Barclays, with Department Store Ally, Opens a Bank in Germany

LONDON - Barclays, Britain's largest banking company, announced Thursday it opened a bank in Germany in a joint venture with Hertie AG, an upscale department store chain.

The venture, Optimus Bank, is offering financial services such as loans and investments to the store's customers. The bank, capitalized at $9 million, will operate out of Hertie's stores in eight German cities, including Berlin, Hamburg, and Cologne.

Optimus is believed to be the first bank to be jointly formed in Europe by a retailer and a banking company. Competition has become intense in Europe as the unified market in financial services nears. Most European countries allow industrial and other companies to own and operate banks.

"We have gained an important opening into the German mass consumer market," said Giles Davison, a Barclays director in Frankfurt.

Germany's banking market is the biggest in Europe, with total assets of $2.7 trillion. But few foreign banks have made major inroads into its domestic consumer banking, and together hold less than 5% of Germany's banking assets. Much of this belongs to Citicorp through its 50-branch Kunden-Kredit-Bank network in Germany.

Optimus, which is 51% owned by Hertie and 49% by Barclays, will position itself as supplementing the services of the big German banks, Barclays said. Much of the business base will be centered on Hertie's "Golden Customer" credit card, which has 450,000 holders, Thomas Wischeropp, the Barclays managing director said.

Barclays and Hertie first forged links in September. Then, the British bank agreed to process the accounts of Hertie's Golden Customer cards through CFS Card Finanz System AG, a recent acquisition by Barclays.

Major Growth Foreseen

Mr. Wischeropp said Optimus estimates are that the plastic market in Germany will develop into a dual market of private-label cards and international credit cards by the mid-1990s, with each having about the same number of cards in circulation.

"A total market of 10 million cards issued in Germany by the mid-1990s is realistic, in our opinion," he said.

Barclays' main business profile in Germany up to now has been in corporate banking, offering services to multinational corporations.

But last year it acquired Merck Finck & Co. a $2.5 billion asset bank serving wealthy customers, to broaden its penetration of local banking services, a spokesman said.

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