BERLIN: Two of Germany’s largest cooperative banks Thursday announced plans to merge next August, creating the country’s third-largest bank by total assets, after Deutsche Bank AG and Commerzbank AG.
The merger of DZ Bank AG and WGZ Bank AG, which are both central clearing banks for the cooperative banking sector, advances the consolidation in Germany’s highly fragmented banking system after decades of talks between the two.
The merger would mark the biggest in Germany’s banking sector in more than 15 years.
The joint entity will act as a central clearing bank for the more than 1,000 German cooperative banks. Currently, DZ Bank, based in Frankfurt, is the central clearing institute for some 900 cooperative banks across Germany. WGZ Bank, based in Düsseldorf, performs the same function but only in the western state of North Rhine-Westphalia and some parts of Rhineland-Palatinate.
DZ Bank Chief Executive Wolfgang Kirsch will head the merged bank. DZ Bank’s supervisory board chairman, Helmut Gottschalk, will assume the same role at the new bank. The current CEO and chairman of WGZ Bank, Hans-Bernd Wolberg, and Werner Böhnke, will become deputies for Mr. Kirsch and Mr. Gottschalk, respectively.
The merged bank’s plans include moderate job cuts over time to eliminate double functions in both banks, such as in the back office, Mr. Wolberg told a joint news conference. In Germany, measures such as early retirement, part-time work and natural fluctuation are commonly used to avoid outright layoffs. DZ Bank currently employs some 30,800 staff; WGZ Bank some 1,650 people.
