Several media reports over the weekend suggested Deutsche Bank CEO Christian Sewing had dropped his opposition to the deal. Sewing was reportedly forced to reconsider his stance following investor pressure over the bank’s declining performance.
The German government, which still owns 15 percent of Commerzbank, is understood to be backing a tie-up between the country’s two largest lenders. Reuters reported that Berlin is pushing for a deal, even though it could cause a multi-billion euro financial hole, because it would force the re-valuation of the lenders’ assets.
Deutsche shares were up by over 2 percent in early deals Monday, while Commerzbank was up nearly 4 percent. Over a 12-month period, shares of both companies are down by around 40 percent.
A banking industry source with knowledge of the matter, who preferred to remain anonymous, told CNBC there’s not massive support for the merger within Deutsche Bank. “The general feeling is that the merger is not a great idea since Commerzbank doesn’t have the same amount of credibility on the street as Deutsche Bank when it comes to clients and this can impact future trades.”
Another concern is the German government’s stake in Commerzbank. “There is skepticism that a merger could mean a bigger say from the government in (the) bank’s dealings,” the source added.
A spokeswoman from Commerzbank declined to comment. Deutsche Bank did not immediately respond to a CNBC request for comment. However, both the companies declined to comment on the merger of a prospect to Reuters.