Merger talks between Deutsche Bank and Commerzbank have failed. Integrating the two banks would have been too difficult and the costs of restructuring and new capital to implement the ambitious marriage would have been too high. Basically, the game is not worth the candle and the two institutes, in a note reported by Bloomberg and relaunched by Radiocor, have decided to interrupt the talks.
After "a careful analysis it became clear that such a combination would not be in the interest of the bank's shareholders or other interested parties" and "would not have created sufficient benefits". “It made sense to evaluate this option for the consolidation of the domestic sector in Germany. However, we have always been clear: we had to be convinced that any possible combination would generate higher and more sustainable returns for shareholders and enable us to enhance our value proposition for clients,” said Martin Zielke, CEO of Commerzbank. "After an in-depth analysis, we concluded that this transaction would not create sufficient benefits to offset the additional implementation risks, restructuring costs and capital requirements associated with this integration."
The announcement had an immediate impact on the Frankfurt Stock Exchange. Deutsche Bank shares rise by 2,4% while Commerzbank loses 2,8%. Deutsche also disclosed first quarter accounts, whose net profit stands at 200 million.
For the first quarter of 2019, Deutsche Bank expects to report a pre-tax result of approximately 290 million euros and a net profit of approximately 200 million. First quarter results will be released tomorrow, Friday 26 April. Total revenues are expected to be $6,4 billion, of which $3,3 billion in the Corporate & Investment Bank. The Cet1 ratio at the end of the quarter should be around 13,7 per cent.
Updated at 11:36am on April 25th
