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Commerzbank CEO hints at merging smaller German banks

Commerzbank CEO hints at merging smaller German banks

BERLIN: Commerzbank chief executive predicting a wave of mergers among Germany’s cooperative and savings banks.

Germany’s second biggest bank head Martin Blessing noted that there were still almost 2,000 banks in Germany, in contrast to about 20 in Spain.

Blessing told a business conference in Berlin I believe the consolidation will mostly obtain position within Germany and not in the private banking sector.

Blessing said he could imagine mergers between smaller banks and their owners, for example between regional Landesbanken and local savings banks or cooperatives.

Further he declined to comment on speculation that Commerzbank itself could be a takeover candidate, with French and Spanish banks seen as potential buyers.

Blessing said stress test results announced by the European Central Bank last month revealed weaknesses in Germany’s cooperative banking sector. The Landesbanken, jointly owned by Germany’s regional states and local savings banks, were among the worst casualties of the financial crisis and many are still struggling despite some downsizing and restructuring.