DVB Bank’s nominal customer lending as at 1 January 2013,

DVB Bank73. DVB Bank’s employees as at 31 December 2012, DVB Bank74. DVB Bank’s consolidated net income before taxes, 1997–2012,

DVB Bank75. Wolfgang Driese, CEO and Chairman of the Board of Managing

Directors of DVB Bank, Frankfurt/Main, DVB Picture Archives76. David Goring-Thomas, Managing Director, Aviation Finance

Division, DVB Bank, London, DVB Picture Archives77. Richard Groeneveld, Chief Operating Officer, DVB Bank,

Frankfurt/Main, DVB Picture Archives78. Marilyn Gan, Deputy Head of Asia/Pacific region, Aviation

Finance Division, DVB Bank, Singapore, DVB Picture Archives

1974 – 19881946 – 1949 1997 – 20131933 – 1945 1989 – 19961950 – 19731923 – 1932

BiBlioGraPhy

Ambrosius, Gerold (Ambrosius 1984): Der Staat als Unternehmer. Göttingen 1984Ambrosius, Gerold (Ambrosius 2005): Von Kriegswirtschaft zu Kriegswirtschaft 1914 – 1945, in: Deutsche Wirtschafts geschichte. Published by Michael North, 2nd Edition Munich 2005, p. 287 – 355Author not named (Der Spiegel 1989): Ostmark zum Willkür-Kurs, in: Der Spiegel, No. 48 1989, p. 112 – 113Berghoff, Hartmut (Berghoff 2002): Der Berliner Kapitalmarkt im Aufbruch (1830 – 1870), in: Geschichte des Finanzplatzes Berlin. Frankfurt/Main 2002, p. 53 – 102Biermann, Gerhard (Biermann 1971): Wechselstuben der DVKB – Chronik 1948 – 1970. Self-publication, Frankfurt/Main 1971Blaich, Fritz (Blaich 1994): Der Schwarze Freitag. 3rd Edition, Munich 1994Brestel, Heinz (Brestel 1973): 50 Jahre Deutsche Verkehrs- Kredit-Bank – Ein halbes Jahrhundert im Dienste der Eisenbahn. Published by Deutsche Verkehrs-Kredit-Bank AG, Frankfurt/Main 1973Brüning, Heinrich (Brüning 1970): Memoiren 1918 – 1934. Stuttgart 1970Buchheim, Christoph (Buchheim 1998): Die Errichtung der Bank Deutscher Länder und die Währungsreform in West-deutschland, in: Fünfzig Jahre Deutsche Mark – Notenbank und Währung in Deutschland seit 1948. Munich 1998, p. 91 – 138Deutsche Verkehrs-Kredit-Bank AG (DVKB 1972): Die Deutsche Verkehrs-Kredit-Bank Aktiengesellschaft – ihre Stellung und Aufgabe als Hausbank der Deutschen Bundesbahn. Self-publication, 2nd Edition, Frankfurt/Main 1972Gottwaldt, Alfred (Gottwaldt 2011): Die Reichsbahn und die Juden 1933 – 1939 – Antisemitismus bei der Eisenbahn in der Vorkriegszeit. Wiesbaden 2011Gries, Rainer (Gries 2003): Die Mark der DDR – Eine Kommunikationsgeschichte der sozialistischen deutschen Währung. Edited by Landeszentrale für politische Bildung, Erfurt 2003Grunenberg, Nina (Grunenberg 2006): Die Wundertäter – Netzwerke der deutschen Wirtschaft 1942 – 1966. Munich 2006Guinnane, Timothy; Bormann, Patrick; Scholtysek, Joachim; Wixforth, Harald; Paul, Stephan; Theurl, Theresia (Guinnane et. al. 2013): Die Geschichte der DZ BANK – das genossenschaftliche Zentralbankwesen in Deutschland vom 19. Jahrhundert bis heute. Munich 2013 Hachtmann, Rüdiger; Kreutzmüller, Christoph (Hachtmann/Kreutzmüller 2013): Arbeiter und Arbeiter-organisationen in Berlin (1930 – 1945), in: Berlin 1933 – 1945, edited by Michael Wildt and Christoph Kreutzmüller. Munich 2013, p. 111 – 126

