Landesbank Saxony

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Logo of Sachsen LB - Landesbank Sachsen Aktiengesellschaft

The Landesbank Sachsen Aktiengesellschaft ( Sachsen LB ) was the Landesbank of the Free State of Saxony with its seat in Leipzig . The Landesbank, founded on January 1, 1992 in the legal form of an institution under public law and trading as Landesbank Sachsen Girozentrale , was converted into a stock corporation in 2007 and operated as Landesbank Sachsen Aktiengesellschaft from October 26, 2007 to March 30, 2008 . Most recently, it was converted into a limited partnership and operated for one day from March 31, 2008 to April 1, 2008 as Sachsen Bank Anstalt Rechts & Co. KG . She was since January 1, 2008, a wholly owned subsidiary of Landesbank Baden-Württemberg (LBBW) and was 1 April 2008 to this merged .

LBBW's regional customer business continued to operate under the brand name Sachsen Bank together with the previous BW Bank branches in Halle (Saale) , Leipzig and Dresden . Until its final liquidation in 2018, Sachsen Bank took over the business field of corporate customer business with a focus on SME business and the business field private banking as an operationally independent unit within LBBW as a regional customer bank .

tasks

On the one hand, the bank was responsible for the tasks of a state and municipal bank for the Saxon savings banks. It was transformed from a promotional bank, which, for example, issued loans and guarantees for economic projects, into an investment bank. After the elimination of the guarantor liability in 2005, the bank's owners, i.e. the Free State of Saxony and the Saxony Finance Group , were no longer fully and without limitation liable for the bank's liabilities. Sachsen LB was also a commercial bank and, as a competitor under public law, operated banking transactions of all kinds and other businesses that served their purposes.

organization structure

Board member of Landesbank Sachsen Girozentrale

The following persons were chairmen of the board:

  • Michael Weiss from 1992 to 2005
  • Hans-Jürgen Klumpp provisionally 2005
  • Herbert Süß from 2005 to September 15, 2007
  • Joachim Hoof from September 15, 2007 to October 26, 2007

The following people were members of the board:

  • Eckhard Laible from May 1, 1995 to December 31, 2001
  • Hans-Jürgen Klumpp from 1993 to November 2005
  • Dieter Burgmer from 2000 to 2001
  • Rainer Fuchs from 2002 to 2005
  • Gerrit Raupach from 2005 to June 30, 2006
  • Stefan Leusder from November 1, 2005 to August 23, 2007
  • Yvette Bellavite-Hövermann from September 1, 2006 to August 30, 2007
  • Werner Eckert from September 1, 2006 to August 30, 2007
  • Wolf-Dieter Ihle from August 30, 2007 to October 26, 2007
  • Harald R. Pfab from September 4, 2007 to October 26, 2007

Board of Directors of Landesbank Sachsen Girozentrale

The chairmen were:

Members were:

  • Uwe Albrecht (unknown – November 30, 2006), member
  • Christine Boragk (May 31, 2007– October 26, 2007), member of employee representatives
  • Michael Czupalla (March 20, 2006– October 26, 2007), member
  • Achim Eißler (unknown - May 30, 2007), member of the employee representative
  • Michael Geisler (March 20, 2006– October 26, 2007), member
  • Reiner Grimm, member
  • Andrea Haas (May 31, 2007– October 26, 2007), member of employee representatives
  • Wieland Hiller (unknown – May 30, 2007), member of the employee representative
  • Claus Friedrich Holtmann (February 1, 2007– October 26, 2007), member
  • Joachim Hoof (March 20, 2006– September 4, 2007), member
  • Burkhard Jung (March 20, 2006– October 26, 2007), member
  • Thomas Jurk , member
  • Petra Kockert, member
  • Peter Krakow (unknown – March 19, 2006), member
  • Catrin Kullmann (unknown – May 30, 2007), member of the employee representative
  • Rainer Kutschke (unknown – March 19, 2006), member
  • Dirk Lindner (May 31, 2007– October 26, 2007), member of employee representatives
  • Bernd Michallik (unknown – March 19, 2006), member
  • Reimund Neugebauer (March 20, 2006– October 26, 2007), member
  • Benedikt Niemeyer, member
  • Ingolf Roßberg , (unknown – May 15, 2006), member
  • Matthias Rößler (December 1, 2006– October 14, 2007), member
  • Arthur Scholz (unknown – March 19, 2006), member
  • Andreas Schramm (March 20, 2006– October 26, 2007), member
  • Friedhelm Schutt (May 31, 2007– October 26, 2007), member of employee representatives
  • Jörg-Udo Veldten (unknown – May 30, 2007), member of the employee representative
  • Rainer Voigt (unknown – December 31, 2006), member
  • Ronald Weckesser (March 20, 2006– October 26, 2007), member
  • Hermann Winkler (March 20, 2006– October 26, 2007), member

