German cooperative banks announce first step to merger
September 24, 2008
Germany's DZ Bank and WGZ Bank, the country's two biggest cooperative banks, said Wednesday they had agreed on the broad outlines for a merger to take place next year.
"Combining the strengths of the two banks will create new earnings and growth potential for the local cooperative banks," DZ Bank's chief executive Wolfgang Kirsch said in a statement.
All WGZ's assets would be transferred to DZ Bank. In return, WGZ shareholders will receive shares in DZ Bank within the framework of a capital increase.
It was unclear if the merger, which is to take place from January 1, will lead to job cuts, with a statement saying only that both groups "attach great importance to employee retention."
The banks expected the merger to save 100-120 million euros (145-175 million dollars) a year in costs.
Germany's cooperative banking sector has around 16 million customers. DZ Bank acts as a clearing house for around 1,000 cooperative banks and WGZ for around 200 others.