Union bosses have warned Deutsche Bank’s top management that they will scupper the integration of Postbank, which it bought nearly a decade ago, if a merger with Commerzbank goes ahead.
Deutsche and Commerzbank started formal talks this month over a deal that would create the eurozone’s second-largest bank, with €1.9tn in assets and more than 140,000 employees.
While the German finance ministry is in favour of the merger, analysts and most large shareholders are sceptical of a deal that faces a number of hurdles and may be hard to turn into a success. Worker representatives make up half the supervisory boards of both banks and have unanimously rejected the merger. A senior Deutsche manager said he could not imagine any scenario under which unions would agree.
In a meeting with Deutsche’s deputy chief executive Karl von Rohr and its top retail banker Frank Strauss last Friday, Frank Bsirske, boss of the Verdi union, and other senior worker representatives threatened to terminate the Postbank talks if the Deutsche-Commerzbank deal goes ahead, according to two people familiar with the discussions.
Germany’s largest lender has so far spent more than €3bn on the integration of Postbank, which it acquired in several steps between 2008 and 2010.
By the end of the week, Verdi will also start limited walkouts at branches of both Deutsche and Postbank. Formally, the action is about demands for a 6 per cent pay rise and better working conditions. “But we can expect that the threat of a merger will motivate employees to protest,” said Jan Duscheck, another Verdi representative who sits on Deutsche’s supervisory board.
Deutsche declined to comment.
After abandoning a costly and protracted first attempt at integrating Postbank in 2015, Deutsche decided to carve out the retail bank and put it up for sale, only to backtrack on the decision in 2017.
The current plan is to fully merge Postbank and Deutsche’s retail banking operations and create a “bank for Germany” with joint assets of €275bn and more than 20m retail customers. Deutsche wants to lower annual costs by €900m by 2022. The bank expects to spend €1.9bn to do this.
Last year, Deutsche finished the legal process of merging the two retail businesses and named the unit’s senior management. However, less than a quarter of the targeted annual cost savings have been achieved so far.
Talks with unions about how to merge the day-to-day operations of the two retail banks started in January. Deutsche hopes to come to a conclusion over the integration of the head office functions by mid-2019 and wants to reach an agreement over operations and IT by the end of this year.
Deutsche has lowered its German retail banking headcount by more than 5,000 through natural attrition and voluntary redundancies and expects to reach agreement with unions about a further 2,500 job cuts this year.
In late 2017, it signed a legally binding commitment to refrain from involuntary redundancies until mid-2021 and offered generous redundancy packages.
A person briefed on Deutsche’s internal discussions told the Financial Times that the bank is still hopeful that the timetable will stay on track. But a union boycott could force Deutsche to abandon Postbank integration again.
“The bank would be more or less back to square one,” a senior union official said.
