The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Small earthquake in Bavaria

Munich, Sunday November 15

The supervisory board of Bavarian giant Hypovereinsbank decides discretion is the better part of valour and exonerates chief executive Albrecht Schmidt of all blame for causing the biggest ruckus in Munich since the 1972 Olympics.

For two weeks the Munich tabloids lived on the feud between Schmidt and Eberhard Martini, his former counterpart at Bayerische Hypobank, over which of them might be least well equipped to run a financial institution. At the centre of the row was a bunch of dummy investments in east German development projects, signed in the euphoria of unification, which are now worth next to nothing. Hypobank had kept these on its balance sheet at close to book value until the rumour mills started. Then it wrote them down to 85%. But for Schmidt that wasn't enough. As soon as he took charge of the newly merged Hypovereinsbank on September 1 he ordered a revaluation by the auditors. They concluded that this sad property portfolio had somehow, between February and October, lost another 35% in street value. Schmidt bit the bullet and announced a Dm3.5 billion ($2.1 billion) additional write-down warning that there would be an enquiry and "appropriate consequences for personnel".

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree