Status: 09/15/2022 12:28 p.m
The Oldenburgische Landesbank continues its course of expansion and buys the Frankfurt Degussa Bank for 200 million euros. The acquisition is part of a large plan by Anglo-Saxon financial investors.
A merger of Deutsche Bank and Commerzbank: Hardly any other fantasy has occupied the German banking sector as much as this one in recent years. Many are hoping for a major consolidation, i.e. a cleansing of the badly fragmented German banking landscape. So far, however, every attempt to merge the two large Frankfurt institutes has failed.
But beyond the listed financial institutions and away from the media interest, a lot has happened in the German provinces in recent years. Powerful Anglo-Saxon financial investors take over one regional institute one after the other, merge them with each other and form larger banks, which increasingly target savers throughout the republic.
Financial investors are driving OLB to make acquisitions
The best example: the Oldenburgische Landesbank, or OLB for short. The North German regional institute is no longer only on the road in its traditional region, in north-west Germany. For five years, the OLB has wanted more. It has been in the hands of Anglo-Saxon financial investors for five years.
In 2017, the US financial investor Apollo, together with the Texan teacher pension fund Teacher Retirement Systems of Texas and the British financial investor Grovepoint, took over the North German regional institute from the insurance giant Allianz and merged it with the Bremer Kreditbank previously bought by Apollo and the Neelmeyer bank. The Wüstenrot Bank was added later.
Almost a million customers after the Degussa takeover
The next big bang followed yesterday evening: The OLB took over the Frankfurt Degussa Bank for 220 million euros from its owners, the Hamburg bankers Max Warburg and Christian Olearius. Degussa Bank operates 60 branches on the premises of large companies, primarily in southern and western Germany, and focuses on their employees as customers.
In an interview with the Reuters news agency, OLB boss Stefan Barth described the takeover as a “milestone”: “By taking over Degussa customers, we are increasing our nationwide presence from 620,000 to almost one million.”
However, the Anglo-Saxon financial investors are not just pursuing nationwide expansion with the OLB. You can also trim the financial institution for profitability. Of course, in the world of financial investors, this also includes reducing costs through staff cuts: OLB boss Stefan Barth proudly reported in the “Handelsblatt” in the summer that the bank was able to cut 360 full-time positions within six months in 2021.
IPO next year?
Barth knows what financial investors want and how they work. Before moving to OLB, he had brought the Austrian company Bawag to the stock exchange as Chief Risk Officer under the aegis of the US financial investor Cerberus, named after the multi-headed hellhound.
A goal that the Anglo-Saxon financial investors around Apollo are now also pursuing with OLB, according to media reports. However, due to the ongoing uncertainty on the financial markets, insiders do not expect an IPO until 2023. Alternatively, a sale would also be an option – for example to a foreign bank that wants to increase its footprint in Germany.
OLB is more profitable than Commerzbank
In any case, the result of the OLB expansion campaign through the German provinces is impressive: at the end of 2021, the Oldenburgische Landesbank had total assets of around 25 billion euros. The return on equity – the indicator of a bank’s profitability – reached 7.3 percent.
Not many banks can do that in Germany; According to OLB boss Barth, it should even be 13 to 15 percent in the medium term. For comparison: the much larger listed Commerzbank achieved a return on equity of 1.5 percent in 2021, and wants to achieve “over seven percent” by 2024.
Due to the nationwide expansion course and the focus on higher profitability, the Anglo-Saxon financial investors are demonstrating with OLB on the small German banking stage what may still be to come on the big one.