Germany 'not ready' to sell Commerzbank stake

Berlin has no plans to sell its stake in Commerzbank, an anonymous government source told newspaper Die Welt Thursday, belying reports a merger could be on the cards for Germany's second-biggest lender.

"We are absolutely not planning to sell. The losses would be too high," the unnamed person told the conservative daily.

Citing financial industry sources, Die Welt added that the government hopes to bring in 3.5 billion euros ($4.2 billion) when it eventually cashes out its 15.6-percent stake.

Commerzbank shares have roughly doubled in value over the past year but a sale at current prices would still represent a loss for the German taxpayer. The stock needs to make a fresh bound of more than 50 percent, to around 18 euros, for the state to make a profit.

The shares lost 0.2 percent to trade at 11.68 euros in Frankfurt around 1200 GMT, slightly underperforming the DAX index of German blue-chip firms.

Chancellor Angela Merkel's government bought its Commerzbank stake in 2009 as part of a rescue bid during the financial crisis, and remains the lender's largest shareholder.

Finance Minister Wolfgang Schaeuble told media last month the government did not intend to remain a shareholder indefinitely.

His comments sparked off a flurry of media reports about interest in the Frankfurt institution by foreign banks, with mooted buyers including France's BNP Paribas and Credit Agricole and Italy's Unicredit.

But Unicredit is in the throes of a restructuring and has ruled out takeovers, while BNP chief executive Jean Lemierre said earlier this month he is hunting for targets within France's borders.

Credit Agricole boss Philippe Brassac told business paper Handelsblatt only that his bank might "examine" a move on Commerzbank if the shares were up for sale.

Meanwhile, Berlin was rumoured last year to favour a merger with Deutsche Bank, but an arduous restructuring and anaemic profitability mean Germany's biggest lender lacks the strength for a takeover bid at present.

Source: AFP