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Deutsche Bank and Commerzbank end talks on historic combination

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Christian Fernsby |
Christian Sewing
Europe   Deutsche Bank CEO Christian Sewing

"A few weeks ago we started talks with Commerzbank to consider a combination of our two banks," said Deutsche Bank CEO Christian Sewing.

"We have consistently said that we want to play an active role in the consolidation of the European banking sector. For that reason, we decided to evaluate this option thoroughly.

"Our discussions with Commerzbank were very intense and took place in a constructive and mutually respectful atmosphere. However, we have now decided not to pursue this possibility further. How did we reach this conclusion?

"We were always clear that we needed to be convinced that any potential combination would generate higher and more sustainable returns for shareholders and allow us to enhance our value proposition to clients.

"After thorough analysis, we have concluded that this transaction would not have created sufficient benefits to offset the additional execution risks, restructuring costs and capital requirements associated with such a large-scale integration.

"And as our preliminary first quarter results demonstrate, we are moving in the right direction under our own steam. In a very difficult financial market environment, we grew net income by more than 65 percent year-on-year to approximately 200 million euros. This is after booking full-year 2019 bank levies of around 600 million euros in the quarter. If the bank levies were distributed evenly over the four quarters of the year, we would have achieved a post-tax return on tangible equity of around 3.6 percent in the first quarter, close to our 2019 target of above 4 percent.

"Furthermore, we continued to deliver on our cost targets."

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