Following the takeover of Hauck Aufhäuser Lampe by Dutch bank ABN Amro announced at the end of May, the German private banking sector remains in a state of flux. A decision could be made by the end of the year as to who will acquire a stake in Hamburg-based M.M. Warburg & CO. Speculation is widespread about a takeover of the bank, which has been rocked by the cum-ex scandal.

The fact that the Hamburg finance industry is not losing confidence is partly due to the commitment of the Senator for Finance Andreas Dressel (SPD). Since the transfer of responsibility for the finance sector from the Ministry of Economics to the Ministry of Finance a few years ago, Senator Dressel has been a „caretaker“, says Eberhard Sautter, CEO of local insurer HanseMerkur, and Chairman of Finanzplatz Hamburg e.V. The Senator has played a major role in the latest initiatives.

„It's about securing skilled workers, developing innovations with science, profiling Hamburg as a sustainable finance location, promoting fintechs and insurtechs, and linking the financial sector with a clustering policy,“ says Sautter. It is also important to make the financial centre visible and to network with industry players in Germany and abroad. This is done, among other things, with delegation trips. „The Senator for Finance opens important doors“, he adds.

It is not yet clear whether the two long-standing main owners will completely separate themselves from Warburg Bank. Christian Olearius, who is accused of serious tax evasion through cum-ex transactions by the Warburg Group in the years 2007 to 2011, with sizeable losses for the tax authorities, has been on trial in Bonn since September last year. He and Max Warburg together hold around 80% of the shares.

In an interview with Börsen-Zeitung, Markus Bolder, the member of the Management Board responsible for Warburg Bank's back office since 2022, said that it is currently impossible to predict how the ownership structure will change. In addition to a family office, a strategic or financial investor is also conceivable. The entry of a new investor is linked to the hope that additional expertise and equity will give the bank new room for manoeuvre. The bank focuses on the three business areas of Private Banking, Corporate & Investment Banking, and Asset Management.

„The expertise is still there – we are very good at providing advice and offer very good products,“ says Stephan Schrameier, board member responsible for the market divisions. He points out that the Warburg brand has a „positive image and appeal“ abroad. For the bank's reputation and business in Germany, however, it will be essential „that the investigation into the cum-ex issue is concluded and the bank disappears from the headlines“. The media coverage is creating a „headwind that we cannot escape“.

Warburg Bank has lost customers such as church organisations and foundations in recent years. While there is still speculation about political influence on the bank's tax treatment in connection with cum-ex transactions during the time of Federal Chancellor Olaf Scholz (SPD) as First Mayor of Hamburg, politicians in the Hanseatic city are distancing themselves from the bank. However, ties between the two sides have traditionally been close.

The bank also wrote in its 225th anniversary publication last year that "the bank's regional roots are still an identity-forming element and an important part of the corporate philosophy to this day.“ CEO Bolder refers to the growing gap between Frankfurt and the other regional financial centres in Germany in recent years. Hamburg has also lost some institutions to other cities. For Warburg Bank, however, „being based in Hamburg is still an advantage.“ Hamburg is a strong city with a diversified economy and a great deal of prosperity.

Will Warburg Bank, currently undergoing a strategic reorganisation that is to be completed in 2026 with the switch of the core banking system to the cooperative IT service provider Atruvia, remain independent? Dressel's office said that it does not comment on individual financial market players. However, it stressed that in principle, it is important for each financial centre to keep banks and other financial market players located there, and to be attractive for new companies.

Market observers say privately that a bank with a long tradition and close ties to Hamburg such as Warburg Bank will definitely be unhappy if it is taken over and loses its independence. Nevertheless, the prevailing opinion is that the economic impact on Hamburg as a financial centre would be manageable.

The business location has experienced carnage over the past three decades. Local giants such as the insurance company Volksfürsorge, and Vereins- und Westbank, were absorbed by larger institutions (Generali, Unicredit). HSH Nordbank only survived the 2008 financial crisis thanks to billions in aid from its state owners, and was privatised in 2018 - the first Landesbank to be massively downsized.

In Germany, the number of employees subject to social insurance contributions in the finance and insurance industry has since 2015 only fallen more sharply in North Rhine-Westphalia than in Hamburg. Only Frankfurt has seen an increase during this period.

