Landesbank Baden-Württemberg
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Landesbank Baden-Württemberg (LBBW) is a universal bank and the
Landesbank In German-speaking jurisdictions, ''Landesbank'' (plural ), , generally refers to a bank operating within a territorial subdivision () that has autonomy but not full sovereignty. It is occasionally translated as "provincial bank". Austria-Hungar ...
for some
Federal States A federation (also known as a federal state) is a political entity characterized by a union of partially self-governing provinces, states, or other regions under a central federal government (federalism). In a federation, the self-governi ...
of
Germany Germany,, officially the Federal Republic of Germany, is a country in Central Europe. It is the second most populous country in Europe after Russia, and the most populous member state of the European Union. Germany is situated betwe ...
(Baden-Württemberg, Rheinland-Pfalz, Sachsen). As of 2018, it is Germany's biggest state-backed landesbank lender. LBBW is a full-service and commercial bank and central bank for savings banks in Baden-Württemberg, Rhineland-Palatinate and Saxony. The company focuses on industrial technologies, information technology, software, telecommunication, innovative services and life science. It prefers to invest in Southern Germany, but also considers investments in other regions of Germany,
Austria Austria, , bar, Östareich officially the Republic of Austria, is a country in the southern part of Central Europe, lying in the Eastern Alps. It is a federation of nine states, one of which is the capital, Vienna, the most populous ...
and Switzerland.


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 Günther Hermann Oettinger (born 15 October 1953) is a German lawyer and politician of the Christian Democratic Union (CDU) who served as European Commissioner for Budget and Human Resources from 2017 to 2019, as European Commissioner for Digit ...
, 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 Thuringia (; german: Thüringen ), officially the Free State of Thuringia ( ), is a state of central Germany, covering , the sixth smallest of the sixteen German states. It has a population of about 2.1 million. Erfurt is the capital and lar ...
,
Saxony-Anhalt Saxony-Anhalt (german: Sachsen-Anhalt ; nds, Sassen-Anholt) is a state of Germany, bordering the states of Brandenburg, Saxony, Thuringia and Lower Saxony. It covers an area of and has a population of 2.18 million inhabitants, making it th ...
and
Saxony Saxony (german: Sachsen ; Upper Saxon: ''Saggsn''; hsb, Sakska), officially the Free State of Saxony (german: Freistaat Sachsen, links=no ; Upper Saxon: ''Freischdaad Saggsn''; hsb, Swobodny stat Sakska, links=no), is a landlocked state of ...
) under the umbrella of Sachsen Bank. By the time of the
financial crisis of 2007–2008 Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fi ...
, 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 A bailout is the provision of financial help to a corporation or country which otherwise would be on the brink of bankruptcy. A bailout differs from the term ''bail-in'' (coined in 2010) under which the bondholders or depositors of global sys ...
of 5 billion euros and reduced its portfolio of
toxic asset A toxic asset is a financial asset that has fallen in value significantly and for which there is no longer a functioning market. Such assets cannot be sold at a price satisfactory to the holder. Because assets are offset against liabilities and freq ...
s 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 SoFFin (Sonderfonds Finanzmarktstabilisierung - Special Financial Market Stabilization Funds) is a program of the German government with the purpose to stabilize and restore confidence in the financial system. It was created in the middle of th ...
, the federal government's bail-out scheme. By 2009, the
European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...
approved a
restructuring Restructuring is the corporate management term for the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs. Other reasons ...
plan which had the institution focus on its core regional banking businesses, curtail capital market and
proprietary trading Proprietary trading (also known as prop trading) occurs when a trader trades stocks, bonds, currencies, commodities, their derivatives, or other financial instruments with the firm's own money (instead of using depositors' money) in order to m ...
activities and shrink its balance sheet. In 2019, LBBW became one of six banks to be mandated by the
Islamic Development Bank The Islamic Development Bank ( ar, البنك الإسلامي للتنمية, abbreviated as IsDB) is a multilateral development finance institution that is focused on Islamic finance for infrastructure development and located in Jeddah, Saudi ...
 (IsDB) to raise $1.5 billion in five-year
sukuk Sukuk ( ar, صكوك, ṣukūk; plural of ar, صك, ṣakk, legal instrument, deed, cheque, links=no) is the Arabic name for financial certificates, also commonly referred to as "sharia compliant" bonds. Sukuk are defined by the AAOIFI ( Acco ...
.


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 The United States Department of Justice (DOJ), also known as the Justice Department, is a federal executive department of the United States government tasked with the enforcement of federal law and administration of justice in the United State ...
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 Zurich, had previously held 35 U.S.-related accounts with $128 million in assets under management since August 2008.Karen Freifeld (May 28, 2015)
U.S. reaches deals with four more banks under Swiss program
''
Reuters Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world. The agency was esta ...
''.
Another LBBW subsidiary, LBBW Luxemburg S.A., is engaged in litigation against the American bank
Wells Fargo Wells Fargo & Company is an American multinational financial services company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and intern ...
as of 2012.


References


External links


Landesbank Baden-Württemberg
{{DEFAULTSORT:Landesbank Baden-Wurttemberg Landesbanks Companies based in Baden-Württemberg Companies based in Stuttgart Banks under direct supervision of the European Central Bank