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Commerzbank shares soar on rumours of a government sell-off

Shares in Germany's second-largest lender Commerzbank leapt Thursday as rumours that the government might soon sell off its stake set financial circles abuzz.

Published: 21 September 2017 12:40 CEST

Commerzbank shares soar on rumours of a government sell-off

Photo: DPA

The bank's stock briefly added more than 5.0 percent before falling back to gains of 3.65 percent by 0930 GMT, trading at €11.23 and topping the DAX index of blue-chip German shares.

Banking shares across Europe have benefited from the US Federal Reserve's slight tightening of monetary policy Wednesday, but Commerzbank has gained an additional boost from two days of rumours about its future.

A spokesman for Germany's finance ministry told journalists Wednesday the federal government would not hang on to its 15.6-percent stake in the lender – the legacy of a rescue during the financial crisis – forever.

But he added that “we want to achieve a good result for German taxpayers,” a far-off prospect as the value of Berlin's holdings remains well below the €5.1 billion it originally paid.

A financial source familiar with the matter suggested the government might have aimed to jolt some life into Commerzbank's valuation.

“Considerations are still in early stages… we do not expect a large move regarding the Commerzbank ownership in a short time period,” ING bank analysts commented.

German business magazine WirtschaftsWoche meanwhile reported Thursday that Berlin favours a future tie-up between Commerzbank and France's BNP Paribas, citing anonymous political and financial sources.

Shares in the French bank gained 1.8 percent to trade at €67.13 in Paris.

BNP declined to comment on the rumours when contacted by AFP.

The French lender is not the only rumoured Commerzbank suitor, with media reports that Italy's UniCredit had expressed interest to Berlin driving up the shares on Wednesday.

Repeatedly the subject of merger or takeover speculation, Commerzbank has for its part always insisted it wants to complete a massive restructuring before considering big new projects.

Swedish inquiry calls for state-run digital ID and low-risk bank accounts

“Too many people are stuck outside the digital system,” Anna Kinberg Batra, the former Moderate Party leader who led the inquiry said as she delivered the conclusions of her more than two-year inquiry on Friday. “Privately-run banks own central parts of the system and the government needs to get more involved.”

In the report, it notes that Sweden is one of only four EU states, alongside Cyprus, Greece, and Romania, which lacks a state-issued digital ID.

Currently, BankID, which is issued by the major banks, dominates the e-ID landscape in Sweden, and even the main alternative, Freja e-ID, is owned by a private company.

The report calls on the government to either task a government agency to develop and run its own digital ID system, or to put out a tender for one which would be run by a private provider, but which meets government guarantees and requirements.

The new digital ID system, it said, it should make it possible for foreigners currently excluded from BankID, such as refugees, foreign students, and people working on short-term contracts, to identify themselves and use digital payment systems.

“For a state-run e-identification system to be able to provide an effective tool for financial inclusion it is important that there are no unnecessary obstacles for asylum seekers, foreign students, and guest workers, among others, to obtain a state-run e-identification.”

The report also calls for action to prevent foreigners living in Sweden from being deprived of their bank accounts or prevented from getting them in the first place because of regulations put in place to prevent money laundering and terror financing.

It suggests pressuring banks in Sweden to offer so-called “low-risk accounts” with limited functions (such as, for example, limits on international payments).

“More people must be given access to bank accounts, through for example more effective surveillance and through banks using the possibilities in legislation to offer accounts with more limited functions (low risk accounts),” the report reads.

As well as access to digital payment services, the inquiry also looked at whether it was important for Sweden to continue to use physical cash and coins.

It concluded that it was important to continue to keep cash as part of the payments system, as otherwise Sweden would be vulnerable in a severe crisis or military attack.

The report also calls for government agencies and pharmacies and shops selling goods deemed essential to life, to be required under law to accept cash payments.

Finally, the report concludes that there is no need at present for the Riksbank to issue a so-called “digital krona”, a state-backed digital coin similar to Bitcoin, but it encouraged the central bank to continue monitoring the situation.

“The Riksbank should continue to consider the issue,” Kinberg Batra told TT. “We have a high confidence in our digital payments, a krona is worth a krona and we have a guarantee on bank deposits for if anything happens to the banks, and banks are also heavily supervised under a rigorous regulatory framework.”

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