Deutsche Bank CEO sees strong case for merger with Commerzbank, says source

Christian Sewing, CEO of Deutsche Bank AG, addresses the media during the bank’s annual news conference in Frankfurt, Germany, February 1, 2019. — Reuters pic
Christian Sewing, CEO of Deutsche Bank AG, addresses the media during the bank’s annual news conference in Frankfurt, Germany, February 1, 2019. — Reuters pic

FRANKFURT, March 21 — Christian Sewing, the chief executive of Deutsche Bank, believes there is a strong case for a merger with rival Commerzbank, according to a person with direct knowledge of his thinking.

Sewing’s stance ahead of today’s meeting of the supervisory board of Germany’s largest bank sets the stage for a showdown with unions fearing massive job cuts.

Sewing sees multiple benefits of a merger, including “clear” dominance in its home market, scale, and shared technology costs, the person said.

Deutsche’s CEO also believes that a combined entity would improve the cost of funding, with “the best funding ever”, the person said. Jobs would be cut with or without a merger, the person said.

Deutsche Bank and Commerzbank declined to comment.

The position marks a shift in Sewing’s position. In past months, he has urged patience, preferring to focus on internal restructuring before taking on a big project, according to other people with knowledge of his thinking.

The comments also contrast with the neutral tone set in a letter to employees on Sunday after both Deutsche and Commerzbank confirmed talks, Sewing said then that many factors could still prevent a merger.

Deutsche Bank would not have entered talks if the bank expected negotiations to fail, said a second person with knowledge of Sewing’s thinking. — Reuters

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