Deutsche Bank CEO John Cryan has called for cross-border bank mergers in Europe.
- John Cryan: “We need more mergers, at a national level, but even also across national borders.”
- “Scattered regionalism among banks placing unacceptable squeeze on bank profits and long-term sustainability.”
- Top executives of Deutsche Bank and Commerzbank held talks on a potential combination in early Aug.
- Source: “There was a round of talks in late August in which (Deutsche Bank Chief Executive) John Cryan and (Chief Financial Officer) Marcus Schenck were present.”
- Deutsche and Commerzbank combined market value 26 billion euros ($29 billion), half of France’s BNP Paribas.
- Both Deutsche and Commerzbank slipping down the rankings of the continent’s top banks.
- Georg Fahrenschon, savings bank association head: “Recent demands for fundamental consolidation among banks are not appropriate.”
John Cryan’s remarks will likely spur further discussion about the future of the bank, although he was quick to throw cold water on a report that Deutsche had examined a merger with Commerzbank (CBKG.DE), partly owned by the German state.
Criticizing what he called the “scattered regionalism among banks”, Cryan said at a financial conference: “We need more mergers, at a national level, but even also across national borders.”Asked if he sees the time coming when Deutsche will engage in large takeovers, Cryan, himself a former M&A banker specializing in financial services during a long career at UBS (UBSG.S), said: “Not any time soon”.
His comments come weeks after Deutsche scraped through regional stress tests of the sector and as European Central Bank (ECB) money printing saps banks’ ability to turn a profit.
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, growing regulation and negative interest rates.
Their combined market value of around 26 billion euros ($29 billion) is less than half of France’s BNP Paribas (BNPP.PA) for example.
Full article: Deutsche Bank CEO calls for cross-border bank mergers in EU (TruNews)