Comdirect Bank

Last updated

Comdirect Bank Aktiengesellschaft
Type Aktiengesellschaft
FWB:  COM
ISIN DE0005428007
Industry Financial services
Founded1994;30 years ago (1994)
Founder Commerzbank
DefunctNovember 1, 2020 (2020-11-01)
Headquarters,
Area served
Germany
Key people
Products Retail banking, Savings, Securities, Asset management
Decrease2.svg 70.723 million (2018)
Decrease2.svg 50.369 million (2018)
Total equity Decrease2.svg €634 million (2018)
Number of employees
1,534 (2018)
Parent Commerzbank (82%) [1]
Subsidiaries
  • Onvista
Website comdirect.de

Comdirect Bank Aktiengesellschaft was the third-largest German direct bank and was based in Quickborn, Schleswig-Holstein. [2] [3] Founded by the Commerzbank in 1994, [4] the company went public in 2000. [5] The Commerzbank integrated the company on November 1, 2020.

Contents

History

Previous logo. Comdirect-Logo.svg
Previous logo.

Foundation

In 1994, the Commerzbank desired to expand its business and customer base and therefore decided to establish a direct bank. [6] Commerzbank founded Comdirect, which was registered in December 1994 as a private limited company (GmbH - Gesellschaft mit beschränkter Haftung). [7] It began operations with 50 employees and 50 million Deutsche Mark on equity in January 1995. [8] The company positioned itself not as a traditional direct bank like seen before, but instead as a universal bank for private customers with a wide range of specialized products. [9] One of the first products of the Comdirect Bank was a money market account. Also, securities trading became one of the top priorities. [10]

Public offering

Within the first few months, the Comdirect Bank gained tens of thousands of customers. [11] In the late 1990s, the Comdirect Bank expanded to other European countries. [12] The Commerzbank and Deutsche Telekom agreed on the cooperation of their subsidiaries, the Comdirect Bank and T-Online International. [13] Comdirect Bank became a public company (Aktiengesellschaft) in November 1999 and went public in June 2000. [7] [5] Commerzbank sold a minority stake in the company. [14] The stock was oversubscribed several times and later became part of the Nemax 50 index and the Prime Standard of Frankfurt Stock Exchange. [15] [16] The proceeds of the initial public offering were used to build the investment banking of the Comdirect Bank, for example. [17] The company doubled its workforce to cope with the growing number of customers. [18]

Consolidation

In 2000, the burst of the dot-com bubble hit the financial industry. The Comdirect Bank was also affected and as a result, growth slowed. [19] [20] After several successful years, the bank announced losses in 2001. [21] As the Comdirect Bank slipped into financial difficulties, the board launched a savings program. [22] At the end of 2001, the Comdirect Bank announced to focus on Germany and the United Kingdom. The company places its loss-making branches at disposal; the subsidiaries in France and Italy were sold and closed. [23] [24] Finally, in 2004, the Comdirect Bank sold its British subsidiary, too. [25]

From then on, the Comdirect Bank exclusively focused on its home market in Germany. [26] The company accelerated the expansion of its product range and, in particular, cared more about customer advisory services. [27] The new strategy stabilized the business. [28] The first dividend was distributed in 2004 and in 2005, [29] the German retail banking of American Express was acquired, which helped to grow the customer base significantly. [30]

To profit more from the performance of the Comdirect Bank, the Commerzbank increased its investment to almost 80% in June 2005. [31] The group purchased the remaining share from T-Online International. [32]

Acquisitions

Even during the global financial crisis from 2007, the business remained stable; the Comdirect Bank profited from the increase in transactions in securities trading. [33]

In 2009, the Comdirect Bank acquired the European Bank for Financial Services (ebase) from the Commerzbank, [34] doubling the number of managed securities accounts. [35] At the same time, the bank extended its position in financial services and asset management. [35] During the following years, the Comdirect Bank repositioned the European Bank for Financial Services as a business-to-business bank. [36] In July 2018, comdirect agreed to sell ebase to London-based financial technology provider FNZ Group to focus more on the core business and completed the sale in July 2019. [37] [38]

In 2016, the Comdirect Bank announced the acquisition of the Onvista Group. [39] Both the Onvista Bank and Onvista Media, operator of a high-reach financial portal, became part of the Comdirect Bank. [40] With this investment, the Comdirect Bank strengthened securities trading and financial information business at the same time. [41] While the Onvista Bank merged with the Comdirect Bank, Onvista Media continued operations as a subsidiary. [42]

Digitalization

In recent years, the Comdirect Bank invested heavily in digital technologies. For example, the company published the first online banking app with support for accounts from other institutions. [43] It launched the "startup garage" for financial technology startups. [44] [45] The company was the first bank in Germany to publish an Amazon Alexa skill, for example, and later added support for Google Home. [46] The Comdirect Bank also launched a robo-advisor named Cominvest. [47]

In late 2019, Commerzbank entered into talks with Petrus Advisers to buy its 7.5% stake in Comdirect and take over the entire online bank. [48]

Structure

Onvista Media is a subsidiary of Comdirect bank in Germany. [40]

Products

comdirect bank offers current accounts, online brokerage and several types of credits and loans. [49] [50] [51] [52]

Responsibility

In 2009, the Comdirect Bank and the Stuttgart Stock Exchange founded the Stiftung Rechnen, a non-profit foundation with a registered office in Hamburg and headquarters in Quickborn. [53] Its primary goal is to support knowledge of mathematics with a focus on young peogle to encourage a joy of numbers and calculation. [54] Johanna Wanka, former Federal Minister of Education and Research, is the patron of the Stiftung Rechnen; [55] Christian Rach, a star-rated chef and author, is one of its prominent ambassadors. [56]

Controversies

The Comdirect Bank accidentally reported 200 million euros to an account of a customer in 2012. [57] The bank justified the error with a technical problem on the sale of funds, which could not be seen before. [58] After the reversal, there was a negative balance, which caused lending rates that the Comdirect Bank had to reimburse. [59]

In 2016, a breakdown occurred after a software update: [60] A small number of customers of the Comdirect Bank were able to view account balances of other customers for a very short time. [61] However, third parties were not able to do wire transfers. [62] Though there was no financial or material damage, the company regretted the mistake, apologized to all affected customers and informed them about the extent of third-party access. [63] [64]

Since 2017, the bank is being targeted by activist investor Petrus Advisers. The investor is questioning the cost structure (cost-income-ratio is over 70%), the governance and incentive structure, and the management quality among others. [65] [66]

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