It's been a week to forget for Deutsche Bank after Citigroup CEO dismisses merger talk
- Deutsche Bank’s shares drop after Citigroup CEO dismisses the chance of a merger between the two institutions.
- Deutsche’s shares were hit earlier this week after it was embroiled in the ongoing Danske Bank money laundering scandal.
- Follow Deutsche Bank’s share price here.
It’s been a rollercoaster week for Germany’s biggest lender, Deutsche Bank, which ended on a sour note after Citigroup’s CEO dismissed talk of a merger between the banks in a German business publication.
Michael Corbat reportedly told German business publication Manager Magazin that there was too much “overlap” between Citigroup’s and Deutsche Bank’s businesses, and that a takeover based purely on cost savings wasn’t a good idea.
Deutsche Bank shares dropped 1.5% in Frankfurt Thursday after the interview, and closed Friday down 0.7%. The bank’s shares started the year at €15.88, but now trade at €8.12, down a remarkable 48.6%.
Takeover or merger talk is nothing new for Deutsche with talks of a tie up with another lender often mentioned. Most recently, rumours circulated that the bank had internally discussed merging with Swiss bank UBS. Deutsche denied that rumour strongly, with CFO James von Moltke calling it a “fiction of the press.”
It’s the second time in a week that the bank has been hit. The first came after it was named as the bank at the centre of a $150 billion money laundering scandal centred on Danske Bank’s operations in Estonia. It’s alleged that Deutsche Bank processed a large chunk of money for Danske Bank from Russia into international markets via Tallinn between 2007 and 2015.
A Deutsche Bank spokesperson, in a statement to Reuters, said: “Our role was to process payments for Danske Bank. We terminated the relationship in 2015 after identifying suspicious activity.”
The bank is in the middle of a major cost cutting scheme but its third quarter net revenues were down 9% this year causing some concern amongst investors.
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