Merger talks between Germany’s top two lenders, Deutsche Bank AG and Commerzbank AG, are expected to end in failure, a person with knowledge of the matter said yesterday.
No final decision has been taken, the person said.
The banks declined to comment.
Shares in Commerzbank traded 1.6 percent lower, while share in Deutsche Bank were down 0.8 percent.
Deutsche Bank toay is expected to provide an update on the status of talks, now in their sixth week, another official said.
The inability to craft a deal would increase pressure on Deutsche Bank to make more radical changes, such as cuts to its US investment bank that regulators and some major investors have been advocating.
Deutsche is looking at a deal for its asset management unit.
A failure of talks would also likely make Commerzbank vulnerable to a foreign takeover.
Unicredit SpA and ING Groep NV have expressed interest in Germany’s No. 2 lender, sources have said.
From the beginning, the talks have met fierce opposition from the banks’ workforces, with unions fearing job losses could total 30,000 people.
Some major investors in Deutsche Bank have also questioned the logic of a deal. Both banks are in the process of restructuring and ratings agencies have warned of the risks of executing a deal.
Separately, Swiss banking giant UBS Group AG said that revenue and profits slid in the first quarter as a chill ran through the global economy and markets, but its performance beat analyst expectations.
Net profits slid 27 percent from the same quarter last year to US$1.1 billion, with the bank benefiting from some exceptional items that boosted performance last year.
Revenue contracted by 12 percent to US$7.2 billion.
Both numbers beat the consensus of analysts surveyed by Swiss financial news agency AWP, which was a net profit of US$873 million on revenue of US$6.9 billion.
“The first quarter of 2019 was characterized by challenging market conditions,” US chief executive officer Sergio Ermotti said in a statement, before adding that market conditions improved at the end of the quarter and into this month.
Pretax profits at the investment banking unit tumbled by 64 percent to US$207 million due to less revenue from advising clients on mergers and acquisitions, as well as from equities.
Less trading by clients of its wealth management unit led to a fall in commissions, with pretax profit sliding 22 percent.
Additional reporting by AFP
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