Citigroup flags interest in German banks

Citigroup flagged its interest in buying a bank in Germany on Tuesday but played down recent talk that it was about to swoop on Commerzbank.

We are not in any talks at all with Commerzbank, Sue Harnett, Citi's Germany head, said on the sidelines of a press conference, throwing cold water on recent rumors that Citi had prepared a bid for the bank.

Citibank is interested in all banks in Germany that would be for sale, Hartnett said.

Earlier this year, she also said she was on the lookout for acquisitions in Germany and could make a move on a big bank. Her comments sent stock prices in Germany's three biggest commercial banks, including Commerzbank, rising.

It surprised many analysts who had said that Citi's cost shake-up ruled it out of a megadeal in Europe's biggest economy.

Few banks are for sale in Germany, where the state dominates the market with hundreds of community lenders which local communities do not want to sell.

Citi's private sector rivals in Germany besides Commerzbank include Dresdner Bank and Postbank.

Of those, Commerzbank, long touted as a takeover candidate, is the only one to have flagged interest in being bought.