Deutsche Bank and Commerzbank confirmed on Sunday that they are in talks about a merger, prompting labor union concerns about possible job losses, Reuters reports.
Germany’s two largest banks issued short statements following separate meetings of their management boards, indicating a quickening of pace in the merger process, according to the report.
However, the parties also warned that a deal is far from certain.
“In light of arising opportunities, the management board of Deutsche Bank has decided to review strategic options,” Deutsche said in its statement.
Christian Sewing, Deutsche Bank’s chief executive, told employees that Deutsche still aims “to remain a global bank with a strong capital markets business… with a global network”.
Sewing said many factors could still prevent a merger, while Commerzbank described the outcome as open.
However, formal disclosure of talks appeared to boost the chances of concluding a deal first floated in 2016 before the banks opted to focus on restructuring, Reuters noted.
The German government has pushed for a combination given concerns about the health of Deutsche, which has struggled to generate sustainable profits since the 2008 financial crisis.
The government, which holds a stake of more than 15 percent in Commerzbank following a bailout, wants a national banking champion to support its export-led economy.
Berlin also wants to keep Commerzbank’s specialty – the funding of medium-sized companies, the backbone of the economy – in German hands.
A merged bank would likely be the third largest in Europe after HSBC and BNP Paribas, with roughly 1.8 trillion euros (US$2.04 trillion) in assets, and a market value of about 25 billion euros.
The supervisory boards of both banks are scheduled to hold long-planned meetings on Thursday, sources familiar with the matter told Reuters. The status of merger negotiations is expected to be discussed.
A merged bank would have one fifth of the German retail banking market. Together the two banks currently employ 140,000 people worldwide – 91,700 in Deutsche and 49,000 in Commerzbank.
Germany’s Verdi labor union on Sunday renewed its objections to a merger, saying that tens of thousands of jobs were at risk and that a tie-up adds no value.
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