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The situation in the German economy after the completion of negotiations on the merger between Deutsche Bank and Commerzbank after six weeks of contacts is bad.
The country's finance minister said "the German industry needs competitive banks," the finance minister said.
The big problem of the German banking sector was also revealed by Spiegel, who was talking about "German exports" in constant decline, stating that "The once famous industry is moving further and further into the crisis."
Deutsche Bank, the largest bank in Germany, is studying all the possibilities open to it.
"We concluded that this transaction would not generate enough benefits to offset risks and costs", said Christian Sewing, CEO of Deutsche Bank
German Finance Minister Olaf Scholz said about the end of the negotiations that German industry needed competitive banks.
It should be noted that the German government was eager to reach an agreement.
As for the forecast for the first quarter of 2019, Deutsche Bank forecasts a pre-tax profit of 290 million euros, a net profit of 200 million euros and a total net profit of 6.4 billion euros.
The Tier 1 capital ratio is expected to be 13.7%.
Regarding the information on a possible agreement with UBS concerning the fund management unit, the CEO of the Swiss bank did not comment.
The Deutsche Bank share lost 1.49%, while Commerzbank lost 2.29%.
The announcement of Commerzbank
"After careful badysis, Commerzbank's board of directors decided that the merger with Deutsche Bank would not generate any significant benefits that could overshadow the risk of implementing the company." 39, agreement, restructuring costs and capital requirements.
As a result, the two banks decided to end the talks, " announces the announcement of Commerzbank.
It should be noted that if the two banks had been merged, they would have created the second largest bank in the euro area in terms of badets.
What is the future of Deutsche Bank and Commerzbank – What do 5 badysts think?
The merger of Deutsche Bank and Commerzbank is now official "Death"
The two banks have made it clear that they will not combine their strengths, a fact that investors have treated their shares on the Frankfurt Stock Exchange less well than they have suffered.
Of course, after the failure of the negotiations, what everyone is asking is what alternatives the two banking groups have, given that they also face a number of problems, because their recent economic slowdown.
Bloomberg has gathered the views of five leading badysts who are trying to predict the future of Deutsche Bank and Commerzbank.
JPMorgan (Kian Abouhossein)
"Deutsche Bank still needs to be restructured.
The bank will have to reform its investment unit and its badets will probably decrease.
In addition, it should take steps to reduce its operating costs.
Commerzbank is likely to be taken over by another group, with ING and UniCredit expressing interest in acquiring it.
Bankhaus Metzler (Jochen Schmitt)
"Deutsche Bank's strategy is not clear.
The bank will have to solve the problems of relatively low revenue reduction and operating costs, it would be better to focus on these changes rather than looking for a new partner in a merger. "
KBW (Thomas Hallett)
"The ongoing review of Deutsche Bank's activities suggests the failure of its strategy and the need for an alternative action.
The end of the talks is initially positive considering the degree of risk that such an agreement has had.
Deutsche Bank has minimal cash flow and its ability to support a development program is extremely limited. "
Credit Suisse (Jon Peace)
"Deutsche Bank's outlook will depend on the quality of operating figures and the reliability of its alternative plans to increase profitability.
The future course of Commerzbank will depend on the interest of other banks in obtaining it. "
CMC Markets UK (Michael Hewson)
"The failure of the talks should not be a surprise.
The merger would not solve the fundamental problem of how to remedy Deutsche Bank itself, which is far from reestablishing a "sound" bank.
The end of the talks will boost speculation about a possible UniCredit offer on Commerzbank. "
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