Landesbank Baden-Württemberg

History

On 1 January 1999, Landesbank Baden-Württemberg (LBBW) was formed through the merger of SüdwestLB, Landesgirokasse, and the commercial banking business of L-Bank.

On 1 August 2005, Baden Württembergische Bank (BW-Bank) was incorporated into LBBW as a legally dependent institution under public law. Also as a legally dependent institution under public law, the former Landesbank Rheinland-Pfalz was integrated in the LBBW Group on 1 July 2008 under the new name Rheinland-Pfalz Bank. In 2007, the state governor of Baden-Württemberg, Günther Oettinger, announced that LBBW would pay an initial 250 million euros, or $342 million, for its competitor Sachsen LB; on 1 April 2008, LBBW re-organized its activities in Central Germany (Thuringia, Saxony-Anhalt and Saxony) under the umbrella of Sachsen Bank.

By the 2008 financial crisis, LBBW had already grown to become the biggest and strongest of Germany's seven remaining independent public Landesbanken. It nonetheless had to take a state bailout of 5 billion euros and reduced its portfolio of toxic assets to 3 billion euros by 2014 from 95 billion in 2008. Similar to other public lenders, it opted for support from its regional state owner instead of drawing on help from SoFFin, the federal government's bail-out scheme. By 2009, the European Commission approved a restructuring plan which had the institution focus on its core regional banking businesses, curtail capital market and proprietary trading activities and shrink its balance sheet.

In 2019, LBBW became one of six banks to be mandated by the Islamic Development Bank (IsDB) to raise $1.5 billion in five-year sukuk.

Assets

LBBW holds shares in various subsidiaries, including the following:

• LBBW Asset Management
• MKB Mittelrheinische Bank
• Südfactoring
• Südleasing
• HSBC Trinkaus & Burkhardt (18.7%)

Controversy

In late 2009, state prosecutors raided the Stuttgart headquarters of LBBW as part of an investigation into alleged breaches of trust in connection with the bank's subprime investments. Several managers were later tried on accounting charges.

In 2015, an LBBW subsidiary in Switzerland agreed with the U.S. Department of Justice to pay a penalty of $34,000 to avoid possible prosecution for helping U.S. account holders conceal assets from the Internal Revenue Service and evade taxes. The subsidiary, LBBW (Schweiz) in Zürich, had previously held 35 U.S.-related accounts with $128 million in assets under management since August 2008.

Another LBBW subsidiary, LBBW Luxemburg S.A., is engaged in litigation against the American bank Wells Fargo as of 2012.{{Citation

References

References

1. Andreas Kröner (February 16, 2016), [https://www.reuters.com/article/lbbw-moves-ceo-idUSFWN15V002 Former Deutsche Bank exec Neske to head LBBW- sources] ''[[Reuters]]''.
2. (April 2023). "LBBW Venture Capital GmbH: Private Company Information - BusinessWeek". investing.businessweek.com.
3. ({{date). "The list of significant supervised entities and the list of less significant institutions".
4. ({{date). "List of supervised entities".
5. Nicola Clark (August 27, 2007), [https://www.nytimes.com/2007/08/27/business/worldbusiness/27german.html Mortgage Crisis Forces Sale of German Bank] ''[[New York Times]]''.
6. Nina Luttmer and Ivar Simensen (November 28, 2007), [https://www.ft.com/content/e598e5e0-9dee-11dc-9f68-0000779fd2ac LBBW faces €800m writedown] ''[[Financial Times]]''.
7. Nikki Tait and James Wilson (December 15, 2009), [https://www.ft.com/content/637ce700-e982-11de-be51-00144feab49a EU gives go-ahead to LBBW revamp] ''[[Financial Times]]''.
8. Arno Schuetze (November 12, 2014), [https://www.reuters.com/article/lbbw-results-idUSL6N0T22A420141112 Germany's LBBW clears out toxic assets, profit rises] ''[[Reuters]]''.
9. Daniel Schäfer (November 30, 2008), [https://www.ft.com/content/41eb9908-bf01-11dd-ae63-0000779fd18c BayernLB set for €10bn bail-out] ''[[Financial Times]]''.
10. Nikki Tait and James Wilson (December 15, 2009), [https://www.ft.com/content/637ce700-e982-11de-be51-00144feab49a EU gives go-ahead to LBBW revamp] ''[[Financial Times]]''.
11. Davide Barbuscia (November 12, 2019), [https://www.reuters.com/article/islamic-dev-bk-sukuk/islamic-development-bank-hires-banks-for-green-euro-sukuk-idUSL8N27S3SZ Islamic Development Bank hires banks for green euro sukuk] ''[[Reuters]]''.
12. Nikki Tait and James Wilson (December 15, 2009), [https://www.ft.com/content/637ce700-e982-11de-be51-00144feab49a EU gives go-ahead to LBBW revamp] ''[[Financial Times]]''.
13. Karin Matussek (February 6, 2014), [https://www.bloomberg.com/news/articles/2014-02-06/lbbw-managers-tried-on-subprime-securities-accounting-charges] ''[[Bloomberg News]]''.
14. Karen Freifeld (May 28, 2015), [https://www.reuters.com/article/us-justice-department-swiss-banks-idUSKBN0OD26O20150528 U.S. reaches deals with four more banks under Swiss program] ''[[Reuters]]''.