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Commerzbank AG is a major German bank operating as a universal bank, headquartered in Frankfurt am Main. In the 2019 financial year, the bank was the second largest in Germany after the balance sheet total.[4]. The bank is present in more than 50 countries around the world and provides almost a third of Germany's trade finance.[5]. In 2017, it handled nearly 13 million customers in Germany and more than 5 million customers in Central and Eastern Europe. Commerzbank is a member of the Cash Group.

Commerzbank AG
Aktiengesellschaft
Traded asFWBCBK
LSECZB
ISINDE000CBK1001
IndustryFinancial services
FoundedFebruary 26, 1870; 149 years ago (1870-02-26) in Hamburg, Germany[1]
FoundersTheodor Wille et al.[1]
HeadquartersKaiserplatz, ,
Area served
Worldwide
Key people
Services
RevenueDecrease 8.57 billion (2018)
Increase €1.245 billion (2018)
Increase €865 million (2018)
Total assetsIncrease €462 billion (2018)
Total equityDecrease €29 billion (2018)
Number of employees
49,174 (September 2018)
Capital ratio12.9% (2018)
Rating
Websitewww.commerzbank.com
Footnotes / references
Commerzbank Investor Relations

Contents

HistoryEdit

 
Commerz- und Disconto-Bank, Hamburg, 1874.
 
Former seat of Hessischer Bankverein in Kassel which was taken over in 1922, the building is used since then by Commerzbank

EmpireEdit

On February 26, 1870, mainly Hanseatic merchants, merchant bankers and private bankers founded the Commerzbank and Disconto Bank in Hamburg. Shipowner C. Woermann was the first chairman of the supervisory board of Commerz- und Disconto-Bank from 1870.[6] In the founding consortium, the following banks were represented:

In 1873, the subsidiary London and Hanseatic Bank was founded, which was active until the First World War. In Germany, Commerzbank was initially active in Hamburg until 1897 branches were built in Berlin and Frankfurt am Main. After the merger in 1905 with the Berliner Bank, founded in 1871, the focus shifted increasingly to Berlin.

Weimar RepublicEdit

In 1920, Commerzbank AG merged with Mitteldeutsche Privatbank AG in Magdeburg to form Commerz- und Privat-Bank AG, thereby gaining a dense branch network in the provinces of Saxony and Thuringia. In the early 1920s, many smaller banks were taken over (including the Hessian Bank Association) and in 1929 followed by the merger with the Mitteldeutsche Creditbank in Frankfurt am Main. On November 1, 1927, the Commerzbank took a large loan of 20 million dollars in ten-year gold notes to 5½% at the American Chase National Bank.

In 1931, during the Great Depression, several banks, including Commerzbank, got into a difficult situation (the German banking crisis). In order to save the banks, the Reich government under Chancellor Heinrich Brüning decided in February 1932 to merge Commerzbank with Barmer Bankverein, which had a dense branch network in northern and western Germany. A capital increase brought the majority of shares of this bank in the possession of the German Reich and the Reichsbank.

Third ReichEdit

As early as November 1932, Supervisory Board Chairman Franz Heinrich Witthoefft and Management Board Spokesman Friedrich Reinhart supported the Commerzbank with the so-called industrial input, with which Reich President Paul von Hindenburg was invited to appoint Adolf Hitler as Chancellor of the Reich as part of a Presidential Cabinet. In 1937, the nationalized shares were then transferred back to private shareholders. In 1940, the name Commerzbank Aktiengesellschaft, which had already been used in public, was adopted and the logo introduced a "C" with side wings (the winged god Mercury (Roman) or Hermes (Greek) protected travellers, merchants and thieves). In the Aryanization of the property of displaced or murdered Jews during the Holocaust, Commerzbank participated actively and benefited in particular through brokerage commissions. From 1940 to 1944, Commerzbank opened several subsidiaries in countries occupied by the German Reich, including the Netherlands, Belgium, Estonia and Latvia. In terms of total assets, Commerzbank fell back from third to fourth place among the big banks in 1942.

Allied OccupationEdit

With the division of Europe after World War II, three regional banks were united in 1958 to form Commerzbank AG, which had its headquarters in Düsseldorf. Commerzbank stepped up its economic financing activities and started expanding around the globe. From 1970 onwards, the bank's administrative activities were shifted to Frankfurt am Main, which has been its legal domicile since 1990.[7]

Federal RepublicEdit

Commerzbank suffered reversals in a disastrous foray into investment banking in the first half decade of the 2000s and eventually shut down its Commerzbank Securities investment banking unit run by Mehmet Dalman and Roman Schmidt after Chairman Klaus-Peter Müller labelled it a "problem child" and a review by consulting firm Mercer Oliver Wyman which concluded that Commerzbank Securities lacked a viable business model.[8][9][10][11] What was left of Commerzbank Securities was folded into a division of the commercial bank called Corporates and Markets.