Liquidity crisis and emergency sale in 2007 and 2008

prehistory

Through its Irish subsidiary “Sachsen LB Europe plc”, Dublin and the conduits “Ormond Quay Funding” and “Georges Quay Funding”, Sachsen LB had carried out securitization transactions with American mortgage market loans, but not from the subprime segment. However, these securitization transactions were hardly known and are not listed in the 2006 annual report of the Irish Sachsen LB subsidiary.

In the wake of the American mortgage market crisis in summer 2007, these conduits were temporarily no longer able to place sufficient short-term bonds on the capital market to fully refinance the long-term loans they had acquired .

Crisis and distress sale in August 2007

The course of the crisis up to the emergency sale on August 26, 2007 was presented by the Sächsische Zeitung in a dossier in the issue of August 26/27. August 2017 as follows, whereby individual references originate from earlier versions of this lemma and have been retained because they supplement this report or provide additional information.

  • On July 30, 2007, IKB Deutsche Industriebank reported that a crisis in the US subprime market had put it in a situation that threatened its existence. Business journalists found that the Irish subsidiary of Sachsen LB is also active in this area to a considerable extent. Thereupon the then State Secretary in the Saxon State Ministry of Finance , Wolfgang Voss , arranged a statement from the then board of the Sachsen LB under the chairman of the board, Herbert Süß , which he received on August 3, 2007. This confirms to him that there are fluctuations in the market, but these have nothing to do with increased default risks.
  • On August 6, 2007, Der Spiegel reported on "financial jugglers", the "Ormond Quay Fund" and the financial volume of 14 billion euros that was at stake. Another unsolicited letter was received by the Ministry of Finance, this time to Minister of State Horst Metz , who was on vacation. This letter also landed with State Secretary Voss. The bankers again assured that the liquidity was secured and there was no cause for panic. Since the Frankfurter Allgemeine Zeitung reported in turn that Sachsen LB had come under the sights of the banking supervisory authorities, the board was invited to the Ministry of Finance. There he again emphasized on August 10, 2007 that the bank had sufficient liquidity and communicated this to the press (press release at that time as individual evidence).
  • On August 14, 2007 - Finance Minister Metz was back from vacation in the meantime - a meeting of the Credit Committee of the Supervisory Board of Sachsen LB took place in Leipzig, chaired by Minister of State Metz. Within a few minutes, it suddenly became known that there was a significant problem with the special purpose vehicle "Ormand Quay". Billions in losses would be threatened if the Dublin investment was not supported immediately. It remained unclear who would have to raise how much funding and when. State Minister Metz and State Secretary Voss informed the State Chancellery on the basis of this information, and State Secretary Andrea Fischer then informed Prime Minister Georg Milbradt on his vacation in Hungary, who immediately broke it off.
  • On August 15, 2007, a crisis meeting took place in the State Chancellery, at which the required amount was named for the first time: 17.3 billion euros. Even specialists in the Ministry of Finance were unclear at the time that these securities even exist and how they worked. It was also criticized that PwC's auditors had always issued correct certificates.
  • Nevertheless, Saxony cannot take out this loan: A meeting is hastily organized at the German Savings Banks and Giro Association (DSGV), which took place on August 16, 2007 and the State Secretary Voss was responsible for the Free State of Saxony. I.a. Heinrich Haasis as President of the DSGV and Claus Friedrich Holtmann as Executive President of the East German Savings Bank Association (OSV) took part in this meeting . At around 10:00 p.m., the public banking sector agreed to provide the required credit line of 17.3 billion euros. Landesbank Baden-Württemberg (LBBW) alone took over half of the EUR 17.3 billion credit line. This credit line was also tied to the condition that Sachsen LB accepts a takeover by a financially strong investor.
  • On Friday, August 17, 2007 State Secretary Voss flew to Frankfurt for a meeting with Axel A. Weber , President of the Deutsche Bundesbank and Jochen Sanio , President of the German Federal Financial Supervisory Authority ( BaFin ), who, supported by the most important savings bank managers in Germany, agreed to this solution in principle on that day.
