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Dresdner Bank A.G. Business Information, Profile, and History

Jurgen-Ponto-Platz 1
60301 Frankfurt

Company Perspectives:

We have set ourselves a full agenda for the years to come: we want to optimize our portfolio of businesses, and to reduce those activities that fail to meet our profitability targets. This is particularly relevant in view of the rapid development of our business environment, and the continued dynamic consolidation in the European financial services sector. Dresdner Bank is impressively positioned in its core business. This is particularly true in Private Clients and Asset Management, where we will pro-actively make use of the opportunities presented through growing wealth and structural changes in retirement provisions. We see additional potential in the diminishing distinction between banks and insurance companies, and the increasing integration of the respective products into a comprehensive range of financial services. We want to seize the opportunity to play an active role in this process.

History of Dresdner Bank A.G.

The third largest bank in Germany and one of the leading international banks in Europe, Dresdner Bank A.G. operates over 1,100 branch offices in 60 nations. Dresdner offers an array of products and services for private and corporate customers, including lending and deposit activities, corporate financing, equity sales, and asset management. In 2001 Dresdner was acquired by Allianz AG, a global insurance provider that saw the takeover as a way of bolstering its financial management arm. Both Dresdner and Allianz have suffered since this merger because of problems with Dresdner's investment bank business, Dresdner Kleinwort Wasserstein.

The Early Years

When Carl Freiherr von Kaskel, Felix Freiherr, and Eugene Gutman opened the doors of Dresden Bankhaus for business in Dresden on December 1, 1872, the time was ripe for new banks in Germany. Before its victory over France in 1871 organized Germany as a modern nation-state, there had not even been standardized units of currency, weight, or measurement. The opportunity for economic growth was enormous, and the management team of Dresdner Bank seized it with a vengeance.

As a universal bank, Dresdner Bank was formulated to serve all of the economic needs of its community. The role of the big banks in Germany was closely related to developing industries and expanding commercial opportunities. Accordingly, Dresdner Bank expanded rapidly in its first decade through a series of acquisitions, liquidations, and absorptions of smaller institutions. Though sometimes criticized for being unusually willing to assume risks, the management team of Dresdner Bank, led especially by Eugene Gutman, quickly made Dresdner the number two financial institution in Germany, behind only Deutsche Bank.

In 1884 Dresdner Bank moved its headquarters from Dresden to Berlin and then spent the rest of the decade expanding even more vigorously. Seeing the potential for growth in foreign markets, Dresdner began opening interests in Asia and Italy. This eye for expansion would continue to make Dresdner grow until its foreign interests were lost after World War I. Dresdner's huge credit reserve, like that of the other large German banks, also helped Germany transform itself from a capital importing to a capital exporting economy during the 1880s.

Dresdner opened new branches in Hamburg in 1892 and in Bremen and London in 1895. The London branch was especially significant for the bank because London was the financial center of the world at that time; it gave the company 19 highly profitable years before the onset of World War I.

At this time Dresdner developed close relations with the electro-technical, rail, and oil industries, which allowed it to build, with Deutsche Bank, a railroad line from Constantinople to Ankara, then an important line of transportation. The foundation of the Central Bank for Railway Securities by Dresdner in 1898 further cemented the relationship between the bank and the railroad industry.

In the early years of the 20th century Dresdner's continuous expansion made it a true giant of German industry. Dresdner achieved unprecedented success in the deposit business between 1896 and 1908 largely through innovative marketing techniques and the bold move of offering higher interest rates to deposit customers to draw a profitable volume of business.

In the first decade of this century, Dresdner formed a community of interest with Schaffhausenschor Bankverein in 1903, opened stock companies to start trade with Asia and South America, formed 27 branches through absorption of smaller banks, and formed an alliance with the American bank J.P. Morgan and Company to engage in international finance.

