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Deutsche Bank and Commerzbank confirm talks about possible merger

2019-03-18 15:38

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BERLIN, March 18 (Xinhua) -- Deutsche Bank and Commerzbank have entered talks about a possible merger, the two German banks confirmed on Sunday.

"Deutsche Bank is reviewing strategic options and confirms discussions with Commerzbank," Deutsche Bank, Germany's largest bank, announced in a statement.

Investors reacted positively to the news of a potential merger. At the start of trading on Monday, both Deutsche Bank and Commerzbank were at the top of the DAX and MDAX respectively.

It would be important to only pursue options that "make economic sense", stressed Christian Sewing, chief executive officer (CEO) of Deutsche Bank, while adding that there would be "no certainty at all that any transaction will materialize".

Commerzbank stated that the talks on a potential merger of the two German banks would be conducted with an "open outcome".

A possible merger of the two banks has been subject of a public discussion for months, as Germany's Finance Minister Olaf Scholz and his deputy Joerg Kukies have been calling for a "national champion" in the banking sector which would be able to compete internationally since summer 2018.

However, the merged company of Deutsche Bank and Commerzbank would not hold a leading position among the world's largest banks. Turnover of the two banks combined amounted to a total of 33.9 billion euros (38.5 billion U.S. dollars) in 2018 while Europe's largest bank, the British HSBC, recorded a turnover of 53.8 billion U.S. dollars alone.

The possible merger of the two banks is facing strong headwinds. Germany would not need "an even bigger and thus politically even more influential gambling bank, which can speculate unrestrainedly on the international financial markets with de facto state liability behind it," said Sahra Wagenknecht, former chairwoman of Germany's Left party.

The German government is the largest shareholder of Commerzbank and is still holding 15 percent of Commerzbank shares since it bailed the bank out during the global financial crisis in 2009.

"I don't see the sense of this merger at all at the moment," Frank Bsirske, chairman of ver.di, one of Germany's largest trade unions, told the newspaper Stuttgarter Nachrichten. "Deutsche Bank and Commerzbank do not complement each other sensibly."

In addition, the possible loss of around 20,000 jobs would be "very problematic", said Bsirske, who is also a member of Deutsche Bank's supervisory board.

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