[an error occurred while processing this directive]
BBC News
watch One-Minute World News
Last Updated: Friday, 16 January, 2004, 09:58 GMT
Commerzbank merger plan 'fails'
Commerzbank branch
Commerzbank's pensions freeze has caused outrage in Germany
Commerzbank's plans to merge with rival German bank HVB have failed, according to a report in the Financial Times.

The paper said Commerzbank's move had been blocked because of the controversy surrounding the bank's decision to freeze staff pensions.

Commerzbank declined to comment on the newspaper report, which said the merger collapse was a blow for the bank's Klaus-Peter Mueller.

His pensions decision has been widely attacked by most German politicians.

Mr Mueller is a well known member of the right of centre Christian Democratic Union, but even leading lights in that party have been calling for his resignation after the pensions issue was revealed last week.

Over-banked

One dubbed him "an ugly capitalist", after Commerzbank was forced to admit it will be ending pensions contributions for its 26,000 German workers at the end of 2004.

Mr Mueller had wanted to become chief executive of the merged company, but with staff members making up half of each German bank's supervisory board, it is thought inevitable that those on HVB's board would have rejected a merger given the pensions controversy.

Both Commerzbank and the larger HVB have been seeking mergers for some time, with the German banking sector being long recognised as over-crowded and in need of consolidation.

HVB chief executive Dieter Rampl said the same last week.

"HVB will play an active role in this consolidation process," he said.

Until the pensions issue arose, Commerzbank was thought to be have been an obvious target for HVB because of its low valuation as a result of poor profitability.




SEE ALSO:
Commerzbank scraps pension scheme
06 Jan 04  |  Business
Big loss hits German bank
12 Nov 03  |  Business
Red ink for German bank giant
05 Feb 03  |  Business
Battered banking giant slashes jobs
12 Nov 02  |  Business
Tough times for German banks
31 Jul 03  |  Business
Cash-call fears hit HVB shares
27 Feb 03  |  Business


RELATED INTERNET LINKS:
The BBC is not responsible for the content of external internet sites


PRODUCTS AND SERVICES

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia
UK | Business | Entertainment | Science/Nature | Technology | Health
Have Your Say | In Pictures | Week at a Glance | Country Profiles | In Depth | Programmes
Americas Africa Europe Middle East South Asia Asia Pacific