B2B Payments

Deutsche Executive Makes The Case For Commerzbank Merger

Deutsche Bank

Deutsche Bank’s head of global transaction banking is making the case for the financial institution’s proposed merger with Commerzbank, aiming to quell concerns that the deal would lead to a decline in service quality.

Reports in the Financial Times on Sunday (March 31) said Deutsche Bank‘s Stefan Hoops spoke at the FI’s headquarters in Germany to address concerns over a deal, particularly as it relates to the impact on corporate services and lending.

“Clearly, there are plenty of German corporates that both us and Commerz lend to and any treasurer would think, ‘will their appetite change?'” he said. “What I can tell you is, it won’t. We don’t have any large-lending limit issues; we have plenty of room to lend to pretty much anybody.”

The publication noted that the proposed merger has raised concerns that joint corporate customers of the banks might be pushed into switching providers as a result of overexposure of the merged bank to any one business. Rival institutions have already moved to capitalize on that fear, attempting to encourage corporates to switch to them since Deutsche and Commerzbank first began merger talks just weeks ago.

“It’s quite important for corporates to understand that one plus one will equal two, even though some ‘helpful’ French or U.S. banks hope that’s not the case,” added Hoops, who said that any joint corporate customers would “get twice the attention” from a merged entity.

Apart from a merger with Commerzbank, Hoops told the publication that he is also focusing on doubling profits for Deutsche’s corporate financial services operations, which include payments, cash management and trade finance. He hopes to propel profits at the FI’s global transaction banking unit from $1.12 billion to $2.24 billion over the next 30 months, reports said.

Yet the publication noted it could be difficult, considering the division’s 13 percent revenue decline since 2017.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.