The regular six-month "casual dress" meeting of Commerzbank's management board ended without any decisions being taken regarding the merger, and no announcements were planned, said one banking source.

"There was a report on the state of talks, nothing happened apart from that," said the source.

Dresdner and Commerzbank said two weeks ago they were holding preliminary talks on a link that could create Germany's second biggest bank with a market value of about 41 billion euros, behind Deutsche Bank AG with 50.5 billion.

But a deal could founder on opposition from the banks' major shareholders, and signs emerged last week that some Commerzbank management board members were cool to a merger that would cost many of them their jobs.

Dresdner, as the larger of the two banks and with the far bigger investment banking business, is set to be the dominant force in a combined bank. One banking source said: "There seems to be no new status in the situation either in a good or in a bad direction. They'll go on talking."

Commerzbank had played down the significance of its weekend board meeting, which was not specifically called to discuss Dresdner. It holds such meetings twice a year to talk about long-term strategy, and this one had been scheduled long ago.

But in a sign that the meeting might have produced a decision on the future of the merger talks, the bank had warned some journalists to be prepared for a possible "background" briefing on Sunday should the need arise.

No such briefing is now due to take place.

The make-up of a merged bank's management board is a potential obstacle as a number of Commerzbank's management board members would stand to lose their jobs.

Klaus Patig, head of Commerzbank's investment banking, would probably have to step aside for Dresdner's new investment bank chief Leonhard Fischer. Dresdner chief executive Bernd Fahrholz, appointed as head of Dresdner in April in the aftermath of Dresdner's collapsed merger with Deutsche Bank AG, would probably be named head of the merged bank, with Commerzbank chief executive Martin Kohlhaussen seen entering the supervisory board.

Commerzbank's largest shareholder, investment company Cobra Holdings MBH with 17 per cent, reiterated on Saturday it was sceptical about the merits of Commerzbank merging with a German partner because a cross-border link would make more sense.

-- (Reuters)