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Deutsche, Commerzbank tentatively talk about merger after months of speculation: source

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FRANKFURT (Reuters) – The management board of Deutsche Bank has agreed to hold talks with rival Commerzbank on the feasibility of a merger, a person with knowledge of the matter told Reuters on Saturday.

FILE PHOTO: Christian Sewing, CEO of Deutsche Bank AG, addresses the media during the bank’s annual news conference in Frankfurt, Germany, February 1, 2019. REUTERS/Kai Pfaffenbach -/File Photo

First unofficial contacts took place within a very small group and the mandate from Deutsche’s board was given more than a week ago, said the source, speaking on condition of anonymity.

Talks were at a very early stage and could fall apart, the person added, confirming information reported earlier by the Welt am Sonntag newspaper.

A spokesman for Deutsche Bank and a spokeswoman for Commerzbank both declined to comment.

Speculation about a possible merger between Germany’s two largest listed lenders has been rife for months, heightening under the tenure of Finance Minister Olaf Scholz, who has emphasized the importance of strong banks.

Proponents of a merger say that a tie-up would give a combined entity — which would have an equity market value of more than 24 billion euros ($27 billion) based on Friday’s closing share prices — a 20 percent share of the German retail banking market.

That would allow it to potentially charge higher prices in a country where banking services have been free or low cost.

Welt am Sonntag reported that both banks were reacting to pressure from the government, which expects a decision on the merger in the coming weeks.

A spokesman for the finance ministry declined to comment on the report.

The two lenders, which flirted with a merger in 2016 before focusing on restructuring, have struggled to return to sustainable profitability since the global financial crisis.

The government holds a stake of more than 15 percent in Commerzbank following a bailout and Deutsche Bank’s shares have fallen 73 percent over the past five years.

Founded in 1870 to help companies with overseas trade, Deutsche is currently regarded as one of the most important banks in the global financial system, having expanded rapidly in the 1990s to become an investment banking giant.

However, its market share has dwindled since the financial crisis and it has been plagued by three years of losses, ratings downgrades, failed stress tests and money laundering scandals.

Its chief executive, Christian Sewing, has said publicly in recent months he was focused on restoring profitability before taking on a complicated merger project.

Sewing is expected to report back to the board before the bank takes further steps, the source said.

Commerzbank’s chief, Martin Zielke, has been more open to the idea of a tie-up, a person with knowledge of his thinking said. Last month, he said speculation about a merger was “understandable”.

A person familiar with the matter said in February that U.S. investor Cerberus Capital Management, a major shareholder in both Deutsche Bank and Commerzbank, was open to a merger, increasing the chances of a tie-up.

However, some of Deutsche Bank’s other key shareholders are opposed, stressing the need for patience to allow the bank to regain its footing.

Ratings agencies, which have cut Deutsche Bank’s credit ratings to the lowest among its major competitors, have warned that a merger would be risky and difficult to execute.

Labor unions have also voiced opposition fearing large job losses.

German officials have been worried about Deutsche since 2016 when the bank was negotiating a hefty fine with the U.S. Department of Justice for its role in the mortgage crisis.

At the time, Deutsche and the government publicly played down speculation that it could need state support. Behind the scenes, however, tensions were running high.

Over the past year, Deutsche has undergone an abrupt management change that installed Sewing as CEO. The bank has trimmed its international operations to focus more on retail banking and its home market.

Negative headlines about the lender have, however, continued.

In November, police searched the offices of all the members of Deutsche Bank’s board as part of an investigation into money laundering allegations linked to the Panama Papers.

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Deutsche said in January that it had received requests for information from regulators and law enforcement agencies that are investigating a money laundering scheme involving Danske Bank.

In the U.S., Congress is also investigating money laundering allegations and the bank’s connections to the U.S. president, who owes the bank at least $130 million dollars.

Deutsche Bank has more than 20 million personal and business customers and Commerzbank around 18 million.

Reporting by Tom Sims and Andreas Framke; Additional reporting by Paul Carrel in Berlin; Editing by John Stonestreet and Kirsten Donovan

Our Standards:The Thomson Reuters Trust Principles.

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Thousands attend NZ vigil, rally to fight racism, remember Christchurch victims

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CHRISTCHURCH (Reuters) – Thousands gathered in New Zealand’s cities on Sunday to protest racism and remember the 50 Muslims killed by a gunman in Christchurch and as Prime Minister Jacinda Ardern announced a national remembrance service to be held later this week.

People attend a vigil for victims of the mosque shootings in Christchurch, New Zealand March 24, 2019. REUTERS/Edgar Su

About 15,000 turned out for an evening vigil in Christchurch in a park near the Al Noor mosque, where a suspected white supremacist killed more than 40 of the victims. Several more people were killed at the nearby Linwood mosque.

Many non-Muslim women wore headscarves at the vigil, some made by members of Christchurch’s Muslim community, to show their support for those of Islamic faith as they had at similar events last week.

Ardern said on Sunday that a national remembrance service would be held on March 29 to honor the victims, most of whom were migrants or refugees.

“The service will be a chance to once again show that New Zealanders are compassionate, inclusive and diverse, and that we will protect those values,” Ardern said in a statement.

The prime minister has been praised for her leadership following the attack. She swiftly moved to denounce the incident as terrorism, toughen gun laws and express national solidarity with the victims and their families.

