Deutsche Bank Chairman rules out European merger

Tuesday, 3 January 2017 00:30 - - {{hitsCtrl.values.hits}}

Reuters: Deutsche Bank Chairman Paul Achleitner has ruled out a European merger or a state bailout after the lender’s mortgage settlement with the U.S. Department of Justice, Frankfurter Allgemeine Sonntagszeitung reported.

The bank, Germany’s biggest, last week announced a $7.2 billion settlement with the U.S. Department of Justice over its sale and pooling of mortgage securities in the run-up to the 2008 financial crisis.

“The management board in principle looks at everything that could help the business,” Achleitner said in an interview with the weekly newspaper published on Sunday.

“At the moment, however, enthusiasm for a pan-European merger is muted as we have other priorities,” he said, when asked why Deutsche does not merge with Italy’s UniCredit or another lender.

Deutsche, which is trying to simplify its operations to make it more efficient, will keep its investment banking operations and ensure they comply with political and regulatory rules, Achleitner said.

Supervisors including Germany’s Bundesbank and the European Central Bank have called for more consolidation in the banking sector, saying there are still too many banks despite a steady fall in the number of branches since the 2008 financial crisis.

Higher capital requirements would put European banks at a competitive disadvantage to their U.S. rivals, Achleitner said, referring to efforts by the Basel committee of supervisors to tighten bank capital rules to avoid a repeat financial crisis.

“The global rules, established with the Basel accord, must not one-sidedly reflect the views of the Americans,” Achleitner said.