Germany's BHF to use N.Y. office as springboard for Latin expansion.

Berliner Handels-und Frankfurter Bank will use its New York office as a springboard for expanding its corporate and trade finance and investment banking activities in Latin America.

Senior officials said BHF also hopes to expand its activities in the United States in such areas as corporate lending, asset management, derivatives, and mergers and acquisitions.

"We are strengthening our business in the Americas," Wulf von Schimmelmann, a managing partner in the Frankfurt-based merchant bank, said in a recent interview in New York.

He said the New York office will serve as a liason for arranging mergers between American and German companies.

A Cautions Return

Like many others, the German bank pulled out of Latin America in the early 1980s but has since cautiously returned to do short-term trade finance and limited underwritings.

The bank recently opened a representative office in Mexico City, from where it hopes to develop asset management for wealthy Mexicans, and securities trading.

Mr. Schimmelmann said the bank's New York branch and investment banking unit, BHF Securities Corp., will participate in developing banking business with Latin America, and underwriting bonds for Latin corporations.

Placement in Europe

Issues originated in New York and Latin America will be placed mainly among large institutional customers in Europe, he said. "New York is the best place to handle these activities because of time-zone differences and strong relations with Latin America," he noted.

"We want to revitalize our [securities] subsidiary by getting them more involved in fixed income and equity trading and asset management," he added.

Like other European bankers, the Frankfurt bank's executives believe that opportunities for making money are currently better in the United States than in recession-gripped Europe

"The U.S. is pulling ahead economically," Mr. Schimmelmann said. "We won't see any improvement in Europe before the end of 1994," he predicted.

A |German Brown Brothers'

Often described as a German version of Brown Brothers Harriman & Co., the bank serves wealthy individuals and medium and large German and international companies.

Around two-thirds of the bank's 1 billion marks ($625 million) in operating revenues for the first ten months of this year came from interest income, and one-third from fees, mainly on securities-related transactions and from trade finance.

The bank is Germany's seventh-largest, with around $34 billion in assets. Around 40% of its assets are outside Germany and around 60% are related to non-German customers.

An oddity in the banking world, it is publicly listed, but is run by partners who remain personally liable for any losses.

Little Known Here

Despite an American depositary share issue last year, it remains relatively little known in this country.

In the United States, where its assets have more than doubled since 1988 to $3.5 billion, the bank focuses mainly on corporate lending, treasury management and trading activities, and trade finance.

The move to expand operations here and in Latin American is the latest attempt by the German bank to develop its international business.

Eyeing Eastern Europe, Asia

Last summer, it significantly expanded its international reach by acquiring -- with Credit Commercial de France -- a majority stake in the London-based investment bank Charterhouse PLC. The two banks are pooling resources to develop merchant banking operations worldwide.

Elsewhere, Berliner Handelsund Frankfurter Bank is making a strong push to develop business in Eastern Europe. It acquired a 40% stake in Prague-based Zivnostenska Bank.

In Asia, it has opened an office in Vietnam, and will soon open a branch and advisory company in Hong Kong, mainly to serve the Chinese market.

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER