Business World

Tuesday 21 August 2018

Deutsche Bank chairman eyes Commerzbank merger

Paul Achleitner is silhouetted next to the Deutsche Bank logo prior to the bank's annual meeting in May. Photo: REUTERS/Kai Pfaffenbach/File Photo
Paul Achleitner is silhouetted next to the Deutsche Bank logo prior to the bank's annual meeting in May. Photo: REUTERS/Kai Pfaffenbach/File Photo

Eyk Henning

Deutsche Bank chairman Paul Achleitner has spoken with top shareholders about merging with cross-town rival Commerzbank as Deutsche, Germany's largest lender, struggles with its turnaround plan, insiders have claimed.

Mr Achleitner has discussed a union of the two lenders with investors and key German government officials in recent months, said the sources, who asked not to be identified.

While there are no formal discussions between the two banks and no such move is imminent, the chairman is talking now with stakeholders about a possible deal down the road, they said. A Deutsche Bank spokesman declined to comment.

A key obstacle is Deutsche Bank's depressed share price, according to the sources. Investors have reportedly told Mr Achleitner that they don't want a merger with Commerzbank at the moment because it would be highly dilutive and could potentially trigger a capital increase and hefty write-downs.

The two banks held talks in the summer of 2016, but decided then against a deal while they focused on restructuring their own businesses, insiders said at the time. Speculation about a merger of the two German lenders - or of one of them with an international competitor - has increased in the past year after private equity firm Cerberus Capital took a stake in both banks.

Deutsche Bank has struggled to maintain the confidence of investors of late amid a tumultuous management reshuffle, and a plan to significantly reduce its global footprint and workforce under new chief executive Christian Sewing.

Shares in the German lender have declined 39pc this year. (Bloomberg)

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business