Badische Bank
Badische Bank was Baden's public bank of issue and later a commercial bank, operating from 1870 until its succession through Baden-Württembergische Bank.
Last updated August 25, 2026
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Overview
Badische Bank, known in English as the Bank of Baden, was a public bank of issue established in the Grand Duchy of Baden in 1870. It was created during a period in which German political and economic unification was increasing pressure on the individual German states to develop modern banking institutions and a more integrated monetary system. The bank received its licence from the Grand-Ducal government on 25 March 1870 and began operations with public and private backing. Its shareholders included the government of Baden, private bankers from the region, Adolf von Hansemann of Berlin's Disconto-Gesellschaft, and Baron Carl von Rothschild of M. A. Rothschild & Söhne in Frankfurt. The initial capital was denominated in the currencies of the period and divided into 30,000 shares. The institution's defining early function was the issuance of banknotes. It was permitted to issue notes up to three times its paid-in capital, subject to reserve requirements under which one-third of the backing had to be silver and the remainder gold or foreign exchange. In exchange for its note-issuing privilege, Badische Bank was required to transfer one-fifth of its profits to the Grand-Ducal government after paying a five-percent dividend. A branch was opened in Karlsruhe in 1871, while the head office remained in Mannheim for many decades. The bank issued its first 10-guilder notes in December 1870 and 50-guilder notes in July 1871. After the introduction of the mark currency across the German Empire, it issued mark-denominated notes, including 100-mark series produced at different dates between 1874 and 1918. Badische Bank also became closely associated with Germany's monetary instability after the First World War. During the hyperinflation period of the early 1920s, it issued a succession of increasingly high-denomination notes, ranging from hundreds and thousands of marks to denominations reaching billions and ultimately 100 billion marks in October 1923. After monetary stabilisation, it issued 50-Reichsmark notes in 1924. These episodes illustrate the changing role of regional note-issuing banks as Germany moved from state-level currencies and banking arrangements toward a more centralised national monetary framework. The bank's ownership and institutional position changed during the interwar period. The Republic of Baden became a shareholder in 1920. In 1931, it acquired a block of shares from Deutsche Bank and thereby obtained approximately 70 percent of the bank's equity. Badische Bank transferred its head office from Mannheim to Karlsruhe in 1932, strengthening its association with the Baden state administration. The National Socialist government abolished its note-issuance privilege in 1934. The institution then continued as a regular commercial bank rather than as a bank of issue, and in 1937 it expanded through the acquisition of Carl Trautwein Bank in Freiburg im Breisgau. Badische Bank ultimately became part of postwar regional banking consolidation. In 1978 it merged with Württembergische Bank and the private-sector Handelsbank Heilbronn to create Baden-Württembergische Bank. That successor institution was later absorbed into Landesbank Baden-Württemberg in 2005. Badische Bank therefore survives primarily as a historical banking name and as part of the institutional lineage of Baden-Württemberg's modern public banking sector, rather than as an independent operating brand.
History
The origins of Badische Bank lay in nineteenth-century efforts to establish a central banking institution for Baden. Discussions about such an institution had existed since at least 1844, but the political momentum generated by German unification encouraged the Grand Duchy to act. The bank received its licence on 25 March 1870 and was formed with a combination of public and private capital. The Grand-Ducal government participated alongside Baden private bankers, Adolf von Hansemann of Disconto-Gesellschaft, and Baron Carl von Rothschild of M. A. Rothschild & Söhne. The initial capital was set at 10.5 million guilders, or six million thalers, represented by 30,000 shares. Badische Bank was established principally as a bank of issue. It could circulate notes up to three times its paid-in capital, but its currency circulation was subject to reserve rules requiring one-third of the backing in silver and two-thirds in gold or foreign exchange. The bank also owed the Grand-Ducal government one-fifth of its profits after a five-percent dividend had been paid. A Karlsruhe branch opened in 1871, although the head office remained in Mannheim until 1932. Its first notes were 10-guilder and 50-guilder denominations. Following the Empire-wide adoption of the mark, the bank issued 100-mark notes in several series between 1874 and 1918. These notes were printed by Dondorf & Naumann in Frankfurt. The bank's note-issuing activity became particularly visible during the inflation crisis of the early 1920s. Between August 1922 and October 1923 it issued denominations that escalated from 500 marks and 5,000 marks to 100 billion marks. After the currency reforms, it issued 50-Reichsmark notes in October 1924. The scale and speed of these issues reflected the instability of the German monetary system rather than a conventional product expansion. Ownership changed during the Weimar period. The Republic of Baden became a shareholder in 1920, and in 1931 it purchased a Deutsche Bank shareholding that gave it around 70 percent of Badische Bank's equity. The head office moved from Mannheim to Karlsruhe in 1932. In 1934, under the National Socialist government's restructuring of German banking and currency administration, the bank lost its right to issue notes. It then operated as a conventional commercial bank and acquired Carl Trautwein Bank of Freiburg im Breisgau in 1937. Postwar regional banking consolidation eventually removed Badische Bank as an independent institution. In 1978 it merged with Württembergische Bank and Handelsbank Heilbronn to form Baden-Württembergische Bank. That bank was later merged into Landesbank Baden-Württemberg in 2005. Badische Bank is consequently best understood as a historical predecessor in the development of Baden-Württemberg's regional banking system.
