Government disengagement, State disassociation, or State disengaging from its commitments or involvement. - The Government of the Federal Republic initiates the sale of Commerzbank shares
The administrative body has started the advertised disposal of its shareholding in Commerzbank. Around 53.1 million shares belonging to the Financial Market Stabilization Fund (FMS) portfolio are set to be offered to institutional investors at an accelerated pace, as revealed by the German Federal Financial Supervisory Authority. This move is expected to reduce the FMS's stake from around 16.5% to 12%.
Not too long ago, the government declared its plan to progressively dispose of its stake in Commerzbank. During the global financial crisis, the state had intervened to save the Frankfurt-based bank, which had absorbed the ailing Dresdner Bank. This intervention required substantial financial aid from the public. In 2008 and 2009 alone, Commerzbank received 18.2 billion euros in capital injections from the FMS. As per financial records, around 13.15 billion euros have already been repaid.
Following this latest share sale, the state will still be Commerzbank's largest individual shareholder. According to the announcement, no additional Commerzbank shares will be sold within the next 90 days, except under specific circumstances.
The Federal Republic of Germany initiated the process of selling its stake in Commerzbank, as mentioned in the global financial crisis when the government intervened to save the bank. This subsequent share sale by the German administration will also make it the largest individual shareholder of Commerzbank.
