Deutsche Bank and UBS reportedly talked in June about teaming up in Europe to create an investing-banking alliance

Reuters/Kai PfaffenbachDeutsche Bank CEO Christian Sewing

  • Deutsche Bank and UBS reportedly discussed forming an investment-banking alliance in June, according to the Wall Street Journal.
  • The alliance would have combined businesses to create the largest financial institution in Germany but would have been short of a full-blown merger.
  • After talks fell through, Deutsche Bank announced its massive restructuring plan including layoffs of 18,000.
  • Read more on Markets Insider.

Deutsche Bank and UBS Group reportedly discussed combining businesses to form an investment-banking operations alliance in mid-June, the Wall Street Journal reported, citing people familiar with the matter.

The talks followed earlier merger talks between Deutsche Bank and Commerzbank that fell through in April.Taken together, the talks about potential combinations show how some European banks are looking to fend of challenging business conditions in the region, such as negative interest rates and a sluggish economy.

Combining forces could also help European banks compete against US banks, which are looking to win over market share in Europe, the Journal reported. US banks have been winning share from their European rivals in recent years, according to analysts.

The Journal reported that a deal wasn’t reached because both sides couldn’t agree on issues such as how to structure and allocate capital to any joint operations, again citing sources familiar with the discussions. Still, the Journal reports that the talks aren’t fully off the table and both Deutsche and UBS have explored combining through a merger for years.

In early July, Deutsche Bank announced a massive restructuring plan, cutting 18,000 jobs by 2022. The bank also said that it would exit the stock sales and trading businesses to focus instead on commercial and corporate clients. The reorganization is expected to cost 6 billion euros.

Read the full WSJ story here.

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