Deutsche Bank CEO sees strong case for Commerzbank merger – Source
FRANKFURT: Deutsche Bank chief executive Christian Sewing believes there is a strong case for a merger with Commerzbank, a person with direct knowledge of his thinking said.
Sewing’s view sets the stage for a potential showdown with labour unions who fear as many as 30,000 job cuts in Germany’s two biggest banks become one.
He will also have to persuade some investors who are sceptical about the merits of a tie-up.
The supervisory boards at both banks met separately on Thursday and discussed the proposed merger, but no decisions were taken by either.
Deutsche Bank and Commerzbank declined to comment.
Sewing sees a merger bringing multiple benefits, including ‘clear’ dominance in the combined bank’s German home market, scale, and shared technology costs, the person said before Thursday’s Deutsche Bank supervisory board meeting.
He also believes that a combined entity would improve the cost of funding, with “the best funding ever”, the person said, adding that jobs will need to be cut with or without a merger.
Deutsche Bank’s CEO has urged investors to be patient in recent months, preferring to focus on an internal restructuring before taking on a big project, other people with knowledge of his thinking have said.
Sewing’s until now private view also contrasts with the more neutral tone set in a letter to employees on Sunday after both Deutsche Bank and Commerzbank confirmed talks. Sewing said then that many factors could still prevent a merger.
And Deutsche Bank would not have entered talks if the bank expected negotiations to fail, a second person with knowledge of Sewing’s thinking said.