Postbank eyes Europe as rivals mull consolidation
ELTVILLE, Germany, April 26 (Reuters) - Germany's big commercial banks are mulling merger options in the wake of the international financial crisis and keen foreign competition, with Deutsche Postbank (DPBGn.DE) eyeing a European solution.
The German retail banking head of Deutsche Bank (DBKGn.DE), Juergen Fitschen, said he would favour seeing the country's four big commercial banks -- Deutsche, Dresdner Bank, Commerzbank (CBKG.DE) and Postbank -- form two big groups that could better compete internationally.
"From my point of view, it would be desirable to bring it into the formula four equals two plus two, so that we would have two big retail banks in Germany that could then play a role on a European basis," Fitschen told a banking conference on Friday.
Remarks made at the conference, organised by the Financial Times Deutschland newspaper, were set for release on Saturday.
"We have to consolidate because our neighbours have all gotten much bigger," Fitschen said.
Reacting to Fitschen's comments, Postbank Chief Executive Wolfgang Klein made clear he was considering options beyond Germany's borders.
"Making two (banks) out of four is not a necessity," Klein said, adding he was looking at banking consolidation "thoroughly in a European context".
Deutsche Post DWPGn.DE is assessing what to do with its controlling stake in Postbank, Germany's biggest retail bank and a potential prize acquisition in the country's overcrowded and fragmented banking market.
Banks would have a lot of work ahead of them to overcome thin margins and low profitability, even in a consolidated market, Klein said.
"The financial market crisis will increase pressure for consolidation in the banking sector overall but it won't lead to revenue paradise tomorrow," Klein said.
Dresdner Bank Chief Executive Herbert Walter agreed. "German banking consolidation is a step in the right direction but it won't resolve the problem of international competition," he said.
Germany's commercial banks, hampered by tiny market shares in their home retail market, in which they compete with an array of public sector and cooperative banks, have been slipping down the league tables of the biggest global banks for years.
Dresdner's owner, insurer Allianz (ALVG.DE), unveiled plans last month to split the bank into two legal entities -- a retail bank and an investment bank -- to play a more active role in industry consolidation.
The move stoked the already hot speculation about possible constellations in the German banking sector.
Deutsche's Fitschen repeated on Friday that Germany's biggest bank aimed to grow organically worldwide but would consider acquisitions where it improved the bank's franchise.
Deutsche and Commerzbank have flagged interest in Postbank. Fitschen on Friday also said Deutsche would look at Citigroup's (C.N) retail operation in Germany if asked. (Reporting by Jonathan Gould, Additional Reporting by Patricia Nann; Editing by David Hulmes)
