Germany may be inching closer to having a new No. 2 lender
A consolidation of Germany's fragmented banking market is very much in the cards, following months of speculation.
The small saving institutions behind several big regional lenders — known as Landesbanken — are considering merging them, the head of the country's savings banks association said. That's after Bloomberg in October wrote about a plan that would see regional lenders Helaba and NordLB combine in a first step, before merging with other companies in the sector.
"Five Landesbanken is too many," DSGV President Helmut Schleweis said in an interview Wednesday. "We need to do more together within the group to strengthen the businesses."
The banks in question had combined assets of about 682 billion euros ($776 billion) at the end of last year, according to data compiled by Bloomberg. That's considerably more than Commerzbank, Germany's second-largest publicly traded listed lender.
Even if an agreement is reached between the regional lenders, it may take years to implement a deal. "We shouldn't rush things," Schleweis said. "It's more important to find a solution that satisfies all parties."
NordLB needs to raise about 3 billion euros ($3.4 billion) to replenish its capital. On Sunday, it narrowed the group of bidders seeking a stake in the ailing German bank to three from four.
Schleweis himself has plenty of experience with mergers. As head of the local savings bank in Heidelberg, he engineered a merger to create a lender with a balance sheet of around 7.5 billion euros and was also involved in three other deals.