Deutsche: You merge, not us

Deutsche Bank Chief Executive John Cryan on Wednesday called for more mergers among European banks but denied speculation that the lender plans to pursue a tie-up with smaller German rival Commerzbank.

Cryan, speaking at a Frankfurt financial conference, said European banks face a “fundamental dilemma” rooted in economic headwinds, broadly lower profits and too much competition.

“Banks are less risky than before the financial crisis but far less profitable,” he said.

Deutsche Bank’s home market itself has too many banks that make too little money for the industry to be sustainable in Germany in its current form, Cryan said.

The saturation of Germany’s retail-banking market is a perennial topic in that country, and low and negative interest rates have squeezed profits further this year.

Cryan said as part of his conference talk that a merger with Commerzbank — a subject of consistent speculation among bankers and investors — wasn’t an option for Deutsche.

In response to a question about whether the option is on the table, he said he didn’t think so.

Asked whether Deutsche Bank is looking for partners in the German market with which to combine, he said no.

“Part of the work we are doing is to make the bank a bit smaller,” he said.

Earlier Wednesday, a German magazine had reported that Deutsche Bank internally discussed the possibility of a merger with Commerzbank.

“Those considerations were theoretical and at a very early stage. It is unclear whether they will resume,” Manager Magazin reported, without citing sources.

A Commerzbank spokeswoman declined to comment on the report.