From banking pioneer to nasty business

– rise and fall of a former jewel in highclass banking sector.

As read in the Financial Times Deutschland (04/11 print edition) I don’t want to withhold the story of ApoBank. Germanies biggest creditor for pharmacies and small medical pratices.

Not too long ago, even before the crash of Lehman Brothers, in 2007 to be exact, bosses as well as clients of Germanies biggest credtitor for small and medium medical practitioners stated that ApoBank is more than just the usual creditor. They had style, they had space in their offices – in short: comfortable athmosphere.

Their figures were satisfying and they had stable business.


ApoBank could use some of its own medicine

But for some this solid story of success wasn’t enough. So they started speculation with satisfying return in the beginning, but with devastating losses in the late 2007. In 2009 it was that bad that they had to call on governmental financial help. I’m afraid that’s not it: lately they were accused of bribery in favor of a real estate agency which has its HQ in the same building as ApoBank. So at least the office of public prosecutor saved some time during office and document searching.

However, what we have here is the story of another company which had it all, and then threw it away for fast money. Fast and risky and the bill also states a loss of client’s faith in the bank.

Would we do it differently? Maybe the example of ApoBank is generating the question if we relish what we have? “More and more” is probably a genetic thing and we can’t do anything about – or can we? There is no risk-free investment but it seems that companies are looking for return even if they have no clue about the risk-part of their investment and I don’t think I need to give an example here.



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One Response to From banking pioneer to nasty business

  1. olexa5 says:

    Great post!
    Possibly, here a second option to look at similar cases: Not always are those examples where losses were made, based on the assumption that managers chose to invest in a risky business aiming for higher returns.

    A risk management report came to an interesting conlcusion: Businesses inlcude all sorts of various risk measurments and early alert systems, though most of these models with a silo approch are based on mathematical calculations, not alway being able to pick up overall risk.

    The businesses are making themsleves dependent on mathematics and dependent, thereby forgetting human quality of simple judgement.

    ‘Faced with an ever greater tension between the need to drive up returns and manage risk conservatively, the organisation erred on the side of the former – partly by relying on a highly mechanical analysis of risk exposure,’ the report continues. ‘That process ticked all the compliance boxes, but was rarely reviewed in terms of judgements, rather than just mathematical models.’


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