FILE PHOTO: Christian Sewing, CEO of Deutsche Bank AG, addresses the media during the bank’s annual news conference in Frankfurt, Germany, February 1, 2019. REUTERS/Kai Pfaffenbach/File Photo
March 21, 2019
By Tom Sims and Andreas Framke
FRANKFURT (Reuters) – Christian Sewing, the chief executive of Deutsche Bank, believes there is a strong case for a merger with rival Commerzbank, according to a person with direct knowledge of his thinking.
Sewing’s stance sets the stage for a showdown with unions fearing massive job cuts and some skeptical investors. The supervisory boards of both banks meet on Thursday.
Sewing sees multiple benefits of a merger, including “clear” dominance in its home market, scale, and shared technology costs, the person said.
Deutsche’s CEO also believes that a combined entity would improve the cost of funding, with “the best funding ever”, the person said. Jobs would be cut with or without a merger, the person said.
Deutsche Bank and Commerzbank declined to comment.
The position marks a shift in Sewing’s position. In past months, he has urged patience, preferring to focus on internal restructuring before taking on a big project, according to other people with knowledge of his thinking.
The comments also contrast with the neutral tone set in a letter to employees on Sunday after both Deutsche and Commerzbank confirmed talks. Sewing said then that many factors could still prevent a merger.
Deutsche Bank would not have entered talks if the bank expected negotiations to fail, said a second person with knowledge of Sewing’s thinking.
The powerful Verdi labor union, which sits on the supervisory boards of both banks, has voiced fierce objections to a merger, saying that as many as 30,000 jobs are at risk over the long term.
Both banks currently employ 140,000 worldwide. A spokeswoman for Verdi said on Thursday that the union’s position hasn’t changed.
At least three of Deutsche Bank’s top investors have voiced reservations about a merger, according to three people with knowledge of the matter. Two of them are awaiting details from Sewing and his colleagues at Thursday’s meeting, two of the people said.
(Reporting by Tom Sims and Andreas Framke; Additional reporting by Hans Seidenstuecker; editing by Kathrin Jones and Keith Weir)
