Commerzbank Euro-Giveaway Sparks Clash With German Rivals
Such business models are “crazy” and aren’t sustainable, Uwe Froehlich, head of the BVR association of German cooperative banks, said in a speech at a conference in Frankfurt today. Commerzbank offers clients 50 euros ($67) for opening an account and an additional 50 euros if they're unhappy with the bank's services, according to its website.
European banks have turned to consumers and businesses to help raise capital after borrowing on financial markets became more expensive due to the European debt crisis. Germany owns 25 percent plus one share of Commerzbank after taxpayers rescued the company during the financial crisis, meaning the government has voting rights on its board of directors.
“We’d prefer our politicians and Commerzbank to work more on paying back state aid rather than throwing money out,” Froehlich said. Thorsten Reitmeyer, chief executive officer of Commerzbank’s Comdirect online unit, responded by thanking Froehlich for “highlighting our great conditions,” telling the same conference that the bank’s offers showed how wide profit margins were at rivals.
Attempts by Commerzbank and foreign lenders to raise a greater proportion of their financing needs through German deposits could damage the country’s banking industry and the economy as a whole, said Froehlich.
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