Deutsche confirms talks

DEUTSCHE and Commerzbank began formal merger talks yesterday in a move that would create Europe’s second-largest lender.

The announcement is an indication that efforts to combine Germany’s two largest lenders are gaining pace.

In a regulatory statement, Deutsche Bank said: ‘We confirm that we are engaging in discussions with Commerzbank. There is no certainty that any transaction will occur.’ It is believed that talks to evaluate the benefits of a tie-up would start immediately while detailed due diligence will begin this week.

The deal would create the eurozone’s second-largest lender after BNP Paribas, with £1.6trillion in joint assets and 140,000 employees. The German government signalled it would back a deal, but said it was up to the banks to find a compelling business case.