Andrea Orcel, Chief Executive Officer of Unicredit, Thursday, November 23, 2023, London, UK.
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unicredit CEO Andrea Orcel told CNBC on Tuesday that he does not foresee a future in which the Italian lender is completely in control. Commerzbank.
Orcel’s comments came as the Italian lender launches a takeover offer for the German bank.
“It’s not a foreseeable scenario at this point, but it’s very clear what we would do if we were in control, and the benefits of that would be … very positive for our shareholders and for Commerzbank shareholders, but it’s up to them,” he told CNBC’s Carolyn Ross.
“We’re not too worried. We’re just focused on delivering and we’ve done everything we can to be involved and now we’re just looking at what happens to our shareholders.”
Last month, UniCredit announced a proposal to further increase its stake in Commerzbank in the form of a share swap. The move is aimed at raising UniCredit’s ownership stake in Commerzbank above 30%, a key regulatory threshold.
The company has steadily increased its investments in German financial institutions since acquiring a minority stake in 2024, and already holds a 28% stake in Commerzbank.
The takeover offer for Commerzbank will begin on Tuesday.
On Monday, UniCredit shareholders voted to approve the issuance of 470 million new shares to be exchanged for Commerzbank shares tendered for the offering.
While Orcel said he did not expect UniCredit to secure control of Commerzbank, he noted that UniCredit’s growing influence has already led UniCredit to “review everything that needs to be reviewed, to extract more value, to be more ambitious (and) to try to change things for the better.”
“We believe very strongly in core businesses and secondary businesses, and we think Commerzbank should focus all its energies on Germany and Poland and less on unrelated external growth, but that’s their decision to get us there,” he told CNBC. “I’m not saying we’re going to change our stance. We’re very visible in what we think we should do. And we’ll see what happens quarter by quarter and our view will become clearer.”
Orcel’s interview with CNBC came after UniCredit announced its first-quarter results, which were touted as the bank’s 21st quarter of profit growth and its best quarter ever.
Net profit rose 16.1% year-on-year to 3.2 billion euros ($3.74 billion), well above the 2.8 billion euros expected by analysts polled by LSEG.
UniCredit stock rose nearly 5% in early trading Tuesday.
Orcel told CNBC that no matter how large the lender’s stake in Commerzbank becomes, the outcome would be a “win-win” for UniCredit shareholders.
“[If]we go below control, preferably by more than 30% but below control, the financial benefits of what we do there will be exceptional because our returns will be well over 20%,” he explained. “They will support our own performance and if Commerzbank does indeed upgrade – as everyone expects – that would be a positive. If it goes bad, we have a put option. We are hedged.”
Commerzbank rebound
UniCredit’s efforts to increase its stake in Commerzbank are facing opposition in Germany.
Commerzbank Deputy CEO Michael Kotzbauer said in an interview with German publication Frankfurter Allgemeine on Monday that the acquisition of UniCredit would “dismantle Commerzbank’s business model.”
“What UniCredit is now putting on the table, after 18 months and numerous meetings, is a plan to dismantle the bank that currently serves its customers, without offering any premium in return to shareholders,” he said, noting that several surveys showed that German business supported an independent Commerzbank.
Asked on Tuesday whether more consolidation was needed in Europe’s banking industry, Orcel said Europe needed to think beyond the European banking industry if it wanted to become a more competitive economic powerhouse.
“From a UniCredit perspective, we continue to push the envelope and keep these issues on the table,” he said. “I think Europe needs to come together[to unify]the banking union, the capital markets union, energy, defence, etc. I think Europeans need to understand that if European countries become stronger economies, they will be better able to protect their core values and cultures.”
Heads of organizations, including the IMF and Norway’s $2 trillion sovereign wealth fund, are calling for greater unity in Europe’s financial and capital markets.
