Bank Mergers Set To Gain Momentum

Although Deutche Bank's next chief executive, Josef Ackermann, is thought to have turned down recent overtures from Citigroup's Sandy Weill for a tie-up between the two giants, it is thought that this might not be the end of the matter.

It is believed that Ackermann does not want to give up control, but analysts feel that once the Deutsche share price recovers a deal may look more attractive.

Deutsche Chief Executive Rolf Breuer has denied that the German bank has received an offer from Citigroup and said that takeover talk made 'the crew nervous'.

The New York Times reports that as banking share prices are beginning to stabilize, 'executives are re-examining the potential for big, cross-border acquisitions.' Many think a merger between Deutsche and Citigroup would make sense. Citigroup would gain further entry to the lucrative German market and Deutsche would have more influence in the US, where it is still considered to by far behind rivals.

The French market is also thought to be ripe for further consolidation, with either BNP Paribas of Credit Agricole thought to be considering bids for Credit Lyonnais.

Although John Mack is doing a fine job at slashing costs at CSFB, it is also felt that the investment bank may well be put up for sale if its Swiss masters lose patience.