Unicredit boss Orcel sees advantages in the merger of the two banks for private customers and small and medium-sized businesses. At the same time, Commerzbank must become more profitable, he demands – and mentions savings opportunities.
After its investment in Commerzbank, the major Italian bank Unicredit is promoting a takeover of Germany’s second-largest private bank. At the same time, Unicredit boss Andrea Orcel demanded that Commerzbank become more profitable and identified potential savings in the event of a merger. The Frankfurt-based DAX group confirmed that it had been in contact with Unicredit, but otherwise remained tight-lipped. The federal government, which has been criticized for its exit from Commerzbank, now wants to sound out the situation.
“A merger of the two banks could lead to significant added value for all stakeholders and would create a much stronger competitor on the German banking market,” Orcel told Handelsblatt. “Private customers could be better supported and German medium-sized companies could be strengthened with financing and supported more comprehensively internationally.”
There is very little overlap between the two institutions, said Orcel. “It would therefore be possible to create a bank that complements each other well geographically and is very well balanced with private customer and corporate business.” There are opportunities for savings, especially in the central functions. Unicredit has had a strong presence in Germany since taking over HypoVereinsbank (HVB) in 2005.
Clear demands on Commerzbank management
“It is important that Commerzbank strengthens its balance sheet, grows and becomes more profitable at the same time,” Orcel continued. “The current management has made significant progress here, but in my opinion much more can be done.” The return on equity of the Unicredit subsidiary HVB is twice as high as that of Commerzbank. Its cost-to-income ratio is 20 percentage points lower than that of the Frankfurt-based bank, said Orcel.
Unicredit took advantage of the federal government’s gradual exit from its stake in Commerzbank and surprisingly made a large-scale investment in the DAX-listed company. The Italians acquired a 4.5 percent stake from the federal government and also bought shares on the market, meaning they now hold nine percent of the shares. The federal government saved Commerzbank from collapse during the financial crisis with billions. It still holds 12 percent of the shares, which it plans to sell off gradually.
A merger with Unicredit would create a European banking giant with a market value of around 79 billion euros. The Verdi union fears job losses and wants to fight against a takeover of the bank. It is demanding that the federal government should not sell any more Commerzbank shares.
Federal government now wants to sound out the situation
Commerzbank boss Manfred Knof did not comment specifically on a possible takeover on Monday. “There has been contact,” he said on the sidelines of an event in Berlin. “We are confident in our own plan.” If someone presents a different plan, it will be examined in the interests of investors, customers and employees. It is now a matter of implementing our own strategy, stressed Knof.
In the wake of Unicredit’s entry, criticism also arose of the federal government’s approach, which was apparently taken by surprise by the Italians’ entry. A spokeswoman for Finance Minister Christian Lindner (FDP) said that the federal government would now analyze the situation. It was the primary concern of the Commerzbank committees to speak to potential shareholders if necessary. In transactions such as the sale of federal shares in Commerzbank, it is usual to approach investors as part of the sales process. This was done by an investment bank commissioned by the finance agency.
Unicredit was contacted, among others. This procedure serves to assess the market environment on the day of the transaction.
Source: Stern
