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Germany’s two largest banks consider merger talks

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Germany’s two largest banks consider merger talks

Two of Germany’s biggest banks Deutsche Bank and Commerzbank confirmed they were in merger talks. The banks did so in separate statements, but did not provide much details.  

According to Deutsche Bank’s statement

In light of arising opportunities, the management board of Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB) has decided to review strategic options. In doing so, the management board of Deutsche Bank is focused on improving the growth profile and profitability of the bank.

The bank continued

There is no certainty that any transaction will occur. In this context, we confirm that we are engaging in discussions with Commerzbank.

Commerzbank’s statement was much terser.

Commerzbank and Deutsche Bank have agreed today to start discussions with an open outcome on a potential merger

The pros

State support: The German government is reportedly in support of the merger. A large bank would provide a supportive base for the country’s export-focused industries.  

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In this age of protectionism, having a large bank would be an asset. The German government has informally stated it would not object to any resulting job cuts or losses, which would rise from the banking behemoth.

The German government holds a 15.5% stake in Commerzbank k, following a bailout a few years ago.

The cons 

Opponents of the bank fear the merger may result in job losses. Deutsche Bank is also contending with several issues such as money laundering as well as a role in what could be termed Trump gate.  

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About Deutsche Bank 

Deutsche Bank was also founded in 1870 and is one of Germany’s biggest banks.  Its operations are divided into two customer-oriented business groups. The Corporate and Investment Bank Group serves corporate and institutional clients, offering investment banking and corporate financing services on a worldwide basis.  

The Private Clients and Asset Management Group focuses on retail banking, mostly in Germany, and the worldwide provision of asset management services for both individuals and institutions.  

About Commerzbank  

Commerzbank came into existence in 1870 when several merchants, merchant bankers and private banks founded the Commerz Und Disconto Bank in Hamburg. It became one of the leading banks in the country.

In  1920 it merged with the Mitteldeutsche Privat-Bank, a regional bank based in Magdeburg, and in 1929 with the Mitteldeutsche Creditbank based in Frankfurt am Main.  

In 1932, due to a crisis in the banking sector, the government ordered the merger in early 1932 of Commerzbank with the Barmer Bank-Verein Hinsberg, Fischer & Co. in Düsseldorf.

In 1940, the name Commerzbank Aktiengesellschaft, by which the bank was generally known, was officially adopted. 

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Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via [email protected]

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Energy

Electricity tariff increase is suspended for 2 weeks

The FG and the Nigerian Labour Unions have agreed to suspend the electricity tariff increase for a period of two weeks.

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Minister of Labour, Ngige, says labour demand will force government to sack workers

The Federal Government and the Nigerian Labour Unions have agreed to suspend the electricity tariff increase for a period of two weeks. This was part of the agreement reached between Labour and the Government as they deliberated to avert a nationwide strike that would have grounded an already deteriorating economy.

While the strike was over two major issues, an increase in electricity charges and fuel price respectively, the decision to call off the strike was based on the suspension of the electricity bills. The following terms of reference underpinned the agreement between Labour and the Government.

Terms of reference for suspension of electricity increase for 2 weeks.

Terms of reference “The Terms of Reference (ToR) are as follows: To examine the justification for the new policy on cost-reflective Electricity Tariff adjustments.”

  • Both parties are to examine the justification for the new policy on cost-reflective tariff adjustment
  • To look at the different Electricity Distribution Company (DISCOs) and their different electricity tariff vis-à-vis NERC order and mandate.
  • Examine and advise government on the issues that have hindered the deployment of the six million meters.
  • To look into the NERC Act under review with a view to expanding its representation to include organized labour.
  • The Technical sub-committee is to submit its report within two weeks.
  • During the two weeks, the DISCOs shall suspend the application of the cost-reflective electricity tariff adjustments. “The meeting also resolved that the following issues of concern to Labour should be treated as stand-alone items:
  • The 40% stake of government in the DISCO and the stake of workers to be reflected in the composition of the DISCOs Boards.
  • An all-inclusive and independent review of the power sector operations as provided in the privatization MOU to be undertaken before the end of the year 2020, with Labour represented.
  • That going forward, the moribund National Labour Advisory Council, NLAC, be inaugurated before the end of the year 2020 to institutionalize the process of tripartism and socio dialogue on socio-economic and major labour matters to forestall crisis.

What this means: The decision reached between the government and labour means the service reflective tariff regime which started on September 1, 2020, is effectively suspended. Customers are therefore no longer required to pay the service reflective tariffs and will revert to the previous MYTO tariffs of 2015.

  • By looking at the “different Electricity Distribution Company (DISCOs) and their different electricity tariff vis-à-vis NERC order and mandate” it appears labour might be looking to recalibrating the tariffs for some Discos.
  • According to documents on the tariff order published by the NERC, some Discos have tariffs for residential customers that are as high as N62/kWh while it’s just under N54 for others.
  • Labour could also get involved in determining the veracity of the tariff bands that determines which customers pay what as electricity tariffs.

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Business

Just-in: NLC, TUC suspend nationwide strike

Hike in electricity tariff to be suspended for 2 weeks, while new pump price of petrol remain unchanged.

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Ayuba Wabba, Why the FG should reverse 6% tenancy, lease stamp duty - NLC

The Nigerian Labour Congress (NLC) and the Trade Union Congress (TUC) have suspended the planned nationwide strike and protest that was to commence on Monday, September 28, 2020, over the recent hike in electricity tariff and petrol pump price.

