German govt denies any provision for Deutsche-Commerzbank merger

German Finance Minister Olaf Scholz said on Wednesday that he had not made any provisions for costs related to a possible merger of Deutsche Bank and Commerzbank in his budget plans. Deutsche Bank and Commerzbank on Sunday confirmed that they were in talks about a merger, although both cautioned that a deal was far from a foregone conclusion.

Scholz said the German government would keep itself informed about the merger talks but any decision would need to be taken by the banks themselves. He reiterated that Germany needed a strong banking sector.

The German government had earlier pushed for a combination given concerns about the health of Deutsche, which has struggled to generate sustainable profits since the 2008 financial crisis. The government, which holds a stake of more than 15 per cent in Commerzbank following a bailout, wants a national banking champion to support its export-led economy, best known for cars and machine tools.