Exploratory talks involved Deutsche Bank Chief Executive Officer John Cryan and his counterpart at Commerzbank, Martin Zielke, said the person, who asked not to be identified because the deliberations were private.
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He singled out Germany saying it has “just too many banks”.
Earlier Wednesday, a German magazine had reported that Deutsche Bank internally discussed the possibility of a merger with Commerzbank.
Cryan said at a conference in Frankfurt on Wednesday that Deutsche Bank’s considerations were “only of a theoretical nature” and at a very early stage.
Mr. Cryan, however, is in support of mergers amongst the German banks as he said that Germany needs more mergers at national and cross border level. Profitability has also been hit hard by the wafer-thin margins now available on the bank’s traditional lending activity as the European Central Bank keeps rates ultra-low and continues to pump money into the financial system. Deutsche Bank now faces 7,000 cases and regulatory actions in German courts according to the Financial Times.
Deutsche Bank’s Cryan concluded: “This situation in Europe can not go on”.
Some analysts have argued that Deutsche would be advised to find a partner once it has stabilized its business, cut costs, and put capital and regulatory concerns behind it.
“We need further consolidation in banking to remain competitive internationally”, he said.
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“Recent demands for fundamental consolidation among banks are not appropriate”, savings bank association head Georg Fahrenschon told the conference, noting bigger banks had shown they could be “poison” for financial market stability.
