German engineering group Siemens is planning to set up a bank of its own to reduce reliance on bank financing considering difficulties faced during the financial turmoil.

Siemens has submitted an application to German banking authority which is currently under review. The company does not intend to venture into retail banking domain but plans to use a banking license primarily to expand its sales finance business.

Siemens also plans to deposit some of its current EUR9bn cash pile at the Bundesbank and broaden its sources of financing.

German automotive majors such as BMW and Volkswagen already own banking license and operates banks that support car sales with leasing and financing offers.

Siemens in a statement said: “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 optimize its risk management. The access to the central bank would provide us with a save haven for our cash.”