A number of sources today have reported that Commerzbank is on the verge of asking the German Government for a bailout as it struggles to raise funds to cover the losses on loans it has. According to Sky News

“Intense talks” have been going on for several days, according to sources who spoke to the news agency Reuters.

Several people familiar with the matter told the agency that the aim was to reach an agreement in principle by the Christmas holidays.

Commerzbank told Sky News it does not comment on market rumour and speculation.

Last week, the bank said it needed to raise an extra 5.3 billion euros by June 2012 to cope with a potential default of European government debt under new rules laid down by the European Banking Authority.

t has until January to explain how it will raise the money.

The bank, which has 14 million customers, is trying to raise the extra funds from private investors and has said it could also sell off parts of its business, cut costs or reinvest its profits to shore up its reserves.

Commerzbank’s chief financial officer Eric Strutz said: “We are aware of our responsibility for the supply of credit to the German economy and we will continue to stand by our customers.

“We stand by our intention not to make use of additional public funds,” he said.

Banking and Finance reporter at the Wall Street Journal, David Enrich, told Sky News he was not confident the money could be found through the usual channels.

He said: “The (German) Government already owns about 25% of Commerzbank…they have other options other than going to the Government.

“They can sell assets, they can try and get money from private investors…the Government is likely to come back in and act as a fallback option.”

Shares in Commerzbank have fallen by 74% in value this year.

Fallen how much ? 😉

Also further news from ZeroHedge on the matter.

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