Until the second half of the 1990s, Commerzbank, founded in 1870, followed the wave of all-round banking sweeping the world, and continuously expanded the scope of its corporate business, entering the business fields of small and medium-sized enterprise (SME) financing, real estate finance, corporate finance, securities trading, private banking, asset management and so on. Among them, the innovation of SME financing business is unique.
First, innovation in bank-customer relationship and financial products. In order to expand small and medium-sized enterprise customers, German commercial banks set up dedicated small and medium-sized enterprise customer manager team, in order to assist the bank will be oriented to the original large-scale enterprise customer products transformed to adapt to the needs of small and medium-sized enterprise products. For example, based on the feedback from the account managers, Commerzbank has lowered the threshold of the note financing business in order to enable SME customers to obtain the convenience of direct financing in the capital market as well - the original note financing was only applicable to large customers and transactions of more than 20 million euros, while the new note financing will be applicable to transactions of 500,000 to 5 million euros. In addition, a multi-bank funds management system has been designed and developed for SMEs, which, in addition to basic cash settlement and funds management services, gradually adds information such as industrial information, news and stock market quote releases, as well as other value-added services in cooperation with a number of external organizations.
Secondly, the company is actively changing its role from "lender" to "loan broker". In the expansion of customer channels at the same time, the German commercial banks are also expanding the source of loan funds. In full use of government forces and external cooperation on the basis of the 2003 Commerzbank launched a special for small and medium-sized enterprises "active loan" activities, the establishment of small and medium-sized enterprise loan fund, and with other banks to the small and medium-sized enterprise loan cooperation. In addition, in order to reduce the burden on assets, Commerzbank also experimented with the sale of SME financing notes by securitization, the first 400 SME financing notes securitized and sold in 2006 (the sale size of 10 million to 50 million euros), and later on the total amount of 200 million euros of SME convertible bonds securitized and sold.
After the securitization channel was blocked, German commercial banks began to expand the syndicated loan channel. 2008, the Bankers' Association for Finance and Trade (BAFT) adopted a new agreement, which simplifies the sharing of trade finance risks among banks, and makes it possible for the banks to share the risks of trade finance under the syndication cooperation. procedures and makes trade finance under syndication possible. Under this agreement, Commerzbank opened a letter of credit totaling 1 billion euros in 2008 and then "distributed" most of the risk by taking full advantage of its structured finance capabilities.
Through securitization, syndicated loan arrangements and credit risk distribution, Commerzbank has shifted its role from pure capital provider to lending intermediary, not only helping a wide range of SME customers to access more sources of capital, but also helping other banks and investors to approach SMEs, identify risks and discover opportunities.
Third, innovation of SME intermediary business. The uncertainty of SMEs' business operation determines the high risk of their business operation. In addition to transforming the role of lenders, German commercial banks also innovate SME intermediary business in order to reduce risks and increase profits.
Fourth, in addition to its traditional public business, Commerzbank also provides SMEs with interest rate and exchange rate risk management products, as well as annuity products through its fund management company (Commerzinvest), and in 2001, it further established a subsidiary, Pensor Pensionsfonds AG, which specializes in providing SMEs with lower cost In 2001, it further established a subsidiary, Pensor Pensionsfonds AG, which specializes in lower-cost simplified annuities for SMEs. During the financial crisis of 2007 and 2008, companies became more aware of risk management and demand for risk management products and services rose sharply, which became an important tool for Commerzbank to stabilize its performance in the adverse market.
Fifthly, the in-depth exposure to SMEs has also secured many investment banking opportunities for Commerzbank outside of direct lending. 2005 saw the IPO of Conergy AG, for which Commerzbank acted as lead underwriter, recognized as the best SME financing in Europe, and in 2008 the company underwrote the renewable energy company Manz Automation, Roth & Rau, and Solar Millennium, as well as the follow-on financing of life sciences company Fresenius and commercial real estate company IFM Immobilien AG, and was the lead underwriter for Germany's only IPO in that year, that of solar energy company SMA Solar Technology AG. Technology AG.
Sixth, in addition to issue underwriting, Commerzbank also innovated corporate financial services for small and medium-sized enterprises (SMEs), including merger and acquisition restructuring, asset securitization, structured M&A financing, and structured tax-exempt products.
In 2003, in response to the problem of high indebtedness of small and medium-sized enterprises, Commerzbank specially set up a subsidiary company to provide mezzanine financing services, i.e., a composite financing variety that combines asset-backed financing with equity-linked financing, with a longer financing tenure than the general bank loan tenure, at 57 years, to meet the capital needs of growing small and medium-sized enterprises. In addition, the Company has set up four financial engineering teams to customize and design financing structures specifically for SMEs, and during the year the Company completed 10 mergers and acquisitions with the help of structured financing arrangements.
Seventh, Commerzbank broke through the tradition in SME financing by innovating the lease financing business. in 2004, Commerzbank expanded its equipment leasing business into the field of financial leasing to help SMEs realize off-balance-sheet financing, and the range of leased items included machinery and equipment, transportation tools, IT systems, and even intangible assets such as intellectual property rights. Since then, Commerzbank has introduced online leasing for small businesses. In the midst of the financial crisis, companies are choosing to lease more often than to buy, and the size of the equipment leasing business has grown by 17% against the market.