German Minster of Finance Olaf Scholz revived his call for a national banking champion, giving the potential merger between Deutsche Bank AG and Commerzbank AG a fresh push as talks enter a critical phase.
While Germany would be happy to host “lots of” lenders from all over the world, the nation and its export-led economy need “strong banks” that could support German businesses in the rest of the world, Scholz said late on Monday in Munich, reinforcing the government’s key argument for a merger.
The German Ministry of Finance played a key role behind the scenes in pushing the nation’s largest listed lenders into talks.
Photo: Reuters
Scholz and German Deputy Minister of Finance Joerg Kukies, a former Goldman Sachs banker, are seeking to shore up Deutsche Bank before a potential downturn on the grounds that the country needs a national champion to support German businesses at home and overseas.
Discussions over the combination, which has sparked opposition from labor unions and politicians over job cuts and financial risks, are reaching a decisive point.
Deutsche Bank chairman Paul Achleitner has said a decision on whether to proceed with a deal would be made by April 26.
Since the banks announced official merger talks in the middle of last month, the government has gone silent, with German Chancellor Angela Merkel distancing herself from the deal, saying it is a private business matter.
A survey published last week in the Bild newspaper showed that 43 percent of respondents were against a merger and only 17 percent were in favor.
Scholz’s popularity dropped by 10 percentage points in a poll published on Monday by Der Spiegel, as he was widely criticized for his banking stance.
Meanwhile, the two German lenders are lining up more Wall Street advisers.
Deutsche Bank hired Morgan Stanley to support it in the merger talks, people familiar with the matter said, adding to a plethora of US firms advising the two German lenders and underscoring US dominance in investment banking.
“Just being a host country — as some European countries are — is not the best thing to strive for,” Scholz said, adding that he would like to see a German bank leading potential cross-border consolidation in Europe.
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