The merger between Commerzbank and Dresdner Bank, announced just a few days ago in Frankfurt, is an important step towards a consolidation of the German banking sector. Fragmentation in this three-pillar market remains the rule. According to recent data, 50% of deposits are in public banks, 30% in cooperative banks and only 15% in private credit institutions.
The new Commerzbank will have assets worth 1,100 billion euros, more than 1,200 branches and around 60,000 employees. The trademark of Dresdner Bank is bound to disappear within a couple of years. The Frankfurt-based bank, independent until 2001 when it was swallowed by Allianz, was founded more than one hundred years ago. It played a major role in the German industrial revolution. Dresdner Bank was founded on November 12, 1872. It rapidly grew into a nationwide credit institution, moving from its birthplace of Dresden, in Saxony, to the new-born capital of Berlin. At the turn of the century, Dresdner Bank was the biggest bank in Germany, larger than its two main competitors, Deutsche Bank and Commerzbank, both founded in 1870. It expanded abroad, opening offices and branches in London, in the Balkans and in South America. However, the bank fell victin of the Great Depression of 1929 and the German government quickly opted for an outright nationalization. Dresdner Bank returned into private private hands at the end of the 30s. Like many large German companies it participated actively in the Nazi economic system, becoming among other things the financial arm of the SS unit. In 2006, Dresdner Bank opened its archives and published a detailed account of its role during the Hitler regime (Die Dresden Bank im Dritten Reich). Allied bombing of Germany hit Dresdner Bank hard: more than 80 percent of its buildings in West Germany were destroyed. Nonetheless, the bank managed to return to business rather quickly and in 1952 it was the first German credit institution to reopen a branch abroad. The 136-year history of Dresdner Bank has a little-known Italian chapter. In 1894, it founded the Banca Commerciale Italiana together with a group of Swiss and Austrian investors. The BCI played a major role in the industrialization and internationalization of the Italian economy between the end of the 19th and the beginning of the 20th century. While BCI is now part of Intesa Sanpaolo, Dresdner Bank is also about to disappear in the merger with Commerzbank. Some may express a bout of nostalgia, but after all both developments are a sign of how dramatically EU economies are changing in the wake of a growing European integration.