German bank enters UK market

Private bank Berenberg, one of the oldest banks in the world,
sets out expansion agenda

Berenberg Bank is proud of its 420 year history. The Hamburg-based bank provides services for wealthy private customers and institutional investors, as well as commercial banking services for medium-sized businesses.

In 1585, as Dutch Protestants were given the choice either to convert to Catholicism or leave the country, the Protestant Berenberg family from Antwerp, which was then the richest and busiest city in Europe, left in search of a new home. They found it in Hamburg, which is where brothers Hans and Paul Berenberg founded the company in 1590.

The company was active in the cloth trade and the general import and export business. Dutch Protestants were seemingly highly ambitious and successful; at the beginning of the 17th century, 32 of the 42 firms in Hamburg that achieved turnovers of over 100,000 marks were of Dutch origin. The Berenberg brothers were ranked in 15th and 16th place. At that time, Dutch people in Hamburg were subject to heavy restrictions, such as being forbidden to do business with other foreigners within the city limits. After the Thirty Years’ War, the third generation of the Berenberg family, namely Cornelius Berenberg, played an active part in the economic life of Hamburg. In 1684 he took the citizen’s oath and paved the way for subsequent generations to hold public office. He also increased the trade in goods far beyond Germany’s borders.

From a trading house to a bank
The lack of a functioning banking system meant that traders used to provide financial backing for transactions themselves. They granted loans to their customers and made advance payments to suppliers for their deliveries. The sheer number of currencies also formed the basis for an extensive exchange business which provided good earning opportunities. Cornelius built on the wealth he had acquired through trade and became more active as a banker. The reputation of the Berenberg brothers grew. Cornelius’s son Rudolph was elected to the city council, and family members later became senators.

As well as founding new businesses in Boston and New York, the Berenbergs quickly realised the importance of the newly created stock corporations and were founding shareholders for many well-known companies during the era of industrial expansion in the mid-19th century. Thanks to their international activities, which were already widespread, the Berenbergs were also co-founders of several Scandinavian banks, as well as the Hong Kong and Shanghai Banking Corporation HSBC.

The USP
Today, Berenberg Bank is one of Germany’s most prestigious banks. While many private banks have since become part of international finance conglomerates, Berenberg is still managed today by personally liable partners who, along with the Berenberg family, hold the majority of shares in the company.

‘The trust that our customers place in us reflects our commitment to responsibility and our sense of duty’, says Dr Hans-Walter Peters, spokesperson for the personally liable partners of the bank. ‘The customers value the fact that a private bank like ours is managed by personally liable partners.’ According to Peters, it is not just the indispensable skills of the company advisors that are important, especially as these form the basis of good working relationships, but also their personal commitment and the lasting nature of the relationship between client and advisor. The personal atmosphere and high level of confidentiality is greatly valued, as is the personal service and independence from corporate interests.

The bank’s successful development can be attributed to its clear strategic positioning and focus on ‘service instead of selling products,’ as Peters succinctly puts it. As well as private banking services, which are always perceived to be the most important aspects of a private bank, Berenberg is also highly successful at providing individual solutions and advisory services in the fields of investment banking, asset management and commercial banking.

As Peters states, ‘the art of managing assets in a professional way lies in minimising risks while achieving attractive returns’. This means the advice that the bank provides is not just limited to stocks, but rather incorporates all kinds of investment opportunities. This comprehensive approach towards assets entrusted to the bank not only appeals to a constantly increasing number of investors, but also ensures that Berenberg is consistently noted for its high level of quality in market surveys. As well as winning a number of awards for equity research and private banking, Berenberg recieves regular prestigious commendation from international publications such as World Finance, Euromoney or Handelsblatt.

UK private banking operations
Berenberg Bank launched its UK private banking operations in January this year. The bank sees the UK market as a strategic next step in developing its international private banking operations and will provide a full advisory service. Andreas Brodtmann, one of the bank’s three Managing Partners, commented “Berenberg is a highly ranked independent private bank. We already advise a large number of foreign investors, who respect our banking style, especially in terms of customised service. The UK offers a dynamic entrepreneurial market for us, with good long-term prospects for wealth creation, within which we can add significant value to our clients.”

Ross Elder and Fred Hervey, both formerly at Barclays Wealth, will be heading the private banking team from the bank’s UK headquarters in Threadneedle Street, London.

Facts and figures
Founded: 1590
Assets under management: €25bn
Liable equity capital: €213m
Annual net profit: €62m
Return on equity: 45%
Employees: 1,000

Business divisions
Private banking
Investment banking
Asset management
Commercial banking
   
Personally liable managing partners
Dr Hans-Walter Peters (spokesperson), Andreas Brodtmann, Hendrik Riehmer

Locations
Hamburg, Bielefeld, Braunschweig, Bremen, Düsseldorf, Frankfurt, Munich, Stuttgart, Wiesbaden, Geneva, London, Luxembourg, Paris, Salzburg, Shanghai, Vienna, Zurich

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