The chief executive of Commerzbank is predicting a wave of mergers among Germany's cooperative and savings banks.

Martin Blessing, who heads Germany's second biggest bank, noted that there were still almost 2,000 banks in Germany, in contrast to about 20 in Spain.

"I suspect the consolidation will largely take place within Germany and not in the private banking sector," Blessing told a business conference in Berlin on Saturday.

He said he could envisage mergers between smaller banks and their owners, for example between regional Landesbanken and local savings banks or cooperatives.

But he declined to comment on speculation that Commerzbank itself could be a takeover candidate, with French and Spanish banks seen as potential buyers.

The Landesbanken, jointly owned by Germany's regional states and local savings banks, were among the worst casualties of the financial crisis and many are still struggling despite some downsizing and restructuring.

Stress test results announced by the European Central Bank last month revealed weaknesses in Germany's cooperative banking sector, Blessing said.

Credit ratings agency Moody's said earlier this week that German banks remain under intense pressure to cut costs but may avoid resorting to extensive layoffs by increasing efficiency through reorganization and automation.

When comparing profitability against risk exposure, German banks are the weakest in Europe, largely because high costs have devoured earnings, according to Moody's data.