  • During the following weekend, the then coalition partner of the CDU, the SPD, first became aware of what was going on , and Vice-Prime Minister Thomas Jurk even only received his last day of vacation that weekend. Pithy political slogans from the direction of the CDU, especially against Karl Nolle (SPD), who profited from inside information from Leipzig, followed.
  • While the board meeting on Monday, August 20, 2007, was said to have been uneventful, the situation worsened on the evening of Tuesday, August 21, 2007: the British investment bank Barclays demanded an amount of 250 million euros with immediate payment. The board of directors in Leipzig had to admit that the equity of Sachsen LB would have to be accessed, which would then be so low that it would violate banking law requirements (i.e. in plain English: the bank would be closed).
  • On August 23, 2007, after the Barclays claim became known, Stefan Leusder, the board member responsible for capital markets, left the company.
  • In addition, on August 24th, a letter from BaFin reached the Ministry of Finance, which had to be informed by Sachsen LB of Barclays' claim, in which the latter wrote that the “existence-threatening situation” led to: “[...] Shouldn't the bank very much are quickly put on a new economic basis, the question of banking supervisory measures would arise ”: This means that immediate closure was threatened. In this letter, BaFin specified the deadline for the opening of the Tokyo stock exchange on Monday (August 27, 2007, around 3:00 a.m. CET).
  • However, this “new economic basis” demanded by BAFin did not mean that it should have been about a sale of SachsenLB to another bank: From the point of view of BAFin and in view of the sole ownership of the Free State of Saxony in SachsenLB it may be sufficient in a first step to meet the requirements of "Barclays" z. B. to use from budget funds of the Free State, for example in the sense of an obligation to make additional payments . However, due to the legal structure and the elimination of the guarantor liability in 2005 (which was also supported by Saxony, which was partly forced), this - simple - solution was blocked for SachsenLB. From other - more theoretical - models, only the “sale” remained within a few hours, especially since the risks from the “Ormond Quay Fund” would otherwise not have been conclusively dealt with, the amount in question of 250 million euros from Barclays for “immediate Due date “far exceeded.
  • From Saturday, August 25, 2007 at 4 p.m., a last 30-hour negotiation marathon began at the headquarters of the Ostsächsische Sparkasse Dresden ( Sparkassenhaus Güntzplatz). In addition to the board members of SachsenLB and the Free State, LBBW and NordLB were also there , but they withdrew their interest in a purchase on Saturday. State Minister Metz was there from the early evening, followed by Prime Minister Milbradt during the night. On Sunday morning, 2.30 a.m., there was a basic agreement with LBBW with 61 sections. They regulated the transfer of Sachsen LB to LBBW by January 1, 2008 at a purchase price of initially “at least EUR 300 million”. From this, LBBW took over the immediate transfer of EUR 250 million to Barclays.
  • On Sunday morning, August 26, 2007, the cabinet draft was drawn up and the urgent cabinet meeting together with the leaders of the parliamentary groups unanimously approved it. On Sunday afternoon, the owners of Sachsen LB and LBBW gave their consent to the purchase and sale.
  • On Sunday evening, at 7.30 p.m., Prime Minister Milbradt will announce the sale and purchase at a press conference. a. with the words: The Sachsen LB comes from a stormy sea in a quiet harbor known - which should not come true.

Follow-up events after the logged sale in 2007 and 2008

After purchasing Sachsen LB, LBBW itself got into trouble. When determining the purchase price, which initially remained open on August 26, 2007, it became clear that Sachsen LB had also sold risks amounting to 43 billion euros. In addition, LBBW discovered many papers “Dublin nature” in their own shops.

After the final takeover threatened to fail at the beginning of December, a final agreement was reached on the takeover of Sachsen LB by LBBW in the night of December 12th to 13th, 2007. This included u. a. Far-reaching financial guarantees of 2.75 billion euros from the state of Saxony.

