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Berlin approached UBS about buying Commerzbank stake - magazine
July 13, 2013 / 1:31 PM / 4 years ago

Berlin approached UBS about buying Commerzbank stake - magazine

BERLIN, July 13 (Reuters) - German Finance Minister Wolfgang Schaeuble has spoken to the chairman of UBS about the possibility of the Swiss bank buying the government’s remaining stake in Commerzbank, a magazine reported on Saturday.

Focus magazine, citing no sources, said Schaeuble had held exploratory talks with Axel Weber, a former Bundesbank chief who is now chairman of UBS, about the sale of the 17 percent stake in Germany’s second-biggest lender.

The finance ministry declined to say whether Schaeuble had spoken to Weber on the subject.

“It was always the goal of the government to limit to as short a time as possible the stabilisation measures introduced as a result of the financial crisis,” said a ministry spokesman.

“However, we do not know when the remaining shares of Commerzbank held by (German bank rescue fund) Soffin will be sold,” he added.

Commerzbank and UBS declined to comment on the report.

The German government bailed out Commerzbank in 2009 after the collapse of Lehman Brothers and ensuring financial turmoil drove a number of major European banks to the brink of collapse.

It originally bought a 25 percent stake and injected 16.4 billion euros worth of non-voting debt-equity hybrid instruments, known as silent participations, to avoid ending up with a stake of around 80 percent.

Berlin has said in the past it wants to avoid booking a loss on its Commerzbank investment. However, to achieve that it must wait for Commerzbank’s share price to increase to over 30 euros before selling.

Commerzbank’s shares closed at 5.96 euros on Friday.

The government’s holding was diluted to 17 percent when it did not participate in a capital increase earlier this year that gave Commerzbank the funds to pay back the remainder of the 16.4 billion euros.

Some analysts say if Berlin had wanted to sell its stake to UBS or another bank, it would have made more sense to do so while it held a 25 percent stake that gives it substantial control over the bank as a blocking minority.

The move to relinquish that blocking minority has made it easier for rivals to buy Commerzbank, but Chief Executive Martin Blessing has said he expects no rapid sectoral consolidation due to a climate in which regulators prefer smaller banks.

Commerzbank’s stock has been under pressure in the last couple of weeks. One reason has been speculation that it might be forced into fire sales of some of its ship portfolio while ratings agency Moody’s has also commented negatively on the bank’s prospects.

Last year, Commerzbank said it planned a push into corporate banking in Switzerland to fill a gap in services for medium-sized companies. (Reporting by Sabine Seibold and Caroline Copley in Zurich; Writing by Madeline Chambers and Arno Schuetze; editing by Patrick Graham)

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