FRANKFURT (Reuters) – Deutsche Financial institution was set on Sunday to verify merger talks with fellow German lender Commerzbank, in accordance with an individual with information of the matter, a sign that efforts to mix the 2 companies have been gaining tempo.
FILE PHOTO: Banners of Deutsche Financial institution and Commerzbank are pictured in entrance of the German share value index, DAX board, on the inventory change in Frankfurt, Germany, September 30, 2016. REUTERS/Kai Pfaffenbach/File Picture
Formal disclosure of talks will increase the possibilities of concluding a tie-up between the nation’s two largest banks.
A merger has lengthy been the topic of hypothesis and the German authorities has pushed for it given considerations concerning the well being of Deutsche which has struggled to generate sustainable income because the 2008 monetary disaster. The federal government holds a stake of greater than 15 p.c in Commerzbank following a bailout.
Earlier this month an individual with information of the matter advised Reuters that the administration board of Deutsche had agreed to carry talks with Commerzbank on the feasibility of a merger.
“We’re going to significantly consider a merger,” mentioned an individual with information of the matter on Sunday.
“However there isn’t a assure that there will likely be a deal ultimately,” the particular person mentioned.
Deutsche Financial institution and Commerzbank declined to remark.
Whereas the banks haven’t publicly commented on merger talks, German Finance Minister Olaf Scholz final Monday confirmed that there are negotiations.
On Thursday, the supervisory boards of each banks are scheduled to carry long-planned conferences, 4 individuals with information of the matter advised Reuters. The standing of merger negotiations is anticipated to be mentioned.
Germany’s Verdi labor union has objected strongly to a potential merger between the 2 banks, arguing that the merged group can be a extra enticing goal for a hostile international takeover and saying that at the least 10,000 jobs are in danger.
The mixed workforce of the 2 banks is round 140,000.
Reporting by Tom Sims and Andreas Framke; Enhancing by Ed Taylor and Ludwig Burger and Keith Weir