The job cuts that would be required to make a deal work are a particularly high obstacle.
Wednesday 13, March 2019
(Bloomberg) --Deutsche Bank faces stiff resistance to a merger with Commerzbank from sceptical internal officials and wary regulators.
When the banks last engaged in informal merger talks almost three years ago, their plans foresaw eliminating 20,000 to 30,000 positions, according to a person involved in the talks at the time. Cuts of a similar magnitude would likely be required this time around as well, according to a person familiar with current discussions.
Jan Duscheck, an Ver.di Union Official and a key labour representative on Deutsche Bank’s supervisory board, is opposing the merger, saying a combination would threaten thousands of jobs and fail to shore up Germany’s finance sector.
The stance is hardening as talks behind the scenes gradually advance.
“The deal would make the combined bank even more susceptible to a hostile takeover from abroad and would not create a national champion,” added Duscheck
After struggling for years to boost profitability and stem a prolonged decline in revenue, Deutsche Bank and Commerzbank are edging closer to a merger as Germany’s largest listed lenders run out of time to show restructuring efforts are paying off.
A merger would be economic nonsense that would cost thousands of jobs, Deutsche Bank Supervisory Board member Stephan Szukalski wrote in a release for his trade union, DBV.
Financial regulators are wary too, though they could be swayed if the banks present a viable business model and show that the new entity would be sufficiently capitalised, some of the people said. Deutsche Bank has been in touch with regulators on the deal, but at an informal level that hasn’t necessitated public disclosure, one said.
Deutsche Bank has offices in the UAE, Saudi Arabia and Bahrain.