Deutsche Bank and Commerzbank scrap merger talks

Credit: Reuters Studio
Published on April 25, 2019 - Duration: 01:32s

Deutsche Bank and Commerzbank scrap merger talks

Deutsche Bank and Commerzbank said their merger talks had ended, with execution risks, restructuring costs and capital requirements dashing German attempts to create a mega-bank.

David Pollard reports.


Deutsche Bank and Commerzbank scrap merger talks

If Germany needed a new mega banking giant, it's not to get one yet.

Six weeks of merger talks between Deutsche Bank and Commerzbank have come to an end.

(SOUNDBITE) (German) DEUTSCHE BANK GROUP SPOKESMAN JOERG EIGENDORF, SAYING: "We, Deutsche Bank, said from the outset that we will only pursue a merger if it makes economic sense.

Unfortunately, this was not the case." If successful, the talks would have welded Germany's top two lenders together.

According to Deutsche boss Christian Sewing - it would not have created enough benefits to offset the risks - like how to integrate two distinct cultures.

German officials - led by finance minister Olaf Scholz - were vocal in calling for a new national banking champion.

But some major investors questioned the deal's logic ... Unions warned of the loss of up to 30,000 jobs ... And the ECB - reportedly - would have asked Deutsche to raise more funds before giving a go-ahead.

(SOUNDBITE) REUTERS SENIOR BANKING CORRESPONDENT, TIM SIMS, SAYING: "It's going to have big implications for the German banking landscape.

For Deutsche Bank it means that there will be even more pressure to make a radical change, perhaps at its U.S. investment bank.

And for Commerzbank, it means that there is an even greater chance of a foreign takeover.

We've already seen interest from abroad, from Italy, from Unicredit and from ING, the Dutch bank." Deutsche in the meantime says it expects Q1 net profits at 223 million dollars - far above forecasts.

Its shares rose over four percent early on Thursday - before losing most of those gains.

Commerzbank were down over two per cent.

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