The Bank of Saxony (German: '''Sächsische Bank''') was a German bank founded in 1865, based in Dresden. It issued its own banknotes until 1935, and was liquidated following World War II.
The German: Sächsische Bank zu Dresden (Bank of Saxony at Dresden) was founded with a state concession on and a capital of 5 million thalers.[1] In 1869 it settled its head office in the former French: Hôtel de Pologne, a historic building at Schloßstraße 7 in the center of Dresden, whose façade it remodeled to a design by architect . In 1873 the capital was increased by 5 million thalers, and later changed to 30 million marks.
With the founding of the German Empire in 1871, individual states such as the Kingdom of Saxony lost their right to legislate with regard to the monetary system. The Reichsbank, established by imperial legislation of, did not receive a monopoly on the issue of banknotes, however, and the existing local central banks retained the right to issue banknotes to the extent set out in an appendix to Section 9 of the law. Among these, the German: Leipziger Bank renounced note-issuance in 1875, the German: Chemnitzer Stadtbank in 1890, and the German: Leipziger Kassenverein in 1890, leaving the Bank of Saxony as the only note-issuing bank in Saxony; its banknotes could be circulated throughout the empire. From 1888 onwards, it also offered its customers commission-free check and giro transactions.
After the hyperinflation of 1923, the Weimar Republic passed the Private Central Bank Act of, which capped the amount the Bank of Saxony could issue at a maximum of 70 million Reichsmarks annually. The bank's share capital was changed to 15 million Reichsmarks in 1924. From the 1920s, the Bank of Saxony also operated bus routes through subsidiaries, which often took over feeder services to the state railway lines.
Like its surviving peers the Bank of Baden, the Bayerische Notenbank, and the Württembergische Notenbank, the Bank of Saxony was deprived of its right to issue banknotes by Nazi legislation of, with effect on . To avoid liquidation, it cooperated with the and took over the latter's customer business on . In 1945 the German: Sächsische Staatsbank held 80% of the capital of the Bank of Saxony.
In 1945, both the German: Sächsische Staatsbank and the Bank of Saxony were expropriated without compensation by the Soviet occupation authorities. The Bank of Saxony was eventually deleted from the commercial register in 1947.[2] Its holdings in West Germany were held in a fiduciary entity appointed by the West German Federal Finance Minister from 1950 to 1980. These assets were finally liquidated and paid off by 1981.