If one were to simplify the worth of a bank, it would comprise of the difference between its assets and its debt. Currently, Deutsche Bank has €1.64trn in assets and liabilities of €1.58trn, giving the financial monolith a net value of €60bn, far more than its current market-cap of some €17bn on the Frankfurt stock exchange. The bank’s high gearing makes investors suspicious, and is at odds with the Hanseatic focus on caution and real assets, that are straightforward to value. After all, the Hanseatic League was an alliance based on the trade in goods.
Of course, the Hanseatic League is now just a relic of a distant past. Economic power has long since shifted away from city states towards nation states, even though there are efforts underway across Europe to repatriate some decision-making powers back to cities. And many of the major banks indigenous to Hamburg such as Berenberg, Donner & Reuschel and M.M. Warburg & Co have meanwhile adopted the neo-liberalist model of banking and have expanded globally to maintain global prevalence.
However, among many north German investors, the Hanseatic mentality has survived: a down-to-earth approach sheltering them from market hypes.
Johannes Sahmland-Bowling is market researcher for Germany at Expert Investor.
