Bulletin: As Commerzbank And Deutsche Bank Talks End, What Now For The Two Banks?

FRANKFURT (S&P Global Ratings) April 26, 2019--Yesterday's announcement from Germany's Commerzbank AG (A-/Negative/A-2) and Deutsche Bank AG (BBB+/Stable/A-2) that they have ended their early stage merger discussions shifts investor attention back to their original stand-alone strategies, which carry their own risks. As we discussed in "Commerzbank And Deutsche Bank Potential Merger Holds Promise Of Increased Efficiencies But Also Risks," published on March 18, 2019, domestic consolidation offered Commerzbank and Deutsche Bank some potential synergies. The two management teams have concluded that the overall business case was insufficiently strong. Although shareholders may be relieved that they have avoided the capital call that would likely have come with a deal, they have no immediate reasons for optimism, in our view. Both banks

...April 26, 2019 FRANKFURT (S&P Global Ratings) April 26, 2019--Yesterday's announcement from Germany's Commerzbank AG (A-/Negative/A-2) and Deutsche Bank AG (###+/Stable/A-2) that they have ended their early stage merger discussions shifts investor attention back to their original stand-alone strategies, which carry their own risks. As we discussed in "Commerzbank And Deutsche Bank Potential Merger Holds Promise Of Increased Efficiencies But Also Risks," published on March 18, 2019, domestic consolidation offered Commerzbank and Deutsche Bank some potential synergies. The two management teams have concluded that the overall business case was insufficiently strong. Although shareholders may be relieved that they have avoided the capital call that would likely have come with a deal, they have no immediate reasons for optimism, in our view. Both banks are now focused on their original stand-alone strategies, which form the base cases underlying our ratings. However, these have their own challenges,...

Bulletin