Deutsche Bank prefers its own shares to Commerzbank's
James von Moltke makes it clear that the potential acquisition of Commerzbank by Unicredit does not concern Deutsche Bank. „We are not waiting for a call from Berlin“, was the curt response of the CFO when asked if he could envision Deutsche Bank as the white knight in what the federal government considers an unfriendly takeover bid. Instead of contemplating mergers, Deutsche Bank aims to focus on its own strengths and the implementation of its strategy.
Dividend payout plans take priority
Among these goals is the ambitious dividend payout policy, which Deutsche Bank hopes will appeal to investors. Despite the setbacks caused by the Postbank debacle in financial planning, von Moltke made it clear that the target of returning a total of 8 billion euros to shareholders through dividend payouts and buybacks from 2021 to 2025 remains a priority. With cumulative capital of 3.3 billion euros already returned, the bank is on the right track.
Deutsche Bank has also submitted an application for another share buyback next year. In other words, Deutsche Bank clearly prefers its own shares to those of Commerzbank. A statement that one would no doubt expect from the leading player in the German banking industry.
Rejection of Commerzbank is not a smokescreen
At this point, it would also be extremely unwise to signal interest. An impending bidding war for Commerzbank would unnecessarily drive up the cost of entry. However, von Moltke is not just throwing up a smokescreen. Criticism of the Italians’ stealthy tactics is the sharpest weapon of the opponents of the takeover. Thus, with such a clear denial, he would undermine his own credibility should Deutsche Bank ultimately decide to enter the fray.
Unsuitable as a white knight
Moreover, Deutsche Bank would be ill-suited to act as a white knight for Commerzbank. This is not only due to the protests that accompanied the exploratory talks in 2019, but also because a merger would hardly be economically viable. Considering its need for improvement in competitive strength, it would likely look in the medium term for acquisition opportunities beyond Germany's borders. Moreover, CEO Christian Sewing is also trying to advance Banking Union and Capital Markets Union in his role as the President of the Association of German Banks.
