Deutsche Bank, Finance Ministry Held 23 Talks as Woes Worsened

13 Jan 2019, 05:34 AM IST

(Bloomberg) -- As Deutsche Bank AG was pulled deeper into a downward spiral last year, its executives engaged almost two dozen times with German Finance Ministry officials.

Representatives of Germany’s largest bank had 23 discussions with officials since the new government was formed in March, most of them with Deputy Finance Minister Joerg Kukies. Chief Executive Officer Christian Sewing and supervisory board Chairman Paul Achleitner each had six exchanges, according to a letter from the Finance Ministry that was seen by Bloomberg.

The frequency of the talks, which included discussions of “strategic options,” highlights the close involvement of Berlin as Deutsche Bank struggles to reverse years of losses and declining revenue. The meetings started in mid-May, after a tumultuous leadership change that fanned concern about its strategy. The shares lost half their value last year, stoking speculation about a merger with Germany’s second-largest bank, Commerzbank AG, which is still part-owned by the government.

The government would back a potential merger between the two banks, people familiar with the matter have said. It has recently discussed plans with executives including Sewing how to assist in a potential merger, Bloomberg News reported last month.

“The German government is open to economically sensible options,” the Finance Ministry wrote. The letter, reported earlier by Frankfurter Allgemeine Zeitung, was a response to questions from a member of Parliament who had inquired what the government’s stance was regarding a potential merger of the two lenders.

Representatives for Deutsche Bank and the Finance Ministry declined to comment.

Other executives participating in the meetings include Chief Regulatory Officer Sylvie Matherat, Chief Financial Officer James von Moltke, investment banking head Garth Ritchie and Asia head Werner Steinmueller, according to the letter.

To contact the reporters on this story: Birgit Jennen in Berlin at bjennen1@bloomberg.net;Steven Arons in Frankfurt at sarons@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Christian Baumgaertel