DSB Bank

Dirk Scheringa, a former police officer, founded DSB BANK as Buro Frisia in 1975. In 1977 the company had capital worth €25 million and a balance of €300 million, due to stable growth and acquisitions. During the end of the 90s, Scheringa wanted to take his company to the market, the company was estimated to be worth 400 million at the time. However, right before the IPO, Scheringa decided not to through with it, since he supposedly did not agree with the introduction price.

He thus remained sole shareholder and found new ways to attract capital. He did so by creating subordinated debt to add to his capital. Such a debt is a loan which ranks after other debts should a company fall into liquidation or bankruptcy. Such debt is referred to as subordinate, because the debt providers (the lenders) have subordinate status in relationship to the normal debt. DSB bank went through some structural changes and changed its name to DSB Bank NV in 2006. Unlike most other banks, DSB bank's main source of profit was provision revenues from premiums and term life insurance, which were sold simultaneously with the loans. This form of combined sale is prohibited in the Netherlands, but no action was taken until 2009.

In June 2007, Scheringa appointed Gerrit Zalm as chief economist and chief financial officer to succeed the outgoing CFO Jaap van Dijk who had been with DSB from 2002 until November 2007. In November 2008, Zalm left DSB, took a job with ABN AMRO, and was succeeded as CFO at DSB from March 2009 to May 2009 by Frank de Grave. In July 2009, Ronald Buwalda, another member of VVD became CFO at DSB.

Fines

As this practice of providing mortgages came to light, the DSB bank received two fines from the Dutch Authority of Financial Markets. One for overpricing their credit and one for the lack of information given to customers with a combined value of €120.00010.