Payments from the Free State of Saxony

Saxony paid up to and including the first half of 2017:

  • 2009: € 10.4 million
  • 2010: € 123.9 million (from here start of quarterly reporting)
  • 2011: € 146.5 million
  • 2012: € 221.7 million
  • 2013: € 608.8 million (additional payment by judgment of the Higher Regional Court Frankfurt am Main)
  • 2014: € 120.5 million
  • 2015: € 185.9 million
  • 2016: € 87.3 million
  • 2017: € 52.5 million (only first half of the year)

Up until then that was a total of € 1,557.5 million.

To cover the expected follow-up costs, a guarantee fund with a portfolio of around 1.21 billion euros (as of end of June 2017) was set up. Saxony's Ministry of Finance stated that this completely covered the residual risk of this guarantee.

After SachsenLB was liquidated at the beginning of 2018, the Free State of Saxony took over its remaining holdings with a special purpose vehicle, whereupon the successors of Sachsen LB were finally liquidated. These portfolios were sold and the income transferred to the guarantee fund, which on October 12, 2018 had a total portfolio of € 1,036.0 million. This is to be used for investments, € 800 million was planned in the 2019/2020 double budget, and a further € 165 million from the sale of the securities should still be used. € 71 million was to be used for the liquidation of the special purpose vehicle.

Further consequences

The section is based on the dossier of the Sächsische Zeitung from 26./27. August 2017.

Politician

Lawyers

  • The Saxon Court of Auditors submitted a report on the sale of the bank that was devastating for the state government.
  • In 2009 the Constitutional Court of the Free State of Saxony declared the sale partly unconstitutional. In particular, the judgment criticized the fact that the state parliament was only informed about the sale and was unable to make a decision on grounds of an impending financial emergency. A Landtag session convened without a form and deadline would also have been possible - even with the acceptance of a non-quorum majority: not even an attempt was made to convene it.
  • A total of 20 civil and criminal lawsuits were conducted. Most managers (or their insurance companies) paid damages in an unknown amount (according to the aforementioned dossier of the Sächsische Zeitung, a total of 60 million euros are under discussion).

Auditors / financial experts

  • As part of the negotiations following the emergency sale in September 2007, Ernst & Young was commissioned by the Saxon state government to examine what was going on at Sachsen LB. The auditors have accused the former board of the Sachsen LB with blatant errors. The credit substitute business was not recorded off-balance sheet by the bank's risk analysis system. Ernst & Young also criticized the fact that at the beginning of the financial market crisis in 2007 no “recognizable measures” were taken to reduce the risks; Instead, however, the business expanded and new special-purpose vehicles were founded.
  • The Stuttgart Regional Court declared the 2004 to 2006 financial statements of Sachsen LB null and void. The auditors of these annual financial statements, the company PwC , avoided a public process and in 2011 transferred an amount of 40 million euros to the Free State of Saxony.

The new owners

  • In 2008 LBBW suffered the highest loss in its history: 2.1 billion euros. CEO Siegfried Jaschinski resigned from the board in May 2009.
  • The legacy issues from the acquisition of Sachsen LB led (e.g.) in 2016 to LBBW reducing the goodwill of its current subsidiary by a further EUR 379 million.
  • The chairman of the board, Rainer Neske , stated that in 2018 he wanted to call on the Free State of Saxony to take over the administration of the Dublin funds itself again (which also happened in 2018, see below).
  • With regard to any profits or losses from the takeover of Sachsen LB, LBBW had it declared at the end of August 2017 that the press spokesman did not have such calculations.

Board and supervisory authorities

  • At the end of August 2007, two more board members were dismissed, and the chairman of the board, Herbert Süß , announced his resignation on September 15, 2007. In the following period, the Leipzig public prosecutor's office investigated former board members. An initial charge was brought in September 2011.
  • None of SachsenLB's top bankers had to go to jail: the processes failed due to formal errors or ended in return for the payment of fines. The last of the lawsuits, the one against Herbert Süß, also ended in 2017 with a suspension against payment of a monetary requirement.
  • The CEO of LBBW, Siegfried Jaschinski, was also exposed to an investigation by the Stuttgart public prosecutor because of the incorrect presentation of the “Dublin papers” and their risks in the balance sheet: It was suspended in 2014 against payment of 50,000 euros.
  • Like the supervisory authorities, the members of the board of directors remained unmolested. Only Jochen Sanio, as President of BaFin, found himself exposed to allegations of breach of trust; the proceedings were discontinued in 2015.

