NEWS UPDATE
EUROPE
Deutsche Bank and Commerzbank
confirm talks over potential merger
Deutsche Bank and Commerzbank both released statements confirming that talks
about being held to explore a potential merger.
D
eutsche Bank and Commerzbank have officially con-
firmed that talks are being held to explore a potential
merger between the two German investment banks.
In brief and separate statements released in mid-March,
both institutions said that they have agreed to start
conversations about a possible tie-up after months of
speculation about a merger. However, both banks reiter-
ated that reaching a deal cannot be guaranteed.
“There is no certainty that any transaction will occur,”
Deutsche Bank said. “In this context we confirm that we
are engaging in discussions with Commerzbank.”
The bank added that the talks follow “arising oppor-
tunities” which led the management board of Deutsche
Bank to review its strategic options while it remains
focused on growth profile and profitability.
Deutsche Bank’s share price rose 3.3% in early trading
in Europe this morning following the news, while Com-
merzbank saw its share price increase more than 6%.
In a memo sent to employees, Deutsche Bank’s chief
executive Christian Sewing wrote that the company is
assessing the role it wants to play in consolidation in
the German and European banking industry.
“Our stated aim remains to be a global bank with a
strong capital markets business – based on a leading
12 // TheTrade // Spring 2019
position in our home market in Germany and in Europe,
and with a global network. This is what our clients
expect from us,” Sewing said.
Critics of the proposed merger have argued that comb-
ing the two struggling institutions would only create a
larger problem for the German banking industry.
Both Commerzbank and Deutsche have faced signif-
icant financial difficulties, with Deutsche Bank only
recently swinging into profit after reporting its first
full-year net profit of €1.3 billion since 2014. Similarly,
Commerzbank’s net profit surged from just €128 million
in 2017 to €865 million throughout the course 2018.
“What is also important to me is that we will only pur-
sue options that make economic sense, building on the
progress we made in 2018,” Deutsche Bank’s chief add-
ed. “That is why we, the management board, will review
the options that present themselves to us carefully. It is
our responsibility and it is our duty.
“In doing so, we will keep the interests of the bank and
all of our stakeholders in mind. At this point in time,
there is no certainty at all that any transaction will ma-
terialise. Experience has shown that there may be a lot
of potential economic and technical factors that could
hinder or prevent such a step.”