Of the four endeavors, the community of interest with Schaffhausenschor increased Dresdner's power the most. As Dresdner had always been a huge success in international business and its partner had long shown a genius for domestic banking, the alliance was a natural one, and the standings of both firms increased greatly as they shared profits and policies.

World War I and Postwar Struggles

World War I and its aftermath were a disaster for almost every company in Germany. Dresdner Bank, which had profited by financing the government's astronomical wartime expenses, found that the German economy's unpreparedness for war, coupled with the Allied blockade and the industrial might of the United States, crippled non-military industries. The war dried up all opportunities for continued expansion and placed a tremendous burden on German industry, forcing it to produce the materials necessary for war on an unprecedented scale. This stifled the basic expansionist impulse of the bank and cut off investment revenue.

The short-lived Weimar Republic (1918-23) was also difficult for Dresdner Bank. The burden of Germany's heavy war reparations stultified the entire economy. This hurt Dresdner even more than had the lack of expansion during the war years. Since one of the primary reasons for a universal bank is to back developing industry, Dresdner, as a major shareholder in many German firms, felt the pinch of the Treaty of Versailles as sharply as the rest of Germany did. On top of this was the Allies' insistence that all Allied countries be given the right to confiscate any German private property abroad. Firms with international interests as extensive as Dresdner's experienced crushing setbacks as they lost vast international securities and capital holdings.

The loss of wealth coupled with the need to pay reparations produced the legendary hyperinflation of the Weimar Republic, further cutting into the German banking business. At the high point of economic chaos, in 1923, Dresdner held assets of 204 trillion marks. Three years later, when the banking industry was stabilized by the introduction of the Rentenmark, Dresdner's share capital and reserves totaled only 100 million Rentenmarks.

Between 1924 and 1929, Dresdner Bank was involved in a lending policy that brought economic chaos to Germany again in 1931. During those five years, Germany began to rebound economically. In 1929, the economy's volume of business was 50 percent greater than it was before the war. This was due largely to the capital loans that Dresdner and the other leading banks made to new and developing German industries. But the banks were too loyal to their customers and lent out too much money. When the effects of the American stock market crash of 1929 hit Germany in 1931, there was little cash on hand to pay investors. Also, Dresdner and the other big banks carried too much foreign credit. They needed foreign capital coming in to pay the interest. This bank crisis necessitated federal involvement: in 1931 the German government took over 90 percent of Dresdner.

Dresdner did benefit somewhat, however, from the government's plan to restructure the banks and keep credit rates down by buying up banks and giving them cash. In the year after the crash, Dresdner was able to buy another of the major Berlin banks, Darmstadter, making Dresdner for a time the largest bank in Germany.

When the Nazis assumed power in 1933, the banking crisis was far from over. The Big Three of Berlin (now Dresdner, Deutsche, and Commerzbank) had lost 1.3 billion marks in assets and capital in the previous two years. Ostensibly socialists, the Nazis were inclined to completely nationalize all the German banks under the absolute power of the Third Reich. The domination of the big banks had long fostered a populist resentment, which the Nazis carefully exploited. Dresdner Bank, as the fattest financial goose among the banks, was the chief target for total and irrevocable nationalization.

In the end, the banks were not nationalized, and Dresdner Bank prospered under state-regulated capitalism. In 1937 Dresdner was able to buy itself back from the government. Its size increased in 1939, when Länderbank, the second largest bank in Austria, merged with Dresdner after the Anschluss in Austria. The Vienna branch of a Czech bank, Zivnostenska, was also annexed.

Rehabilitation and Recovery After World War II

Dresdner's relationship with the Nazi government led to dire consequences after the conclusion of World War II. As one of the privileges of leadership, Hermann Goering was allowed to have a company of his own, Goering Werke, an iron ore processing works whose products were in heavy demand during the Nazi war buildup. A representative of Dresdner, Karl Rasche, sat on the management board of a subsidiary of Goering Werke. This was not unusual; having representatives on boards and councils, as well as controlling blocks of voting stock shares, were the chief ways that the big German banks exercised economic control. But Karl Rasche's presence on the board of a Goering Werke subsidiary during this time was later considered positive evidence by the Allies that Dresdner had not only escaped being socialized by the Nazis, but that it had maintained a close relationship with the Nazi government.

