MUNICH (Reuters) - Germany’s Commerzbank on Wednesday played down the prospects of an immediate takeover approach by a foreign bank following failed merger talks with Deutsche Bank.
Commerzbank’s finance chief Stephan Engels, speaking to journalists after a sharp fall in first-quarter profit, said he didn’t hear anyone knocking at the door, as he put it.
Both Italy’s UniCredit and Dutch ING Groep have expressed interest in Commerzbank, which is Germany’s second largest lender and 15 percent owned by the government, sources have said. Unicredit and ING have declined to comment.
A strategy of continuing as a standalone bank remains an alternative, Engels said. “It was before and it is now. I can’t say if it always will be.”
Talks with larger rival Deutsche Bank ended last month after six weeks of negotiations. The banks attributed the failure to the risks of doing a deal, restructuring costs and capital demands.
German government officials, led by Finance Minister Olaf Scholz, had pushed for a tie-up to create a national banking champion and end questions over the future of both banks, which have struggled to recover since the financial crisis.
Chief Executive Martin Zielke told staff during the merger talks with Deutsche that Commerzbank does not have the market share for costly investments, fuelling speculation of an alternative tie-up if talks fell through.
Doing nothing is “not an option”, Zielke has told his staff, 82 percent of whom were against a merger in an internal survey.
Commerzbank is working on a new strategic plan that it will present later this year.
“We are addressing the right issues with our strategy,” Zielke said in a statement on Wednesday. The bank has been focusing on shifting its processes to a digital model.
Commerzbank posted a 54 percent drop in net profit in the first quarter, blaming a higher tax burden for the decline.
Net profit of 120 million euros ($134.4 million) was slightly above the 115 million euros expected by analysts in a Reuters poll. It fell from 262 million euros a year earlier.
Commerzbank shares slipped 1.3 percent to 7.64 euros by 1040 GMT.
Revenues also declined to 2.156 billion euros in the first quarter, from 2.217 billion a year earlier. But the bank forecast that underlying revenues would be higher in 2019 than in 2018.
Engels said business remains on a positive track.
“The challenge now is to build on this progress,” he said.
Reporting by Tom Sims and Hans Seidenstuecker; Additional reporting by Gianluca Semeraro in Milan and Toby Sterling in Amsterdam; Editing by Michelle Martin and Keith Weir