Building of the Herzogliche Landesbank in
Altenburg, erected 1862-1865[1]
The German public banking sector (
German: Öffentliches Kreditwesen) represents a significant share of the broader banking sector in
Germany. Unlike in most other Western and Central European countries, German public-sector banks have been present since the early phases of formalization of banking entities in the
early modern period and have never lost their collective significance. They are typically referred to as one of the three “pillars” of the German banking system, the other two pillars being the
cooperative banks and
commercial banks.
Following many steps of development, consolidation, and restructuring, the German public banking sector (leaving aside the
Deutsche Bundesbank) consists mainly of two clusters: the
Sparkassen-Finanzgruppe, which competes with commercial and cooperative banks and includes local savings banks (
German: Sparkassen) and regional entities (
German: Landesbanken); and promotional and development banks (
German: Förderbanken) owned by the Federal Republic of Germany (in the case of
KfW) or the individual
states of Germany.
History
Government-owned banks are among the oldest financial institutions in Germany, with several appearing in the late 18th century simultaneously as the first municipally-owned savings banks. Throughout the 19th century, governments of individual
states or
provinces of Prussia established (respectively) Landesbanken and Provinzialbanken to lend to various kinds of borrowers, including Sparkassen but not limited to them.[2]: 28 Unlike in most European countries where banking was an exclusive activity of the private sector, government-owned banks thus remained a structural feature of the German financial system, even as joint-stock
Grossbanken [
de] gained relative importance in the second half of the century.[2]
The beginning of the 20th century saw the emergence of a number of Girozentralen acting as centralizing entities for their region's Sparkassen, a trend that was greatly accelerated by government policy choices during
World War I even though it had started slightly earlier;[3]: 209 numerous episodes of consolidation followed, leading to the current Landesbank landscape.[4] By 1929, government-owned banks accounted for at least 40 percent of all banking assets in Germany.[5]: 6 That feature set Germany apart from other European countries in which, aside from the
Soviet Union of course, the bulk of the banking sector was in private-sector hands.[6]: 16
With the delineation of West Germany's Länder between 1948 and 1957, the Landesbanks started acting as "house banks" of their respective Land, thus expanding into some of largest foreign issuers in Germany. By the early 21st century, other European countries that had nationalized swathes of their banking sectors in the 1930s and 1940s had mostly brought them back into the private sector, and Germany again stood out for the large share of its banking sector under government control,[7] a situation that has not much changed in the subsequent two decades.
The Förderbanken emerged more recently as a distinct category.
KfW was established in 1948 and a few regional promotional banks in the early 1950s, but in most German states they were created (in Eastern Germany) or spun off from the local Landesbank (in the West) in the 1990s and 2000s.
The German public banking sector has witnessed numerous episodes of distress, in part because of its inherently politicized governance. In mid-1931, the default of the
Landesbank der Rheinprovinz, following aggressive and uncontrolled expansion of its credit to German municipalities, was a major trigger of Germany's economic depression, even though other Landesbanken such as the Mitteldeutsche Landesbank survived the episode largely unscathed.[8] Other cases of major difficulties have included the troubles of
Westdeutsche Landesbank (WestLB) in the 1970s;
Bankgesellschaft Berlin in the early 2000s;
Landesbank Sachsen [
de] and (again) WestLB in 2007–2008; and
HSH Nordbank and
NORD/LB in the 2010s.
The following lists detail the path of formation of the current landscape, which has tended to be understudied because of its complexity and heterogeneity.[9] For relative readability, developments are classified in broad geographical categories, and individual Sparkassen are omitted. The list also omits various state financial entities set up at the time of
Nazi Germany and discontinued in 1945.
