Siemens has applied to establish its own bank in a move to safeguard its finances.

Siemens, the global powerhouse in electronics and electrical engineering, has applied to BaFin to set up its own bank in a move to optimise risk management.

The German company has filed an application for the grant of a license to conduct banking business with the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht or BaFin) – which is currently reviewing the application.

With the help of a licensed credit institution, Siemens aims to expand the product portfolio of its financial services unit, particularly in the sales finance area, add flexibility to Group financing and optimise its risk management.

The move underscores how large industrial groups are seeking rapidly to reduce their reliance on bank financing after the credit crisis. In a statement, Siemens said: “The access to the central bank would provide us with a safe haven for our cash.”

The group would be one of the first German industrial companies outside the car industry to hold a banking licence; such a licence allows a financial company to take on deposits, give loans and tap the central bank’s funding.

Car companies such as BMW and Volkswagen own banks that support car sales with leasing and financing offers. These banks expanded their retail deposit business during the financial crisis, when carmakers sought to broaden their refinancing base.

However, unlike General Electric, its US main rival, Siemens does not strive to become a retail bank and it therefore did not apply for a retail bank licence.

Joe Kaeser, CFO of Siemens AG, told the Süddeutsche Zeitung newspaper: “Three years ago I would have absolutely no concerns about where we put our liquidity, or with whom to engage in foreign exchange deals or interest hedging…after the experience of the last two years, I see real need for action in these areas.”