This follows the agreement reached between the Federal Government and the organized labour during the meeting held by both parties which started on Sunday night and dragged on till the early hours of Monday morning.

The disclosure was made by the Minister of State for Labour and Employment, Festus Keyamo, through a tweet post on his twitter handle.

In the agreement between the Federal Government and organized labour, the hike in electricity tariff is to be suspended for a period of 2 weeks, while the new pump price of petrol is to remain unchanged.

According to the agreement, which was seen by Nairametrics, both parties agreed to set up a technical committee on Electricity Tariff reforms, comprising Ministries, Agencies, Departments, NLC and TUC, which will work for a duration of 2 weeks with effect from Monday, September 28, 2020, to examine the justification of the new policy in view of the need for the validation of the basis for the new cost-reflective tariff.

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This is due to the conflicting field reports which appear different from the data presented to justify the new policy by NERC, metering deployment, challenges, timelines for massive rollout.

The technical committee is to be headed by the Minister of State for Labour and Labour, Festus Keyamo.

Other members of the committee include the Minister of State Power, Godwin Jedy-Agba, Executive Chairman, National Electricity Regulatory Commission (NERC), James Momoh, Special Assistant to the President on Infrastructure, Ahmad Zakari as the Secretary.

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Also in the committee are Onoho’Omhen Ebhohimhen, Joe Ajaero (NLC), Chris Okonkwo (TUC) and a representative of electricity distribution companies.

The terms of reference for the technical committee include;

  • To examine the justification for the new policy on cost-reflective electricity tariff adjustments.
  • To look at the different Electricity Distribution Companies (DISCOs) and their different electricity vis-à-vis NERC order and mandate.
  • Examine and advice government on the issues that have hindered the deployment of the 6 million meters.
  • To look into the NERC act under review with a view to expanding its representation to include organized labour.

 

 

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Coronavirus

COVID-19 Update in Nigeria

On the 27th of September 2020, 126 new confirmed cases and 2 deaths were recorded in Nigeria

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The spread of novel Corona Virus Disease (COVID-19) in Nigeria continues to record increases as the latest statistics provided by the Nigeria Centre for Disease Control reveal Nigeria now has 58,324 confirmed cases.

On the 27th of September 2020, 126 new confirmed cases and 2 deaths were recorded in Nigeria, having carried out a total daily test of 3,011 samples across the country.

To date, 58,324 cases have been confirmed, 49,794 cases have been discharged and 1,108 deaths have been recorded in 36 states and the Federal Capital Territory. A total of 505,556  tests have been carried out as of September 27th, 2020 compared to 502,545 tests a day earlier.

COVID-19 Case Updates- 27th September 2020,

  • Total Number of Cases – 58,324
  • Total Number Discharged – 49,794
  • Total Deaths – 1,108
  • Total Tests Carried out – 505,556

According to the NCDC, the 126 new cases were reported from 12 states- FCT (30), Lagos (24), Rivers (23), Ogun (13), Katsina (9), Plateau (9), Ondo (6), Kaduna (4), Kwara (4), Imo (2), Bauchi (1), Edo (1).

Meanwhile, the latest numbers bring Lagos state total confirmed cases to 19,239, followed by Abuja (5,674), Plateau (3,388), Oyo (3,254), Edo (2,624), Kaduna (2,397), Rivers (2,347), Ogun (1,836), Delta (1,802), Kano (1,737), Ondo (1,631), Enugu (1,289), Ebonyi (1,040), Kwara (1,032), Abia (891), Gombe (864). Katsina (857), Osun (827),  Borno (741), and Bauchi (698).

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Imo State has recorded 568 cases, Benue (481), Nasarawa (449), Bayelsa (398),  Jigawa (325), Ekiti (321), Akwa Ibom (288), Niger (259), Adamawa (237), Anambra (234), Sokoto (162), Taraba (95), Kebbi (93), Cross River (87), Zamfara (78), Yobe (76), while Kogi state has recorded 5 cases only.

READ ALSO: COVID-19: Western diplomats warn of disease explosion, poor handling by government

Lock Down and Curfew

In a move to combat the spread of the pandemic disease, President Muhammadu Buhari directed the cessation of all movements in Lagos and the FCT for an initial period of 14 days, which took effect from 11 pm on Monday, 30th March 2020.

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The movement restriction, which was extended by another two-weeks period, has been partially put on hold with some businesses commencing operations from May 4. On April 27th, 2020, Nigeria’s President, Muhammadu Buhari declared an overnight curfew from 8 pm to 6 am across the country, as part of new measures to contain the spread of the COVID-19. This comes along with the phased and gradual easing of lockdown measures in FCT, Lagos, and Ogun States, which took effect from Saturday, 2nd May 2020, at 9 am.

On Monday, 29th June 2020 the federal government extended the second phase of the eased lockdown by 4 weeks and approved interstate movement outside curfew hours with effect from July 1, 2020. Also, on Monday 27th July 2020, the federal government extended the second phase of eased lockdown by an additional one week.

On Thursday, 6th August 2020 the federal government through the secretary to the Government of the Federation (SGF) and Chairman of the Presidential Task Force (PTF) on COVID-19 announced the extension of the second phase of eased lockdown by another four (4) weeks.

READ ALSO: Bill Gates says Trump’s WHO funding suspension is dangerous

 

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