National entities
1895: Preussische Central-Genossenschaftskasse, also known as the
Preussenkasse, established in
Berlin to facilitate the funding of local agricultural cooperative banking throughout Prussia, with capital provided by the Prussian state[10]
1924:
Deutsche Industriebank (initially Bank für deutsche Industrieobligationen) founded to act as a trustee for the revenues collected from German industry under the
Dawes Plan[6]: 26
1949: DGZ recreated in
Düsseldorf, and
Landwirtschaftliche Rentenbank established as a public bank in Frankfurt. Deutsche Genossenschaftskasse (DGK) is also recreated but without government ownership[10]
1950: Vertriebenen-Bank AG established in
Bonn, later renamed Bank für Vertriebene und Geschädigte (1952), Lastenausgleichsbank (1954) and eventually
Deutsche Ausgleichsbank [
de] (1986)
1956: Deutsche Kapitalanlagegesellschaft (Deka) established in Frankfurt
1923: Thüringische Staatsbank takes over the Landesbank in Altenburg,[22] Landesbank in
Rudolstadt, Landeskreditanstalt Meiningen, and the Landessparkassen in the former
Gera-
Greiz area[21]
1924: Wohnungsfürsorgegesellschaft Berlin established in Berlin[23]
1925: Berliner Stadtbank – Girozentrale der Stadt Berlin established in Berlin[24]
1927: Brandenburgische Provinzialbank und Girozentrale established in Berlin[25]
1928: Mitteldeutsche Landesbank - Girozentrale für die Provinz Sachsen, Thüringen und Anhalt formed by merger of Girozentrale - Kommunalbank für die Provinz Sachsen, Thüringen und Anhalt and Sächsische Provinzialbank in Merseburg, with head office in Magdeburg[19]
1937: Wohnungsfürsorgegesellschaft Berlin restructured as Wohnungsbau-Kreditanstalt der Reichshauptstadt Berlin; the construction and property management operations are spun off as Gemeinnützige Siedlungs- und Wohnungsbaugesellschaft Berlin (GSW)[23][27]
1973: Berliner Pfandbrief-Bank, later known as
Berlin Hyp, formed by combination of the West Berlin operations of Prussian State Bank, Brandenburgische Provinzialbank und Girozentrale, and other entities
1840: Hannoversche Landeskreditanstalt established in Hanover[41]
1875: Hamburger Bank taken over by the Bank of Prussia[42]
1883: Bodencredit-Anstalt des Herzogtums Oldenburg established in
Oldenburg, renamed Staatliche Kreditanstalt des Herzogtums Oldenburg in 1906 and Staatliche Kreditanstalt Oldenburg in 1922[43]
1917: Landesbank Schleswig-Holstein Girozentrale established in
Kiel[44]
Landesbank der Provinz Hannover established in Hanover[45]
1918: Niedersächsische Wohnungskreditanstalt Stadtschaft established in Hanover[41]
1952: Hamburgische Wohnungsbaukasse established in Hamburg, renamed Hamburgische Wohnungsbaukreditanstalt (WK) in 1973[50]
1970:
Norddeutsche Landesbank Girozentrale (later branded as NORD/LB) formed by merger of Braunschweigische Staatsbank, Hannoversche Landeskreditanstalt, Niedersächsische Landesbank Girozentrale, Niedersächsische Wohnungskreditanstalt Stadtschaft, and Braunschweigische Landessparkasse)[41]
1983: Bremer Landesbank Kreditanstalt Oldenburg – Girozentrale (also known as Bremer Landesbank, or BLB) formed by merger of Bremer Landesbank – Girozentrale and Staatlichen Kreditanstalt Oldenburg-Bremen[43]
2003:
HSH Nordbank AG formed by merger of Hamburgische Landesbank – Girozentrale and Landesbank Schleswig-Holstein Girozentrale, with joint head offices in Hamburg and Kiel[52]
2019: HSH Nordbank privatized and renamed
Hamburg Commercial Bank;[56] Landesbank role in Hamburg and Schleswig-Holstein taken up by NORD/LB
Verwaltungsbezirk building on
Ruhfäutchenplatz [
de] in
Braunschweig, head office of Braunschweigische Staatsbank until 1966
1896 building of the Deutsche Nationalbank, head office of Bremer Landesbank in
Bremen from 1938 to the 2010s[57]
Building at Schiffgraben 6 in
Hanover, head office of Landeskreditanstalt from 1914 to 1970; later seat of the regional Sparkassenverband[58]
Building at Martendamm 4 in
Kiel, head office of Landesbank Schleswig-Holstein Girozentrale (1954–2003), HSH Nordbank (2003–2019), and Hamburg Commercial Bank (since 2019)[59]
Building at Georgsplatz 2 in Hanover, head office of Niedersächsische Landesbank Girozentrale from 1958 to 1970, then of NORD/LB until 2002[60]
High-rise wing of the former Niedersächsische Landesbank Girozentrale complex in Hanover
Former
Alter Bahnhof [
de] building or Ottmerbau in Braunschweig, head office of Braunschweigische Staatsbank (1966–1970), Nord/LB (1970–2002), then Braunschweigische Landessparkasse (since 2008)
1890: Provinzial-Hülfskasse Westfalen renamed Landesbank der Provinz Westfalen[65][63]
