Read the financial press in Germany these days and the most exciting banking story is about the Landesbanken: the seven remaining state-owned wholesale banks of which WestLB is best known. Two years after the loss of their state guarantees and hence, top credit ratings, Germany’s Landesbanken face the kind of activity that gets bankers’ adrenaline flowing: hot merger speculation, initial public offerings (IPOs), expansions and, in a first for the sector, privatisation.
The merger speculation is being driven by Siegfried Jaschinski, chief executive of Landesbank Baden-Württemberg (LBBW), the largest of the group. Convinced that his bank can form the basis for a new “national champion”, Mr Jaschinski has held merger talks with four peers, including Nord/LB and WestLB. WestLB is particularly attractive to LBBW because of its investment banking arms in London and New York.