After World War II, Dresdner and the other large German banks were split up. Once again it lost branches and assets to the war's victors. With the Soviet occupation of East Germany, all of Dresdner's offices east of the Oder-Neisse line were closed permanently. Of Dresdner's total of 327 offices, only about half remained open, and most of those were badly damaged. Dresdner was at first restructured into ten separate institutions. The bank struggled to regain some of its prominence during the early postwar years but then faced another reformation from the Liquidation Commission.

The Liquidation Commission was formed by the occupation forces to study the roles that various companies and industries had played in the war economy of Nazi Germany. Citing the "silent financing" of the German war effort through loans, as well as direct links of the kind previously noted, the Liquidation Commission decided to restructure Dresdner Bank into 11 small banks, each of which could operate only within its own zone of occupation. Yet Dresdner Bank was, like Germany itself, impossible to keep down. In 1952 the 11 regional banks were turned into three successor institutions of Dresdner Bank. Each of the three derivative banks prospered so much as a part of the "economic miracle" of the 1950s that Dresdner was allowed to recombine itself again in 1957 as Dresdner Bank A.G., with its new headquarters in Frankfurt am Main.

Reunification meant more than gaining domestic strength for the new Dresdner Bank: it meant the bank could expand once again. Dresdner immediately took advantage of its situation and became the first German bank to open an office overseas after World War II when it established a representative station in Istanbul in the late 1950s.

Dresdner also expanded through technical innovation, using data processing systems to manage accounts in 1958, becoming the first West German firm to do so. Dresdner also pioneered the way for foreign stock shares to be traded on West German exchanges at about this time.

When the restrictions limiting the three major branches of Dresdner from operating outside of their zones of occupation were lifted in 1963, the domestic business needed to finance foreign expansion was finally available, and the bank started to become the international giant that it is today. Dresdner again pioneered overseas business dealings by becoming the first firm to set up a German bank outside of its own borders, opening the Company Luxemburgeoise de Banque S.A. in Luxembourg in 1967.

Dresdner continued to expand, opening branches in Singapore and New York in 1972. By developing these overseas connections, the bank was able to outgrow its involvement in various consortiums with other banks and became truly international on its own terms again. In the mid-1970s, Dresdner opened representative offices in London, Tokyo, and even Moscow.

In 1968 Dresdner established German-American Securities--now called ABD Securities Corporation--in New York. This investment-banking subsidiary was an extremely important part of Dresdner's worldwide securities expertise. As a measure of the subsidiary's, and Dresdner's, American prominence, ABD's chief, Theodor Schmidt-Scheuber, was the first foreigner to be made head of an American stock exchange, in Boston.

Dresdner earned recognition in 1974 for its adroit handling of the sale of the Quandt family's 10 percent share of Daimler-Benz to Kuwait, the largest deal of the kind at the time. Three years later, Dresdner and the entire German business community were shocked when Jürgen Ponto, Dresdner's chief executive, was killed by left-wing terrorists during a kidnapping attempt. The assassination cut short the life of the man who had headed Dresdner since 1969 and had been instrumental in turning the firm into an international business powerhouse.

Hans Friderichs, a former economics minister, was Ponto's eventual replacement. In 1978, Dresdner had officially become one of the ten largest banks in the world. But Dresdner did not prosper under Friderichs for long; his six years in charge were marked by mounting losses and turmoil among executives. Friderichs's tenure ended in February 1985, when he resigned in the wake of charges that he had accepted a bribe for a favorable tax ruling given to the Flick Industrial Group while he was economics minister.

