Deutsche Bank and Commerzbank go public on deal talks
FRANKFURT: Deutsche Bank and Commerzbank on Sunday confirmed they were in talks to possibly merge, an indication that efforts to combine Germany’s two largest lenders are gaining pace.
The announcement followed meetings of the management boards of both banks, a person with knowledge of the matter said.
“In light of arising opportunities, the management board of Deutsche Bank has decided to review strategic options,” Deutsche said in a statement. It said there was no certainty of a deal and that the board was “focused on improving the growth profile and profitability of the bank”.
Commerzbank said the outcome was “open”.
Formal disclosure of talks increases the chances of concluding a tie-up that has long been the subject of speculation and surfaced in 2016 before both banks decided to focus on restructuring.
The German government has pushed for a combination given concerns about the health of Deutsche, which has struggled to generate sustainable profits since the 2008 financial crisis.
The government, which holds a stake of more than 15% in Commerzbank following a bailout, wants a national banking cham- pion to support its export-led economy, best known for cars and machine tools.
Berlin also wants to keep Commerzbank’s speciality - the funding of medium-sized companies, the backbone of the economy - in German hands.
“We are going to seriously evaluate a merger,” said the person with knowledge of the matter said ahead of the announcement.
“But there is no guarantee that there will be a deal in the end,” the person added.
An announcement on Sunday represents progress after a person with knowledge of the matter this month told Reuters that the management board of Deutsche had agreed to hold talks with Commerzbank on the feasibility of a merger. While the banks had not publicly commented on merger talks until Sunday, German finance ,inister Olaf Scholz last Monday confirmed that there are negotiations.