Daily Management Review

Handelsblatt: Deutsche Bank is considering a merger with UBS


Handelsblatt reports that the likely scenario was discussed at a meeting of the bank's supervisory board. Deutsche Bank itself called the report a "fiction".

Yet, the market is rumoring that Deutsche Bank is considering merger options, seeking to compensate for losses that the credit organization has incurred in three years.

As the German newspaper Handelsblatt reported referring to its own sources, possible scenarios for the merger of UBS and Commerzbank were discussed at a meeting of the bank's supervisory board. Yet, the bank itself denied this statement, calling Handelsblatt’s message "fiction."

"We are amazed at what passes through editorial filters and gets into the media," Deutsche Bank CFO James von Moltke commented on the information that appeared in the German publication, adding that the bank will have to do a great job of uniting its retail units, which will take some years.

Earlier, the executive director of Deutsche Bank Christian Sewing also besieged speculation about possible deals, saying that the organization should focus on "homework" for the next 18 months.

Reports in the media appeared after Deutsche Bank changed direction and announced a revision of the strategy, which involves cutting thousands of jobs and reducing the global investment business.

At the same Handelsblatt ihas already assessed possible transactions, referring to results of the Supervisory Board meeting. The merger with UBS seems more profitable, as Deutsche Bank and the Swiss credit institution will complement each other well in the field of investment banking and capital management. According to the publication, Deutsche will become a junior partner in the case of a merger with UBS.

Merger with Commerzbank, on the other hand, can lead to high restructuring costs due to large duplication.

At the same time, the very same newspaper, referring to the bank’s management, reported that any immediate merger was deemed "completely unrealistic" at a meeting on the strategy of the credit institution. 

The talks about possible transactions, however, is partly fueled by the German authorities, which own 15% of Commerzbank. 
Earlier, Finance Minister Olaf Scholz said that the country needs strong banks to stimulate exports. In the media, it is noted that some bankers privately view this as a shift in mood and hint at a willingness to support the financial industry, including help with merger deals.

source: handelsblatt.com