Deutsche Bank preparing for wave of industry deals

FRANKFURT (Reuters) – Deutsche Bank is working hard to prepare for a wave of mergers in the banking sector, its finance chief said on Tuesday, signalling a potential change in tone at Germany’s biggest bank which has been focusing mainly on its turnaround.

Policymakers have long said Europe’s ailing banking sector needs to consolidate, but regulatory and political obstacles have hindered big deals over the past decade.

This year, however, has seen major domestic bank tie-ups in Italy and Spain, with bankers saying regulators are now more willing to wave deals through.

Deutsche’s chief financial officer James von Moltke said the bank supported the “appropriate or valid industrial logic” of mergers among the region’s larger banks.

“For Deutsche Bank, we’ve been very focused on executing on our own strategy, and we think that strategy would prepare us to engage in merger activity when the time comes and the right opportunities arise,” von Moltke said at a financial conference.

“So we are expecting this wave but we are also working hard to prepare on our side,” he said.

The statements come amid growing speculation about a potential deal in Switzerland.

The board of UBS, which held brief tie-up talks with Deutsche last year, gathered last week to discuss strategy. Staff at the lender recently examined a potential merger with Credit Suisse, whose executives also expect consolidation.

It was only last year that Deutsche called off merger talks with domestic rival Commerzbank. Von Moltke said domestic mergers “frankly present some challenges”.

Raimund Roeseler, who oversees banking supervision at Germany’s financial regulator BaFin, said mergers could be helpful, but were not always the solution.

“Do we really believe that the problems of the German banking market would be solved if we only had 700 or 500 banks instead of 1,400? I don’t think so,” he said at a separate banking conference.

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