2018 Integrated Report – On track towards a better Railway


Group financing

Group Treasury at DB AG is responsible for DB Group financ­­ing. This ensures that all Group companies are able to borrow and invest funds at optimal terms and conditions. Before obtaining funds from external sources, we first conduct intra-Group financing transactions. When borrowing external funds, DB AG takes out short-term loans in its own name, whereas long-term capital is generally obtained through the Groupʼs financing company, DB Finance. The funds are passed on to the Group companies as short-term credit lines, which can be utilized as part of cash pooling on internal current accounts and/or through fixed short-term credit, or in the form of long-term loans. This concept enables us to pool risks and resources for the entire Group. Further advantages arise from the consolidation of our know-how, realized synergy effects and minimized refinancing costs.

The Group Treasury operates as an in-house bank, al­­though it provides a service function rather than acting as a profit center. The Group companies have business relationships with the Treasury (foreign exchange transactions, cash pool­­ing, cash investments and taking up of loans). The conditions are agreed at arm’s length at market rates. This means that the agreed interest rates are in line with those quoted by the banks if they were not intended to yield a profit. Market rates also mean that credit margins are adjusted in line with creditworthiness: the credit margin for the infrastructure companies is largely in line with the credit margins of DB AG in the financial and capital market. The credit margins for non-infrastructure companies are higher and are based on an internal metric-based credit rating and the credit margins quoted on the capital market.

Consolidation of the Group finance function in DB AG gives us a uniform market presence in the financial and cap­­ital markets, and allows us to achieve economies of scale and cost benefits. In addition, central Group financing en­­ables us to adequately monitor financial transactions and achieve comprehensive risk management.