Enterprise Risk Management at Commerzbank
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Case Details:
Case Code : ERMT-018
Case Length : 18 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Commerzbank
Industry : Banking
Countries : Germany
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction
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Commerzbank, the fourth largest bank in Germany offered banking services to
individual and corporate clients, across the world. It provided both traditional
banking (company financing, investment, property services, loans, and leasing)
and investment banking (asset management, market trading, mergers, acquisitions
and the development of specific products) services. With 924 subsidiaries in
Germany, and 21 abroad, Commerzbank was also developing an on-line banking
service via COMLINE.
Some analysts believed that Commerzbank was relatively weak, compared to other
German banks like Deutsche Bank, HVB Group, and Allianz-owned Dresdner Bank,
both at home and in overseas markets.
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To get around these weaknesses, Chairman Klaus-Peter Muller had been attempting
to cultivate more profitable relationships from the bank's clients. The company
had also strengthened its cross-selling alliances with such European companies
as Assicurazioni Generali and Crédit Lyonnais.
In response to a slowing international banking market, Commerzbank had cut
staff, primarily in Germany, and was considering divestment of some lines of
business.
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The bank had launched a more performance-driven strategy and implemented an
Anglo-American style of management in an effort to become more competitive. It
had plans to shed 4,000 additional jobs by 2003 and to sell off Montgomery Asset
Management to Wells Fargo.
Commerzbank's mortgage bank RheinHyp merged with Dresdner Bank's Deutsche
Hypothekenbank and Deutsche Bank's Eurohypo in November 2001. The combined
company, named Eurohypo, dealt in commercial property in Europe and the US. It
had plans to rival HVB Group's mortgage powerhouse HVB Real Estate. Commerzbank
and Deutsche Bank each owned 35% of Eurohypo, while Dresdner held 30%. |
Background Note
In 1870 a group of merchants and bankers formed Commerz- und Disconto-Bank in
Hamburg. Riding on Germany's boom after the Franco-Prussian War, the bank
expanded quickly into Frankfurt, Berlin, and London. Its 1905 purchase of
Berliner Bank refocused the bank on the German capital.
Enterprise Risk Management at Commerzbank
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