Sharp differences have opened up between Dresdner Bank and Commerzbank over the valuation of the two banks as more details have emerged of their merger plans. Commerzbank is pressing for a merger of near-equals that would lead to a share swap close to 50-50. Dresdner believes it should have a greater share of the combined bank, with several analysts suggesting fair values would give it more than 55 per cent.

A growing feeling in both camps is that the chances of agreement by the end of the month are fading. Allianz, the German insurer that owns 21.7 per cent of Dresdner, warned yesterday that the merger could fail because of valuation difficulties.