Start > Milestones 2005 > BHF-Bank
BHF-BANK: Return to glory
Shot of BHF-BANK headquarters on Bockenheimer Landstrasse in Frankfurt Westend
With the acquisition of BHF-BANK in early 2005, Sal. Oppenheim initiated one of the most significant takeovers in the history of German private banking. With a two-bank and two-brand strategy, uncommon on the financial market, the Cologne-based private bank successfully enlarged the Sal. Oppenheim Group.
Frankfurt am Main, 2 December 2004, at the BHF-BANK headquarters: It was late in the afternoon. The notary was the last to enter the conference room on the first floor. At last, all those who participated in the project were together. The five representatives – Michel Tilmant (ING Group), Cees Maas (ING Group), Sytse A. Andringa (ING-BHF), Dietmar Schmid (BHF-BANK) and Matthias Graf von Krockow (Sal. Oppenheim) – were sitting at the table, ready to sign the contract. The tension evaporated as the last signature was completed. Judicial sobriety was finally replaced by excitement and elation in view of this success.
A unique transaction had just been signed and sealed. The captains of the three winning teams were all present: Matthias Graf von Krockow, Michel Tilmant and Dietmar Schmid. Sal. Oppenheim had, for around € 600 million, just acquired BHF-BANK Aktiengesellschaft, the new public limited company established by ING Group as part of its restructuring process. In the space of less than four months, the deal had been proposed, organised and made ready for the final signatures. It was one of the most significant takeovers in the history of German private banking.
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Entrance hall of BHF-BANK on Bockenheimer Landstrasse
At a time when the number of private banks is rapidly declining, Sal. Oppenheim has succeeded in giving BHF-BANK the freedom to build on both its strengths and its quality as a company, by offering the firm foundation of a clear ownership structure.
Sal. Oppenheim's primary objective is always to ensure the long-term viability of the successful private bank business model, which, in particular, entails strengthening its market position.
The motivation behind the acquisition of the additional client base in Private Banking, Asset Management and Financial Services from BHF-BANK was to achieve economies of scale, as well as to be able to leverage cost synergies, to substantially increase return on equity and to improve capital utilisation. With the takeover of BHF-BANK, the stage had been set.
Back in late summer 2004, the partners of Sal. Oppenheim met with BHF-BANK's Board of Managing Directors. It very soon became clear that a two-bank and two-brand strategy would offer both institutions great opportunities. The management of the newly founded BHF-BANK was to have the greatest possible degree of independence, and the BHF Board of Managing Directors lived up to these high expectations. The business model that it presented to the personally liable partners of Sal. Oppenheim was a convincing illustration of how a high-earning new bank could look. As a matter of respect for the fine history of the institution, the management at the same time declared themselves willing to accept personal responsibility in an effort to save BHF-BANK. This was the deciding factor in Sal. Oppenheim's resolution to go ahead with the transaction.
Everyone was convinced that the similarities between the two corporate cultures, the economies of scale and the synergies, the perfectly complementary client structures, and especially the motivation of all those involved was a recipe for success. It was necessary, within a short space of time, not only to balance all the interests, but also to win the support of employees, clients and the market for the planned strategy, not least so as to silence sceptics and speculators.
Contract signing on 2 December 2004 at BHF-BANK's offices
This led to the formation of “BHF-BANK – Privat seit 1854”, as it is now known internationally, with its Asset Management & Financial Services, Private Banking, and Financial Markets & Corporates divisions.
The new owners were welcomed by the employees with gratitude. The company could hardly wait to finally be able to act as an independent and profitable private bank again, and thus ensure long-term job security for its employees.
There was never any doubt that the unique identity of each institution should remain. Not only are the cultures to be preserved; maintaining existing earnings potential and the complementary client bases is also an important task. And since then, the highly qualified and motivated employees of both banks have successfully worked side-by-side in the financial market. Both Sal. Oppenheim and BHF-BANK are equally focused on the independent acquisition of new clients, as well as on maintaining and building on existing client relationships. In this context, an image was presented to the public at the Sal. Oppenheim results press conference in Cologne on 6 April 2005 which was readily taken up by the press. A comparison was drawn between scrambled and fried eggs and everyone present understood that it wasn't simply a question of throwing all the ingredients together. Here were two strong brands, two outstanding banks that can only unfold their full potential as separate market entities.
The evidence followed two weeks later, when the new BHF-BANK reported on its first 100 days in the new constellation. Not only did business performance exceed the targets in all areas, more had changed in hearts and minds than had been anticipated at this stage; the high level of motivation among employees spread to the market and clients, business had been tangibly vitalised.
The two-bank strategy has borne fruit in just one year. Sal. Oppenheim and BHF-BANK have won over many new clients in that time.
Naturally, this could not be predicted down to the last detail – but the inherent business sense, the passion and motivation of all involved and the belief in the successful independent private bank model have contributed greatly to this.
