German Bank Consolidation Just Getting Started: Sparkassen Chief
(Bloomberg) -- A plan to consolidate Germany’s fragmented public-sector banking market through a series of mergers is just getting started, according to Helmut Schleweis, the head of the German savings banks association.
The small saving institutions behind several big regional lenders are considering combining them in what could be the sector’s biggest deal in eight years, Bloomberg reported last year. Schleweis, the architect of the plan, has faced resistance from some of the owners of the regional banks, or Landesbanks.
The talks “haven’t failed because we haven’t held negotiations about the issue yet,” Schleweis said Monday at an event in Frankfurt. "One central savings bank institute is sufficient for the savings banks in Germany."
The plan discussed last year could create Germany’s second-largest bank with nearly 700 billion euros ($799 billion) in assets. That’s considerably more than Commerzbank AG, Germany’s No. 2 listed lender. The city of Stuttgart, which owns 19 percent in Landesbank LBBW, called the plans an "unpredictable adventure”.
According to Schleweis, cost savings can be achieved with just one central wholesale lender for the country’s savings banks, or Sparkassen. “Four different branches of German Landesbanks in New York, for example, aren’t necessary,” he said.
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