The country’s two biggest banks are projected to scrape mid single-digit returns on tangible equity by 2019. A merger that cut a tenth of joint costs could get that closer to double-figures. It could also stabilise Deutsche and give Berlin an excuse to sell its Commerzbank stake.
The state has been stealthily reducing its role in industry by allowing private players to gain market share. There's appetite for a more aggressive approach. If national carrier Air India can be sold, look for banks, energy and other assets to follow if Modi wins a second term. This is a Breakingviews prediction for 2018. To see more of our predictions, click here.