The vigil started with an Islamic prayer, followed by a reading of the names of the victims, which included students from the nearby Cashmere High School.

“Darkness cannot drive out darkness only light can,” Okirano Tilaia, one of the school’s pupils, told the crowd. “Hatred cannot drive out hatred, only love can.”

Earlier in the day more than 1,000 people marched in a rally against racism in central Auckland, carrying “Migrant lives matters” and “Refugees welcome here,” placards.

Muslims account for just over 1 percent of New Zealand’s 4.8-million population, a 2013 census showed, most of whom were born overseas.

As New Zealand continued to mourn and ask questions about how such an attack could have happened in the peaceful Pacific nation, the victims’ families spoke about their losses.

Shahadat Hossain, whose brother Mojammel Haque was killed in the attack, arrived in New Zealand on Saturday to bring his brother’s body back to Bangladesh.

“I can’t describe how I felt when I saw my brother’s lifeless body,” he told Reuters. “I was devastated.”

Farid Ahmed, who was at the Al Noor mosque when the shooting took place, escaped but his wife, Husna, was killed. On Sunday, he went door-to-door, thanking his neighbors for their support.

    “They came running… they were crying, they were in tears,” he said of his neighbors when they found out that Husna had died.

“That was a wonderful support and expression of love, and I am feeling that I should also take the opportunity to say to them that I also love them.”

Reporting by Jill Gralow Natasha Howitt, Charlotte Greenfield in Christchurch, Ruma Paul in Dhaka, James Redmayne and Tom Westbrook in Sydney; Writing by Lidia Kelly; Editing by Sam Holmes

Our Standards:The Thomson Reuters Trust Principles.

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Almost 400 people winched from stricken cruise liner off Norway

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OSLO (Reuters) – Rescue services had airlifted 397 people to safety from a luxury cruise liner with engine trouble off the coast of Norway by Sunday morning and were preparing to tow the vessel to a nearby port.

The Viking Sky, with 1,373 passengers and crew on board, sent out a mayday signal on Saturday as it drifted towards land in the Norwegian Sea.

The ship was carrying 915 passengers, of whom “a large number” were from the United States and Britain, according to the rescue services.

Some 17 injured passengers had been taken to hospital, a local rescue coordinator told a news conference early on Sunday, while others suffered minor cuts and bruises.

One was taken to St. Olav’s Hospital in the town of Trondheim, which is central Norway’s most advanced medical facility. Others were taken to local hospitals in the region.

“Many have also been traumatized by the experience and need care when they arrive on shore,” the Norwegian Red Cross said in a statement.

The airlift had gone on through the night. The ship has been able to restart three of its four engines on Sunday morning but still needed assistance.

“The evacuation continues at the request of the vessel … they need tugboats to get to port,” rescue service spokesman Per Fjeld said, adding that the plan was to bring the Viking Sky to the town of Molde.

Rescue services have begun to attach lines to the ship from tugboats to begin towing it towards the port.

BROKEN WINDOWS

Stormy weather conditions had improved in the early hours of Sunday, with winds blowing at 14 meters per second, down from 24 meters per second previously, according to the Norwegian Meteorological Institute. The wind speeds are expected to fall further during Sunday.

Images and film posted by passengers on social media showed furniture sliding around as the vessel drifted in waves of up to eight meters (26 feet), and passengers earlier described the ordeal.

Slideshow (3 Images)

“We were having lunch when it began to shake. Window panes were broken and water came in. It was just chaos. The trip on the helicopter, I would rather forget. It was not fun,” American passenger John Curry told public broadcaster NRK on Saturday.

The stretch of water known as Hustadvika and surrounding areas are known for fierce weather and shallow waters dotted with reefs.

Viking Cruises, which owns the ship, on Saturday said the safety of passengers was its top priority. The company was not immediately available for further comment on Sunday.

Reporting by Terje Solsvik and Gwladys Fouche; Editing by Jane Merriman/Keith Weir

Our Standards:The Thomson Reuters Trust Principles.

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Rescue services prepare to tow stricken cruise ship off Norway to port

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OSLO (Reuters) – Evacuation from a luxury cruise liner with engine trouble off the coast of Norway continued for a second day on Sunday, with 397 people airlifted off the vessel, while rescue services prepared to tow the ship to a nearby port, rescue workers said.

The Viking Sky, with 1,373 passengers and crew on board, sent out a mayday signal on Saturday as it drifted towards land in the Norwegian Sea.

“The evacuation continues at the request of the vessel … they need tugboats to get to port,” rescue service spokesman Per Fjeld said, adding that the plan was to bring the Viking Sky to the town of Molde.

Rescue services have begun to attach lines to the ship from tugboats to begin towing it towards the port.

The ship has been able to restart three of its four engines but was still requesting assistance.

Stormy weather conditions had improved in the early hours of Sunday, with winds blowing at 14 meters per second, down from 24 meters per second previously, according to the Norwegian Meteorological Institute. The wind speeds are expected to fall further during Sunday.

The stretch of water known as Hustadvika and surrounding areas are known for fierce weather and shallow waters dotted with reefs.

Viking Cruises, which owns the ship, on Saturday said the safety of passengers was its top priority. The company was not immediately available for further comment on Sunday.

Reporting by Terje Solsvik and Gwladys Fouche. Editing by Jane Merriman

Our Standards:The Thomson Reuters Trust Principles.

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