CERBERUS INTENTIONS

Banks charmed by hounds of hell

Frankfurt am Main
All quiet on the western front but the banks need to get a move on. Source: Getty

After months of mystery and speculation, it is now becoming clearer what private investor Cerberus Capital Management wants from Germany’s banks. Last summer, the powerful American investment company – named after a mythological three-headed dog which guards the gates of hell – acquired more than 5 percent of Commerzbank, Germany’s second-largest bank. In November, it proceeded to snap up at least 3 percent of Deutsche Bank, the country’s largest.

Many observers suspected that Cerberus wanted to engineer a merger between the two troubled banks. Now it seems such a jumbo merger can be ruled out, after sources confirmed to Handelsblatt that the Cerberus CEO spoke against such a linkup during an unpublicized visit to Germany last month.

In meetings with senior figures in government, administration and business, Stephen Feinberg repeatedly insisted that there is room for two major banks in Germany, with no need for them to merge. Originally, when the investor bought the stakes, there was speculation that a merged entity would be better able to hold its own against major French and US rivals. On his visit, Mr. Feinberg also expressed support for Deutsche’s embattled boss John Cryan.

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