Deutsche Bank, Commerzbank merger talks intensify

FRANKFURT. Deutsche Bank AG and Commerzbank AG are intensifying discussions about a potential merger as their turnaround efforts sputter and after the German government put pressure on the firms, according to a person familiar with the matter.

The talks are informal and the supervisory boards of the companies haven’t given a mandate to pursue a deal, said the person, asking not to be identified in disclosing internal deliberations. Deutsche Bank is still considering other options though a deal has become more likely as Chief Executive Officer Christian Sewing has given up resistance, people familiar with the matter said.

Less than a year after taking over, Sewing is struggling to reverse a long slide in revenue amid a slowdown in the economy that’s delaying a return to more normal interest rates. The Finance Ministry had favoured a merger of both lenders before the situation gets worse to support the small and mid-sized companies that are the backbone of the export economy, people familiar with the matter have said.

Deutsche Bank in February reaffirmed its 2019 profitability target but also made clear that it would need to implement tougher measures if markets don’t play along and revenue continues to decline. January was a terrible month for the trading business though February has seen improving conditions, the people familiar with the matter said.