When he was co-chairman of Deutsche Pfandbrief Bank back in Wiesbaden, Gerhard Bruckermann never had much patience for what he calls the “slow consensual decision making typical of German banking.” Advising governments, municipalities and public agencies, he contends, requires the “fast decision-making process that characterizes international investment banking.”
So last month the 54-year-old North Rhine,Westphalia native sundered his bank into two entities and pulled one of them out of Germany altogether: DePfa Bank, a lean public finance machine, was relocated to Dublin. Aareal Bank, a traditional German mortgage lender, remains in Wiesbaden. Bruckermann, who has moved to London, heads DePfa, and his onetime co-chairman, Karl-Heinz Glauner, will run Aareal. The two banks are listed separately, both in Frankfurt; DePfa, however, is registered as an Irish company.
The deal turned out to be even more complex than the German collateralized bonds that Deutsche Pfandbrief specialized in and which DePfa hopes to duplicate in Dublin while it continues to issue the original thing through a German subsidiary. But the objective was straightforward: to create clarity for confused investors - and perhaps for Bruckermann.
Dublin offered tax breaks and low costs, as well as the lure of a congenial corporate climate. “As in other English-speaking countries,” explains Bruckermann, “here we can vest all executive power in a combined CEO and chairman and then effectively parcel out decision-making power throughout the organization. In Germany you,ve got to get around laws that state the executive power is shared by all the members of the management committee.”
The banker, who never before worked outside Germany but spent a lot of time in New York and London (and happens to be married to an American), adds: “In Dublin, London or New York, a reorganization like ours would be as natural as breathing air,” but in Germany “our efforts are like the one-eyed man who becomes king in the land of the blind.”
