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MUNICH - Three of Germany's largest banks said Thursday that they are in early talks toward creating a unified mortgage bank.

"Commerzbank, Dresdner Bank, and Deutsche Bank are in first discussions to find enough common ground to enter into negotiations about merging their mortgage businesses," said Klaus-Peter Mueller, chief executive officer of Commerzbank AG, told CNBC in an interview that was scheduled to be broadcast Thursday evening.

His counterpart at Deutsche Bank AG, Rolf-Ernst Breuer, noted on the sidelines of a banking conference in Munich that the banks are "exchanging thoughts." Bernd Fahrholz, chief executive officer at Dresdner Bank AG, confirmed the preliminary talks as well.

The three CEOs stressed that the talks are only exploratory and are being conducted on a bilateral basis.

Rival Bayerische Hypo-und Vereinsbank AG, whose roots are in mortgage banking, is already strong in the business and isn't participating in the talks. It is Germany's second-largest bank, after Deutsche Bank. Dresdner is No. 3, and Commerzbank is No 4.

The mortgage market in Germany has held up strongly as other parts of the banking sector have weakened. The move by the three banks looks to be an effort to reproduce the success Hypovereinsbank has had in the mortgage business.

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