Germany's need to close a budget deficit and the uncertain prognosis for bank profitability are reviving talk of a possible merger, five years since Deutsche Bank and Commerzbank abandoned their bid to merge.
German officials have stated that the country is exploring every possible way to acquire money, including selling shares in some of its 100+ enterprises.
One source acquainted with Christian Lindner's views says that while a sale of the government's remaining 15% stake in Commerzbank is not imminent, he is open to it and would eventually prefer the government to sell the stock.
Another reason that might influence the German government is Deutsche Bank's longer-term stability, which would be strengthened by a merger with Commerzbank. The source spoke on condition of anonymity and stated that the combination would enable Deutsche Bank to diversify further away from fragile investment banking earnings.
Based on a Friday report by Bloomberg News without citing sources, Deutsche Bank, which has finished most of a multi-year reorganization plan, has recently increased internal talks on mergers, including potential acquisitions of banks like ABN Amro and Commerzbank.
According to a second source with knowledge of the matter, Deutsche Bank has moved closer to revisiting the prospect of merging with Commerzbank in recent months, even if no active talks are taking place.
When contacted outside of regular business hours for comment, representatives of Commerzbank and the finance ministry did not immediately respond. Deutsche Bank did not respond to requests for comment.
Friday's closing price of 12.05 euros for Deutsche Bank shares represented a 1.23% decrease, bringing the bank's valuation to 25 billion euros, or $27.37 billion. At 11.35 euros at the close of business, Commerzbank's shares were valued at 14 billion euros. In order to realize the benefits of merging overlapping operations, a merger would be hampered by Deutsche Bank's weak valuation, assets that would have to be marked down, and the potential for painful job layoffs. It is just worth a small portion of its book value.
Alexander Wynaendts, the chairman of Deutsche Bank, stated in November that the corporation wished to be prepared for M&A should the chance arise.
Given all of the obstacles, the likelihood of a significant transaction in the near future is really low. RBC Europe analyst Anke Reingen stated in a note on Saturday.
However, she claimed that the possibility of a change has grown as a result of prior remarks made by the bank and press rumors.
The government continues to lose money on Germany's 2008 global financial crisis investment in Commerzbank.
Documents from the German Finance Ministry indicate that the government intends to sell corporate holdings in order to collect up to 4 billion euros this year. The state-owned train operator, Deutsche Bahn, would receive the funds.
On December 28, Sueddeutsche Zeitung revealed that, without disclosing the adviser's identity, Germany had engaged an investment bank to look into the Commerzbank shareholding.
Commerzbank has long been viewed as a possible partner for UniCredit, which is already represented in Germany through HVB, and the two are said to have undertaken merger negotiations prior to Russia's invasion of Ukraine in 2022.