Friderichs's replacement was Wolfgang Röller, a member of Dresdner's board whose specialty was the securities business. It was Röller who been behind the founding of ABD Securities in 1968, and who had arranged the Kuwaiti sale of Daimler-Benz. Röller's background in securities made him an especially appropriate choice as the banking industry in general, and Germany's in particular, entered an era of decreasing regulation and intensified international competition.

Under Röller, Dresdner began to prosper again. In his first year in charge, earnings rose 18 percent and assets 8 percent, to DM 189 billion. That year, Dresdner became the first German company to have its shares listed on the Tokyo stock exchange.

Re/Unification in the Late 1980s and 1990s

Beginning in the late 1980s, banks throughout Europe and the world began to gear up for the unification of the European market that was planned for 1992, which would create an integrated market for banking and financial services. "The upshot is that the German and European banking landscape will look substantially different from today," Dresdner Chairman Wolfgang Röller told the Wall Street Journal in 1990. The dissolution of economic barriers between European states required German banks to extend beyond their national boundaries.

Dresdner set out to bolster its international presence by concentrating on developing a global asset-management network. The company was already anchored by a strong domestic presence and its American subsidiary, ABD Securities. In May 1988, Dresdner bought a majority interest in Thornton & Company, a leading British asset-management company, to strengthen its presence in that country and also in Asia, where Thornton had a strong position. Thornton managed about $1.49 billion in mutual funds and pension accounts. Dresdner also bolstered its U.S. position by purchasing several seats on the New York Stock Exchange, and in 1993 made its first public offering there.

The reunification of East and West Germany offered Dresdner a host of new opportunities as well. In anticipation of monetary union in 1990 (which preceded political union by a year), East Germany revamped its entire banking system, spinning off its state central bank's retail operations into a new unit called Deutsche Kreditbank. Dresdner and its rival Deutsche Bank both rushed to capture this new market, forming joint ventures with Deutsche Kreditbank outlets. In 1990, Dresdner inked a deal with Deutsche Kreditbank that gave the West German firm control over 72 Kreditbank retail branches and a 49 percent stake in the outfit, which was named Dresdner Bank Kreditbank AG. Dresdner also planned to add 150 of its own branches in the former East Germany in 1991.

Dresdner also continued its pan-European development when it forged an alliance with Banque Nationale de Paris (BNP), one of the three largest banks in France, in 1991. The alliance involved a 7 percent share swap between Dresdner and BNP, which acted as a foundation for a global cooperation pact.

In 1995, Dresdner spent about $1.58 billion to acquire the British investment bank Kleinwort Benson Group PLC. With this purchase, Dresdner signaled a significant strategic switch. Long considered the most conservative of the "Big Three" German banks, Dresdner's Kleinwort acquisition showed that the company was thoroughly committed to expanding into investment banking, rather than remaining primarily focused on its lower-margin core commercial banking operations. A few months after swallowing Kleinwort, Dresdner purchased San Francisco-based RCM Capital Management from Travelers Group, which managed assets of $26 billion for institutional clients in the stock and bond markets. Dresdner then united its assets-management operations into one unit: Dresdner Kleinwort Benson, which boasted 8,000 employees and was one of Germany's largest fund managers.

The trend towards consolidation in the European banking industry continued in the late 1990s and early in the new century. European banks were eager to combine so that they could compete more effectively with American mega-financial institutions, like Citigroup Inc., which offered a panoply of services to their corporate clients and were making headway in European markets. Dresdner and Deutsche Bank almost joined this merger frenzy. The two German banks were in the final stages of negotiating a merger in 2000, when the deal fell apart. Deutsche Bank wanted Dresdner to jettison its investment banking arm, Dresdner Kleinwort Benson; Dresdner refused, making itself "a takeover candidate more than ever," according to the April 10, 2000, Wall Street Journal. After the merger's failure, Dresdner's chairman, Bernhard Walter, resigned and was replaced by Bernd Fahrholz. Soon thereafter, Dresdner began merger talks with Commerzbank AG, the second largest bank in Germany, though these negotiations were also scuttled.

