Tuesday 19 September 2017

Deutsche boss says no to bank merger

Deutsche Bank chairman Paul Achleitner
Deutsche Bank chairman Paul Achleitner

Andreas Cremer

Deutsche Bank chairman Paul Achleitner has ruled out a European merger or a state bailout after the lender's mortgage settlement with the US department of justice, 'Frankfurter Allgemeine Sonntagszeitung' reported.

Germany's biggest bank last week announced a $7.2bn (€6.8bn) settlement with the US department of justice over its sale and pooling of mortgage securities in the run-up to the 2008 financial crisis.

"The management board in principle looks at everything that could help the business," Mr Achleitner said in an interview with the weekly newspaper published yesterday.

"At the moment, however, enthusiasm for a pan-European merger is muted as we have other priorities," he said, when asked why Deutsche does not merge with Italy's UniCredit or another lender.

Banking supervisors, including Germany's Bundesbank and the European Central Bank (ECB), have called for more consolidation in the banking sector, saying there are still too many banks despite a steady fall in the number of branches since the 2008 financial crisis.

In fact, the crisis saw many European lenders sell or close cross-border units, including in Ireland, where examples included AIB's sale of its Polish unit and Bank of Scotland Ireland's decision to quit the market here.

Meanwhile, higher capital requirements put European banks at a competitive disadvantage to their US rivals, Mr Achleitner said, referring to efforts by the Basel committee of supervisors to tighten bank capital rules to avoid a repeat financial crisis.

"The global rules, established with the Basel accord, must not one-sidedly reflect the views of the Americans," Mr Achleitner, a former finance chief of Allianz, said.

Reuters

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