BUSINESS OF BANKING

GERMAN MERGER ON THE CARDS

GERMANY is pushing for a merger of Deutsche Bank and Commerzbank by the end of May, before elections would make EU approval more complicated, Wirtschaftswoche reported. A preliminary decision could be made over the coming weeks in confidential talks between the banks’ chief executives, as German Finance Minister Olaf Scholz pushes for an agreement, the weekly magazine reported, without identifying the sources of the information. A merger may involve setting up a wind-down bank for the unwanted assets of both companies, which could be interpreted as state aid and attract the attention of EU competition authorities, Wirtschaftswoche reported. If a decision isn’t made before European Parliament elections at the end of May, a deal may not happen, according to the publication. Scholz and Joerg Kukies, a former Goldman Sachs banker who serves as his deputy, have been pushing a merger as both lenders still struggle to turn around their businesses a decade after the financial crisis. The goal would be to create a national champion to serve the small and midsized companies that are the backbone of Germany’s export economy. The plan is also aimed at avoiding another government bailout should the economy turn. Both companies lost more than half of their market value last year. I Bloomberg