NEW DELHI:
Deutsche Bank
, Europe's once-dominant financial institution, threw in the towel on years of failed turnaround efforts and agreed to begin government-backed merger talks with Commerzbank.
By bowing to officials' desire to forge a durable German lender with global reach out of two troubled firms, Deutsche Bank's leaders are hardly putting their woes behind them - massive job cuts, political turbulence, a weakening European economy, US probes into its dealings with Donald Trump and a herculean integration, not to mention skeptical clients and investors, lie ahead if they reach a deal.
"I have consistently stressed that consolidation in the German and European banking sector is an important topic for us," Deutsche Bank CEO Christian Sewing said in a letter to employees. "We have to assess how we want to play a part in shaping it."
The companies confirmed the move to deeper discussions in statements on Sunday, capping months of speculation and behind-the-scenes talks with the finance ministry. Both firms have struggled to restore revenue growth after deep cuts to their investment banking units. An economic slowdown that has pushed back expectations for higher interest rates has added urgency to the situation.
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