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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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‘I shall reign in righteousness’: Thailand crowns king in ornate ceremonies

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BANGKOK (Reuters) – Thailand’s King Maha Vajiralongkorn on Saturday completed intricate Buddhist and Brahmin rituals to symbolically transform him into a living god as the Southeast Asian nation officially crowned its first monarch in nearly seven decades.

Thailand’s King Maha Vajiralongkorn and Queen Suthida attend his coronation in Bangkok, Thailand, May 4, 2019 in this still image taken from TV footage. Thai TV/Pool via REUTERS

King Vajiralongkorn, 66, became constitutional monarch after the death of his revered father, King Bhumibol Adulyadej, in October 2016 after 70 years on the throne.

The king was joined by new Queen Suthida after a surprise announcement three days before the coronation that the thrice-divorced monarch had married for a fourth time.

His coronation, after a period of mourning for the late king, comes amid the uncertainty of an unresolved election battle between the current military junta chief and a “democratic front” trying to push the army out of politics.

King Vajiralongkorn sat erect on a high throne above his queen, royal family members and Brahmin priests inside the Grand Palace throne hall where the royal guardian deity Phra Siam Devadhiraj is said to reside.

“I shall reign in righteousness for the benefits of the kingdom and the people forever,” the king said in his first royal command, while sitting under a nine-tiered umbrella in full royal regalia including a gold-enameled, diamond-tipped crown.

Traditionally uttered after a king is crowned, the king’s first royal command serves to capture the essence of his reign. The king’s royal command was similar to that of his father’s 69 years ago.

King Maha Vajiralongkorn also granted Queen Suthida, a former Thai Airways flight attendant and head of his personal bodyguard regiment, her full royal title.

Thai kings’ coronation rituals are a mixture of Buddhist and Hindu Brahmin traditions dating back centuries. One of the many official titles King Vajiralongkorn will take is Rama X, or the 10th king of the Chakri dynasty founded in 1782.

Saturday’s rituals were about transforming him into a “Devaraja”, or a divine embodiment of the gods.

Outside the palace walls, a sea of people in yellow polo shirts sat on roadsides, holding up portraits of the king and the Thai national flag.

Yellow is particularly significant in Thai culture, which is steeped in astrology, as it is the color of Monday, the day the king was born, and also the color of the sun, which represents the monarch in the cosmos.

The king received the royal golden plaque containing his name and title, the royal horoscope, and the royal seal, which were made in a three-hour ritual last week.

He also received and put on five articles of the royal regalia from the chief Brahmin.

The high-reaching crown, which weighs 7.3 kg (16 lb) symbolizes the summit of Mount Meru, the Hindu god Indra’s heavenly abode, and its weight represents the monarch’s royal burden.

King Vajiralongkorn put the crown on his head himself with the help of court officials, and adjusted it several times during the ceremony.

Before the crowning ritual, King Vajiralongkorn appeared dressed in simple white robes as he underwent a royal purification ritual, sitting under a canopied fountain that poured consecrated waters over his head.

As the waters started pouring, cannons from the 19th century, used specifically for the coronation, started firing 10 volleys each.

The country’s Buddhist Supreme Patriarch also poured sacred waters over the king, followed by Brahmin priests and royal family members.

The king later changed into a full uniform and took a seat on an eight-sided, carved wooden throne to receive sacred waters on his hand in an anointment ritual.

Selected officials, including military junta chief Prayuth Chan-ocha, the head of the National Legislative Assembly, and the chairman of the Supreme Court, poured the waters from eight directions, representing the cardinal and ordinal directions on a compass.

The waters used in the two rituals were collected from 117 sources last month, blessed by Buddhist monks and Brahmin priests in temples around the country, before they were combined and consecrated.

During the ceremonies, the king gave alms to saffron-robed, barefoot monks.

Later on Saturday evening, the king will proclaim himself the royal patron of Buddhism later in the evening, and perform a private housewarming ritual at the royal residence where he will stay the night, as previous kings have done.

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During 18 months of his reign so far, King Vajiralongkorn has moved to consolidate the authority of the monarchy, including taking more direct control of the crown’s vast wealth with the help of Thailand’s military government.

Thailand ended absolute rule by its kings in 1932, but the monarchy remains highly revered as the divine symbol and protector of the country and Buddhist religion.

Reporting by Patpicha Tanakasempipat and Panarat Thepgumpanat; Editing by Kay Johnson and Stephen Coates

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Shares claw higher before U.S. jobs data, oil sinks again

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LONDON (Reuters) – World stocks were battling to avoid their first weekly fall in six weeks on Friday, as investors waited to see whether key U.S. jobs data later would give the Federal Reserve another reason to dismiss rate cut calls.

