Commerzbank CEO Manfred Knof dampens speculation about a merger between his bank and Deutsche Bank.

When asked whether Commerzbank could once again sound out a merger with the industry leader in Germany, Knof told the news agency Reuters on Tuesday: "No, that is not our topic. I think that's always more of a topic for journalists and the media - but not for us." The CEO of Germany's second-largest bank added on the sidelines of a "Welt" business conference in Berlin: "Customers want independent private banks where they can actually get their business financed." Commerzbank is focusing on its 2027 strategy program, which is geared towards growth.

The two largest German banks had played through a merger in 2019, but then called it off in order to do their own homework first. Deutsche Bank CEO Christian Sewing and Knof, who has been in office since the beginning of 2021, have recently tried to get their banks back on track by cutting thousands of jobs and closing hundreds of branches in some cases. In the past, Knof has repeatedly emphasized that Commerzbank is doing well on its own two feet and underlined the bank's independence.

"INDEPENDENCE MEANS THAT WE ARE AN INDEPENDENT BANK"

When asked whether independence for him also meant that Commerzbank could also be the German business of a global bank, Knof told Reuters: "Independent means that we are an independent bank and have freedom of action, which is in the interests of our customers." All employees and he himself stand up for this every day. "That is also the message we get from our customers, from German SMEs," emphasized the 58-year-old. "Our customers want to have an independent private German bank that accompanies SMEs abroad and finances their investments."

Knof did not reveal whether he would seek a second term as Commerzbank CEO. "We'll discuss that when the time comes." That is not on the agenda at the moment. "I will continue to concentrate on implementing our strategy."

KNOF SKEPTICAL ABOUT THE ECONOMY - GROWTH ONLY WITH REFORMS

The manager was cautious about the economy. "Fortunately, German companies and SMEs are very resilient." However, the economy is currently sluggish and there are "no signs of momentum". So far, he has noticed little impact on his own business. "We are not seeing a wave of loan defaults across the board," said Knof. "However, we are feeling the reluctance of companies to invest." The investment backlog in the German economy is growing every day.

After the economy shrinks by 0.3 percent in 2023, there will probably be no positive gross domestic product (GDP) figures in 2024 either. Commerzbank is expecting a slight decline in GDP of less than half a percent. "This is not a deep recession," said Knof. "I only expect to see growth momentum again when the structural issues are tackled, and there are plenty of them."

Customers also reported concerns and fears on a daily basis. "We need an agenda for the future that addresses the major issues facing the economy: Digitalization, energy, infrastructure, education." Such an agenda for the future must be communicated well and involve as many people as possible. This could also help to ease the brakes on investment in Germany. "That would help us to make progress in the green and digital transformation," said Knof. There is a "huge social consensus that we need such a transformation". But at the same time, it is difficult to implement this. The green and digital transformation will only succeed "if we mobilize significantly more private capital now."

(Edited by Ralf Bode. If you have any queries, please contact our editorial team at frankfurt.newsroom@thomsonreuters.com)

- by Klaus Lauer