(Bloomberg) -- Deutsche Bank AG held frequent talks with the government and its main domestic competitor over the past months as concern mounted that Germany’s largest lender may not be able to emerge from its crisis without outside help.
Representatives of Deutsche Bank had 23 discussions with officials since the new government was formed in March, most of them between Deputy Finance Minister Joerg Kukies and Chief Executive Officer Christian Sewing as well as supervisory board Chairman Paul Achleitner, according to a Finance Ministry letter seen by Bloomberg. Sewing also met regularly with Commerzbank AG CEO Martin Zielke, according to two people briefed on the matter.
The frequency of the talks, which included discussions of “strategic options,” according to the Finance Ministry letter, highlights the sense of urgency in Berlin and Frankfurt as Deutsche Bank struggles to reverse years of losses and declining revenue. The shares of both lenders lost more than half of their value last year, stoking speculation about a merger. Commerzbank, the country’s second-largest listed lender, is still part-owned by the government after a bailout.
Talks between Sewing and Zielke in past months included the topic of a potential merger, though such a move isn’t officially on the banks’ agenda, according to Handelsblatt, which reported the meetings between the two executives earlier.
The government would back a potential merger between the two banks, people familiar with the matter have said. It has recently discussed plans with executives including Sewing how to assist in a potential merger, Bloomberg News reported last month.
Representatives for Deutsche Bank and Commerzbank declined to comment. The Finance Ministry declined to comment on the letter, which was reported earlier by Frankfurter Allgemeine Zeitung.
“The German government is open to economically sensible options,” the Finance Ministry wrote in its letter, in response to questions from a member of Parliament who had inquired what the government’s stance was regarding a potential merger of the two lenders.
Other executives participating in the meetings with the finance ministry include Chief Regulatory Officer Sylvie Matherat, Chief Financial Officer James von Moltke, investment banking head Garth Ritchie and Asia head Werner Steinmueller, according to the letter.
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