Deutsche Bank has called a halt to a merger with Commerzbank.
Talks began last month between the two German shipping lenders over a combination.
But, after careful analysis, Deutsche Bank said it had discontinued discussions.
"A combination with Commerzbank would not have created sufficient benefits to offset the additional execution risks, restructuring costs and capital requirements associated with such a large-scale integration," it said.
"Deutsche Bank will continue to review all alternatives to improve long-term profitability and shareholder returns."
A merger would have created Europe's second-biggest banking group after HSBC.
Deutsche Bank chief executive Christian Sewing said: "We have consistently said that we want to play an active role in the consolidation of the European banking sector. For that reason, we decided to evaluate this option thoroughly.
"Our discussions with Commerzbank were very intense and took place in a constructive and mutually respectful atmosphere. However, we have now decided not to pursue this possibility further."
Provisions on the rise
The bank also announced a rise in provisions for credit losses.
These reached €140m ($156m) in the first quarter of 2019, up 60% year-on-year.
The rise partly reflects lower net releases in corporate and investment banking (CIB), driven mainly by releases in the CIB shipping portfolio in the prior-year quarter, and a rise in private and commercial bank provisioning driven partly by model recalibrations.
"At 13 basis points of loans, provision for credit losses remains low by historical standards, reflecting the low risk profile of the bank’s portfolio," it said.
Net profit was €201m for the first quarter of 2019, up 67% year-on-year, while net revenue was down 9% to €6.4bn.
Commerzbank has offloaded €5.1bn ($5.75bn) of legacy loans as its shipping book dwindles.
The asset and capital recovery segment has continued to run down its portfolios, with maritime loans cut to less than €500m in 2018. This related to fewer than 60 ships.