Humann, Detlev (Humann 2011): Arbeitsschlacht – Arbeitsbeschaffung und Propaganda in der NS-Zeit 1933 – 1939. Göttingen 2011James, Harold (James 1998): Die Reichsbank 1876 bis 1945, in: Fünfzig Jahre Deutsche Mark – Notenbank und Währung in Deutschland seit 1948. Munich 1998, p. 29 – 89James, Harold (James 2002): Strukturwandel in Kriegs- und Krisenzeiten 1914 – 1945, in: Geschichte des Finanzplatzes Berlin. Frankfurt/Main 2002, p. 157 – 213Kaatz, Hermann (Kaatz 1926): Die Organisation der Deutschen Verkehrs-Kredit-Bank Aktiengesellschaft. Inaugural dissertation at the Economics and Social Sciences Faculty of Frankfurt University. Frankfurt/Main 1926Kaatz, Hermann (Kaatz 1927): Entwicklung der Geschäfts-bedingungen der Deutschen Verkehrs-Kredit-Bank, excerpt from the dissertation entitled: Die Organisation der Deutschen Verkehrs-Kredit-Bank Aktiengesellschaft. Frankfurt/Main 1927Kopper, Christopher (Kopper 2005): Bankiers unterm Hakenkreuz. Munich Vienna 2005Kopper, Christopher (Kopper 2007): Die Bahn im Wirtschafts-wunder – Deutsche Bundesbahn und Verkehrspolitik in der Nachkriegsgesellschaft. Frankfurt/Main 2007Kuhlmann, Bernd (Kuhlmann 2012): Deutsch-Deutsche Grenzbahnhöfe – Ost-West-Eisenbahnverkehr 1945 – 1990. Munich 2012Malotki, Alfred (Malotki 1935): Die Frachtstundung der Deutschen Reichsbahn-Gesellschaft, Königsberg. Berlin 1935Matis, Herbert; Stiefel, Dieter (Matis/Stiefel 1995): Das Haus Schenker – die Geschichte der internationalen Spedition 1872 – 1931. Vienna 1995Matis, Herbert; Stiefel, Dieter (Matis/Stiefel 2002): Die Geschichte der Spedition Schenker 1931 – 1991. Vienna 2002Mayer, Florian (Mayer 2006): Vom Niedergang des unter nehmerisch tätigen Staates – Privatisierungspolitik in Groß britannien, Frankreich, Italien und Deutschland. Wiesbaden 2006Melichar, Peter (Melichar 2004): Neuordnung im Bankwesen – Die NS-Maßnahmen und die Problematik der Restitution. Publications of the Austrian Commission of Historians: Vermögensentzug während der NS-Zeit sowie Rückstellungen und Entschädigungen seit 1945 in Österreich. Volume 11, Munich 2004Merten,Th.; Schmidt, E. (Merten; Schmidt 1963): 40 Jahre Deutsche Verkehrs-Kredit-Bank. Published by Deutsche Verkehrs-Kredit-Bank AG, Frankfurt/Main 1963Mierzejewski, Alfred C. (Mierzejewski 1999): Most Valuable Asset of the Reich – A History of the German National Railway Volume 1, 1920 – 1932. Chapel Hill, London 1999Mierzejewski, Alfred C. (Mierzejewski 2000): Most Valuable Asset of the Reich – A History of the German National Railway Volume 2, 1933 – 1945. Chapel Hill, London 2000Nedship Bank (Nedship Bank 1999): 100 years of international ship mortgaging. Rotterdam 1999Olten, Rainer (Olten 2006): 100 Jahre Verband der Sparda- Banken e. V. – Zeitreise 1906 – 2006. Frankfurt/Main 2006


