Christian Sewing, the chief executive of Deutsche Bank, believes there is a strong case for a merger with rival Commerzbank, according to a person with direct knowledge of his thinking, Trend reported citing Reuters.
Sewing’s stance sets the stage for a showdown with unions fearing massive job cuts and some skeptical investors. The supervisory boards of both banks meet on Thursday.
Sewing sees multiple benefits of a merger, including “clear” dominance in its home market, scale, and shared technology costs, the person said.
Deutsche’s CEO also believes that a combined entity would improve the cost of funding, with “the best funding ever”, the person said. Jobs would be cut with or without a merger, the person said.
Deutsche Bank and Commerzbank declined to comment.
according to other people with knowledge of his thinking.
The latest comments also contrast with the neutral tone set in a letter to employees on Sunday after both Deutsche and Commerzbank confirmed talks. Sewing said then that many factors could still prevent a merger.
Deutsche Bank would not have entered talks if the bank expected negotiations to fail, said a second person with knowledge of Sewing’s thinking.
The powerful Verdi labor union, which sits on the supervisory boards of both banks, has voiced fierce objections to a merger, saying that as many as 30,000 jobs are at risk over the long term.
Both banks currently employ 140,000 worldwide. A spokeswoman for Verdi said on Thursday that the union’s position hasn’t changed.