We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Deutsche Bank (DB) CEO Dismisses Commerzbank Merger Talks
Read MoreHide Full Article
John Cryan, chief executive officer of Deutsche Bank AG (DB - Free Report) brushed away rumors of a potential merger between Deutsche Bank and Commerzbank AG, the second largest bank in Germany.
Earlier on Wednesday, without specifying sources, a German magazine reported that Deutsche Bank had held discussions with Commerzbank about a possible merger. People familiar with the matter also stated about the merger talks between the two companies.
However, at the Handelsblatt banking summit held on Wednesday in Frankfurt, Cryan mentioned that he is not looking for any alliance and intends to shrink the company. Later, in an interview with the CEO of Handelsblatt newspaper, Cryan stated that the company is focused on its restructuring initiatives “to make our bank a bit smaller in order to make it a bit simpler”.
When asked about likely acquisitions in the U.S. or in the Asian region, Cryan replied, “Not any time soon. Probably not in the U.S.”
At the summit, Cryan urged for consolidation in the European banking industry as he observes that the fragmentation in the sector is affecting bank profits. He stated, “We need more mergers, at a national level but also across national borders”.
In the interview, Cryan noted, “If we look at Germany in particular – and I take Germany as an example – it hasn’t gone through that wave of consolidation that very recently Spain has seen. Italy seems to be moving in this direction, and France has already been through it. But in Germany, there are too many banks. That leads to very strong price competition, which is good for customers, but less so for the solidity of the banking system. So I think Germany should consider, particularly some of the smaller banks, in teaming up and investing in the modernization of the system”.
While Cryan is expediting its restructuring efforts, profitability of Deutsche Bank remains threatened by a stressed operating environment with negative interest rates, sluggish European economy and global headwinds. Management continues to see a challenging revenue environment in 2016, specially post Brexit.
Also, while the company expects to settle significant cases this year, litigation headwinds are not likely to ease any time soon as the bank continues to grapple with numerous lawsuits and regulatory proceedings, in and outside Germany. Notably, Deutsche bank lost nearly 40% on the NYSE, year to date.
Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell). Some favorably placed stocks in the foreign banks include KB Financial Group, Inc. (KB - Free Report) , Banco Macro S.A. (BMA - Free Report) and The Bank of Nova Scotia (BNS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Deutsche Bank (DB) CEO Dismisses Commerzbank Merger Talks
John Cryan, chief executive officer of Deutsche Bank AG (DB - Free Report) brushed away rumors of a potential merger between Deutsche Bank and Commerzbank AG, the second largest bank in Germany.
Earlier on Wednesday, without specifying sources, a German magazine reported that Deutsche Bank had held discussions with Commerzbank about a possible merger. People familiar with the matter also stated about the merger talks between the two companies.
However, at the Handelsblatt banking summit held on Wednesday in Frankfurt, Cryan mentioned that he is not looking for any alliance and intends to shrink the company. Later, in an interview with the CEO of Handelsblatt newspaper, Cryan stated that the company is focused on its restructuring initiatives “to make our bank a bit smaller in order to make it a bit simpler”.
When asked about likely acquisitions in the U.S. or in the Asian region, Cryan replied, “Not any time soon. Probably not in the U.S.”
At the summit, Cryan urged for consolidation in the European banking industry as he observes that the fragmentation in the sector is affecting bank profits. He stated, “We need more mergers, at a national level but also across national borders”.
In the interview, Cryan noted, “If we look at Germany in particular – and I take Germany as an example – it hasn’t gone through that wave of consolidation that very recently Spain has seen. Italy seems to be moving in this direction, and France has already been through it. But in Germany, there are too many banks. That leads to very strong price competition, which is good for customers, but less so for the solidity of the banking system. So I think Germany should consider, particularly some of the smaller banks, in teaming up and investing in the modernization of the system”.
While Cryan is expediting its restructuring efforts, profitability of Deutsche Bank remains threatened by a stressed operating environment with negative interest rates, sluggish European economy and global headwinds. Management continues to see a challenging revenue environment in 2016, specially post Brexit.
Also, while the company expects to settle significant cases this year, litigation headwinds are not likely to ease any time soon as the bank continues to grapple with numerous lawsuits and regulatory proceedings, in and outside Germany. Notably, Deutsche bank lost nearly 40% on the NYSE, year to date.
DEUTSCHE BK AG Price
DEUTSCHE BK AG Price | DEUTSCHE BK AG Quote
Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell). Some favorably placed stocks in the foreign banks include KB Financial Group, Inc. (KB - Free Report) , Banco Macro S.A. (BMA - Free Report) and The Bank of Nova Scotia (BNS - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>