Responsible corporate governance
To be able to continually and successfully apply our focused business model in cyclical and even slumping markets, it is crucial that we proactively identify all the risks that we are exposed to. We use Controlling, Risk Management and Compliance to ensure that all legal, regulatory and statutory requirements are being met.
Group Compliance is responsible for preventing money laundering, market abuse or manipulation, ensuring data protection, handling conflicts of interest, and compliance with the Markets in Financial Instruments Directive as well as with the new requirements set out in BaFin's Minimum Requirements for Risk Management (MaRisk).
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Fostering fair and transparent competition
Fostering fair and transparent competition is a cornerstone of our business philosophy, which is underpinned by clearly defined and strict compliance guidelines:
- Rules to promote fair competition and transparent competition (Conflict of Interest Policy)
- Rules to fight corruption (Anti-Corruption and Bribery Policy)
- Guidelines relating to accepting gifts and benefits (Gifts and Gratuities Policy)
- Procedure for reporting any irregularities (Whistleblowing Policy)
Our Code of Conduct secures and deepens employee awareness, and understanding, of compliant and ethically faultless conduct. In 2016, it will be revised to reflect sustainability issues to an even deeper degree. We are proud of our experienced and effective staff, who maintain exemplary standards of conduct towards clients, business partners, investors and colleagues.
Compliance and legal training
Our employees receive regular, mandatory training on the following issues:
- Prevention of money laundering and fraud
- Code of Conduct
- Operational Risk Management
- Data security
- Handling conflicts of interest
Some of these trainings are required by law, others by our Code of Conduct. They are one way of raising employee awareness for issues that are important in our day-to-day operations and dealing with clients. They also alert all staff to their legal duties and explain the expectations held by the Board of Managing Directors. This is how we ensure a high level of service for our clients.
By the end of 2015, the training ratio amongst employees for whom participation was compulsory was 100%.
The Bank also offers voluntary legal and documentation training for its staff. These training sessions are aimed at fostering the Bank’s in-house expertise and cover general topics relevant to all Transport Finance divisions as well as subjects specific to Shipping Finance, Aviation Finance, and Land Transport Finance.
These training measures are developed by
- Group Legal in consultation with experts across the Transport Finance businesses,
- approved law firms, or
- the Loan Market Association, with whom DVB has a membership.
The training materials are available as videos, webinars and presentation slides via the intranet. New material is added frequently.
An important aspect of our compliance work is the emphasis on the conduct of senior managers in the Bank towards clients, as required by regulators. Specifically, regulators are looking for managers to ensure that any risk of treating clients unfairly has been identified, mitigated, and necessary enhancements implemented. This is driven by experience during the recent crisis where clients may not have been sold adequate products, or may not have received information or disclosures. The expectation is that senior managers have full oversight of all activities of the respective units – not just the business unit that they may be directly responsible for.
DVB has recognised the importance of ensuring that senior managers accept this responsibility, and are accountable for their actions. In addition to existing policies and procedures – notably, our Code of Conduct – DVB has initiated a specific training programme for senior executives, established customised management information packages, and commenced assessing its business to identify any areas of concern. The Bank will be addressing these proactively. This programme is currently being implemented worldwide, and we are looking to apply the lessons learned at other entities.
Trusted and long-term co-operation with our clients
As at 31 December 2015, DVB's global client base comprised 608 clients or client groups (previous year: 608). Most of our clients are domiciled in Europe (48.5%), followed by North America (19.9%) and Asia (18.0%).
Our clients and client groups are distributed across our business divisions as follows:
- Shipping Finance accounts for 47.8% of clients (previous year: 46.1%);
- Aviation Finance accounts for 24.5% of clients (previous year: 25.2%);
- Offshore Finance accounts for 8.1% of clients (previous year: 8.4%);
- Land Transport Finance accounts for 7.2% of clients (previous year: 7.4%);
- ITF Suisse accounts for 7.1% of clients (previous year: 7.1%);
- Investment Management accounts for 2.0% of clients (previous year: 2.1%);
- portfolios no longer in line with the Bank's strategy (which are being phased out, or wound down) account for 3.3% of clients (previous year: 3.8%).
DVB pursues a cycle-neutral business model, providing financing and advice, and has remained a reliable partner to its clients – even in a market environment that continues to be challenging. This strengthens trust and deepens the intensity of our client relationships for the long term.
Accordingly, we support our Transport Finance and Investment Management clients with their financing projects on a long-term basis: as at 31 December 2015, 52.6% of our clients had been using our range of services for more than five years (previous year: 51.6%). Of our client relationships in the Transport Finance and Investment Management business divisions, we have maintained
- 9.1% for less than one year,
- 20.6% for between one to three years,
- 17.7% for between three to five years,
- 34.3% for between five to ten years,
- 12.6% for between ten to 15 years, and
- 5.7% for 15 years and longer.
Whilst the average length of client relationships differs between the business divisions, it is worth noting that Investment Management only commenced operations in 2001. Offshore Finance has only existed as an independent division since the beginning of 2013; the division covers the offshore financing activities previously handled by Shipping Finance.
Length of client relationship by business division
In 2015, we were awarded for the following transactions:
- Commercial Loan Deal of the Year (Airfinance Journal, May 2015); and
- Rail Finance Deal of the Year – Europe (Global Transport Finance, December 2015).