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FINANCE

Allianz likely to sell Dresdner Bank to Commerzbank

The board of German insurer Allianz is to recommend its Dresdner Bank unit be sold to Commerzbank paving the way for a major overhaul of Germany’s banking sector, press reports said on Friday.

Allianz likely to sell Dresdner Bank to Commerzbank
Photo: DPA

Commerzbank boss Martin Blessing and his Allianz counterpart Michael Diekmann agreed on the basic terms of a sale when they met late Thursday, the Frankfurter Allgemeine Zeitung (FAZ) and Handelsblatt dailies said on their websites.

Commerzbank, the second biggest private German bank, is now better placed than the China Development Bank (CDB), the FAZ added, even though the Chinese bank was prepared to pay more for Dresdner, which is number three in Germany.

Dresdner Bank is believed to be worth around nine billion euros.

Spokespeople at both Allianz and Commerzbank declined to comment on the reports.

A banking source told AFP however that “no decision has been made yet.”

According to the reports, which cited sources close to the talks, Commerzbank would buy Dresdner in two stages, taking a 51 percent stake first in exchange for 30 percent of its own shares.

Commerzbank’s board was to meet on Friday, the FAZ said, while on Sunday, the supervisory boards of Allianz and Commerzbank were expected to make their final decisions. Neither group was immediately available to comment on the reports.

A long-awaited deal would mark a significant remodelling of Germany’s private banking sector, though public savings banks would continue to dominate the retail banking sector.

A combined bank would have total assets of around €1.09 trillion ($1.6 trillion) but would still trail number one Deutsche Bank, with €1.99 trillion, by a wide margin.

MONEY

Where in Germany do people have the highest disposable income?

An economic study has shown huge regional differences in income throughout Germany. So which parts of the country have the most to spend each month, and which are feeling the squeeze?

Where in Germany do people have the highest disposable income?

A study by the Economic and Social Sciences Institute (WSI) of the Hans-Böckler foundation reveals stark regional differences in disposable income in Germany. In some cases, households had as much as double the spending money of those in other parts of the country. 

Here’s where people have the most – and least – disposable income each month.

What is disposable income?

The WSI calculated disposable income as the sum of income from wealth and employment, minus social contributions, income taxes, property taxes and other direct benefits or taxes.

What’s left is the income which private households can either spend on consumer goods or save.

The study, which was based on the most recent available national accounts data for 2019, looked at the disposable income of all of the 401 counties, districts and cities across Germany.

Which regions have the highest and lowest disposable incomes?

The study found that the regions with the highest disposable incomes were in the southern states.

Heilbronn in Baden-Württemberg had the highest disposable income of all 401 German counties and independent cities – with an average per capita disposable income of €42,275. The district of Starnberg in Bayern followed in second place with €38,509.

READ ALSO: REVEALED: How much do employees really earn across Germany’s states?

By comparison, per capita incomes in the cities of Gelsenkirchen and Duisburg in North Rhine-Westphalia were less than half as high, at €17,015 and €17,741 respectively. These regions had the lowest disposable income in the country. 

The study also found that, more than thirty years since German reunification, the eastern regions continue to lag behind those in the west in terms of wages.

According to the WSI, the Potsdam-Mittelmark district is the only district in the former east where the disposable per capita income of €24,127 exceeds the national average of €23,706.

Do regional price differences balance things out?

The study also showed that regionally different price levels contribute to a certain levelling out of disposable incomes, as regions with high incomes also tend to have higher rents and other living costs.

“People then have more money in their wallets, but they cannot afford more to the same extent,” WSI scientist Toralf Pusch explained.

READ ALSO: EXPLAINED: When will Germany raise the minimum wage?

Therefore, incomes in the eastern states, adjusted for purchasing power, are generally somewhat higher than the per capita amounts would suggest.

That could explain why, even after price adjustment, the cities of Gelsenkirchen and Duisburg in western Germany continue to be at the very bottom of the list.

Saxon-Anhalt’s Halle an der Saale, on the other hand, which has an average disposable income of only €18,527, benefits from the lower prices in the east.

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