In September 2000, Dresdner opted to beef up its investment banking operations again, when it acquired Wasserstein Perella, a New York investment bank that had played an advisory role in the merger of Time Warner, Inc. and America Online, Inc. Wasserstein gave Dresdner a stronger presence in the United States, as well as a boost in its American mergers and acquisitions business. Dresdner renamed its investment banking operations Dresdner Kleinwort Wasserstein.

Dresdner's goal of merging with an equal was achieved at last in 2001, when it was acquired by Allianz AG, the largest insurance company in Germany, for about $20 billion. Allianz had long sought to establish itself not just as an insurance company, but as a global financial services provider along the lines of Citigroup. Allianz, which already owned 22 percent of Dresdner before the acquisition, saw Dresdner as key to this transformation. Dresdner was delighted that its investment banking arm was included as part of the package. Rather than forcing Dresdner to sell the investment bank (an obstacle in prior merger negotiations), Allianz created a new corporate and market division under the leadership of Kleinwort Wasserstein.

Soon after the Allianz merger, though, Dresdner stumbled badly. The global economic decline and the stock market drops of the early 21st century eroded Dresdner's loan business, as it was forced to write off loans to failing and insolvent companies. Particularly in the wake of the global insecurity caused by the terrorist attacks in the United States on September 11, 2001, investment banking took a beating across the globe, and Dresdner's mergers and acquisitions business dried up. In 2002 almost all of Germany's major banks reported their worst losses in the postwar era. Dresdner was not exempt. Allianz announced it would lay off 8,000 Dresdner employees that year, with another 3,000 cuts slated. In 2003 Dresdner's chief executive Bernd Fahrholz resigned and was replaced by Herbert Walter. Allianz made it clear that it would either split off or scale back Kleinwort Wasserstein. According to the Wall Street Journal, analysts predicted that Allianz would sell off the investment bank as soon as market conditions improved and would require Dresdner to refocus on commercial banking and pension and fund products.

Principal Subsidiaries: Dresdner Asset Management GmbH (Germany); Dresdner Assert Management Ltd. (Singapore); Dresdner Bank plc (Ireland); Dresdner International Management Services Ltd. (Ireland); Dresdner RCM Gestion; Dresdner RCM Global Advisors Asia Ltd.; Dresdner RCM Global Investors Holdings Ltd. (U.K.); Dresdner RCM Global Investors LLC; MEIJI Dresdner Asset Management Co. Ltd.; Pension and Compensation Consulting GmbH; ALLAGO AG; Dresdner Bank Lateinamerika AG; Dresdner Bank Luxembourg SA; Dresdner Corporate Finance GmbH; Dresdner Kleinwort Wasserstein Limited (Japan); Dresdner Kleinwort Wasserstein Securities Limited; Dresdner Kleinwort Wasserstein Securities Limited (Asia); Dresdner Kleinwort Wasserstein Securities LLC (U.S.A.).

Principal Competitors: Bayerische Hypo-und Vereinsbank Aktiengesellschaft; Citigroup Inc.; Commerzbank AG; Credit Suisse Group; Deutsche Bank AG.


  • Key Dates:
  • 1872: Dresden Bankhaus is founded.
  • 1884: Dresdner Bank moves its headquarters to Berlin.
  • 1903: Dresdner forms a community of interest with Schaffhausenschor Bankverein.
  • 1957: Dresdner's three postwar units are allowed to reconsolidate as Dresdner Bank A.G., with its new headquarters in Frankfurt.
  • 1968: Dresdner establishes German-American Securities (later ABD Securities Corporation) in New York.
  • 1972: Dresdner open branches in Singapore and New York.
  • 1990: Monetary union of East and West Germany is completed.
  • 1995: Dresdner acquires Kleinwort Benson.
  • 2001: Allianz AG takes over Dresdner.

Additional topics

Company HistoryFinance: Banks & Credit

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