Hypovereinsbank - Slugfest in Bavaria
Two crucial meetings this month may settle the uncertain future of Bavarian giant HypoVereinsbank, in turmoil since chairman Albrecht Schmidt and merger partner Eberhard Martini had a very public row. Auditors, former board members and the Munich state prosecutor are embroiled in a high-octane war. It was born in the euphoria of German unification, brewed in the property slump of the late 1990s, and exploded into a battle of numbers that no-one can win. David Shirreff reports.
On December 9 hundreds of senior managers of HypoVereinsbank, Germany's second biggest bank, will converge on Munich to listen to their executive chairman Albrecht Schmidt.
Schmidt, known internally as "little Napoleon", will explain to them how it was not his vanity and over-vaulting ambition that paralyzed the bank for a year. Far from it. It was a necessary, if rather slow blood-letting, to purge the bank - the result of a 1998 merger between Bayerische Vereinsbank (BV), previously run by Schmidt, and Bayerische Hypotheken- und Wechselbank (Hypobank) - of its worst Hypobank elements.
Schmidt, assisted by a couple of lieutenants from McKinsey, will unveil a strategy - Kurs 125 - to take the bank into the next century, and achieve a near-doubling of the share price to €125. At the end of November it stood at around €70.
There is more than a touch of irony here. HypoVereinsbank is in play. During November there were strong rumours that it would be merged with Dresdner Bank, a wannabe global universal bank which has lost its way. Schmidt, who for nearly a decade has insisted that his bank will be a "bank of the regions", could hardly re-invent himself and come out on top of the merged Hypo-Dresdner, unless Dresdner is largely dismantled.