Risk Talk with Dirk Scheringa

After his keynote speech on the Risk Conference 2019, the Risk Magazine had the opportunity to sit down with Dirk Scheringa, former CEO of DSB Bank and former owner of football club AZ. We asked him about his successful career as an entrepreneur which has known high peaks, but some lows as well. We spoke about the rise and fall of DSB and his current life as an entrepreneur.

The basis you need for that is passion.

Mr. Scheringa, can you tell us how a police officer grows to become a top banker?

“During the days I worked as a policeman, so you find yourself in the middle of society. In the evenings I would give financial advice to friends and family. At a given moment I thought I needed diplomas and certificates for that so I followed an array of courses.” Scheringa worked long days and his advisory company started to grow, slowly but steadily. “It took me 32 year to make DSB what it was in 2009. To build something like that goes step-by-step and requires hard work. The basis you need for that is passion”.

What was the ultimate secret to success for DSB in those 32 years?

“Excellent marketing. It all started with text on a telex tape, later on the fax made its entrance. We always attempted to stay one step ahead of the competition. In the 90’s we would advertise mostly in television guides, which were well-read at the time. Besides, we always asked our customers how they had found us.” Scheringa’s marketing and sales expertise would become an important factor in the rise of his bank. “Furthermore, we had very young employees, the average age was 27 at our firm. You wouldn’t find that at other banks. Also, 70% of those employees were women.”

This would ultimately mean the end of the bank.

In October 2009, DSB’s success story comes to an abrupt end. De Nederlandsche Bank applies for an emergency bankruptcy procedure at court, which is initially rejected. When this news leaked a run on the bank occurred, in which many savers attempted to withdraw their money simultaneously which sparked liquidity problems for DSB. This would ultimately mean the end of the bank.

How do you look at the role De Nederlandsche Bank played in the bankruptcy?

“The whole bankruptcy wasn’t necessary. There were no solvency problems and every single creditor and saver has been paid back to today. De Nederlandsche Bank acted in an careless manner.” That very same Nederlandsche Bank had imposed a 875 million euro haircut on the bank just days before. Why? “We still don’t know. And there was no satisfying answer in court to that question either.”

The collapse of the bank must have been a tough period for you. How do you overcome such a thing?

“Fortunately, a psychologist wasn’t necessary. What I felt was an enormous urge to survive, fighting spirit and adrenaline. Simultaneously with the DSB bankruptcy I started a new small business in factoring. At the moment I am active as an advisor to four companies, but I am not in boards myself anymore. Among other things, we try to do reforestation in Latin America.”

At the end of your speech you said that you would like to see the banking system reformed. What should it look like?

“The consequences of a bankrun can be huge. In our current age, large amounts of money can be withdrawn from a bank in nanoseconds when a hype occurs. Deposits should therefore be put into a State bank and commercial banks should attract other sources of funding. This could fund the national debt and reduce interest spending for the government by billions. Also, the deposit insurance systems becomes redundant.”