Commerzbank and Deutsche Bank confirmed this week that they were in discussions about unification. This move by both the firms prompted labor union distresses about probable job losses and queries from analysts regarding the merits of a combination. Germany’s two biggest banks published short statements after separate meetings of their management boards, an individual with knowledge of the subject said. He indicated a quickening of pace in the unification process, although both additionally warned that an agreement was far from to be assured.
In its statement, Deutsche said that the management board of Deutsche Bank has decided to assess strategic alternatives available considering arising opportunities. Christian Sewing, Chief Executive, Deutsche Bank, told staff members that Deutsche is still focused to be an international bank with a strong capital markets business with a global network. Sewing proclaimed that many factors might still stop this merger.
On a similar note, Deutsche Bank AG came into the news as it disclosed that it is introducing a unit in India. Reportedly, this unit is intended to purchase and reorganize soured debt. This follows as the unit looks for profit from an exceptional bad-loan cleanup in the nation with one of the nastiest non-performing loan ratios in the world. The information was given by individuals known with the subject said.
The German bank experienced the requirement to have its own asset reconstruction firm to purchase and reorder non-performing credit. This need came as the present Indian rules limit overseas investors from purchasing soured loans straight from lenders in the country, the individuals said. At the same time, the Bank of America Corp. is considering to introduce a comparable unit, other individuals known with the subject said. Over 29 ARCs have been introduced in India following parliament, in 2002, passed a law. This law was intended to assist banks to clear their balance sheets by selling bad loans.