Hilmar Kopper embodied a bygone era of European banking. The former Deutsche Bank boss, who died last week at the age of 86, was a gentleman banker at heart. He saw his own tenure not as a means of accumulating wealth or self-glorification, but as a temporary management of a company to which he devoted his entire working life and firmly refused to criticize the mistakes of his successors. He ran Deutsche in the 1990s, when it was the bank everyone else watched and many feared.
The irony was that by initiating the process that turned Deutsche from a German bank into a globally operating bank, it ushered in a new era of bloated balance sheets and risk-taking. It was the prelude to the 2008 financial crisis, and more than a decade of struggle and even existential crisis at a bank he remained connected to long after his retirement.
When we caught up with Hilmar Kopper in March 2019 for a three-hour interview followed by a decent lunch at an upscale bistro nearby, Deutsche was arguably at its lowest ebb: it was said in Frankfurt that the German government was about to pass a forced merger with Commerzbank. Kopper was privately scathing about the proposal, in part because of the story she told about the decline of the German bank.
But the esteem in which Kopper was held among the German elite was clear. Over lunch, a series of leading German industrialists, and even a successor to the post of CEO of Deutsche Bank, came to pay tribute to him.
We chose Kopper as the banker who best represented the history of the 90s in a series of articles to commemorate Euromoney’s 50th anniversary. Kopper was in good company: Siegmund Warburg in the 1960s, John Reed of Citibank in the 1980s and Jamie Dimon of JPMorgan in the 2010s. He deserved his place in this pantheon.
Kopper was on an expansive but thoughtful and at times regretful form as he looked back on his life and career. He was a child of the conflict, whose family had been forced to migrate west from what is now Poland towards the end of World War II. He spoke with some emotion about having to steal food to put on his mother’s table to feed the family (his father was still fighting on the Eastern Front). His first trade was in cigarettes – “the best currency of all,” he said.
A long career began in 1954 with humility as a branch employee processing checks. He hated the stifling and petty approach of his colleagues and was driven to do better. The next steps in his career turned internationally – rare at the time – and shaped his future trajectory.
Kopper told us about the violent events that earned him a promotion on the battlefield to CEO (or speaker, as the title then was) three decades ago, as if it were yesterday. Alfred Herrhausen, his predecessor, was blown up in his car on November 30, 1989 on a sleepy street in Taunus by the left-wing revolutionary Red Army faction. In order not to be excessively derailed by terrorists, the bank had Kopper in post that afternoon. Within ten years, Deutsche Bank had bought a struggling but important Wall Street name, Bankers Trust.
Herrhausen had already started pushing the bank in London, where Kopper finalized the acquisition of Morgan Grenfell. Like Bankers Trust later, it had been considered too expensive. Nonetheless, Deutsche was the name to beat outside of the United States in corporate and investment banking in the late 1990s. Then and now, Deutsche had been plagued by a poor domestic market. “Why pay for banking services when I can get it for free” was Kopper’s summary of his compatriots’ approach, reflecting a notoriously overbanked market, fueled because it is not only by “three pillars.” (state-owned, cooperative and private banks), but supported in the SME world by the state-backed lender, KfW.
Deutsche Bank, which finally began to recover from the 2008 financial crisis under Christian Sewing, after a very chaotic period under the leadership initially of those who had bet an over-indebted balance sheet on the pre-crisis economic model, remains the only systemically important bank. France has three. Kopper told us that Deutsche got lost after the rise to the top of traders rather than bankers and he somewhat blamed himself for putting them there. Nonetheless, a little-known facet of the deal with Bankers Trust was the creation of the global transaction services business of Deutsche Bank, which remains a world leader and is a more home-based utility.
Kopper attributed his rise at Deutsche to a very careful analysis of the technical processes that underpin the bank and then his attempts to make them more efficient. To this end, he was one of the supporters of online banking very early on thanks to the launch of the now-forgotten Bank24, in particular to avoid an expensive and unionized branch network. A public relations blunder put an end to Deutsche Bank’s otherwise sensible foray into this area in the early 2000s.
Kopper’s Deutsche Bank almost got there. He was open and philosophical about the “almost”. And he was right that his country is a tough place to be a bank. Germany’s formidable industrial sector may be a testament to an unusual mixed economy, but it continues to hinder a banking union that would provide Europe with the local institutions of scale it deserves and has. almost had. Kopper’s Germany-based world drummer is almost certain to never repeat himself in banking.
John Orchard is Managing Director and Clive Horwood is Editor-in-Chief and Deputy Managing Director of OMFIF.