The fact that financial centre players in the Hanseatic city are nevertheless confident is primarily due to the „Hamburg Finance Masterplan 2021-2025“ adopted in 2021. As well as the Finance City Hamburg cluster agency initiated by the city, the Hamburg Chamber of Commerce and Finanzplatz Hamburg e.V. 2023, which was founded in 2007. It deals with the implementation of the masterplan objectives. In this context, financial centre players emphasise the increased commitment of the political sector in Hamburg.

The Global Financial Centres Index published by the London-based think tank Z/Yen provides information on where Hamburg currently stands in the competition between financial centres. In the 35th edition published in March, the Hanseatic city ranks 51st out of 121 financial centres assessed worldwide – in Germany behind Frankfurt (13), Berlin (32), Munich (36) and Stuttgart (44).

Financial centre lobbyist Sautter emphasises that the development of financial centres is dependent on the overall economic development of a region. „There is always an interdependence," he says. Bavaria, for example, was a rather poor state with low wages after the war. At that time, Bavaria also received money from the federal states financial equalisation scheme. This helped Bavaria with its business location policy. Technologies, electronics and software came to Bavaria. Its strength as an insurance location with companies such as Allianz and Münchener Rück in turn contributed to a strong financial centre.

Sautter went on to explain that Frankfurt today benefits from the fact that because the local banking sector was very large, this had a significant influence on the decision in favour of the European Central Bank location. The regional stock exchange in Stuttgart has created a unique selling point in structured products trading. For Hamburg is traditionally strong because of the port and trade. For the north of Germany, the energy transition, the big expansion of renewable energy, now offers a great opportunity for stronger growth. New economic structures, new capital requirements and demand for skilled labour are emerging. Sautter emphasises that a smart financial centre will participate in this.

„Where the economy flourishes, so does the financial centre," he says. Wind energy and financing the transformation offer good business and growth opportunities for the coastal states in northern Germany. „That's why I'm confident about Hamburg as a financial centre,“ says Sautter. At the same time, risks that may dampen growth should not be overlooked, for example with regard to the high energy requirements of new technologies and the high energy prices in Germany. „When it comes to reliable energy, other countries in Europe such as France have an advantage when it comes to foreign companies deciding where to locate.“ This will become even more important in the future due to AI and cloud providers.

Hamburg also has encouraging growth of fintech companies. Since 2017, the number of fintechs has increased from 30 to over 100, reports Sautter. The location is attractive for young companies, also because there are good financing options. Although Hamburg is „not as hip as Berlin“, it is characterised by good cooperation. Established companies work together with new companies, and young companies receive excellent support from the city and the Chamber of Commerce.

Due to the takeover of insurance companies, but also in the banking sector, there has been an erosion of Hamburg as a financial centre. Sautter also recognises this. „Nevertheless, I am convinced that the financial centre will develop well, also because there is a lot of stability in Hamburg that is consistent.“ He cites Germany's largest savings bank, Hamburger Sparkasse (Haspa), as a „shining example“ of this.

A few weeks ago, the bank moved into its new headquarters as an anchor tenant in the newly built „Deutschlandhaus“ on Hamburg's Gänsemarkt – one of the most important major property projects in the Hanseatic city in recent years. „A strong commitment to Hamburg and the city centre,“ said CEO Harald Vogelsang at a presentation at the end of May. What is needed is ultimate employer attractiveness. Over the next ten years, up to 2,500 new employees will be needed to replace the retiring baby boomers.

The fact that politicians in Hamburg are once again more interested in and committed to the local financial sector, with its approximately 44,000 employees, can be explained not least by the growing distance from the years of the HSH Nordbank crisis. Fear of contact has diminished. However, it would be beneficial for the financial centre if the economic authorities also supported the sector in the interest of better networking with other industries.

There would be opportunities to further develop Hamburg as a financial centre through stronger networking with the Scandinavian region, which is not far away. Financial centre players could also well imagine a stronger revival of traditional links to London. For the time being, however, expectations are primarily linked to the master plan initiative: „With our master plan for the financial sector, which we are implementing together with many players in the city, we have an excellent basis for putting Hamburg more centre stage as a financial centre both nationally and internationally,“ says Senator Dressel.