Milan (Italy) (AFP) – The chief executive of Italy’s UniCredit bank said Wednesday there would be no decision on a possible takeover of German rival Commerzbank for at least a year. “The process of engaging with all the stakeholders will take some time,” Andrea Orcel told a conference call with analysts. UniCredit was the “largest investor in Commerzbank today,” he said, but for now, it was “an investment and nothing else.”
He confirmed his interest in the German lender but stated that “there isn’t anything on the table at the moment, there never was.” “We cannot be an investor forever without taking a decision, but I would not look at that decision being taken before a year from now,” he said. Italy’s second-biggest lender surprised markets in September by building up a stake of about 21 percent in its German rival, fueling speculation that it could be gearing up to mount a takeover effort.
The approach has sparked anger in Germany, with unions fearing it could lead to job losses and politicians—led by Chancellor Olaf Scholz—speaking out against a merger. Commerzbank raised its 2024 outlook Wednesday after better-than-expected quarterly results. It posted a net profit from July to September of 642 million euros ($689 million), down six percent from a year earlier. Coming against a backdrop of falling eurozone interest rates, the results nevertheless beat analysts’ expectations.
“Our figures and our strong customer business emphasize that our strategy is paying off,” said Commerzbank’s new CEO Bettina Orlopp, who has vowed to fight any takeover attempt by UniCredit.
UniCredit also published third-quarter results on Wednesday, posting a net profit of 2.5 billion euros, 8.2 percent higher than a year ago. This was also better than expected by analysts. Orcel said the Italian lender was now targeting net profit of more than nine billion euros this year as well as in 2025 and 2026, compared to more than 8.5 billion euros previously.
Commerzbank’s Orlopp has warned that a tie-up with UniCredit could cause the German bank to lose customers and hurt its credit score. After Wednesday’s better-than-expected results, Commerzbank raised its forecast for net interest income from around 8.1 billion euros to around 8.2 billion for the year.
It also boosted its forecast for net commission income and maintained its profit target for the year at 2.4 billion euros, which would be a record. Orlopp said Wednesday that Commerzbank would present a new strategy next February “to further increase the bank’s profitability in the coming years and create sustainable value for our shareholders.” In a bid to boost its attractiveness for investors, Commerzbank had already enhanced its medium-term targets in September, with net profit forecast to exceed three billion euros by 2027. The bank is also launching a fresh share buyback, which should boost its share price.
© 2024 AFP