Some of the largest publicly owned banks in Germany mulling a merger to shore up their position in a market suffering from overcapacity and intense competition. News reports suggested that the initiative, which could create the nation’s second-largest bank, is aimed at protecting the country’s weakened Landesbanks, which are owned by federal states and local savings banks. Under the plan, Helaba and NordLB would combine in a first step and then merge with DekaBank and LBBW at a later stage. Deka is a central institution for the savings banks, or Sparkassen, that acts mainly as an asset manager. The proposed merger would be the biggest among German banks since 2010. The merger could create a bank with nearly 700 billion euros ($796 billion) in assets, bigger than Germany’s second-largest listed bank Commerzbank.