FILE PHOTO: A man looks at an electronic board showing the Nikkei stock index outside a brokerage in Tokyo, Japan, January 7, 2019. REUTERS/Kim Kyung-Hoon

Europe’s bourses nudged fractionally higher early on as earnings from banks HSBC and Societe Generale cheered traders and encouraging Adidas profits < ADSGn.DE> sent the German sportswear firm’s shares leaping 7 percent to a record high.

The dollar was also trying to end the week on a firmer note having seen markets scale back bets on a U.S. rate cut this week. As well as the jobs figures later, there are no less than eight Federal Reserve policymakers due to speak.

Bond and commodity markets remained firmly on the backfoot however with most benchmark government bond yields up on the day and Brent oil slipping back toward $70 a barrel again for what will be its worst week in over two months.

Fund manager UBP strategist Koon Chow said it all pointed to a little bit of the steam coming out of the markets after a flying start to the year.

“For the last four months it has been the unwinding the extreme pessimism that had built up (last year)” he said, referring to trade war nerves and the slowdown in many of the world’s largest economies.

“So here we are now in search of the next big thing, and I think today, and for the last few weeks, it is a views and portfolio repositioning exercise.”

U.S. employment figures are due at 1230 GMT, which are forecast to show 185,000 net new jobs were added in April and the unemployment rate at a steady 3.8 percent.

A report by payrolls processor ADP on Wednesday showed U.S. private employers added 275,000 jobs last month.

A solid official reading later would bolster the notion the world’s biggest economy remains on track for its longest expansion ever, further boosting the dollar potentially and the prospects for corporate earnings.

Overnight Asian trading had remained thin with both Japan and China traders still enjoying holidays. Hong Kong was in though and climbed 0.4 percent , the Australian market gained 0.1 percent, while Korea’s KOSPI slipped 0.5 percent.

Overnight on Wall Street, major indices,, had given up an initial attempt to regain their record highs and closed in the red, weighed down by energy shares.

Oil prices had plunged again after U.S. crude production output set a new record, though the losses were capped by the intensifying political crisis in Venezuela and the stopping of Iranian oil sanction waivers by Washington.[O/R]

U.S. crude was still in the red in early London trade down 0.3 percent at $61.65 a barrel, while Brent slipped 0.5 percent to $70.42.

PRESSURE DOWN UNDER

In the currency markets, Australian and New Zealand dollars both fell as speculators wagered both countries could see interest cuts next week. [FRX/]

The Aussie slipped below psychological support of $0.7000 overnight to the lowest since early January while the kiwi dollar drifted closer to a recent five-month trough of $0.6581.

The weakness in the antipodean currencies also came as the U.S. dollar gained on remarks by U.S. Federal Reserve Chair Jerome Powell earlier this week that a recent weakness in inflation owed to “transitory” factors.

That led traders to start paring expectations for a Fed rate cut. Futures now imply about a 49 percent probability of an easing at year-end, down from 61 percent late on Wednesday, according to CME Group’s FedWatch program.

The dollar index held at 97.842, inching toward a two-year peak of 98.33 touched last week.

Against the Japanese yen, the dollar was little changed at 111.48 having spent the entire week in a tight 111.03-111.89 range, while the euro stayed closed to $1.12

(Graphic: US ADP non farm datastream, tmsnrt.rs/2DFqpOn)

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Monstrous rumors stoke hostility to Pakistan’s anti-polio drive

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PESHAWAR, Pakistan (Reuters) – His bearded face was half-covered by a shawl, but Hameedullah Khan’s fear and ignorance was on full display as he delivered a chilling message for anyone who tries to vaccinate his children against polio.

FILE PHOTO: People move a child on a stretcher after what they say was a defective vaccine administered outside a hospital in Peshawar, Pakistan April 22, 2019. REUTERS/Fayaz Aziz/File Photo

“I will stab anyone who comes to my house with polio drops,” Khan growled, refusing to be filmed or photographed as he shopped in a fly-blown bazaar on the outskirts of Peshawar, a city scarred by years on the frontline of Islamist militancy in Pakistan.

This dangerous hostility to immunization teams flared last week after religious hardliners in the city spread false rumors, raising a scare on social media that some children were being poisoned and dying from contaminated polio vaccines.