Announcement: Acquisition of Dresdner BankEdit

Further mergers, acquisitions and restructures saw the group grow to servicing over 4 million customers in 1998, 6 million customers in 2001 and 15 million post the Global financial crisis oriented takeover of Dresdner Bank from Allianz for €5.5 billion in 2008. Commerzbank was hit hard by the financial crisis and received an €18 billion ($22.3 billion) state bailout.[12] In September 2016, Commerzbank planned to cut 9,600 jobs or about a fifth of its workforce in 4 years.[13]

ShareholdersEdit

As of December 2018, the bank's two largest shareholders were the Government of Germany (15.6%) and Cerberus Capital Management (5.01%).[14]

ControversiesEdit

For more than a decade, Commerzbank was involved in laundering hundreds of billions of U.S. dollars out of Iran, Sudan and Myanmar, against US sanctions.[15] Commerzbank agreed to pay $US1.5 billion in fines and dismiss several employees for their role in laundering $US253 billion, and for helping the Japanese company Olympus Corporation orchestrate accounting fraud.[16][17]

In 2017, Frankfurt prosecutors, together with federal crime police and tax officials, conducted searches of Commerzbank offices as well as the flats of three suspects in Frankfurt and nearby Hanau.[18] The police raid is about a "tax evasion probe in which several current and former managers are suspected of evading €40 million in taxes via dividend stripping, also known as "cum-ex" transactions".[19] The investigation also extends to trades in 2008 at Dresdner Bank, which was taken over by Commerzbank in 2009.[19] Commerzbank said "it proactively notified the authorities with the preliminary results of that investigation and is cooperating fully".[19]

ReferencesEdit

  1. ^ a b Manfred Pohl, Sabine Freitag, ed. (1994). Handbook on the History of European Banks. Brookfield: Edward Elgar Publishing. p. 375. ISBN 1-85278-919-0.
  2. ^ Michael Brächer (September 6, 2017). "Ein Banker als Anwalt der Kunden". Handelsblatt (in German). Retrieved May 6, 2018.
  3. ^ "Commerzbank-Aufsichtsrat neu gewählt: Schmittmann wird Vorsitzender". Handelsblatt (in German). May 8, 2018. Retrieved May 25, 2018.
  4. ^ "Commerzbank fourth-quarter net profit jumps 51 pct, tops expectations". www.cnbc.com. Feb 14, 2019. Retrieved Feb 14, 2019.
  5. ^ "How Germany Might Sell Its Commerzbank Stake: Four Scenarios". Bloomberg.com. 2018-03-27. Retrieved 2018-03-27.
  6. ^ Commerzbank's history on Commerzbank AG site.
  7. ^ History from 1870 until today on Commerzbank AG site.
  8. ^ Althaus, Sarah (2004-09-30). "Commerzbank unit chief 'to quit'". FT.com. Retrieved 2013-10-26.[permanent dead link]
  9. ^ "Commerzbank culls 900 as losses grow". Efinancialnews.com. 2004-11-09. Retrieved 2013-10-26.
  10. ^ Landler, Mark (10 November 2004). "Major Bank in Germany Cutting Back Its Trading" – via NYTimes.com.
  11. ^ "A weary lender". The Economist.
  12. ^ Kanishka Singh (January 26, 2018), Goldman, Barclays, SocGen interested in Commerzbank unit: Handelsblatt Reuters.
  13. ^ "Commerzbank To Cut 9,600 Jobs By 2020". September 30, 2016.
  14. ^ "Commerzbank (CBK)". Marketscreener.com. Dec 27, 2018. Retrieved Dec 27, 2018.
  15. ^ Schroeder, Peter (12 March 2015). "German bank to pay $1.45B to settle money laundering charges".
  16. ^ Protess, Ben (12 March 2015). "Commerzbank of Germany to Pay $1.5 Billion in U.S. Case" – via NYTimes.com.
  17. ^ Times), News Documents (The New York. "Justice Dept.'s Criminal Information With Commerzbank". www.documentcloud.org.
  18. ^ Sims, Tom. "German prosecutors raid Commerzbank in tax evasion probe". U.K. Retrieved 2018-05-03.
  19. ^ a b c Maria Sheahan, Tom Sims, Hans Seidenstuecker (14 November 2017). "German prosecutors raid Commerzbank in tax evasion probe". Reuters. Retrieved 14 November 2017.CS1 maint: Multiple names: authors list (link)

External linksEdit