With its new direct brokerage system "Postbank easytrade", Postbank is to commence the trading in securities via the internet, over the telephone and at Deutsche Post branches. "In terms of volume and number of securities accounts, Postbank easytrade intends to become one of the leading providers of direct-brokerage services in Germany. Our objective is to have 250,000 active securities accounts by the end of the first full financial year." With this statement Professor Dr Wulf von Schimmelmann, Chairman of the Board of Deutsche Postbank AG announced the target of the new direct brokerage system to journalists in Frankfurt on Wednesday.

Four factors for success

Mr von Schimmelmann based his convictions on four factors for success. The most important reason is the huge potential of Postbank with its 10 million customers. In addition to 700,000 online customers, 1.3 million customers manage their accounts over the telephone, the second most important access for direct brokerage. Mr von Schimmelmann stated that "as a result, we have an extensive customer base, which, in terms of securities trading, is far from being fully developed and which justifies expectations of strong growth". The 400,000 plus unit trust customers of the bank are also being focused on.

He also regards the close connection to Deutsche Post as a second "inestimable advantage". Postbank, as a multi-channel bank, will incorporate the branches of Deutsche Post in its brokerage. Customers have had the opportunity to open easytrade securities accounts in 6,000 Postbank branches since Monday, so that they may subsequently subscribe to Deutsche Post shares within the framework of its upcoming flotation on the stock exchange. "This is the natural extension of our objective to become the first real multi-channel bank in Germany", stated Mr von Schimmelmann.

Stock exchange flotation of Deutsche Post: trump card for Postbank easytrade

Mr von Schimmelmann perceives the upcoming stock exchange flotation of the Deutsche Post World Net Group as the third factor for success. He has no doubt that "this opportunity resulting from the stock exchange flotation of Deutsche Post World Net and our venturing into direct brokerage, will benefit our customers". The head of Postbank expects that a major factor in the strong growth of Postbank easytrade in the first year of operation will be the IPO of Deutsche Post. This will ensure Postbank easytrade an enormous amount of attention. As part of the equity story, Postbank has found a strong response in all analyses and with Postbank easytrade as co-lead manager, it has a major role to play. Via an employee participation scheme the Group is offering its 240,000 staff in Germany employee shares. These shares are settled via the Postbank easytrade system, thus ensuring a high level of basic utilisation very quickly.

Preferential allocation for Postbank customers

With the stock exchange flotation of Deutsche Post, the 10 million customers of the Postbank Group are now to be given the opportunity to register their interest in the YELLOW SHARE. In the event that the issue is over subscribed, Postbank customers can improve their chances of obtaining shares. The scheme applies only to current customers of the Postbank Group. The customers can submit an application to participate in the scheme at 6,000 branches of Deutsche Post until October 5, 2000. Customers must also provide proof of identity and open a securities account with Postbank EasyTrade.AG in good time. Once the account opening documents have been received, the subscription to the YELLOW SHARE can be carried out conveniently over the telephone, via the internet or in the branches of Deutsche Post within the subscription period. The customer will be informed of the exact number of shares allocated in this preferential scheme once book building has been completed.

As a fourth factor for success, Mr Schimmelmann stated that it is products and prices which will set easytrade apart from the competition. He made particular reference to the innovative "flat fee price model" which means that the direct brokerage is extremely reasonable for large volume orders. Normal market prices will apply for average-sized orders.

Mr von Schimmelmann also perceives the planned partnership with an investment bank in respect of co-operation on new issues as an added sweetener for investors. He stated that "the huge potential represented by our customers means that we are attractive to other issuing houses that may wish to co-operate with us. The negotiations in this respect have already reached the final stage". In the next few months, Postbank will also conclude a co-operation agreement with a leading institution for equity research to provide the Postbank easytrade customers with in-depth and easily comprehensible assistance in taking decisions in respect of their securities investments.

Stock exchange for everyone

Stock exchange for everyone With his company, Dr Wilhelm Hemmerde, Chairman of the Board of Postbank EasyTrade.AG, intends to make it possible for the person on the street to partake in securities trading. Thus "Stock exchange for everyone" is the philosophy with which easytrade is being launched in the market. Customer orientation and utilisation are the priorities.

Postbank easytrade will commence with securities and unit trusts traded at German stock exchanges. Customers may also call up information on share prices and general market news. The direct brokerage will offer Postbank unit trusts in addition to fund products offered by other companies. Stock exchanges outside Germany as well as real-time prices and intraday trading will follow in stage two of the scheme. Over-the-counter trading, options, futures and securities savings plans are scheduled for the third stage.

"Flat fee" makes for economical and transparent brokerage

"Flat fee" makes for economical and transparent brokerage With an innovative pricing model, Postbank easytrade is to offer simple, transparent and economical brokerage. The key aspect is the flat fee with three price levels, irrespective of the order volume. The highlight here: an order for over EUR 5,200 via the internet costs EUR 19. Wilhelm Hemmerde sees this as "a very attractive price which passes on cost savings to customers with higher volume transactions." For order volumes between EUR 2,600 and EUR 5,200, the fee is EUR 13, for orders under this, it is EUR 10. At EUR 3 the surcharge for orders by phone is reasonable. "We offer an upfront price. With us the customer has no surprises."

With high levels of availability Postbank easytrade intends to secure customer communication. Via the internet the new direct broker offers a full service package, which is also available by telephone with the call agent. From the very start the WAP standard will be available with key functions. In selected Deutsche Post branches, the customers can open security accounts, subscribe to the YELLOW SHARE in the Deutsche Post IPO and even give orders.

To ensure constant availability Postbank easytrade has built up a high level of personnel in its call centers. In each of the sites Cologne and Leipzig some 200 staff are employed. For the hot phase of the Deutsche Post, an additional 400 staff will also be available.

Dr Hemmerde pointed out that the development of Postbank easytrade – from the concept to the launch stage – was completed within a single year. As part of an internal employee test, the first order was taken on February 4, 2000. Since then, the direct brokerage has already succeeded in securing over 140,000 customers.