Germany’s biggest bank, Deutsche Bank, is currently working to prepare for a wave of mergers within the banking sector, according to its finance chief on Tuesday, with this being a signal of the bank’s potential change in tone after primarily focusing on its turnaround.
Policymakers have repeatedly claimed that Europe’s ailing banking sector needs to consolidate, yet regulatory and political obstacles have hindered such big deals for the last decade.
However, this year has seen major domestic bank links between banks in Italy and Spain, as bankers continue to say that regulators are now more willing to allow deals to happen.
Deutsche Bank’s chief financial officer James von Moltke stated during a financial conference that the bank supported the “appropriate or valid industrial logic” of mergers among the region’s larger banks.
He added that “For Deutsche Bank, we’ve been very focused on executing on our own strategy, and we think that strategy would prepare us to engage in merger activity when the time comes and the right opportunities arise”.
He also said that they “are expecting this wave”, yet are also working very hard in order to prepare for what is to come on their side.
These statements were made after growing speculation surrounding a potential deal in Switzerland.
The board of UBS, which held brief tie-up talks with Deutsche last year, gathered together last week in order to discuss a way forward in terms of strategy.
Staff at the lender recently assessed a potential merger with Credit Suisse, with the executives of the Swiss bank also expecting consolidation.
As recently as last year, Deutsche bank called off merger talks with domestic rival Commerzbank, with von Moltke stating that such mergers “frankly present some challenges”.
Raimund Roeseler, who is in charge of banking supervision at Germany’s financial regulator BaFin, claimed that whilst mergers could be helpful, yet they are not always the solution to problems.
During a separate banking conference, Roeseler stated that “Do we really believe that the problems of the German banking market would be solved if we only had 700 or 500 banks instead of 1,400? I don’t think so”.