By Geoffrey Smith
Investing.com – A flood of news from the banking sector stands out through a generally weak start to Thursday on Europe's stock markets.
Germany's two largest private banks, Deutsche Bank (DE 🙂 and Commerzbank (DE 🙂 have canceled merger negotiations, under pressure from shareholders, regulators and unions.
The merged merger was never the preferred option for one of the banks, both of which are more concerned with trying to reverse chronic unprofitable operations. Negotiations were largely due to political pressure from the German Ministry of Finance to ensure the survival of a national master.
Such logic convinced no regulators, who feared the creation of a new bank that was too big to fail would hold German political decision makers, or unemployed unions from both institutions, who feared up to 30,000 work cuts.
Deutsche was up 3.2% on relief after escaping the nightmare of such a politically charged merger, even though the shares & # 39; Valuation at only 0.24 times the book value shows that it still faces major challenges in the future. Commerzbank's stock is down 2.0%, reflecting the loss of a potential buyer.
Nevertheless, it is not impossible that a bidding war of different types may still appear to the bank: Italias Unicredit (MI 🙂 SpA and Dutch based ING AS 🙂 have both shown interest, according to recent reports, and BNP Paribas (PA 🙂 had also looked at Commerzbank a few years back. None of these shares react with any enthusiasm to the idea that they are now more likely to get it.
Older Places, Barclays (LON 🙂 was down 2% despite a generally decent set of results noticeable to the investment bank division, again being better than many US rivals in the turmoil in the first quarter. It should strengthen the position of CEO Jes Staley, who will meet a proposal for next week's shareholders meeting to admit the activist investor Edward Bramson to the board. Bramson is pushing for the investment bank to be scaled back drastically.
At the same time, the Royal Bank of Scotland's (LON 🙂 shareholder meeting ahead of today of news that CEO Ross McEwan will go down. He will still serve next year. During McEwan, RBS has returned to profitability and settled most of the management-related scandals that plagued it for the past decade.
None of this stops a surge of profits in markets across the continent, but the reference was down 1
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