Finance - German Banks Balk At Merger
Germany's Deutsche Bank and Commerzbank have backed out of merger talks, saying the deal would have been too risky.
The German government had been supporting a merger to create a national champion in the banking industry. But both banks said the deal would not have generated "sufficient benefits" to offset the costs of the deal.
"Deutsche Bank will continue to review all alternatives to improve long-term profitability and shareholder returns," the institution said in a statement.
While Commerzbank chief executive Martin Zielke said it had "made sense" to consider the deal, he came to agree with Deutsche Bank that the potential benefits of a tie up did not justify the extra costs and risk.
Many others opposed a merger, arguing that merging the two big banks would have just created one large bank with problems. Unions also opposed a merger, fearing that at more than 10,000 jobs would be cut.