UPDATE 1-Deutsche Bank CEO sees strong case for merger with Commerzbank - source

Christian Sewing, the chief executive of Deutsche Bank, believes there is a strong case for a merger with rival Commerzbank, according to a person with direct knowledge of his thinking. Sewing's stance ahead of Thursday's meeting of the supervisory board of Germany's largest bank sets the stage for a showdown with unions fearing massive job cuts.

Sewing sees multiple benefits of a merger, including "clear" dominance in its home market, scale, and shared technology costs, the person said. Deutsche's CEO also believes that a combined entity would improve the cost of funding, with "the best funding ever", the person said. Jobs would be cut with or without a merger, the person said. Deutsche Bank and Commerzbank declined to comment. The position marks a shift in Sewing's position. In past months, he has urged patience, preferring to focus on internal restructuring before taking on a big project, according to other people with knowledge of his thinking.

The comments also contrast with the neutral tone set in a letter to employees on Sunday after both Deutsche and Commerzbank confirmed talks, Sewing said then that many factors could still prevent a merger. Deutsche Bank would not have entered talks if the bank expected negotiations to fail, said a second person with knowledge of Sewing's thinking.