Andrea Orcel, chief executive officer of Unicredit, in London, UK, on Thursday, Nov. 23, 2023.
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UniCredit CEO Andrea Orcel told CNBC Tuesday that he does not foresee a future where the Italian lender fully controls Commerzbank.
Orcel’s comments came as the Italian lender’s tender offer to raise its stake in the German bank kicks off.
“If we get to control, which is not the expected scenario at the moment, what we would do is very clear, and the returns on that would be … very positive for our shareholders, and also for the shareholders of Commerzbank, but it’s up to them,” he told CNBC’s Carolin Roth.
“We’re not really fretting it. We are just focusing on delivering, and we’ve done all we could to engage, and now we are just looking at what shareholders will do.”
Last month, UniCredit announced an offer to build more shares in Commerzbank, structured as a share exchange. The move aims to increase UniCredit’s holding in Commerzbank to more than 30%, a key regulatory threshold.
It already holds a 28% stake in Commerzbank, after steadily increasing its investment in the German lender since taking a minority stake in 2024.
The tender offer for Commerzbank begins on Tuesday.
On Monday, UniCredit shareholders voted to approve the issuance of 470 million new shares which could be exchanged for Commerzbank shares tendered in the offer.
While Orcel said he’s not expecting UniCredit to secure a controlling stake in Commerzbank, he noted that UniCredit’s growing influence has already driven the latter to “review everything they need to review and try to extract more value, be more ambitious [and] change things in a better way.”
“We believe very strongly in core business versus side shows, and we believe that Commerzbank should focus all its energy on Germany and Poland, and less so in unrelated growth externally, but that is their decision until we’re there,” he told CNBC. “I wouldn’t say that we’re going to change our posture. What we think should be done is very, very visible. And quarter after quarter, we will observe what happens, and our views will be clear.”
Orcel’s interview with CNBC came after UniCredit published its first-quarter earnings, which were touted as the bank’s 21st quarter of profitable growth and its best quarter on record.
Quarterly net profit grew 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.
Shares of UniCredit were up nearly 5% in early trade on Tuesday.
Orcel told CNBC that regardless of how much bigger the lender’s stake in Commerzbank becomes, the outcome will be a “win-win” for UniCredit shareholders.
“[If] we end up below control, hopefully above 30% but below control, the financial returns of what we would do there would be exceptional, because we would be well above 20% returns,” he explained. “They would underpin our own results, and if indeed Commerzbank upgrades — as we all expect — that’s a plus. If it goes badly, we have our put option. We are hedged.”
Commerzbank pushback
UniCredit’s push to up its stake in Commerzbank has been met with opposition in Germany.
Commerzbank’s Deputy CEO Michael Kotzbauer said in an interview with German publication Frankfurter Allgemeine on Monday that a UniCredit takeover would “dismantle Commerzbank’s business model.”
“What Unicredit has now put on the table after 18 months and numerous meetings is a plan that breaks up the Bank as it currently serves its clients — and offers our shareholders no premium in return,” he said, noting that several surveys had shown support from the German business community for an independent Commerzbank.
When asked on Tuesday whether more consolidation was needed in the European banking space, Orcel said the continent needed to think beyond just his industry if it wanted to be a more competitive economic power.
“From a UniCredit standpoint, we continue to push the envelope, we continue to put these issues on the table,” he said. “I think Europe needs to come together [to unify a] banking union, capital markets union, energy, defense. I think Europeans need to understand that we will be able to protect our principal values and culture a lot better if we’re a stronger economic bloc.”
The heads of various organizations have called for more unity in European finance and capital markets, including the IMF and Norway’s $2 trillion sovereign wealth fund.
