German banks Helaba, Deka consider tie-up

HAMBURG/FRANKFURT: German public-sector banks Helaba and Deka are considering a potential tie-up, people close to the matter said, in a sign that the country’s fragmented banking market might be moving toward consolidation. Helaba is one of Germany’s landesbanks which are traditionally owned by savings banks and regional states. They act as wholesale banks helping local savings banks arrange large loans. The landesbanks also have their own corporate lending and mortgage businesses and most of them - except Helaba - needed bailouts in the financial crisis. There is pressure to consolidate because low interest rates and competition from listed or cooperative banks as well as online start-ups is squeezing their margins. The two Frankfurt-based banks, both owned by municipally-held savings banks, are in exploratory talks which could lead to a merger that could eventually serve as a catalyst for further deals with other public-sector banks, the sources said. — Reuters