Slash and Burn at Desperate Deutsche Bank
September 02, 2016
- The gathering takes place amid speculation over the future of Deutsche Bank, once a powerful international player, after it held talks in August about a tie-up with smaller rival Commerzbank, but decided not to pursue the idea.
- Both Deutsche and Commerzbank – the two biggest lenders in Europe’s biggest economy – have been slipping down the rankings of the continent’s top banks, hamstrung by a fragmented and competitive home market and rock-bottom interest rates.
- At the heart of the talks among Deutsche’s top managers will be how it is implementing a group strategy presented last year, one of the sources said, while another said speeding up the sale of assets will also be in focus.
- Last year Deutsche Bank announced plans to slash 15,000 jobs and shed businesses employing some 20,000 staff.
- The bank’s total assets were down to 1.8 trillion at the end of the quarter, from 2.2 trillion at the end of 2008, but up 6 percent year-on-year and analysts have often criticized the slow pace of asset cutbacks.
IS A POTENTIAL MERGER OF EURO BANKS IN THE WORKS?
While the official internal agenda is focused on internal processes, the sources said, strategic alternatives will likely be put on the table.
Earlier this week, a person familiar with the matter said that Deutsche and Commerzbank had held talks on a potential combination, but shelved the project as they want to complete their restructurings before any such move.
Cryan took the unusual step of publicly calling for cross-border bank mergers in Europe at a conference on Wednesday.
Reports of a possible tie-up with its Frankfurt neighbor left some investors bemused.
Helmut Hipper, a fund manager at Deutsche Bank shareholder Union Investment, questioned the logic of a tie-up with Commerzbank, given Deutsche’s plans to spin off a retail bank it owns, Postbank.
“The regulatory trend at the moment is moving in the direction of shrinking rather than growingbanks,” he said.
Analysts have argued that Deutsche would be advised to find a partner once it has stabilized its business.
Contribution by Kathrin Jones and Arno Schuetze of Reuters – editing by Maria Sheahan and Alexander Smith
– See more at: http://www.trunews.com/article/slash-and-burn-at-desperate-deutsche-bank#sthash.1KqNuXyn.dpuf