The management board of Deutsche Bank has agreed to hold talks with rival Commerzbank on the feasibility of a merger, a person with knowledge of the matter told Reuters on Saturday. First unofficial contacts took place within a very small group and the mandate from Deutsche's board was given more than a week ago, said the source, speaking on condition of anonymity. Talks were at a very early stage and could fall apart, the person added, confirming information reported earlier by the Welt am Sonntag newspaper.
A spokesman for Deutsche Bank and a spokeswoman for Commerzbank both declined to comment. Speculation about a possible merger between Germany's two largest listed lenders has been rife for months, heightening under the tenure of Finance Minister Olaf Scholz, who has emphasised the importance of strong banks. Proponents of a merger say that a tie-up would give a combined entity - which would have an equity market value of more than 24 billion euros ($27 billion) based on Friday's closing share prices - a 20 percent share of the German retail banking market.
That would allow it to potentially charge higher prices in a country where banking services have been free or low cost. Welt am Sonntag reported that both banks were reacting to pressure from the government, which expects a decision on the merger in the coming weeks. A spokesman for the finance ministry declined to comment on the report.
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