Situation after 2008

On April 1, 2008, Sachsen LB was finally merged with LBBW and thus expired. The regional customer business was then continued to operate by LBBW together with the previous BW Bank branches in Halle, Leipzig and Dresden under the new brand name Sachsen Bank . However, this only affected some of the 600 employees at the former Sachsen LB. Other parts of Sachsen LB's business were taken over by a newly established LBBW branch in Leipzig.

After SachsenLB was liquidated at the beginning of 2018, the Free State of Saxony took over the remaining Dublin holdings with a special purpose vehicle, whereupon the successors of Sachsen LB were finally liquidated. The guarantee fund set up for this special purpose vehicle had a total volume of € 1,036.0 million on October 12, 2018. The payments by the Free State of Saxony for the emergency sale to LBBW are thus final and total around 1.73 billion euros.

See also

literature

  • Ulrich Wolf: Dramatic days in August and what happened to those involved. In: Saxon newspaper . 26./27. August 2017, p. 3. Documentation of the process of the sale of SachsenLB in August 2007 and the aftermath. 1st part also (online) . Retrieved November 23, 2018.

Web links

Individual evidence

  1. ^ Press release October 26, 2007: Change of legal form to a stock corporation completed.
  2. ↑ a b Sachsen LB is now called Sachsen Bank . In: FAZ , March 27, 2008.
  3. ^ Law on the public credit system in the Free State of Saxony. From December 13, 2002, §§ 36, 67 (accessed on August 28, 2017)
  4. ↑ a b c d e f g h Landesbank Sachsen: Annual financial statements as of December 31, 2006 and 2007 search in the electronic Federal Gazette
  5. ↑ Sachsen LB pays ex-board member Klumpp 55,000 euros - comparison. In: Saxon newspaper . February 28, 2008, accessed January 7, 2011.
  6. ↑ To be found at https://search.cro.ie/company/CompanyDetails.aspx?id=383193&type=C, accessed on August 28, 2017, but only via the homepage of the Irish search engine and manual entry , manual archiving in the web archive has failed .
  7. ↑ To be found at https://search.cro.ie/company/CompanyDetails.aspx?id=367304&type=C, accessed on August 28, 2017, but only via the homepage of the Irish search engine and manual entry , manual archiving in the web archive has failed .
  8. ↑ sachsenlb.ie On the right Track (Annual Report of Sachsen LB Europe plc from 2006) ( Memento from November 18, 2007 in the Internet Archive ) (PDF; archive.org ; 1.3 MB)
  9. ↑ sachsenlb.de
  10. ↑ a b c d The entire section is based, unless there is a detailed individual reference at the appropriate point, on: Ulrich Wolf: Dramatik Tage im August und What became of those involved. In: Saxon newspaper . 26./27. August 2017, p. 3. Documentation of the process of the sale of SachsenLB in August 2007 and the aftermath. 1st part also (online) . Retrieved November 23, 2018.
  11. ^ Statement on the situation on the ABS market ( memento from October 6, 2014 in the Internet Archive ), notification from Sachsen LB from August 10, 2007.
  12. ↑ Sachsen LB ad hoc announcement of August 17, 2007
  13. ↑ Aid for Landesbank - rescuers put Saxony under pressure . In: Spiegel Online . August 20, 2007.
  14. ↑ Stefan Leusder resigns from the board ( Memento from November 4, 2013 in the Internet Archive ), notification from Sachsen LB from August 23, 2007.
  15. ↑ This BaFin measure also became known to business journalists, see z. B. SachsenLB should be saved by Sunday ( memento from September 26, 2007 in the Internet Archive ) in ftd.de
  16. ↑ owners agree on rescue of Sachsen LB . In: Spiegel Online . December 13, 2007.
  17. ↑ Taxpayers continue to vouch for banking debacles. Retrieved August 18, 2017 .
  18. ↑ a b dpa: Sale of Sachsen LB securities completed. Online , accessed October 12, 2018.
  19. ↑ Minister falls due to banking crisis . In: Die Zeit online , 2007.
  20. ↑ From the judgment of the SächsVerfG.
  21. ↑ Examiners reprimand the Sachsen LB manager . ( Memento from February 6, 2013 in the web archive archive.today ) In: Financial Times Deutschland . March 11, 2008.
  22. ↑ Changes in the Board of Management, notification from Sachsen LB dated August 30, 2007
  23. ↑ FAZ , September 8, 2011, p. 15.