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Deutsche, Commerzbank eye $2tln megabank

Credit: Reuters Studio
Published on March 18, 2019 - Duration: 01:17s

Deutsche, Commerzbank eye $2tln megabank

Germany's two biggest banks, Deutsche Bank and Commerzbank, are in talks over a merger, but unions say a deal could cost tens of thousands of jobs.

Julian Satterthwaite reports.

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Deutsche, Commerzbank eye $2tln megabank

Germany's two biggest banks are talking about a merger.

Deutsche Bank and Commerzbank confirmed long-standing rumours on Sunday (March 17).

A tie-up would create a megabank behind only HSBC and BNP Paribas in Europe.

It would have about 2 trillion dollars in assets.

But both banks say talks will be slow, and the outcome uncertain: (SOUNDBITE) (English) DEUTSCHE BANK'S GLOBAL HEAD OF COMMUNICATIONS & CORPORATE SOCIAL RESPONSIBILITY, JOERG EIGENDORF, SAYING: "It is important to us that we will only engage in transaction if it makes economic sense.

Therefore, it needs a plan, especially a good integration plan." Germany's government is in favour.

It wants a national banking champion to support its export-led economy.

But plenty of analysts think there's little logic in a merger.

Deutsche emerged unscathed from the 2008 financial crisis, but has struggled ever since.

Commerzbank has also found it hard to generate profits.

A merger might just create a bigger bank with the same problems. Unions aren't keen either.

They say tens of thousands of jobs would be at risk in a deal that creates no added value.

Reuters sources say the boards of both banks will meet on Thursday to discuss the tie-up.

There will be a lot more talking before any deal is done.

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