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Deutsche Bank and Commerzbank merger talks are expected to fail: source



Conversations between Germany's two leading lenders, Deutsche Bank and Commerzbank, are expected to end in failure, a person with knowledge of what was said on Thursday.

  FILE PHOTO: Outside view of Deutsche Bank and the Commerzbank headquarters in Frankfurt

FILE PHOTO: Outside view of Deutsche Bank and Commerzbank headquarters in Frankfurt, Germany, March 18, 2019. REUTERS / Ralph Orlowski / Photo File

FRANKFURT: of Deutsche Bank and Commerzbank are expected to end in frustration, although no final decision has been taken, a person with knowledge says Thursday.

The two highest banks in Germany refuse to comment on opposition violations, which have achieved fierce opposition from workers, unions that fear 30,000 job losses.

German government officials, led by Fi nance Minister Olaf Scholz, who pushed for a tie to create a national bank champion and conclude future questions of both banks, which have struggled to recover from the financial crisis.

Shares in Commerzbank were 1.5 percent less than 0728 GMT on Thursday, while Deutsche Bank reached 0.7 percent.

Deutsche Bank expects to provide an update on the status of discussions, now in their sixth week, on Friday at the latest, said another official.

the inability to make a deal will increase pressure on Deutsche Bank to make more radical changes, such as reductions in its bank investment bank that regulators and some major investors are promoting. Announcement

A failure of conversations is likely to make Commerzbank vulnerable to a foreign acquisition. Both Unicredit and ING Groep have expressed interest in No. 2 lender of Germany, sources say.

Some major Deutsche Bank investors are asked in the deal's logic and do not want to take any extra money to do so, while credit ratings agencies are warning about risks.

The European Central Bank asks Deutsche Bank to raise fresh funds before it gives rise to a break, a person with direct knowledge of the matter said.

The ECB's single supervisory board, set to meet Thursday, has not received a formal application from banks about a merger, a person familiar with the situation.

But the discussions of the supervisors are likely to emphasize the disadvantages of the advantages, said the man,

Both banks announced the commencement of formal talks on March 17 and since then crunching the numbers for a tie-up.

Last month, Deutsc said Chairman of Bank Paul Achleitner that the banks were aiming to express more concrete steps at the time the bank published its earnings on April 26.

The first income in quarter earnings are expected to show continuing weakness, with the expected 75 percent net income decline and 9 percent loss in revenue, according to a consensus forecast posted on the bank's website. [196590024] (Reporting by Francesco Canepa, Frank Siebelt, Hans Seidenstuecker, Andreas Framke, Arno Schuetze and Tom Sims; Editing by Sabine Wollrab, Tassilo Hummel, Michelle Martin and Alexander Smith)


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