Deutsche Bank and Commerzbank at odds over client losses
Some companies expected to move parts of business to rival lenders in case of a merger
Deutsche Bank and Commerzbank are at odds over how many clients would ditch the Frankfurt-based rivals if they merged, highlighting one of the many obstacles to a deal that could transform the face of German banking.
Many companies in Germany are clients of both Deutsche and Commerzbank. Some of them are expected to move parts of their business to rival lenders if the merger happens to avoid becoming overly dependent on a single lender.
Deutsche’s internal estimates suggest that this would result in lost revenue of slightly more than €1bn a year, or about 3.5 per cent of the two lenders’ combined pro forma revenue of €33.5bn.
Commerzbank’s view is much more benign, however. It expects that the merged group will suffer only about half of the revenue losses its larger rival is predicting, people familiar with the matter told the Financial Times.
The more optimistic view by the smaller partner is in line with the perception among Frankfurt financiers that Commerzbank — one of the largest lenders to Germany’s so-called Mittelstand of family-owned small and medium-sized companies — is keener to strike a deal than Deutsche.
The German government — which with a 15 per cent stake in Commerzbank is its single largest shareholder — would also prefer a domestic deal rather than a cross-border one, according to people briefed on the views of Berlin officials.
Deutsche’s prediction of a large drop in revenue may feed investor scepticism about a complex deal that is likely to involve raising up to €10bn in fresh equity and is facing stiff employee resistance.
Kian Abouhossein, analyst at JPMorgan, estimated earlier this year that about 2.5 per cent of joint revenue — or just under €900m by 2021 — would disappear “due to [an] overlap in clients and businesses”. He estimated the merged group would have its “biggest overlap in Mittelstand, followed by international corporates, financial institutions and small business customers”.
Christa Remme, a Commerzbank worker council member in Stuttgart who deals with large corporate clients, said at a union rally against the deal this month that “many large customers tell us that their risk exposure [to a merged group] would be too big, and that they don’t want to be dependent on just one bank”.
Deutsche is already suffering from falling revenue and analysts expect that this year’s top line will be almost a fifth lower than in 2016. Commerzbank earlier this year ditched its 2020 growth target.
However, a person close to the merger talks said the diverging views on revenue losses were not a potential deal breaker. “In total, the transaction would be so highly synergetic that a €500m difference in revenue number would not matter at the end of the day,” that person said.
Analysts expect that a merger would generate between €2bn and €2.5bn in annual cost-saving opportunities, with lower funding costs providing an additional financial benefit to an enlarged lender
Kuo: Apple upgrading front camera in 2019 iPhones to 12 megapixels, ultra-wide lens ‘inconspicuous’ thanks to new coating
Kuo today said that Apple plans to upgrade the front camera in the 2019 iPhones from 7-megapixels to 12-megapixels. He also said that the much rumored triple-camera system will come to the 6.5-inch and 5.8-inch OLED iPhones, adding a brand new super-wide 12-megapixel lens.
Both the super-wide and front camera lenses will be specially coated in black, to make them blend in better with the surrounding bezel for an ‘inconspicuous’ look.
Kuo’s report again indicates that the 6.1-inch iPhone XR successor will adopt a dual-camera system this year.
The front-camera improvements go beyond an increase in megapixels from 7 to 12. The camera will also change from the existing 4-element lens to a 5-element lens component. The new front camera will be included on all three new 2019 iPhones, including the ‘XR 2’ or whatever that model is called.
Kuo says that the ultra-wide lens will be manufactured exclusively by Sony featuring a 12MP/1um sensor.
The allusion to a black lens coating is interesting because it may help the new square camera protrusion look more aesthetically appealing.
The idea being that it would be almost impossible to see the new lens as the cover glass is tinted to match the bezel, improving the apparent aesthetic symmetry.
Based on the above mockup of the expected square-shaped bump, if Apple could make the third camera on the right hand side ‘disappear’, it is arguably prettier than if all three lenses were visible.
Adding the same new lens tint to the front camera will also further the seamless appearance of the iPhone as there will be more visual uniformity in the sensor housing (notch) area.
Apple is expected to officially announce its trio of new iPhones in the fall, likely at a September media event.
Apple revamping Find My Friends & Find My iPhone in unified app, developing Tile-like personal item tracking
Apple is working on a new app that’s going to replace the Find My Friends and Find My iPhone apps. With codename “GreenTorch”, the app is currently being tested by engineers at the company.
People familiar with its development shared exclusive details about the project with 9to5Mac, but asked to remain anonymous discussing the company’s plans. The new app will have the same features of the two existing apps, but combined into a single app, which will be available on both iOS and on macOS, as a Marzipan app.
The new unified app includes an improved ability to find a user’s devices. Called “Find Network”, the feature allows devices to be tracked even when not connected to Wi-Fi or to a cellular network.
Besides sharing their location with members of their family, users are also able to share their location with any friend. Friends can also send location sharing requests to other people. When a friend is sharing their location with a user, they’re be able to create notifications for when this friend arrives or leaves a specific location.
All devices from a user – and their family – can be located using the unified app, including AirPods. Devices can be put in “lost mode” or made to play a sound using the same app, just like Find My iPhone.
