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Dresdner Bank and Dresdner Keinwort got $2.6 billion from AIG

16 May, 2009

Dresdner Bank received $0.4 billion from the AIG bailout funds.

The Dresdner Bank (here), founded in 1872 by a consortium of several German banks, grew rapidly until, by 1900, it had the largest branch network of any German bank and had offices in Milan and London. In 1906, Dresdner Bank and two other banks founded the Deutsch-Südamerikanische Bank in Berlin (today Dresdner Bank Lateinamerika AG, Hamburg).

Although the bank continued to grow in Europe and East Asia, it suffered many setbacks during the two World Wars and did not open a branch office in New York City until 1972.

In 1967, Dresdner Bank partnered with several other banks to found the first multinational bank in Europe, and in 1968, founded German-American Securities Corp., Boston, later renamed ABD Securities Corporation, New York.  [ABD was later known as Dresdner Kleinwort Wasserstein Securities (Asia) Ltd., Hong Kong]

In 1969, the bank became involved in investment management for institutional investors and in mortgage loans.

In 1983, Dresdner Bank AG was established in Zurich; and Dresdner Finance B.V., was founded in Amsterdam, as an international (re)financing company.  Similar companies were established in New York (1983), in Milan (1986) and in Dublin (1989).  In 1988, Dresdner Asset Management was established in Luxembourg and then, in 1989, in Dublin.

In 1989, the bank also signed an agreement for extensive cooperation with leading insurance companies including AllianzDresdner took over the British investment bank Kleinwort Benson in 1995.  [Back in 1906, the Keinworts had worked with Goldman Sachs and Lehman Brothers in the offering of Sears Roebucks  (here)] In 2000, Dresdner took over the US investment bank Wasserstein Perella Group Inc., New York, which then merged with Dresdner Kleinwort Benson to produce Dresdner Kleinwort Wasserstein.

So many mergers, so much growth, but look what happened next:  2001 –  Dresdner Bank was taken over by Allianz AG (with whom it had partnered in 1989)  The next year, Dresdner’s mortgage bank combined with Deutsche Bank’s mortgage group and Commerzbank’s mortgage group to become “the market leader Eurohypo.”

2006 was a big year for Dresdner:

  • Dresdner Bank and The World Bank offered the first World Bank Bonds for private investors.
  • Deutscher Investment Trust and Dresdner Bank Investment Management united to form Allianz Global Investors.
  • Dresdner’s investment bank division (Dresdner Keinwort Wasserstein) was renamed Dresdner Kleinwort.

Dresdner Kleinwort received $2.2 billion from the AIG bailout.

In 2007, Allianz SE  announced that it would sell Dresdner AG to Commerzbank AG.  The sale was completed in 2009. On Dresdner’s home page (here) is this statement:

Dresdner Bank is one of the largest banks in Europe.  Since 11 May 2009, Dresdner Bank has been a label of Commerzbank.

So, what happened.  How did such a large and successful bank suddenly disappear – especially after receiving so much assistance from AIG? Maybe it was because of this:  the result of the merger of Dresdner and Allianz was a major financial institution in insurance and asset management as well as banking.   Must have been some pretty toxic assets!

Allianz, however, remains the largest shareholder of Commerzbank, so in reality it is still partnered with Dresdner as well as with Commerzbank.  What is it with all these mergers and acquisitions and private deals?  Will there eventually just be one gigantic financial institution offering special services to the world’s “private investors” and large corporations?

I am reminded of a time I tried to untangle a skein of yarn so that I might finish a blanket I was crocheting.   No matter how or where I dug through the skein, I kept coming up with knots and dead ends.  I finally threw the skein away and bought another, but that option eludes me here.

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