Explainer: Why Germany wants a merger to underpin Deutsche Bank

FRANKFURT: The German government has pressured Deutsche Bank into merger talks with state-backed Commerzbank amid concerns for the health of the country's flagship bank, according to officials familiar with the matter.Deutsche, the largest bank in Germany, Europe's biggest economy, emerged unscathed from the financial crash but later lost its footing.

Berlin wants a reliable national banking champion to support its export-led economy, known for cars and machine tools.Deutsche and other European banks have taken longer to recover from the financial crisis, losing ground to stronger rivals from the United States.Other than Deutsche, Commerzbank is Germany's only remaining big bank, after a series of mergers. The government holds a 15 percent stake after bailing it out during the crisis, giving it an important voice.

Deutsche's chief executive officer Christian Sewing would prefer to have more time to stabilize the bank before taking on a merger, people familiar with the matter have said.In February, Deutsche's management board gave Sewing the go-ahead for exploratory talks with Commerzbank, a person with knowledge of the matter said. There have been contacts among a small circle of executives. Talks could end without a deal, the person said.

The deal would make the German government a shareholder in the country's largest bank and executives would want to curb its influence. The continued pressure from Berlin makes it harder for Deutsche to go it alone. Merging with a state-owned lender, in the officials' view, offers a safe harbor.

Business Business Latest News, Business Business Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Merger speculation boosts shares in Deutsche and CommerzbankShares in Deutsche Bank and Commerzbank traded higher on Monday as German business warmed to the prospect of a tie-up between the country's two ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Two top shareholders skeptical of Deutsche-Commerzbank merger: sourcesShares in Deutsche Bank and Commerzbank traded higher on Monday as German business warmed to the prospect of a tie-up between the country's two ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Germany's Verdi union opposes Deutsche-Commerzbank mergerGermany's Verdi labor union on Tuesday voiced strong objections to a possible merger between Deutsche Bank and Commerzbank, arguing that a ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Germany's Verdi union opposed to Deutsche-Commerzbank mergerGermany's Verdi labor union on Tuesday voiced strong objections to a possible merger between Deutsche Bank and Commerzbank, arguing that a ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Deutsche Bank management board agrees to Commerzbank merger talks: sourceThe management board of Deutsche Bank has decided to hold talks with rival Commerzbank to examine the feasibility of a merger, a person with ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Deutsche Bank, Commerzbank have no mandate for merger talks: sourcesDeutsche Bank and Commerzbank managers have no official mandate for merger talks, two people with knowledge of the matter said on Friday.
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Berlin backs Deutsche Bank merger despite risk of shortfall: sourcesBerlin is so worried about the health of Deutsche Bank that it pushed for a merger with rival Commerzbank even though it could open up a huge ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Deutsche Bank, Commerzbank CEOs resume talks over potential merger: FocusDeutsche Bank and Commerzbank's chief executives have resumed talks over a potential merger of Germany's two biggest lenders, Focus magazine ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »

Deutsche, Commerzbank tentatively talk about merger after months of speculation: sourceThe management board of Deutsche Bank has decided to hold talks with rival Commerzbank to examine the feasibility of a merger, a person with ...
Source: ChannelNewsAsia - 🏆 6. / 66 Read more »