FILE-In this March 18, 2019 file photo headquarters of Deutsche Bank, left, and Commerzbank are seen in Frankfurt, Germany. Deutsche Bank and Commerzbank are halting talks on a possible merger that would have created Germany's biggest financial institution. (AP Photo/Michael Probst)
Republished April 25, 2019 - 3:33 AM
Original Publication Date April 25, 2019 - 2:06 AM
FRANKFURT - Germany's Deutsche Bank and Commerzbank said Thursday they were halting talks on a possible merger, saying it would be too risky and costly.
Deutsche Bank CEO Christian Sewing said in a statement that that the combination "would not have create sufficient benefits to offset the additional execution risks, restructuring costs and capital requirements associated with such a large-scale integration."
The major German lenders had said on March 17 that they would discuss a merger. The country's finance minister reportedly favoured the move, but there was widespread skepticism about the merits of merging two companies that have so far struggled to overhaul their own businesses.
Deutsche Bank made profit last year after three straight years of losses and a wrenching restructuring that has seen it shed thousands of jobs and pull out of countries where its business was less profitable. Commerzbank, which was bailed out by the German government in 2009, has laboured to wind down billions in bad shipping loans. The government still owns a stake of more than 15 per cent in Commerzbank.
Employee representatives and unions also balked at the merger idea, which would have meant still more job cuts.
The apparent government push toward the merger comes amid recent statements by cabinet ministers in support of creating larger companies that they think would be better able to compete on a global scale.
Separately, Deutsche Bank said it expects to report on Friday that its first-quarter net income was about 200 million euros ($224.2 million) and net revenue 6.4 billion euros.
News from © The Associated Press, 2019