Commerzbank has attracted interest from European banks including ING Groep of the Netherlands and Italy’s UniCredit since ending talks with Deutsche Bank.
Thursday 23, May 2019
(Bloomberg) --Commerzbank is opening the door to another deal after the collapse of merger talks with Deutsche Bank last month.
Chief Executive Officer Martin Zielke said that the lender is considering options other than organic growth as part of a strategy review to be unveiled in the fall, that means the German bank may consider merging with another European or domestic rival to boost growth and profitability.
The two banks have lined up deal advisers as they prepare for talks, the people said. Zielke said at the AGM that he’s met ING CEO Ralph Hamers twice in the past year, though hasn’t received any concrete proposal to start talks.
Zielke said that the Deutsche Bank talks have shown that we possibly should sharpen our strategy, adding that the lender is not happy with current levels of profitability and vowed it would work hard to boost it.
The CEO reiterated that the bank expects to give investors a strategy update in the fall, without revealing any potential details of the new plan.
Commerzbank could also opt to buy a smaller bank in Germany, last year the lender was interested bidding for regional lender NordLB though it ultimately backed away from the idea.
Zielke is more than halfway through a four-year plan to pivot away from investment banking and build up lending to retail and corporate clients. But negative interest rates and competition are eroding profitability, even as the CEO can point to the jump in customer numbers and lending volumes as signs of progress.
ING and UniCredit have held on-and-off again talks with Commerzbank, though no formal negotiations are ongoing.