Deutsche Bank AG held frequent talks together with the government and its main domestic competitor over the last months as concern mounted that Germany’s largest lender are probably not competent to emerge from its crisis without outside help.
Representatives of Deutsche Bank had about two dozen discussions with officials because new government was formed in March, many between Deputy Finance Minister Joerg Kukies and Top dog Christian Sewing and even supervisory board Chairman Paul Achleitner, in line with a Finance Ministry letter seen by Bloomberg. Sewing also met regularly with Commerzbank AG CEO Martin Zielke, based on a family briefed for the matter.
The frequency on the talks, including discussions of “strategic options,” according to the Finance Ministry letter, highlights a feeling of urgency in Berlin and Frankfurt as Deutsche Bank struggles to reverse numerous years of losses and declining revenue. The shares of both lenders lost more than half of these value not too long ago, stoking speculation regarding a merger. Commerzbank, the nation’s second-largest listed lender, continues to part-owned because of the government after a bailout.
Talks between Sewing and Zielke in past months included the main topic of a potential merger, though an extremely move wasn’t officially for the banks’ agenda, as outlined by Handelsblatt, which reported the meetings between the two executives earlier.
Deutsche Bank fell 0.2% at 11:42 a.m. in Frankfurt trading, while Commerzbank declined 2.2%.
A merger “will only are more likely if there are signs which the turnaround of it bank is definately not successful under CEO Sewing either,” Independent Research analyst Markus Riesselmann wrote within a note on Monday. “The soon-to-be-published fourth-quarter effects are unlikely to deliver evidence for this sort of turnaround.” Riesselmann says in the meantime, a merger is unlikely.
Still, the us government would back any deal forwards and backwards banks, people accustomed to the issue have said. It offers recently discussed plans with executives including Sewing ways to help in a possible merger, Bloomberg News reported last month.
Representatives for Deutsche Bank, Commerzbank along with the Finance Ministry declined to comment.
“The German government is prepared to take economically sensible options,” the Finance Ministry wrote in their letter, in answer to questions coming from a person in Parliament who had inquired precisely what the government’s stance was regarding a possible merger of the two lenders.
Other executives doing the meetings with the finance ministry include Chief Regulatory Officer Sylvie Matherat, Chief Financial Officer James von Moltke, investment banking head Garth Ritchie and Asia head Werner Steinmueller, according to the letter.
? 2019 Bloomberg L.P