Apple also wants users to be able to track any item – not just their Apple devices – using this new unified app. The company is working on a new hardware product, known only as “B389” by the people involved in its development.
This new product will be a tag that can be attached to any item – similar to other products like Tile. The tag will be paired to a user’s iCloud account by proximity to an iPhone, like AirPods. Users will be able to receive notifications when their device gets too far away from the tag, preventing them from forgetting the item the tag is attached to. Certain locations can be added to a list of ignored locations, so that the item can be left at those locations without the user being notified. The location of a tag can also be shared with friends or family.
Users will be able to store their contact information in the tag, which can be read by any Apple device when the tag is put into “lost mode” – the owner of the tag will receive a notification when it is found. It seems that Apple wants to leverage the vast amount of active Apple devices to create a crowdsourced network that helps its users find any lost item, by using this new hardware product.
9to5Mac was unable to get any information about when this product is supposed to ship to customers, but it could be announced as early as this September, when the company is expected to release new iPhones.
Gapping down
In reaction to disappointing earnings/guidance:
- SNBR -14.2%, TEAM -9.2%, PLXS -5.9%, LLNW -4.8%, CHKP -4.3%, GTLS -3.4%, AA -3.1%, TSM -1.3%, RCI -1.3%, GOLD -0.8%, DHR -0.7%, AXP -0.7%, KEY -0.5%
M&A news:
- ANGO -8.5% (to sell NAMIC fluid management business to Medline Industries for $167.5 mln )
Other news:
- EIGR -13.9% (prices underwritten public offering of 4,500,000 shares of its common stock at a price to the public of $11.00 per share)
- NOW -1.4% (following TEAM earnings)
- GPOR -1.3% (reports Q1 net production averaged 1,263.6 MMcfe per day)
- ZEN -1% (following TEAM earnings)
- TRVN -0.7% (entered into $50 mln common stock sales agreement with H.C. Wainwright for "at the market" offerings)
- DAVA -0.5% (prices offering of 5 mln ADSs at $27.25 per shae)
Analyst comments:
- JBHT -2.8% (downgraded to Sell from Buy at Deutsche Bank)
- SRCL -2.8% (downgraded to Underperform from Neutral at Robert W. Baird)
- CF -2.2% (downgraded to Underperform from Buy at BofA/Merrill)
- BCS -1.4% (downgraded to Neutral from Buy at BofA/Merrill)
- LYG -1.4% (downgraded to Underperform from Buy at BofA/Merrill)
- MS -1% (downgraded to Neutral from Buy at Citigroup)
Gapping up
In reaction to strong earnings/guidance:
- BX +8.6%, URI +7.3%, SNA +4.9%, CNS +4.3%, ADTN +3.8%, STI +3.1%, LVS +2.9%, ETFC +2.8%, TCBI +2.6%, UL +2.3%, PPG +2.2%, DOV +2.1%, SYF +1.8%, OZK +1.4%, HON +1.3%, TRV +0.9%, SLB +0.8%, CCI +0.7%, CATY +0.7%, RF +0.7%, CFG +0.7%, PM +0.6%
Select cannabis related names showing strength:
- HEXO +5%, CGC +5%, PYX +3.5%, CRON +2.3%, MJ +1.9%, ACB +1.3%, NBEV +1%, TLRY +0.8%, .
Other news:
- MBIO +167.3% (St. Jude Children's Research Hospital publishes results of lentiviral gene therapy for treatment of infants with X-linked severe combined immunodeficiency), APHA +4.9% (prices offering of $300 mln of 5.25% convertible senior notes due 2024)
- VFF +3.2% (extending yesterday's 10% move higher)
- PBR +2.3% (being attributed to CFO comments suggesting the sale of new group of natural gas pipelines)
- WTR +2.2% (prices offering of 32,495,667 shares of its common stock at $34.62 per share)
- AFMD +1.4% (Affimed Therapeutics announces regulatory update on AFM11 clinical program)
- WYNN +1.3% (following LVS earnings), .
Analyst comments:
- ETRN +5% (initiated with a Sector Perform at RBC Capital Mkts)
- VNTR +4.8% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
- NICE +0.7% (upgraded to Overweight from Neutral at JP Morgan)
Early premarket gappersGapping up:
- MBIO +256.8%, CGC +6.9%, URI +6.7%, CNS +4.3%, HEXO +4.1%, CRON +3.6%, ETFC +3.6%, PYX +3.5%, APHA +3.2%, MJ +3%, LVS +2.9%, TCBI +2.6%, UL +2.2%, TLRY +2.1%, SYF +2%, HON +1.9%, ACB +1.6%, WYNN +1.5%, VFF +1.4%, AFMD +1.4%, OZK +1.4%, KMI +1.3%, STI +1.1%, PBR +1%, CCI +0.7%, CATY +0.7%, CFG +0.7%, IGC +0.6%, RF +0.6%
Gapping down:
- SNBR -14.2%, EIGR -12.9%, STNE -9.3%, TEAM -8.9%, ANGO -8.5%, PLXS -5.9%, CHKP -5%, LLNW -4.8%, DHR -3.1%, AA -2.8%, GPOR -1.3%, ZEN -0.9%, TRVN -0.7%, NOW -0.5%, DAVA -0.5%