The rumors spread like wildfire, triggering mass panic in northwestern Khyber Pakhtunkhwa province. Mobs burned a village health center, blocked a highway and pelted cars with stones. Medical workers were harassed and threatened.

Mosques made announcements that children were having cramps, vomiting and diarrhea after they were given “poisonous” polio drops. Word went out on social media that some children had died.

Panicked parents rushed their children to hospitals, overwhelming health authorities. In Peshawar alone, about 45,000 children were brought to hospitals complaining of nausea and dizziness. Officials described it as mass hysteria, asserting there had been no deaths confirmed.

KILLED BY MILITANTS

It is easy to feed the fears of communities that feel under siege, as in northwest Pakistan.

Mistrust of outsiders and modernity goes a long way to explaining why Pakistan and neighboring Afghanistan are two of just three countries in the world – Nigeria is the third – where polio remains endemic.

Some Muslim clerics have peddled stories that the vaccines are part of Western plot to make Muslims sterile, while militant groups have killed nearly 100 health workers and their guards since 2012 on the pretext that they could be Western spies.

Those killings escalated after a doctor in Peshawar involved in the campaign against polio helped U.S. forces track down and eliminate al Qaeda leader Osama bin Laden in 2011.

Just late week, militants shot and killed a medical worker and two policemen guarding other vaccination teams in the Khyber Pakhtunkhwa and neighboring Baluchistan province.

But the scale of the most recent backlash against a campaign to eradicate polio is something new for government officials, who worry that the suspicions and backward thinking of a hardline minority has infected the wider public.

“The mistrust in one segment of society, that refuses vaccinations due to religious beliefs, is translating into the rest of the country, which is something not seen in the past,” Babar Atta, the government’s top coordinator in the drive against polio, told Reuters.

Every year Pakistan’s government mounts public education campaigns and recruits Muslim religious leaders to reassure people, but their suspicions persist.

As a result of last week’s false rumors, families of hundreds of thousands of children in Khyber Pakhtunkhwa and elsewhere refused to participate in the latest campaign to eradicate a virus that can cause paralysis or death.

“No drops for us in the future!,” Saif-ur-Rehman, a father of eight, repeating the rumors that the vaccines were contaminated or expired.

“Even my son was saying: ‘The next time they bring polio drops to school, I am going to get up and run away from school’. I said, ‘Do that’.”

PLAYING DEAD

An inquiry found the false stories originated at two schools on the outskirts of Peshawar. Health workers seeking to vaccinate pupils from the Dar-ul-Qalam and Roza-tul-Atfaal schools had met with repeated refusals, according to provincial officials.

Investigators also identified and arrested a man seen in a video telling dozens of children to pose as if the vaccine had rendered them unconscious, Farooq Jameel, Khyber Pakhtunkhwa’s senior-most health official, said.

Police also arrested 16 other men, some of whom had threatened vaccination teams on the streets.

A provincial leader of a conservative Islamist party that officials suspected had some links to the schools’ owners denied any connection and went on to endorse the immunization program.

“I have been vaccinating my own children and will continue to give them polio vaccine till a certain age, but people have some misconception and doubts about polio vaccine, and the government needs to address their concerns,” Abdul Wasey, secretary-general of Jamat-e-Islami Pakistan in Khyber Pakhtunkhwa, told Reuters.

But the damage has been done.

Pakistan has made huge strides in tackling polio, but officials say that while the latest immunization drive succeeded in inoculating 37.6 million children, 1.4 million were left unprotected.

Citing fears of attacks on health workers, authorities called off a two-day catch up for the vaccination drive last week.

The global campaign against the disease over the past few decades has been a great success story, with the World Health Organization (WHO) reporting just 33 cases of polio worldwide in 2018.

But most of them were in Pakistan and Afghanistan, and the danger is that so long as a single child remains infected the virus can quickly spread into polio-free countries and un-immunized populations.

There is no known cure for polio, but the disease can be prevented if children are given multiple treatments with the vaccine.

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Nadia Gul, a housewife, is among the volunteer health workers who make up the vaccination teams. Two children in her close family are victims of polio.

Covering her face with a veil to talk with strangers, Gul spoke of the dangers she faces due to the heinous slurs propagated by ill-educated opponents, but she refuses to be cowed.

“We have fears in our minds and in our hearts, but we will not lose courage,” Gul told Reuters. “Our aim, the aim of all the polio workers, is that we end this scourge in our country, so that no child, God forbid, is crippled.”

Writing by Asif Shahzad and Drazen Jorgic; Editing by Simon Cameron-Moore

Our Standards:The Thomson Reuters Trust Principles.

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