Bankers Trust

The Bankers Trust Company was founded in 1903 in New York as an asset management company ( Trust Company ), led by JP Morgan from several banks, which themselves could not perceive this activity due to legal restrictions, was founded.

In the course of a checkered history, the company had grown to the mid- 1990s, the eighth largest bank in the U.S. and had its focus in investment banking when it was taken over in 1998 by the German bank and integrated into the German banking group. The company itself has been continued as a specialized institution for asset management ( private banking ) under the name German Bank Trust Company Americas.

In Australia, the investment activities of Bankers Trust were spun ( management buyout ) and sold three years later to the Australian Westpac. Since then, this area has been working as an investment division of the Australian bank under the name of BT Financial Group in the market.

Based on the principle of regional bank in the U.S. there are in other states, a number of institutions that have the name or part of the name Bankers Trust, but who have not obtained all similar meaning. Thus, the Internet address bankerstrust.com is a company founded in 1917 eponymous municipal bank in Des Moines, Iowa.

History

The company was registered on 24 March 1903. The initial capital was $ 1,500,000. Partner was J. P. Morgan. Its first president was the former steel Manager Edmund C. Converse, who was also president of the Liberty National Bank. The Bank opened their business on March 30 in the Liberty Street with eight employees, but withdrew due to a very successful business startes after just four months on Wall Street. Addition to asset management, the Company had success with the issuance of traveler's checks for the American Bankers Association from 1907 quickly.

An increase in growth resulted from the acquisition of Mercantile Trust Company (1911) and Manhattan Trust Company (1912). After these acquisitions, assets under management reached $ 150 million and shareholders' equity $ 20 million. The company moved into the newly built Bankers Trust Building, finished there but only three floors.

Through the creation of the Federal Reserve System and the commercial banks were authorized to manage assets from 1914. Due to the loss of their competitive advantage, the activities of Bankers Trust in turn was extended to the business of banking. Due to the weak position in the retail business to successfully target in the 1920s then to expand the area of ​​investment banking. Focus was on the issue and trading of bonds and shares. With offices in Paris (1920 ) and London ( 1922) was also built up an international position.

After the Second World War it came through several acquisitions to further expand the business, which also included the private customer business. In 1959 the attempt, Manufacturers Trust Company failed to take over at the approval of the supervisory authorities. For expansion of business then you acquired in the 1960s a number of smaller commercial banks and institutions specializing in factoring, leasing and mortgage business. From the recession due to the oil crisis of the early 1970s, the Bank was particularly significantly affected the real estate sector. In the late 1970s it was considered the ertragsschwächste among the major U.S. banks.

This changed when it was decided to focus on investment banking to legen.Träger the new strategy was again stronger Charles S. Sanford, since the mid- 1980s, the new CEO of the company. This had already attracted attention in 1975 when he wanted to give new loans without restructuring the finances more of New York City because of insolvency. With the new alignment of the retail banking was sold. Instead, it reinforced the Transaction Banking, which became one of the foundations of the turnaround. Especially one developed under Sanford a system for evaluating risk and return requirements dependent on systems with higher risks ( RAROC - risk-adjusted return on capital ). The method of risk-weighted capital adequacy of investments has been subsequently taken over in the industry. Thus, the German bank has changed its risk management on RAROC in the years 1995/96. With this control, their facilities, Bankers Trust was possible to enter early into the innovative derivatives business. The loan book, however, decreased significantly. The early 1990s, Bankers Trust was again a successful and profitable Investment Bank. In addition to the derivatives it was also known for the imposition of emissions junk bonds and the Neuer Markt.

Takeover by the German Bank

The new performance of Bankers Trust was honored in 1994 by Hilmar Kopper. Consolidating its with Morgan Grenfell in London position in investment banking in an effort to was looking for a suitable partner in the U.S., where the German bank was too weak to compete against the big American institutions.

In Bankers Trust Sanford was in 1996 scheduled resigned and been through Frank Neil Newman ( Vice- Minister of Finance of the United States of America, in 1994 by 1995) replaced. The second half of the 1990s were characterized for the Bank of ups and downs. In 1994, we received an award as Bank of the Year in the area of ​​derivatives. In the same year, was involved in a dispute with several major customers. The processes with Gibson Greetings and Procter & Gamble could be done only with expensive comparisons from the world. In 1995 there were significant problems with credit in Latin America. Newman sat still different from Sanford strategy on an expansion of the loan portfolio in emerging markets and the bank was hit significantly in the wake of the financial crises in Russia and Asia. Despite the successful acquisition of the famous Merchant Bank Alex. Brown came there in 1998 to several takeover bids.

Compared to American competitions, the German bank was attractive as a contractor because of the relatively small overlaps in the management of Bankers Trust. With the acquisition of Bankers Trust had approximately 20,000 employees, including 12,000 in the U.S.. The German bank brought it to this point to approximately 4,000 employees in the U.S. (total: 70,000 ). Larger overlap there was also in London and Australia.

After a due diligence phase in November 1998, the proposed acquisition was published on 24 November 1998. The offer was at $ 93 per share (share). The stock of Bankers Trust had slumped last year a high of $ 133 and was a result of the Asian crisis to less than $ 70. In November, had already been speculated on a takeover and the price was the day before the publication at $ 77.50. On the day of the announcement he jumped to $ 84.50. The significant distance to the takeover price was a sign that was still expected to considerable problems in the approval.

The Deutsche Bank fell by 5% at the same time, a sign of the skepticism with which the merger and the purchase price were recorded. For the German bank's takeover meant a significant shift its center of gravity. The public feared a similarly difficult and lengthy integration phase, as it had been in the acquisition of Morgan Grenfell (1989 ) before. Above all, attention was drawn to the cultural differences. The judgment of Rolf -E. Breuer, the head of Deutsche Bank, was quite different:

The approval of the supervisory boards of both banks on 30 November 1998. Upon approval by the regulatory authorities and approval by the general meetings, the German bank was on 4 June 1999 (Closing Day) this transaction with a total value of $ 9.8 billion (15 billion. DM) to complete on schedule. In the period up to the closing day of the integration had already been prepared. Noteworthy is the composition of the uppermost integration teams. Headed it was of Josef Ackermann, who had come to the German bank only since 1996. While the American side, by Frank Newman and two other managers was represented by Bankers Trust, were on site of Deutsche Bank with Edson Mitchell and Michael Philipps two London-based investment bankers who only recently were also working for the bank. This is mainly because it was connected with the measures to strengthen synergies staff reductions of more than 4,000 people well, the locations in London and New York affected predominantly. By the end of 1999, the essential steps for the integration of Bankers Trust were completed.

Under company law is Bankers Trust continued in the German Bank Trust Company Americas and the end of 2008 with approximately 1,500 employees in asset management ( private banking ) operates. She had total assets of $ 50 billion and the sum of assets under management amounted to 150 billion dollars.

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