From CNBC:

Deutsche Bank CEO Christian Sewing has acknowledged the inevitability of a recession in Germany and called for leaders to accelerate decoupling from China. Speculation resurfaces over the potential merger of Deutsche Bank and Commerzbank amidst reports of the German government considering selling some of its company stakes. Sewing seems to pour cold water on the rumors, stating that M&A is not a priority and focusing instead on the regulatory preconditions for banking union and fair value gaps. The recent rejection of reforms to the European Stability Mechanism by Italy’s lower house of parliament leaves the bloc unable to implement a portion of its banking union legislation, compelling Deutsche Bank to focus on its own business.

The potential merger of Germany’s two biggest banks, Deutsche Bank and Commerzbank, could create a combined entity with around $2 trillion in assets, despite concerns about bank profitability, low valuation and regulatory preconditions for the banking union. Previously abandoned in 2019, the uncertainty resurfaced again with reports of the German government considering selling some of its company stakes. Christian Sewing seemed to downplay these rumors, emphasizing the regulatory and fair value gap requirements for any potential M&A activity, revealing that it is not a priority for this year.

In light of reports of the German government considering selling some of its company stakes, Christian Sewing appears to dismiss the recent merger speculation, stating that M&A is not a priority but focusing instead on regulatory prerequisites and fair value gaps. This follows Italy’s lower house of parliament rejection of reforms to the European Stability Mechanism, complicating the implementation of a portion of banking union legislation and diverting Deutsche Bank’s focus to its own business.

The rejection of reforms to the European Stability Mechanism by Italy’s lower house of parliament poses a challenge for the euro zone in implementing a portion of its banking union legislation. This forces Deutsche Bank to focus on its own business, while remaining open to smaller add-ons, like the recent acquisition of Numis. Christian Sewing emphasizes the bank’s focus on its own business amidst regulatory challenges and market conditions, diverting attention from potential M&A activity.



Read more: Deutsche Bank CEO says acquisitions not a ‘priority’ as Commerzbank rumors swirl