How many times in these columns have we applauded HVB?s Dieter Rampl for being the most optimistic man on earth and the only bank chairman we know who never fails to laugh and flash his gnashers at the cameras?
When you consider that Dieter?s hand of cards at HVB never contained more than two pairs, you have to admire his general joie de vivre. ?Dieter would still have been smiling if the HVB ship had sunk with all hands,? commented a Munich-based money manger who recently acquired more HVB shares.
But is Dieter Rampl still the happiest bunny in the financial services industry? Perhaps not. Just as we were all thinking that HVB?s fortunes were on the mend and that Dieter?s hand of two pairs might be turned into a full house, some unscrupulous bounder seems to have removed one of HVB?s wheels. Instead of taking the chequered flag for the first time, Dieter has run straight into a brick wall. Ambulances were rushed to the scene, where they say that no one is hurt, but both Dieter and the bank are badly shaken.
What went so terribly wrong? We wish we had been able to keep our arranged lunch appointment with HVB?s senior managers, but it was they who cancelled at the last minute, as one of the bank?s super top brass was called away. Would we have been given any indication that profits were about to fall out of bed? Perhaps not, but we will never know. Would someone be very kind and re-arrange the lunch, as we would welcome a wider range of contacts.
The disappearing trick performed by HVB?s profits drew gasps of horror from the audience and makes a mockery of the earlier perception that HVB would be able to merge with Commerzbank from a position of strength. Just a couple of months ago, HVB was banging the big drum, saying that Commerzbank was still walking with a crutch and that in any combined bank they would be calling the shots. Indeed, HVB was so aloof and proud that the inference was that it didn?t really need Commerzbank at all.
But now the boot is on the other foot. Commerzbank has come out with some results which may not be straight out of a Tiffany?s or a Van Cleef & Arpels catalogue, but which did contain some genuine sparkle. Just at the right moment, like Marshal Blücher arriving late at the Battle of Waterloo, Mehmet Dalman?s trading and securities divisions came riding to the rescue to make Commerzbank?s chairman, Peter Müller look like a hero.
While Commerzbank was looking at its nimblest for three years, HVB?s earnings in the first quarter inexplicably fell off the cliff. Who was responsible? Should Dieter Rampl order heads to roll? Will stunned HVB shareholders suggest that Dieter?s own head should be served up on the sacrificial platter? Hadn?t those same shareholders stumped up no less than Eu3bn in a rights issue just a few months earlier?
HVB is not out for the count but it has become the lame duck of German banking. By missing earnings forecasts by a mind-blowing 65%, Dieter Rampl has given himself almost an impossible amount of ground to catch up.
In our opinion, he does not have a rock?n?roll investment banking division to haul him out of the mire and building up this division should perhaps be his first priority. For reasons which are understandable when you look at the dismal performance of WestLB and, until the arrival of Mehmet Dalman, Commerzbank, German financial institutions were not enamoured with investment banking, and HVB?s foray into the sector has not exactly cut the same territorial swathe as Charlemagne or Tamerlane.
However, Deutsche Bank, with the inspiration of Josef Ackermann, has proved beyond any doubt that investment banking can, if properly managed, be a goldmine. Where would Deutsche be today if it were not for the contribution of the trading and securities businesses over the past three years? ?Deep in the brown Windsor soup,? commented a former Deutsche managing director, who recently joined the stampede to set up his own hedge fund.
HVB?s Dieter Rampl should scout around for some managers who could follow in the footsteps of Deutsche?s Anshu Jain, who seems to set most of the Euromarket benchmarks these days. There is some excellent talent available at a price which would not make him weep. At the same time, Dieter should hire Sherlock Holmes, the Pinkertons and Hercule Poirot to find his missing net interest income, which fell by 50%. Were the billions hijacked and stashed away down an abandoned coalmine in Silesia? HVB should offer a suitable reward for their recovery.