Pagenstecher, Cord; Buggeln, Marc (Pagenstecher/ Buggeln 2013): Zwangsarbeit, in: Berlin 1933 – 1945. Edited by Michael Wildt and Christoph Kreutzmüller, Munich 2013, p. 127 – 142Röll, Viktor von (Röll 1914): Enzyklopädie des Eisenbahn-wesens. Second fully revised edition, volume 5: Fahrpersonal – Gütertarife, Berlin, Vienna, 1914Ruser, Ursula-Maria (Ruser 1981): Die Reichsbahn als Reparationsobjekt. Freiburg 1981Siemens, Georg (Siemens 1962): Carl Friedrich von Siemens – ein großer Unternehmer, Freiburg, Munich 1962Statistisches Reichsamt (Statistisches Reichsamt 1925): Statistical Yearbook for the German Reich, 44th Year 1924/25. Berlin 1925Statistisches Bundesamt (Statistisches Bundesamt 2012): Statistical Yearbook 2012. Wiesbaden 2012Steinmann, Carl-Peter (Steinmann 1997): Das Millionen- Ding im Osten – Der Schränker Walter Pannewitz, in: TatOrt Berlin. Berlin 1997, p. 112 – 132Streit, Manfred E. (Streit 1998): Die deutsche Währungsunion, in: Fünfzig Jahre Deutsche Mark – Notenbank und Währung in Deutschland seit 1948. Munich 1998, p. 675 – 719Thieme, H. Jörg (Thieme 1998): Notenbank und Währung in der DDR, in: Fünfzig Jahre Deutsche Mark – Notenbank und Währung in Deutschland seit 1948. Munich 1998, p. 609 – 653Wolf, Herbert (Wolf 1980): 30 Jahre Nachkriegsentwicklung im deutschen Bankwesen. Mainz 1980Wolfrum, Edgar (Wolfrum 2006): Die geglückte Demokratie – Geschichte der Bundesrepublik Deutschland von den Anfängen bis zur Gegenwart. Stuttgart 2006Zweig, Stefan (Zweig 1958): Die Welt von Gestern – Erinnerungen eines Europäers. Berlin 1958

Selected documents from the corporate archive of DVB Bank (chronological order)Memo dated 25 September 1924 regarding an agreement governing the investment of Reichsbahn funds between Reichsbahn Administration, Board of Managing Directors and Supervisory Board of Deutsche Verkehrs-Kredit-Bank, as well as Bankhaus S. Bleichröder, Dresdner Bank, Commerz- und Privatbank, Darmstädter und National-Bank and Deutsche Bank (Document 1)Report on the Verkehrs-Kredit-Bank and the takeover of the deferred freight payment business by the Bank, prepared by Deutsche Reichsbahn-Gesellschaft – Main Administration, 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)

Letter from Carl Friedrich von Siemens, President of the Supervisory Board of the Deutsche Reichsbahn-Gesellschaft dated 04 December 1926 to the Belgian Reparation Trustee Léon Delacroix (Document 5)Letter from the Reichsbank Board of Directors (no. II 421) dated 23 January 1928, Berlin, to the Main Administration of the Deutsche Reichsbahn-Gesellschaft (Document 6)Letter from the Personnel department of the Deutsche Verkehrs-Kredit-Bank dated 28 January 1936 to Abraham Schlesinger (Document 7)Letter from Bankhaus Abraham Schlesinger dated 30 January 1936 to the Deutsche Verkehrs-Kredit-Bank (Document 8)Internal report by the Deutsche Verkehrs-Kredit-Bank on the “Structure, Future and Current Legal State of Affairs” dated 30 August 1952 (Document 9)Internal communication within the Deutsche Verkehrs- Kredit-Bank dated 20 February 1954 regarding the claim for compensation of Frank (Fritz) Cassel (Document 10)Letter from the Deutsche Verkehrs-Kredit-Bank to the Finanzamt Frankfurt/Main-Mitte dated 10 January 1955 regarding the payment for compensation to Mr Frank (Fritz) Cassel, USA (Document 11)Letter from the Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank regarding the reparation case of Dr. Othmar Ziegler (Document 12)Letter from the Board of Managing Directors of Deutsche Verkehrs-Kredit-Bank to Dr Wolfgang Vaerst, First President and Chairman of the Management Board of Deutsche Bundesbahn dated 26 March 1976 regarding Dr Othmar Ziegler (Document 13) Documentation of mutual agreement, Berlin 4 May 1990, signed by the Deutsche Kreditbank AG, Reichsbahn- Sparkasse e.G., Deutsche Verkehrs-Kredit-Bank AG and Deutsche Reichsbahn (Document 14)

Additional sourcesAnnual reports since 1923Bank employee gazettes since 1959 For general information relating to German and international history, the Living Virtual Online Museum (LeMO), a joint project between the German Historical Museum (DHM), the House of History of the Federal Republic of Germany (HdG) and the Fraunhofer Institute for Software and Systems Technol-ogy was consulted – http://www.dhm.de/lemo/home.html

imprint

Author:Prof Dr Borislav BjelicicHead of Group Corporate Communications

Publisher:DVB Bank SEPlatz der Republik 660325 Frankfurt/[email protected] www.dvbbank.com

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

Holger Ziemannwww.erzaehlzeichen.net

ISBN 978-3-00-043344-3

DVB Bank SEPlatz der Republik 660325 Frankfurt/Mainwww.dvbbank.com

ISBN 978-3-00-043344-3 The

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