Shares in two banks reached new highs in 2019: Deutsche Bank went up 3.2 percent, while Commerzbank rose 3.4 percent.
Germany’s Dax increased 0.1 percent, and the benchmark Euro Stoxx 600 jumped 0.92 points, or 0.2 percent, to 382.02. At the London Commodity Exchange, the FTSE index was up 0.6 percent.
Both banks finally admitted that neither of them can save itself by its own efforts. In a message to employees, Deutsche Bank CEO Christian Sewing mentioned the merger very carefully. Obviously, it will be difficult to lay off enough employees of German banks. But it will be even harder to realize the extra layer of IT complexity to Deutsche Bank. The bank’s last IT head called them the weakest ever seen.
Analysts say that the most influential shareholder in the new bank can become the very government that has been developing its own banking market for years in favor of state-owned and cooperative banks that have priorities than profit. The merged bank will never be allowed to go bankrupt for practical purposes. In the short term, that would be more important than costs and support Germany’s investment business.
Both banks’ stocks are currently trading at around a quarter of their book value.
