FRANKFURT Dec 21 Commerzbank is in no
rush to pay back the German government's remaining "silent
participation" or non-voting capital that the lender received in
the financial crisis, its chief executive said.
"We will pay interest on the government's silent
participation and therefore there is no pressure to pay it
back," Martin Blessing told Sueddeutsche Zeitung newspaper in an
Commerzbank said in November that it expects to pay interest
on the non-voting capital this year, after years of not paying
because it had failed to turn a full-year profit under German
HGB accounting standards.
"In any case, the silent participation is only recognised as
equity capital until the end of 2017. At that point at the
latest, it doesn't make economic sense anymore," Blessing told
the paper, referring to the phase-out of silent participations
under new Basel III capital rules for banks.
The German government bolstered Commerzbank with billions of
euros in aid in the financial crisis and still holds a 25
percent stake in Germany's second-biggest lender.
After paying back the lion's share of the government aid,
Commerzbank still has about 1.6 billion euros ($2.12 billion) in
so-called silent participation, on which it would expect to pay
nearly 150 million euros per year in interest.
However, Commerzbank has not had to pay interest so far
because under its agreement with the government, it is not
required to do so as long as it posts a loss.
Commerzbank has said it places a higher importance on
paying a dividend to shareholders before it repays the remaining
silent participation but sees a dividend payment as unlikely
before the 2014 financial year.
($1 = 0.7555 euros)
(Reporting by Jonathan Gould; Editing by Hans-Juergen Peters)