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Deutsche Bank and Commerzbank merger could threaten 30,000 jobs

In the short term, around 10,000 jobs will be under threat, said Jan Duscheck, board member with Deutsche Bank who is also a representative of German trade union Verdi.

As many as 30,000 jobs could be lost over the long term if the merger between Deutsche Bank and its rival Commerzbank takes place, a supervisory board member with Deutsche told German television news channel n-tv broadcaster on Monday.

Most of the jobs at risk are based in Germany, said Jan Duscheck, the board member with Deutsche who is also a representative of German trade union Verdi. In the short term, around 10,000 jobs will be under threat, he added.

‘In our opinion a possible merger would not result in a business model that is sustainable in the long term,’ said Mr Duscheck.

Both banks on Sunday confirmed talks about a merger, but the announcement was met with strong opposition from trade unions and some reservations from shareholders.

The announcement on the merger has, however, seen a rally in the stocks of both banks. Deutsche Bank was 4.15% higher while Commerzbank gained by 7.21% on Monday’s close.

The supervisory boards of both banks will meet on Thursday where the merger is expected to be discussed.

Struggling banks

The two banks currently employ 140,000 people worldwide, with 91,700 staff at Deutsche and 49,000 staff in Commerzbank.

The German government had pushed for the combination as it was concerned with the health of Deutsche, which has been struggling to generate sustainable profits since the financial crisis in 2008.

Commerzbank meanwhile, has 15% of its stake belonging to the government following a bailout.

Berlin has also long been looking for a reliable national-banking champion to support its export-led economy.

A merged bank would account for one-fifth of Germany’s retail banking market. It would also have roughly €1.8 trillion in assets, such as loans and investments, and a market value of around €25 billion.

A deal would mean the banks would have to raise billions in new cash, which could be hard for investors to stomach given the banks weak financial positioning.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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