1903: Hessische Landes-Hypothekenbank AG established in
Darmstadt[66]
1914: Landesbank der Rheinprovinz becomes the payments clearing house (
German: Girozentrale) for the savings banks in the Rheinisch-Westfälische Sparkassentag, in substitution of the Stadtsparkasse Köln which had taken up that role in 1911 for the
Rhine Province of
Prussia
1921: Westfälisches Pfandbriefamt für Hausgrundstücke established in Münster[67]
1923: Hessische Landesbank - Staatsbank established in Darmstadt[68]
1929: Landeskommunalbank - Girozentrale für Hessen established in Darmstadt[69]
1935: Landesbank der Rheinprovinz renamed Rheinische Girozentrale und Provinzialbank[65]
1940: Hessische Landesbank Darmstadt Girozentrale formed by merger of Landeskommunalbank - Girozentrale für Hessen, Hessische Landes-Hypothekenbank AG, and Hessische Landesbank - Staatsbank, with seat in
Darmstadt[70]
1941: Landesbank und Girozentrale Westmark established in
Saarbrücken, renamed Landesbank und Girozentrale Saar in 1946 (also known as
Landesbank Saar, later SaarLB)[71]
1943: Landesbank für Westfalen (Girozentrale) formed by merger of Landesbank der Provinz Westfalen and Westfälisches Pfandbriefamt für Hausgrundstücke[63]
1948: Landesbank und Girozentrale Kaiserslautern established in
Kaiserslautern[72]
1953: Hessische Landesbank Girozentrale (Helaba) formed by merger of Landeskreditkasse Kassel, Nassauische Landesbank, and Hessische Landesbank Darmstadt Girozentrale, with seat in Frankfurt[74]
1958:
Landesbank Rheinland-Pfalz [
de] (LRP) formed by merger of the branch of the Rheinische Girozentrale und Provinzialbank in
Koblenz, that of the Hessen-Nassauische Landesbank in
Mainz and Landesbank und Girozentrale Kaiserslautern, with seat in Mainz
1969:
Westdeutsche Landesbank Girozentrale (WestLB) formed by merger of Rheinische Girozentrale und Provinzialbank and Landesbank für Westfalen (Girozentrale), with joint head offices in Düsseldorf and Münster and branches in Cologne,
Dortmund,
Bielefeld, and
Essen[65]
1972: WestLB starts its international expansion by opening a branch in
Luxembourg, followed by
London in 1973 and
New York in 1975
2002: WestLB spins off
NRW.Bank,[75] converts itself into a joint-stock company as WestLB AG, and sells its private banking business to
Merck Finck Privatbankiers
Förderbank Hessen, known as Wirtschafts- und Infrastrukturbank (WI-Bank) established in Frankfurt and
Offenbach am Main[76]
1780: Hochfürstlich-Brandenburg-Anspach-Bayreuthische Hofbanco established in
Ansbach, successively renamed as Königlich Baierische Banco (1806), Königliche Bank Nürnberg (1807), Königliche Filialbank in
Munich (1875), and
Bayerische Staatsbank (1918)
1931:
Bank of Baden (est. 1870 in
Mannheim) becomes government-owned; relocated to Karlsruhe in 1932[85]: 466
1934: Bank of Baden and Württembergische Notenbank deprived of their note-issuing role and repurposed as commercial entities; the latter renamed Württembergische Landeskommunalbank - Girozentrale (also known as Württembergische Bank) in 1935
1972:
Bayerische Landesbank Girozentrale (BayernLB) formed by merger of Bayerische Gemeindebank (Girozentrale) Öffentliche Bankanstalt and Bayerische Landesbodenkreditanstalt[83]
Landeskreditbank Baden-Württemberg [
de] formed by merger of Württembergische Landeskreditanstalt and Badische Landeskreditanstalt für Wohnungsbau
1975: Landessparkasse – Girokasse öffentliche Bank formed by merger of Württembergische Landessparkasse and Städtische Spar- und Girokasse Stuttgart, renamed
Landesgirokasse Stuttgart [
de] in 1977[84]
1978:
Baden-Württembergische Bank [
de] (BW-Bank) formed by merger of Bank of Baden, Württembergische Bank and private-sector Handelsbank Heilbronn, with seat in Stuttgart[84]
1999:
Landesbank Baden-Württemberg (LBBW) formed by merger of SüdwestLB, Landesgirokasse Stuttgart and the commercial activities of Landeskreditbank Baden-Württemberg[84]
Lion statue in front of BayernLB head office in Munich, 2009
Courtyard of BayernLB head office in Munich, 2014
Cross-regional consolidation
1992: Hessische Landesbank Girozentrale takes up Landesbank role in
Thuringia, and is renamed Landesbank Hessen-Thüringen Girozentrale while keeping the shorthand name Helaba
2010-2013: Saarland acquires control of SaarLB from BayernLB[90]
National representation
Two overlapping organizations represent the German public banking sector: the
Deutscher Sparkassen- und Giroverband (DSGV), the umbrella organization for the Sparkassen-Finanzgruppe; and the
Association of German Public Banks, which brings together the Landesbanks (also members of the DSGV) and the Förderbanken.