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Tue, Jun 29, 2010 - Page 10 News List

Siemens wants its own bank

DIVERSIFICATIONAfter the recent economic and banking crisis, the industrial conglomerate is seeking the security of its own banking institution for its investments

AFP , FRANKFURT, GERMANY

The German industrial group Siemens has applied for a banking license, it said yesterday, to ensure it has a safe place to park its pile of cash.

The sprawling conglomerate “aims to expand the product portfolio of its financial services unit, particularly in the sales finance area,” it said in a statement.

APPLICATION

The group has therefore applied for a banking license with Germany’s Federal Financial Supervisory Authority, which is currently reviewing the application.

Finance director Joe Kaeser told the Sueddeutsche Zeitung daily that Siemens had learned lessons from the past in making its decision.

“In the current situation, we can be affected if banks have problems, with a legislative environment that is not totally transparent,” Kaeser said.

“Our liquidity now amounts to around nine billion euros [US$11 billion], which means we really need to be able to make safe investments” that Siemens “could do by itself” via its own bank, he said.

Siemens could thus place deposits directly with the German central bank, for example, he said.

APPROVAL EXPECTED

Kaeser expected German authorities to give their approval shortly.

However, in contrast to other German groups such as automakers BMW and Volkswagen, which offer banking services like savings accounts and customer credits, Siemens “does not want to do retail banking,” the finance director said.

However, it did want to offer services to large industrial clients, he added.

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