The dire results for several US investment banks in the second half of 2007 inevitably set the tone for coverage of the leading players in Germany. Dresdner Bank was no exception. Write-downs of €1.275bn on the asset-backed securities (ABS) trading book of investment banking arm Dresdner Kleinwort cut the group’s overall operating profit to €710m for 2007, down from €1.35bn in 2006. Speculation intensified in March 2008, when Allianz split Dresdner Kleinwort into a separate wholesale bank, with the rest of Dresdner focused on private and corporate client (PCC) activities.
Speaking to The Banker before the split was announced, Caspar von Blomberg, Allianz’s head of banking strategy, urged observers to look beneath the alarming headlines. “If we leave aside the part that was affected by the crisis – which was about 10% of the investment bank – this was one of the best years that the bank has ever delivered in terms of creating profits, both for the entire PCC segment, but also for large parts of the investment bank,” he said. In the first half of 2007, Dresdner Bank was contributing 20% to the overall operating profits of its owner, Allianz Group, he added.
