Ger­many weighs mega bank merger

Gulf News - - News -

The Ger­man gov­ern­ment is ready to or­ches­trate a merger be­tween Deutsche Bank and Com­merzbank to en­sure that Europe’s largest econ­omy has at least one lender ca­pa­ble of back­ing its com­pa­nies abroad, Fo­cus mag­a­zine re­ported.

The fi­nance min­istry said it did not want to get in­volved in any spec­u­la­tion. Deutsche Bank de­clined to com­ment but re­ferred to re­cent com­ments by CEO Chris­tian Sewing dis­miss­ing per­sis­tent merger spec­u­la­tion.

Deutsche, fac­ing neg­a­tive head­lines around two high­pro­file money laun­der­ing cases, has seen its share price fall to record lows. Shares in Com­merzbank, which was bailed out after the global fi­nan­cial cri­sis a decade ago, have also headed lower.

Cit­ing sources, Fo­cus said that the fi­nance min­istry was ex­am­in­ing sce­nar­ios in­clud­ing one in which the state takes a stake in Deutsche Bank and then leads a merger of the two banks through a share swap.

A sec­ond op­tion be­ing ex­am­ined was to tap in­vestors and pos­si­bly the Ger­man state to fi­nance a takeover of Com­merzbank by Deutsche, Fo­cus said, while a third would fore­see cre­at­ing a hold­ing com­pany as a ve­hi­cle for a merger.

Sewing re­port­edly op­poses a merger with Com­merzbank, while Com­merzbank CEO Martin Zielke is open to it. Deutsche’s shares de­clined by 51 per cent this year and Com­merzbank’s by 45 per cent. Deutsche’s mar­ket cap­i­tal­i­sa­tion shriv­elled to €15.9 bil­lion (Dh66.5 mil­lion or $18.1 bil­lion), and Com­merzbank’s is down to €8.6 bil­lion.

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