BayernLB:
BayernLB or Bayerische Landesbank (Bavarian State Bank) is a publicly regulated bank based in Munich, Germany and one of the eight Landesbanken. As of the end of 2008, it is owned jointly at 50% each by the state of Bavaria and the Sparkassenverband Bayern, the umbrella organization of Bavarian Sparkassen. With a balance of €416 billion and 19,200 employees (in the group; 5,170 in the bank itself), it is the eighth-largest financial institution in Germany.
[edit] Main business activities
As a commercial bank, BayernLB offers private and commercial customers a universal range of services in private, industrial, investment and foreign business. This includes loans, securities trading and asset management, as well as mid-term and long-term bond issuance and securitization. The bank is refinanced through a variety of commercial debenture instruments.
As a state and municipal bank, BayernLB is responsible for comprehensive credit and financial counsel for the state of Bavaria and its municipalities and districts.
Through its subsidiaries, the bank is involved in a variety of further business areas. The Bayerische Landesbodenkreditanstalt is an organ of state housing policy, while the LBS Bayern is a public building society (Bausparkasse). Through its full ownership of the Deutsche Kreditbank, based in Berlin, BayernLB is also involved in retail banking.
[edit] History
Through its predecessor, the Bayerische Gemeindebank (founded 1914), and its much older subsidiary, the Bayerische Landesbodenkreditanstalt (founded 1884), BayernLB can claim to have more than 100 years of history. In its current form, the bank was founded by law on June 27, 1972, through the merger of the two institutions. Its first President was CSU veteran politician Karl Theodor Jacob. Later managers and Board members would also frequently be drawn from politics. The bank expanded internationally in the 1990's, gaining toeholds in East Asia, Eastern Europe and the United States. Through the 2007 acquisition of a 50.01% share in Hypo Group Alpe Adria for a sum of €1.625 bn, BayernLB expanded its geographic presence to Austria and the Balkans.
[edit] Involvement in the mortgage crisis
In early 2008 it was revealed that BayernLB had made large losses due to investments in sub-prime mortgage securities in the United States. Although the extent of these investments has been the topic of speculation, it was revealed from the company's Q2 2008 financial report that over €24 billion had been invested in critical securities, with losses of €2.3 billion in 2007 and a further €2 billion in the first quarter of 2008.[1]
The heavy public criticism took its first toll in March, 2008 when CEO Werner Schmidt resigned. The crisis also consumed the governing CSU party and its chairman, Erwin Huber, who as Bavarian Minister of Finance was the acting chair of the bank's Administrative Council and was accused of covering up the extent of losses. [2] The bank and the losses were major factors in the September, 2008 parliamentary elections, in which the CSU had its worst election result since 1962 and Huber resigned.
[edit] References
- ^ BayernLB, Press release from April 3rd, 2008: BayernLB trotz Finanzmarktkrise mit positivem Ergebnis
- ^ spiegel.de from April 3rd, 2008
[edit] External links
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