Business

Deutsche Bank Turnaround is Running Out of Steam According to Sources

The trouble German bank has been in the process of turning around their business for close to half a decade, but no discernible progress seems to have been made. According to a Reuters report, people close to the developments have said that time is fast running out for the German giant to turn it around on its own and it is likely that Deutsche might have to merge with rivals Commerzbank.

Deutsche Bank, which has been one of the pillars of German and indeed global finance, for decades has been in the doldrums over the recent years. Even until a few months ago, key stakeholders including executive, government authorities and big investors had been of the opinion that the bank should get more time to turn things around. However, that opinion has now changed, and many stakeholders’ stand about the bank has hardened.

One of the bank’s key investors is waiting keenly for the earnings reports of both Deutsche and Commerzbank in the next two weeks. They wish to see the reactions of the market to the earnings reports and following that they would take a call on whether there is a need for a merger. The source close to this investor stated that if the German government were keen for a merger, then they would not oppose it. The possibility of a merger between the two banks has gained ground during the time of German Finance Minister Olaf Scholz, and apparently, the finance minister’s entourage has met with executives from both banks. Scholz has frequently spoken about the need for strong banks, and a merger is something that would be consistent with his public stance.

On the other hand, sources close to Deutsche Bank have stated that the bank was completely focused on turning around its business. The source stated that the bank wanted to achieve long term profitability and added that it was ‘completely false’ that a merger with Commerzbank (or any other bank for that matter) is the only way out.

Deutsche remains one of the biggest players in the global financial system but the last three years have been nothing short of disastrous for the Frankfurt-based bank. They have not only suffered from losses and downgrades but have also been involved in scandals. In addition to money laundering scandals, the bank had also been fined $7.2 billion for involvement in the mortgage market affair.

Timothy Cox
About author

Timothy Cox recently started working with FinanceKnown as a news writer. He covers news stories covering from breaking news, finance, business and economy. He holds master’s degree in journalism. He has a passion for film, news and photography. In his free time, he travels a lot with a camera.
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