- 2005
Successor merged into Landesbank Baden-Württemberg
[1]Baden-Württembergische Bank was merged into Landesbank Baden-Württemberg.
- 1978
Merged to form Baden-Württembergische Bank
[1]Badische Bank combined with Württembergische Bank and Handelsbank Heilbronn.
- 1937
Carl Trautwein Bank acquired
[1]Badische Bank acquired Carl Trautwein Bank in Freiburg im Breisgau as part of its commercial banking expansion.
- 1934
Note-issuing privilege abolished
[1]The National Socialist government ended Badische Bank's authority to issue banknotes.
- 1932
Head office moved to Karlsruhe
[1]The bank transferred its head office from Mannheim to Karlsruhe.
- 1931
State ownership reaches a majority
[1]The Republic of Baden acquired Deutsche Bank's block of shares and reached approximately 70 percent ownership.
- 1920
Republic of Baden becomes a shareholder
[1]The Republic of Baden took an equity position in the bank.
- 1874
Mark-denominated notes introduced
[1]Following the introduction of the mark, the bank began issuing mark-denominated notes, including a 100-mark series.
- 1871
Karlsruhe branch opened
[1]Badische Bank opened a branch in Karlsruhe and issued a 50-guilder note later that year.
- 1870
Banking licence granted
[1]The Grand-Ducal government granted Badische Bank its licence on 25 March, creating Baden's public bank of issue.
Products and positioning
A state-backed regional bank of issue that later transitioned into a conventional commercial bank serving Baden and the wider German banking market.
Currency issuance · 1870
Badische Bank banknotes
The bank's principal early offering was its own paper currency. It issued guilder notes beginning in 1870, mark notes after the German currency transition, and later Reichsmark notes after monetary stabilisation. During the early-1920s inflation crisis, its denominations increased dramatically, culminating in a 100-billion-mark note in October 1923. The bank lost its note-issuing privilege in 1934.
Commercial banking · 1934
Regional commercial banking
After its note-issuing authority was abolished, Badische Bank operated as a regular commercial bank. Its business included regional banking activity in Baden, although the available reference material does not provide a detailed breakdown of specific account, lending, or payment products.
Brand decisions
1978
Merger creating Baden-Württembergische BankM&ABackground
Regional banking consolidation brought together institutions from Baden and Württemberg.
Action taken
Badische Bank merged with Württembergische Bank and Handelsbank Heilbronn.
Aftermath
Badische Bank ceased to exist as an independent institution and became part of Baden-Württembergische Bank.
1937
Acquisition of Carl Trautwein BankM&ABackground
Following the loss of its note-issuing privilege, Badische Bank was expanding its conventional commercial banking activities.
Action taken
Badische Bank acquired Carl Trautwein Bank in Freiburg im Breisgau.
Aftermath
The transaction broadened the bank's regional commercial banking presence.
1934
Transition from bank of issue to commercial bankStrategyBackground
Governmental changes to Germany's monetary and banking system removed Badische Bank's authority to issue banknotes.
Action taken
The institution continued operating as a conventional commercial bank.
Aftermath
The change ended its defining nineteenth-century role as a regional issuer while allowing it to continue as a banking business.
Sources1 sources
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